SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-l
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
CHEYENNE SOFTWARE, INC.
__________________________________________________________________
(Name of Subject Company)
TSE-TSEHESE-STAESTSE, INC.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
__________________________________________________________________
(Bidder)
COMMON STOCK, PAR VALUE $.01 PER SHARE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS
__________________________________________________________________
(Title of Class of Securities)
166888107
__________________________________________________________________
(CUSIP Number of Class of Securities)
SANJAY KUMAR
TSE-TSEHESE-STAESTSE, INC.
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
__________________________________________________________________
<PAGE>
CALCULATION OF FILING FEE
===========================================
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$1,150,198,432 $230,040
===========================================
* Estimated for purposes of calculating the amount of filing fee
only. The amount assumes the purchase of 37,711,424 shares of common stock,
par value $.01 per share, including associated Preferred Stock Purchase
Rights (the "Shares"), at a price per Share of $30.50 in cash. Such number
of Shares represents all of the Shares outstanding as of October 7, 1996.
__ Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: None.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
Page 1 of 7 Pages
Exhibit Index begins on Page 7
<PAGE> 2
1. Security and Subject Company.
(a) The name of the subject company is Cheyenne Software,
Inc., a Delaware corporation (the "Company"), and the address of its
principal executive offices is 3 Expressway Plaza, Roslyn Heights, New York
11577.
(b) This Statement on Schedule 14D-1 relates to the offer by
Merger Subsidiary (defined below), to purchase all outstanding shares of
Common Stock, par value $.01 per share, including associated Preferred Stock
Purchase Rights (the "Shares"), of the Company at $30.50 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth
in the Offer to Purchase (the "Offer to Purchase") and in the related Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2) (which, together with any amendments or supplements thereto,
collectively constitute the "Offer").
The information set forth in the Introduction to the Offer to Purchase (the
"Introduction") is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of
Shares; Dividends") of the Offer to Purchase is incorporated herein by
reference.
2. Identity and Background.
(a)-(d) and (g) This Statement on Schedule 14D-1 is filed by
Tse-tsehese-staestse, Inc. ("Merger Subsidiary") and Computer Associates
International, Inc. ("Computer Associates"), each of which is a Delaware
corporation. Merger Subsidiary is a wholly-owned subsidiary of Computer
Associates. Information concerning the principal business and the addresses
of the principal offices of Merger Subsidiary and Computer Associates is set
forth in Section 8 ("Certain Information Concerning Merger Subsidiary and
Computer Associates") of the Offer to Purchase, and is incorporated herein
by reference. The names, business
addresses, present principal occupations or employments, material
occupations, positions, offices or employment during the last five years and
citizenship of the directors and executive officers of Merger Subsidiary and
Computer Associates are set forth in Schedule I to the Offer to Purchase and
are incorporated herein by reference.
(e) and (f) None of Merger Subsidiary, Computer Associates or,
to the best knowledge of such corporations, any of the persons listed on
Schedule I to the Offer of Purchase, has during the last five years (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws.
3. Past Contacts, Transactions or Negotiations with
the Subject Company.
(a) and (b) The information set forth in (i) the
Introduction, Section 10 ("Background of the Offer; Past Contacts,
Transactions or Negotiations with the Company"), Section 11 ("Purpose of the
Offer; Merger Agreement; Appraisal Rights") and Schedule I to the
<PAGE> 3
Offer to Purchase, (ii) the Agreement and Plan of Merger, dated as of
October 7, 1996 (the "Merger Agreement"), among the Company, Computer
Associates and Merger Subsidiary, a copy of which is attached as Exhibit
(c)(1) hereto, and (iii) the Confidentiality Agreement, dated October 1,
1996 (the "Confidentiality Agreement"), between Computer Associates and the
Company, a copy of which is attached as Exhibit (c)(2) hereto, respectively,
is incorporated herein by reference.
4. Source and Amount of Funds or Other Consideration.
(a) and (b) The information set forth in Section 9 ("Source
and Amount of Funds") of the Offer to Purchase is incorporated herein by
reference.
(c) Not applicable.
5. Purpose of the Tender Offer and Plans or Proposals
of the Bidder.
(a)-(e) The information set forth in the Introduction and
Section 11 ("Purpose of the Offer; Merger Agreement; Appraisal Rights") of
the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 12 ("Effect
of the Offer on the Market for the Shares; Stock Quotations,
Registration Under the Exchange Act") of the Offer to Purchase is
incorporated herein by reference.
6. Interest in Securities of the Subject Company.
(a) None.
(b) Not applicable.
7. Contracts, Arrangements, Understandings or Relation-
ships with Respect to the Subject Company's Securities.
The information set forth in (i) the Introduction, Section 8
("Certain Information Concerning Merger Subsidiary and Computer
Associates"), Section 10 ("Background of the Offer; Past Contacts,
Transactions or Negotiations with the Company") and Section 11 ("Purpose of
the Offer; Merger Agreement; Appraisal Rights") of the Offer to Purchase,
(ii) the Merger Agreement, and (iii) the Confidentiality Agreement,
respectively, is incorporated herein by reference.
8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 17 ("Fees and Expenses") of the
Offer to Purchase is incorporated herein by reference.
<PAGE> 4
9. Financial Statements of Certain Bidders.
The information set forth in Section 8 ("Certain Information
Concerning Merger Subsidiary and Computer Associates") of the Offer to
Purchase, and such information and the consolidated financial statements of
Computer Associates in Computer Associates' Annual Report on Form 10-K for
the fiscal year ended March 31, 1996 and Quarterly Report for the three
months ended June 30, 1996, respectively, are incorporated herein by
reference.
10. Additional Information.
(a) The information set forth in Section 11 ("Purpose of the Offer;
Merger Agreement; Appraisal Rights") of the Offer to Purchase is
incorporated herein by reference.
(b)-(d) The information set forth in Section 16 ("Certain
Legal Matters; Regulatory Approvals") of the Offer to Purchase is
incorporated herein by reference.
(e) None.
(f) The information set forth in (i) the Offer to Purchase,
(ii) the Letter of Transmittal, (iii) the Merger Agreement, and (iv) the
Confidentiality Agreement, respectively, is incorporated herein by reference.
11. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase dated October 11, 1996.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Text of joint press release issued by Computer
Associates and the Company dated October 7, 1996.
(a)(7) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(8) Form of summary advertisement dated October 11, 1996.
(b)(1) $1,300,000,000 Amended and Restated Credit Agreement,
dated as of July 3, 1996 (previously filed as an
exhibit to
<PAGE> 5
Computer Associates' 10-Q for the three months ended
June 30, 1996 (File No. 0-10180) and incorporated
herein by reference).
(b)(2) $700,000,000 Credit Agreement, dated as of July 3, 1996
(previously filed as an exhibit to Computer Associates'
10-Q for the three months ended June 30, 1996 (File
No. 0-10180) and incorporated herein by reference).
(c)(1) Agreement and Plan of Merger, dated as of October 7,
1996, among the Company, Computer Associates and Merger
Subsidiary.
(c)(2) Confidentiality Agreement, dated October 1, 1996,
between Computer Associates and the Company.
(d) None.
(e) Not applicable.
(f) None.
<PAGE> 6
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: October 11, 1996
TSE-TSEHESE-STAESTSE, INC.
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
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Exhibit Name
- ------ -------------
<S> <C>
(a)(1) Offer to Purchase dated October 11, 1996.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(6) Text of joint press release issued by Computer
Associates and the Company dated October 7, 1996.
(a)(7) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(8) Form of summary advertisement dated October 11,
1996.
(b)(1) $1,300,000,000 Amended and Restated Credit
Agreement, dated as of July 3, 1996 (previously
filed as an exhibit to Computer Associates' 10-Q
for the three months ended June 30, 1996 (File
No. 0-10180) and incorporated herein by
reference).
(b)(2) $700,000,000 Credit Agreement, dated as of July
3, 1996 (previously filed as an exhibit to
Computer Associates' 10-Q for the three months
ended June 30, 1996 (File No. 0-10180) and
incorporated herein by reference).
(c)(1) Agreement and Plan of Merger, dated as of October
7, 1996, among the Company, Computer Associates
and Merger Subsidiary.
(c)(2) Confidentiality Agreement, dated October 1, 1996,
between Computer Associates and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
EXHIBIT 99(a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Rights)
of
Cheyenne Software, Inc.
at
$30.50 Net Per Share
by
Tse-tsehese-staestse, Inc.
a wholly owned subsidiary of
Computer Associates International, Inc.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON FRIDAY, NOVEMBER 8, 1996, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING
VALIDLY TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN A NUMBER OF SHARES
OF COMMON STOCK, PAR VALUE $.01 PER SHARE (INCLUDING THE ASSOCIATED RIGHTS
(DEFINED HEREIN)) (THE "SHARES"), OF CHEYENNE SOFTWARE, INC. (THE "COMPANY")
WHICH, TOGETHER WITH THE SHARES THEN OWNED BY TSE-TSEHESE-STAESTSE, INC.
("MERGER SUBSIDIARY") AND COMPUTER ASSOCIATES INTERNATIONAL,INC. ("COMPUTER
ASSOCIATES"), WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS AND (2) THE EXPIRATION OR
TERMINATION OF THE APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
THE OFFER AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, HAS
UNANIMOUSLY APPROVED THE OFFER AND THE TRANSACTIONS CONTEMPLATED BY THE
MERGER AGREEMENT, AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
__________________________
Any stockholder desiring to tender Shares should either (i)
complete and sign the Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal and deliver it
with the certificate(s) representing such tendered Shares and all other
required documents to the Depositary or follow the procedure for book-entry
tender of Shares set forth in Section 3 or (ii) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder having Shares registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such person if such stockholder desires to tender such Shares.
Any stockholder who
desires to tender Shares and whose certificate(s) representing such Shares
are not immediately available, or who cannot comply with the procedure for
book-entry transfer on a timely basis, may tender such Shares pursuant to the
guaranteed delivery procedure set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer
to Purchase or the Letter of Transmittal may be directed to the Information
Agent at its addresses and telephone numbers specified on the back cover of
this Offer to Purchase.
_________________________
The Information Agent for the Offer is:
D.F. King & Co., Inc.
October 11, 1996
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
INTRODUCTION.....................................................1
1. Terms of the Offer..........................................3
2. Acceptance for Payment and Payment..........................5
3. Procedure for Tendering Shares..............................6
4. Withdrawal Rights...........................................9
5. Certain Tax Consequences...................................10
6. Price Range of Shares; Dividends...........................11
7. Certain Information Concerning the Company.................11
8. Certain Information Concerning Merger Subsidiary and
Computer Associates.......................................13
9. Source and Amount of Funds.................................15
10. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company.............................16
11. Purpose of the Offer; Merger Agreement; Appraisal Rights...19
12. Effect of the Offer on the Market for the Shares; Stock
Quotations; Registration Under the Exchange Act...........30
13. Dividends and Distributions................................31
14. Extension of Tender Period; Termination; Amendment.........32
15. Certain Conditions of the Offer............................33
16. Certain Legal Matters; Regulatory Approvals................36
17. Fees and Expenses..........................................38
18. Miscellaneous..............................................39
Schedule I Directors and Executive Officers...................I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
CHEYENNE SOFTWARE, INC.:
INTRODUCTION
Tse-tsehese-staestse, Inc., a Delaware corporation ("Merger
Subsidiary") and a wholly owned subsidiary of Computer Associates
International, Inc., a Delaware corporation ("Computer Associates"), hereby
offers to purchase all outstanding shares of Common Stock, par value $.01 per
share (including the associated Rights (defined below) (collectively, except
where the context otherwise requires, the "Shares"), of Cheyenne Software,
Inc.,
a Delaware corporation (the "Company"), at $30.50 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the
"Offer"). Tendering stockholders of the Company (the stockholders of the
Company are referred to herein as the "Stockholders") will not be obligated
to pay brokerage fees or commissions or, except as set forth in the Letter
of Transmittal, transfer taxes on the purchase of Shares pursuant to the
Offer. Computer Associates will pay all charges and expenses of The Bank of
New York
(the "Depositary") and D.F. King & Co., Inc. (the "Information Agent") in
connection with the Offer.
The Board of Directors of the Company has unanimously determined that
the Offer and the transactions contemplated by the Merger Agreement (defined
below) are fair to, and in the best interests of, the Stockholders of the
Company, has unanimously approved the Offer and the transactions contemplated
by the Merger
Agreement, and unanimously recommends that the Stockholders of the Company
accept the Offer and tender their Shares.
Pursuant to the Merger Agreement, the Company has represented to
Computer Associates that Lazard Freres & Co. LLC ("Lazard Freres"), the
Company's financial advisor, has delivered to the Company's Board of
Directors its written opinion to the effect that the $30.50 per Share to be
paid in the Offer and the
Merger is fair to the holders of the Shares from a financial point of view.
The opinion of Lazard Freres is set forth in
full in the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), being mailed to Stockholders with this Offer
to Purchase. Stockholders are urged to read this opinion in its entirety.
The Offer is conditioned upon, among other things, (1) there being
validly tendered by the Expiration Date (defined below) and not withdrawn a
number of Shares which, together with the Shares then owned by Computer
Associates and Merger Subsidiary, would represent at least a majority of the
total number of outstanding Shares, assuming the exercise of all outstanding
options, rights and convertible securities (if any) and the issuance of all
Shares that the Company is obligated to issue (such total number of
outstanding Shares being hereinafter referred to as the "Fully Diluted
Shares") (the "Minimum Condition") and (2) the expiration or termination of
the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"). See Section 15, which sets forth in full the conditions to the Offer.
<PAGE> 2
The Company has represented to Computer Associates that, as of October
7, 1996, there were 37,711,424 Shares issued and outstanding, and 5,003,136
Shares reserved for issuance upon the exercise of stock options outstanding
under various employee and director stock option plans. Based upon the
foregoing, as of October 7, 1996, there were approximately 42,714,560 Shares
outstanding on a fully diluted basis. Neither Computer Associates nor Merger
Subsidiary owns any Shares. Accordingly, Computer Associates believes that
the Minimum Condition would be satisfied (based on the foregoing
assumptions) if approximately 21,357,281 Shares are validly tendered
pursuant to the Offer and not withdrawn.
The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of October 7, 1996 (the "Merger Agreement"), among the
Company, Computer Associates and Merger Subsidiary, which has been
unanimously approved by the Company's Board of Directors. The Merger
Agreement provides, among other things, that, after consummation of the
Offer, and upon the later of (i) November 30, 1996, provided that as of such
date the conditions to the Merger set forth in the Merger Agreement shall be
fulfilled or waived and (ii) the first business day on which such conditions
to the Merger shall be fulfilled or waived, Merger Subsidiary will be merged
into the Company (the "Merger"), with the
Company continuing as the surviving corporation (the "Surviving
Corporation"). Pursuant to the Merger Agreement, at the effective time of
the Merger (the "Effective Time"), each outstanding Share (other than Shares
owned by Computer Associates, Merger Subsidiary or any subsidiary of either
of them or held by the Company as treasury stock (which shall be canceled)
or by Stockholders exercising appraisal rights under Delaware Law (defined
below)) will be converted into the right to
receive $30.50 in cash or any higher price paid for each Share in the Offer,
without interest. If the Minimum Condition is satisfied and Merger
Subsidiary purchases Shares pursuant to the Offer, Merger Subsidiary will
have the power to approve the Merger without the affirmative vote of any
other Stockholder. In the event that Merger Subsidiary owns 90% or more of
the Shares then outstanding, the "short-form" merger provisions of the
Delaware General Corporation Law ("Delaware Law") would permit the Merger to
occur without a meeting or a vote of the Stockholders. See Section 11.
Pursuant to the Merger Agreement, at the Effective Time, all
outstanding stock options under the Company's various stock option plans
shall by virtue of the Merger become fully exercisable and vested and be
assumed by Computer Associates. See Section 11.
In connection with the execution of the Merger Agreement, the Company
amended its Rights Agreement, dated as of April 15, 1996, as amended (the
"Rights Agreement"), between the Company and Continental Stock Transfer &
Trust Company, as Rights Agent, to make it and the Preferred Share Purchase
Rights issued thereunder (the "Rights") inapplicable to the Offer and the
Merger. See Section 11.
Upon acceptance for payment by Merger Subsidiary of such number of
Shares which satisfies the Minimum Condition, Computer Associates is
entitled, pursuant to the Merger Agreement, to designate the number of
directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Company's Board of Directors and (ii) the percentage that the number of
Shares owned by Computer Associates or Merger Subsidiary (including Shares
accepted for payment) bears to the total
number of Shares outstanding, and the Company shall take all necessary action
to cause Computer Associates' designees to be elected or
<PAGE> 3
appointed to the Company's Board of Directors; provided that, prior to the
Effective Time, the Company's Board of Directors shall always have one member
who is neither a designee nor an affiliate of Computer Associates or Merger
Subsidiary nor an employee of the Company (an "Independent Director"). No
action proposed to be taken by the Company to amend or terminate the Merger
Agreement or waive any action by Computer Associates or Merger Subsidiary
shall be effective without the approval of the Independent Director.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer.
Upon the terms and subject to the conditions set forth in the
Offer, Merger Subsidiary will accept for payment and purchase, at the time
and in the manner set forth in Section 2, all Shares that are validly
tendered by the Expiration Date and not withdrawn as provided in Section 4.
Unless and until certificates representing Rights ("Rights Certificates") are
issued, a tender of Shares pursuant to the Offer will constitute a tender of
associated Rights evidenced by the certificates for such Shares. The term
"Expiration Date" shall mean 12:00 Midnight,
New York City time, on Friday, November 8, 1996, unless Merger
Subsidiary shall have extended the period of time for which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by Merger Subsidiary, shall
expire.
The Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Condition and expiration or termination
of the waiting period applicable to Merger Subsidiary's acquisition of Shares
pursuant to the Offer under the HSR Act. If any such condition is not
satisfied, Merger Subsidiary may, except as otherwise described below, (i)
terminate the Offer and return all tendered Shares to tendering Stockholders,
(ii) extend the Offer and, subject to withdrawal rights as set forth in
Section 4, retain all such Shares until the expiration of the Offer as so
extended, (iii) waive such condition (except the Minimum Condition) and,
subject to any requirement to extend the period of time during which the
Offer is open,
purchase all Shares validly tendered by the Expiration Date and not withdrawn
or (iv) delay acceptance for payment or payment for Shares, subject to
applicable law, until satisfaction or waiver of the conditions to the Offer.
Notwithstanding the foregoing, but subject to Computer Associates' or the
Company's ability to terminate the Merger Agreement under certain
circumstances (described in Section 11 below), if the applicable waiting
period under the HSR Act shall not have expired or been terminated as of the
date the Offer would otherwise have expired, Merger Subsidiary has agreed,
pursuant to the Merger Agreement, to extend the Offer from time to time until
the earlier of (x) the date that is 30 days after the first scheduled
Expiration Date and (y) the
date that such waiting period has expired or been terminated.
For a description of Merger Subsidiary's right to extend the period of time
during which the Offer is open and to amend, delay or terminate the Offer,
see Section 14. Merger Subsidiary acknowledges that Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
Merger Subsidiary to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer.
<PAGE> 4
Pursuant to the Merger Agreement, Computer Associates and Merger
Subsidiary expressly reserve the right to waive any of the conditions to the
Offer and to make any change in the terms or conditions of the Offer;
provided that, without the written consent of the Company, no change may be
made which changes the form of consideration to be paid in the Offer,
decreases the price per Share or the number of Shares being sought in the
Offer, imposes conditions to the Offer in addition to those expressly set
forth in the Merger Agreement, changes or waives the
Minimum Condition, extends the Offer (except as set forth in the Merger
Agreement) or makes any other change to any condition to the Offer set forth
in the Merger Agreement which is adverse to the holders of Shares.
Any extension, delay in payment, amendment or termination of the Offer
will be followed as promptly as practicable by public announcement thereof,
such announcement in the case of an extension to be made no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which Merger
Subsidiary may choose to make any public announcement, subject to applicable
law (including Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act which require that material changes be promptly
disseminated to stockholders in a manner reasonably designed to inform them
of such changes), Merger Subsidiary shall have no obligation except as
otherwise required by applicable law) to publicly advertise or otherwise
communicate any such public announcement other than by issuing a release to
the Dow Jones News Service.
Subject to the Merger Agreement, if Merger Subsidiary makes any
material change in the terms of the Offer or the information concerning the
Offer, or waives any condition to the Offer that results in a material change
to the circumstances of the Offer, Merger Subsidiary will disseminate
additional tender offer materials and extend the Offer to the extent required
to comply with Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act.
The Securities and Exchange Commission (the "Commission") has interpreted
such rules to prescribe that the minimum
period during which an offer must remain open following material changes in
the terms of the offer or information concerning the offer, other than a
change in price or a change in percentage of securities sought, will depend
upon the facts and circumstances, including the relative materiality of the
terms or information changed. With respect to a change in price or a change
in the percentage of securities sought, a minimum period of ten business days
may be required to allow for adequate dissemination to stockholders and
investor response. As used in this Offer to Purchase, "business day" means
any day other than a Saturday, Sunday or a federal holiday and shall consist
of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
The Company has provided Merger Subsidiary with the Company's
stockholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Shares and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the stockholder list or, if applicable,
who are listed as participants in a clearing agency's security position
listing for subsequent transmittal to beneficial owners of Shares.
<PAGE> 5
2. Acceptance for Payment and Payment.
Subject to the terms of the Offer and the satisfaction (or waiver to the
extent permitted by the Merger Agreement) of all the conditions to the
Offer, Merger Subsidiary shall accept for payment all Shares validly
tendered and not withdrawn pursuant to the Offer as soon as practicable
after the expiration of the Offer and shall pay for all such shares promptly
after acceptance; provided that Merger Subsidiary may extend the Offer if,
at the scheduled expiration date of the Offer or any extension thereof any
of the conditions to the Offer shall not have been
satisfied, until such time as such conditions are satisfied or
waived, and Merger Subsidiary may extend the Offer for a further period of
time of not more than 20 business days to meet the objective (which is not
a condition to the Offer) that there shall be validly tendered prior to the
Expiration Date (as so extended) and not withdrawn a number of Shares, which,
together with Shares then owned by Computer Associates and Merger Subsidiary,
represents at least 90% of the Fully Diluted
Shares. For a description of Merger Subsidiary's right to terminate the
Offer (subject to the terms of the Merger Agreement) and not accept for
payment or pay for Shares or to delay acceptance for payment or payment for
Shares, see Section 14.
For purposes of the Offer, Merger Subsidiary shall be deemed to have
accepted for payment tendered Shares when, as and if Merger Subsidiary gives
oral or written notice to the Depositary of its acceptance of the tenders
of such Shares. In all cases, upon the terms and subject to the conditions
of the Offer, payment for Shares accepted for payment pursuant to the Offer
will be made by deposit of the purchase price with the Depositary, which
will act as agent for the tendering Stockholders for the purpose of receiving
payments from Merger
Subsidiary and transmitting such payments to tendering Stockholders.
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or of a confirmation of a book-entry transfer
(a "Book-Entry Confirmation") of such Shares into the Depositary's account
at one of the Book-Entry Transfer Facilities (defined in Section 3)), (ii)
a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) or an Agent's Message
(defined below) in connection with a book-entry transfer and (iii) any other
required documents. Accordingly, payment may be made to tendering
Stockholders at different times if delivery of the Shares and other required
documents occur at different times. For a description of the procedure for
tendering Shares pursuant to the Offer, see Section 3. Under no
circumstances will interest be paid by Merger Subsidiary on the consideration
paid for Shares pursuant to the Offer, regardless of any delay in making such
payment.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of
a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares which are the subject of
such Book-Entry Confirmation, that such participant has received and agrees
to be bound by the terms of the Letter of Transmittal and that Merger
Subsidiary may enforce such agreement against such participant.
<PAGE> 6
If Merger Subsidiary increases the consideration to be paid for
Shares pursuant to the Offer, Merger Subsidiary will pay such increased
consideration for all Shares purchased pursuant to the Offer.
Merger Subsidiary reserves the right to transfer or assign, in whole
or from time to time in part, to one or more of Computer Associates or any
of its wholly owned subsidiaries, the right to purchase Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Merger Subsidiary of its obligations under the Offer or prejudice the rights
of tendering Stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer, such Shares will be
credited to an account maintained at one of the Book-Entry Transfer
Facilities), without expense to the tendering Stockholder, as promptly as
practicable following the expiration or termination of the Offer.
3. Procedure for Tendering Shares.
To tender Shares pursuant to the Offer, either (i) a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof), or an Agent's Message in connection with a book-entry transfer of
such Shares, and any other documents required by the Letter of Transmittal
must be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase and either (a) certificates for such
Shares to be tendered must be received by the Depositary at one of such
addresses or (b) such Shares must be delivered
pursuant to the procedures for book-entry transfer described below (and a
Book-Entry Confirmation received by the Depositary), in each case by the
Expiration Date, or (ii) the guaranteed delivery procedure described below
must be complied with.
The Depositary will establish an account with respect to the Shares
at The Depository Trust Company and Philadelphia Depository Trust Company
(collectively referred to as the "Book-Entry Transfer Facilities") for
purposes of the Offer within two business days after the date of this Offer
to Purchase, and any financial institution that is a participant in the
system of any Book-Entry Transfer Facility may make delivery of Shares by
causing such Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of such Book-Entry
Transfer Facility. However, although delivery of Shares may be effected
through book-entry transfer, the
Letter of Transmittal (or facsimile thereof), or an Agent's Message in
connection with such book-entry transfer, and any other required documents
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase by the Expiration Date, or
the guaranteed delivery procedure described below must be complied with.
Delivery of the Letter of Transmittal and any other required documents to
a Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
<PAGE> 7
Except as otherwise provided below, all signatures on a Letter of
Transmittal must be guaranteed by a bank, broker, dealer, credit union,
savings association or other entity that is a member of a recognized
Medallion Program approved by The Securities Transfer Association, Inc. (an
"Eligible Institution"). Signatures on a Letter of Transmittal need
not be guaranteed (i) if the Letter of Transmittal is signed by the
registered holder of the Shares tendered therewith and such holder has
not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or
(ii) if such Shares are tendered for the account of an Eligible
Institution. See Instructions 1 and 5 of the Letter of Transmittal.
If the certificates representing Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if
payment is to be made to, or certificates for unpurchased Shares are to
be issued or returned to, a person other than the registered holder,
then the tendered certificates must be endorsed or accompanied by
appropriate stock powers, signed exactly as the name or names of the
registered holder or holders appear on the certificates, with the
signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions
1 and 5 of the Letter of Transmittal.
If the certificates representing Shares are forwarded separately
to the Depositary, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) must accompany each such delivery.
If a Stockholder desires to tender Shares pursuant to the Offer
and cannot deliver such Shares and all other required documents to the
Depositary by the Expiration Date, or such Stockholder cannot complete
the procedure for delivery by book-entry transfer on a timely basis,
such Shares may nevertheless be tendered if all of the following
conditions are met:
(i) such tender is made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by Merger
Subsidiary, is received by the Depositary (as provided below) by the
Expiration Date; and
(iii) the certificates for all physically delivered Shares
(or a Book-Entry Confirmation of all Shares delivered
electronically), as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three trading days on the American Stock Exchange, Inc. (the
"AMEX") after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in
such Notice.
<PAGE> 8
The method of delivery of Shares and all other required documents,
including delivery through any Book-Entry Transfer Facility, is at the
option and risk of the tendering Stockholder, and the delivery will be
deemed made only when actually received by the Depositary. If
certificates for Shares are sent by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of the certificates for such Shares, or a Book-Entry
Confirmation of the delivery of such Shares, and the Letter of
Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal.
Under the federal income tax laws, the Depositary will be required
to withhold 31% of the amount of any payments made to certain
Stockholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering Stockholder must provide the Depositary with
such Stockholder's correct taxpayer identification number and certify
that such Stockholder is not subject to such backup withholding by
completing the Substitute Form W-9 included in the Letter of
Transmittal.
By executing a Letter of Transmittal, a tendering Stockholder
irrevocably appoints designees of Merger Subsidiary as such
Stockholder's proxies in the manner set forth in the Letter of
Transmittal to the full extent of such Stockholder's rights with respect
to the Shares tendered by such Stockholder and accepted for payment by
Merger Subsidiary (and any and all other Shares or other securities
issued or issuable in respect of such Shares on or after October 7,
1996). All such proxies shall be considered coupled with an interest in
the tendered Shares. Such appointment is effective only upon the
acceptance for payment of such Shares by Merger Subsidiary. Upon such
acceptance for payment, all prior proxies and consents granted by such
Stockholder with respect to such Shares and other securities will,
without further action, be revoked, and no subsequent proxies may be
given nor subsequent written consents executed by such Stockholder (and,
if given or executed, will not be deemed to be effective). Such
designees of Merger Subsidiary will be empowered to exercise all voting
and other rights of such Stockholder as they, in their sole discretion,
may deem proper at any annual, special or adjourned meeting of the
Company's stockholders, by written consent or otherwise. Merger
Subsidiary reserves the right to require that, in order for Shares
to be validly tendered, immediately upon Merger Subsidiary's acceptance
for payment of such Shares, Merger Subsidiary is able to exercise full
voting rights with respect to such Shares and other securities
(including voting at any meeting of stockholders then scheduled or
acting by written consent without a meeting).
All questions as to the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by Merger Subsidiary, in its
sole discretion, which determination shall be final and binding on all
parties. Merger Subsidiary reserves the absolute right to reject any or
all tenders of Shares determined by it not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of
Merger Subsidiary's counsel, be unlawful. Merger Subsidiary also
reserves the absolute right to waive any defect or irregularity in any
tender of Shares, whether or not similar defects or irregularities are
<PAGE> 9
waived in the case of any other tender of Shares. None of Merger
Subsidiary, Computer Associates, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any
defect or irregularity in tenders or incur any liability for failure to
give any such notification. Merger Subsidiary's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal
and the instructions thereto) will be final and binding.
The acceptance for payment of Shares tendered pursuant to any one
of the procedures described above will constitute an agreement between
the tendering Stockholder and Merger Subsidiary upon the terms and
subject to the conditions of the Offer.
4. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer may be withdrawn at
any time prior to the Expiration Date. Thereafter, such tenders are
irrevocable, except that they may be withdrawn on or after December 9,
1996 unless theretofore accepted for payment as provided in this Offer
to Purchase. If Merger Subsidiary extends the period of time during
which the Offer is open, is delayed in accepting for payment or paying
for Shares or is unable to accept for payment or pay for Shares pursuant
to the Offer for any reason, then, without prejudice to Merger
Subsidiary's rights under the Offer, the Depositary may, on behalf of
Merger Subsidiary, retain all Shares tendered, and such Shares may not
be withdrawn except as otherwise provided in this Section 4.
For a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase and must specify the name of the person who tendered
the Shares to be withdrawn and the number of Shares to be withdrawn. If
the Shares to be withdrawn have been delivered to the Depositary, a
signed notice of withdrawal with (except in the case of Shares tendered
by an Eligible Institution) signatures guaranteed by an Eligible
Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by
delivery of certificates, the name of the registered holder (if
different from that of the tendering Stockholder) and the serial numbers
shown on the particular certificates evidencing the Shares to be
withdrawn or, in the case of Shares tendered by book-entry
transfer, the name and number of the account at one of the Book-Entry
Transfer Facilities to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by Merger
Subsidiary, in its sole discretion, which determination shall be final
and binding. None of Merger Subsidiary, Computer Associates, the
Depositary, the Information Agent or any other person will be under any
duty to give notification of any defect or irregularity in any notice of
withdrawal or incur any liability for failure to give any such
notification.
<PAGE> 10
5. Certain Tax Consequences.
This summary sets forth material anticipated Federal income tax
consequences to Stockholders of their disposition of Shares pursuant to
the Offer and the Merger. The summary is based on the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as currently in effect. Such laws or
interpretations may differ on the date of the consummation of the Offer
or at the Effective Time, and relevant facts may also differ. The
summary does not address any foreign, state or local tax consequences,
nor does it address estate or gift tax considerations. Neither the
consummation of the Offer nor the effectiveness of the Merger is
conditioned upon the receipt of any ruling from the Internal Revenue
Service or any opinion of counsel as to tax matters.
This summary is for general information only. The tax treatment
of each Stockholder will depend in part upon his particular situation.
Special tax consequences not described below may be applicable to
particular classes of taxpayers, including financial institutions,
pension funds, mutual funds, broker-dealers, persons who are not
citizens or residents of the United States or who are foreign
corporations, foreign partnerships or foreign estates or trusts,
Stockholders who own actually or constructively (under certain
attribution rules contained in the Code) 5% or more of the Shares,
Stockholders who acquired their Shares through the exercise of an
employee stock option or otherwise as compensation, and persons who
receive payments in respect of options to acquire Shares. All
Stockholders should consult with their own tax advisers as to the
particular tax consequences of the Offer and the Merger to them,
including the applicability and effect of any state, local and foreign
tax laws.
Sales of Shares by Stockholders pursuant to the Offer (or the
Merger) will be taxable transactions for Federal income tax purposes
and may also be taxable transactions under applicable state, local,
foreign and other tax laws.
In general, a Stockholder will recognize gain or loss equal to the
difference between the tax basis of such Stockholder's Shares and the
amount of cash received in exchange for the Shares. This gain or loss
will be capital gain or loss if the Shares are capital assets in the
hands of the Stockholder and will be long-term capital gain or loss if
the holding period for the Shares is more than 12 months as of the date
of the sale of such Shares.
<PAGE> 11
6. Price Range of Shares; Dividends.
The Shares are traded on the AMEX. The following table sets forth
for the periods indicated the high and low closing prices per Share as
reported by the AMEX.
<TABLE>
<CAPTION>
High Low
<S> <C> <C>
Fiscal 1995: First quarter ended September 30,1994 $ 13.38 $7.75
Second quarter ended December 31,1994 13.88 9.13
Third quarter ended March 31, 1995 17.75 13.25
Fourth quarter ended June 30, 1995 20.00 12.38
Fiscal 1996: First quarter ended September 30,1995 22.00 16.63
Second quarter ended December 31,1995 27.75 16.88
Third quarter ended March 31, 1996 26.38 14.13
Fourth quarter ended June 30, 1996 24.25 15.00
Fiscal 1997: First quarter ended September 30, 1996 22.50 14.38
</TABLE>
On October 4, 1996, the last day of trading prior to the issuance by
the Company and Computer Associates of a joint press release announcing the
execution of the Merger Agreement, the closing price per Share on the AMEX
was $22.38. On October 9, 1996, the second to last day of trading prior to
the commencement of the Offer, the closing price per Share on the AMEX was
$30.13. Stockholders are urged to obtain current market quotations for the
Shares.
As reported by the Company, the Company has not paid any dividends on
its Common Stock for the periods presented above. As of October 9, 1996,
there were approximately 1,000 holders of record of outstanding Shares.
7. Certain Information Concerning the Company.
The Company is a Delaware corporation with its principal executive
offices located at 3 Expressway Plaza, Roslyn Heights, New York 11577.
According to the Company's Annual Report on Form 10-K for its
fiscal year ended June 30, 1996 (the "Company 10-K"), the Company is
engaged in the development, sale, and support of software products for
use in desktop and networked Local Area Network and Wide Area Network
applications. According to the Company 10-K, the Company's strategy is
to provide storage, management, security and communications software for
desktops and distributed enterprise networks.
The following selected consolidated financial data relating to the
Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company 10-K. More comprehensive
financial information is included in the Company 10-K and the other
documents filed by the Company with the Commission, and the financial
data set forth below is qualified in its entirety by reference to such
reports and other documents including the financial statements (and any
related notes) contained therein. Such reports and other documents may
be examined and copies may be obtained from the offices of the
Commission in the manner set forth below.
<PAGE> 12
<TABLE>
<CAPTION>
CHEYENNE SOFTWARE, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data)
Income Statement Fiscal Year Ended
Data June 30,
-------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Total revenues $174,096 $127,927 $ 97,737
Total costs and
expenses 136,439 90,121 52,435
Operating income 37,657 37,806 45,302
Net income 27,228 38,504 32,538
Income per share $0.70 $0.97 $0.82
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Data At June 30,
-------------------
1996 1995
<S> <C> <C>
Working capital $ 86,822 $ 57,786
Total assets 176,472 129,394
Total liabilities 25,950 13,065
Total stockholders'
equity 150,522 116,310
</TABLE>
The information concerning the Company contained herein has been
taken from or is based upon reports and other documents on file with the
Commission or otherwise publicly available. Although Computer
Associates and Merger Subsidiary do not have any knowledge that would
indicate that any statements contained herein based upon such reports
and documents are untrue, Computer Associates and Merger Subsidiary do
not take any responsibility for the accuracy or completeness of the
information contained in such reports and other documents or for any
failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information but that are
unknown to Computer Associates or Merger Subsidiary.
The Company is subject to the informational requirements of the
Exchange Act and files periodic reports, proxy statements and other
information with the Commission relating to its business, financial
condition and other matters. The Company is required to disclose in
such proxy statements certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration,
stock options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions
with the Company. Such reports, proxy statements and other information
may be inspected at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and should also be available for inspection and copying at the
<PAGE> 13
regional offices of the Commission in New York (Seven World Trade
Center, New York, New York 10048) and Chicago (500 West Madison Street
(Suite 1400), Chicago, Illinois 60661). Copies of such material can
also be obtained from the Public Reference Section of the Commission in
Washington, D.C. 20549, at prescribed rates. The Commission maintains
a Web site on the Internet that contains reports, proxy statements and
other information (http://www.sec.gov).
8. Certain Information Concerning Merger Subsidiary and Computer
Associates.
Merger Subsidiary, a Delaware corporation and a wholly owned
subsidiary of Computer Associates, was organized to acquire the Company
and has not conducted any unrelated activities since its organization on
October 4, 1996.
Computer Associates, a Delaware corporation, is engaged in the
design, development, marketing and support of standardized computer
software products for use with a broad range of desktop, midrange and
mainframe computers from many different hardware manufacturers. Its
products include a broad range of standardized systems management
software (which enables customers to use their total data processing
resources more efficiently), information management software (which is
generally used in connection with database management systems and
applications generators), business management software (which is used in
financial, human resource, manufacturing, distribution and banking
systems applications), and desktop computer software.
The principal executive offices of Computer Associates and Merger
Subsidiary are located at One Computer Associates Plaza, Islandia, New
York 11788. The name, business address, principal occupation or
employment and citizenship of each director and executive officer of
Merger Subsidiary and Computer Associates are set forth in Schedule I
hereto.
The following selected consolidated financial data relating to
Computer Associates and its subsidiaries has been taken or derived from
the audited financial statements contained in Computer Associates'
Annual Report on Form 10-K for the year ended March 31, 1996, and the
unaudited financial statements contained in Computer Associates'
Quarterly Report on Form 10-Q for the three months ended June 30, 1996.
The information set forth below gives effect to the acquisitions of
Legent Corporation in fiscal 1996 and The ASK Group, Inc. in fiscal
1994. More comprehensive financial information is included in such
Annual Report, such Quarterly Report and the other documents filed by
Computer Associates with the Commission, and the financial data set
forth below is qualified in its entirety by reference to such reports
and other documents including the financial statements (and any related
notes) contained therein. Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission
in the same manner as set forth with respect to the Company in Section
7.
<PAGE> 14
<TABLE>
<CAPTION>
COMPUTER ASSOCIATES INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data)
Income Statement Data Fiscal Year Ended Three Months Ended
March 31, June 30,
-------------------------- ------------------
(Unaudited)
1996 1995 1994 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenue $3,504,629 $2,622,992 $2,148,470 $792,099 $577,452
(Loss) income before
income taxes (100,611) 696,619 626,972 190,138 140,554
Net(loss)income (56,354) 431,904 401,262 119,787 88,549
Net(loss)income per
common share(1) $(0.15) $1.14 $1.04 $0.32 $0.23
Dividends declared per
common share(1) $0.09 $0.08 $0.06 $0.05 $0.04
</TABLE>
<TABLE>
Balance Sheet Data At March 31, At June 30, 1996
------------------------ ----------------
1996 1995 (Unaudited)
---- ----
<S> <C> <C> <C>
Working capital $ (53,757) $ 299,673 $ (132,567)
Total assets 5,015,966 3,269,428 4,876,939
Long-term debt (less
current maturities) 944,506 50,489 845,804
Stockholders' equity 1,481,662 1,578,125 1,592,705
<FN>
__________
(1) Adjusted to reflect three-for-two stock splits effective August
12, 1995 and June 19, 1996, respectively.
</TABLE>
Computer Associates is subject to the informational requirements
of the Exchange Act and files periodic reports, proxy statements and
other information with the Commission relating to its business,
financial condition and other matters. Computer Associates is required
to disclose in such proxy statements certain information, as of
particular dates, concerning its directors and officers, their
remuneration, stock options granted to them, the principal holders of
its securities and any material interests of such persons in
transactions with Computer Associates. Such reports, proxy statements
and other information should be available for inspection and copying at
the offices of the Commission in the same manner as set forth with
respect to the Company in Section 7.
<PAGE> 15
Neither Computer Associates, Merger Subsidiary nor, to their
knowledge, any of the persons listed in Schedule I or any associate or
majority-owned subsidiary of any of the foregoing, beneficially owns or
has the right to acquire any equity securities of the Company, nor has
Computer Associates, Merger Subsidiary or, to their knowledge, any of
the persons or entities referred to above or any of the respective
executive officers, directors or subsidiaries of any of the foregoing,
effected any transaction in the equity securities of the Company during
the past 60 days.
Except as described in this Offer to Purchase, neither Computer
Associates, Merger Subsidiary nor, to their knowledge, any of the
persons listed in Schedule I, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Company, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies.
Except as described in this Offer to Purchase, there have been no
contracts, negotiations or transactions between Computer Associates,
Merger Subsidiary or any other subsidiary of Computer Associates or, to
their knowledge, any of the persons listed in Schedule I, on the one
hand, and the Company or its affiliates, on the other hand, concerning
a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets.
Except as described in this Offer to Purchase, none of Computer
Associates, Merger Subsidiary, any other subsidiary of Computer
Associates, or, to their knowledge, any of the persons listed in
Schedule I, has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that
would require disclosure pursuant to the rules and regulations of the
Commission.
9. Source and Amount of Funds.
The total amount of funds required by Merger Subsidiary to
purchase Shares pursuant to the Offer and the Merger and to pay related
fees and expenses is estimated to be approximately $1.2 billion. Merger
Subsidiary has not conditioned the Offer on obtaining financing. Merger
Subsidiary plans to obtain all funds needed for the Offer and the Merger
from Computer Associates by means of a capital contribution, loan or a
combination thereof. Computer Associates will obtain such funds (i)
from its general corporate funds and (ii) by borrowing under its
existing $1,300,000,000 Amended and Restated Credit Agreement, dated as
of July 3, 1996 (the "$1.3 Billion Credit Agreement"), and $700,000,000
Credit Agreement, dated as of July 3, 1996 (the "$700 Million Credit
Agreement") (together, the "Credit Agreements"), in each case among
Computer Associates, as Borrower, the banks and other financial
institutions party thereto, as Banks (the "Banks"), and Credit Suisse,
as Agent. The $1.3 Billion Credit Agreement provides for borrowings of
up to an aggregate of $1.3 billion of loans, in each case on an
unsecured basis and at interest rates (at Computer Associates' option)
of (i) the London inter bank offered rate plus a margin of 0.175% (as
adjusted from time to time based upon the financial performance of
Computer Associates) or (ii) the higher of (x) the Credit Suisse base
lending rate and (y) the federal funds rate plus a margin of 0.50%. The
$700 Million Credit Agreement provides for borrowings of up to an
aggregate of $700 million of loans, in each case on an unsecured basis
<PAGE> 16
and at interest rates (at Computer Associates' option)
of (i) the London inter bank offered rate plus a margin of .070% (as
adjusted from time to time based upon the financial performance of
Computer Associates) or (ii) the higher of (x) the Credit Suisse base
lending rate and (y) the federal funds rate plus a margin of 0.50%.
Loans under the Credit Agreements are repayable (with a right to borrow)
on the last of each interest period applicable thereto, with full and
final repayment due, in the case of the $1.3 Billion Credit Agreement,
on July 2, 2001 and, in the case of the $700 Million Credit Agreement,
on July 9, 1997 (unless, in the case of the $700 Million Credit
Agreement, extended pursuant to annual evergreen provisions by mutual
agreement between Computer Associates and the Banks). The Credit
Agreements include customary covenants by Computer Associates, including
financial covenants.
As of October 8, 1996, Computer Associates had (i) approximately
$200 million in cash, cash equivalents and marketable securities and
(ii) availability to borrow up to an additional $1.13 billion of loans
under the Credit Agreements.
The foregoing summary of the source and amount of funds is
qualified in its entirety by reference to the text of the Credit
Agreements, copies of which are filed as exhibits to Computer
Associates' Quarterly Report on Form 10-Q for the three months ended
June 30, 1996 filed with the Commission and are incorporated in this
Offer to Purchase by reference and may be inspected in the same manner
as set forth with respect to the Company in Section 7.
Although no definitive plan or arrangement for repayment of
borrowings under the Credit Agreements have been made, Computer
Associates anticipates such borrowings will be repaid with internally
generated funds (including, if the Merger is accomplished, those of the
Company) and from other sources which may include the proceeds of future
bank refinancings or the public or private sale of debt or equity
securities. No decision has been made concerning the method Computer
Associates will use to repay the borrowings under the Credit Agreements.
Such decision will be made based on Computer Associates' review from
time to time of the advisability of particular actions, as well as
prevailing interest rates, financial and other economic conditions and
such other factors as Computer Associates may deem appropriate.
10. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company.
Computer Associates and the Company have various licensing and
development arrangements pursuant to which the Company develops software
to be compatible with certain Computer Associates products, Computer
Associates licenses Company products to sell as part of Computer
Associates product offerings and the Company licenses to sell Computer
Associates products that include Company software. Representatives of
Computer Associates and the Company have met from time to time over the
past several years to discuss the technical and marketing aspects of
these arrangements. As part of those discussions, Charles B. Wang,
Chairman and Chief Executive Officer of Computer Associates, Sanjay
Kumar, President and Chief Operating Officer of Computer Associates, and
ReiJane Huai, Chairman and Chief Executive Officer of the Company, have
met to discuss the existing relationships, synergies of the companies
and ways of expanding the existing relationships.
<PAGE> 17
During May 1996, Mr. Wang and Mr. Kumar discussed with Mr. Huai
the synergies that might result from developing a closer relationship
between the two companies. On June 2, Mr. Huai and Elliot Levine, Chief
Financial Officer of the Company, met at Mr. Kumar s home with Mr. Wang,
Mr. Kumar and Charles P. McWade, Senior Vice President of Computer
Associates, to discuss the synergies of a possible stock-for-stock
business combination in which the Company s shareholders would receive
shares of Computer Associates common stock.
Shortly thereafter, Computer Associates and the Company, together
with their respective counsel, discussed entering into a confidentiality
agreement to permit each party to engage in a due diligence review of
the other party. Mr. Kumar had several discussions with Mr. Huai over
the terms of the confidentiality agreement. Before coming to agreement
on the terms of the confidentiality agreement, the Company and Computer
Associates ceased discussions.
Mr. Kumar had further discussions with Mr. Huai in early July and
again in early August about the possibility of beginning due diligence
and discussing terms of a business combination. At the August meeting
of the Computer Associates Board of Directors, Mr. Kumar discussed
several strategic options for Computer Associates, including a possible
business combination with the Company.
On August 7, 1996, representatives of the parties met, at the
initiation of Computer Associates, and discussed the possibility of a
stock-for-stock transaction. No understanding was reached with respect
to the basic financial terms. Accordingly, the parties determined not
to enter into a confidentiality agreement, exchange information or
engage in further discussions at that time.
On September 27, Mr. Huai was meeting with Mr. Wang on unrelated
business, when the possibility of a combination was again raised. Later
that day, Mr. Kumar asked Mr. Huai for a meeting with him and
representatives of Lazard, Freres & Co. LLC, financial advisors to the
Company, to discuss the steps required to be taken toward discussing a
possible business combination with the Company. On the morning of
September 29, Mr. Kumar met with the Lazard representatives to discuss a
possible transaction between Computer Associates and the Company. Later
that day, Mr. Kumar discussed the possibility of a transaction with Mr.
Huai, and agreed to discuss entering into a confidentiality agreement
and the process to complete a transaction.
On the morning of October 1, Mr. Kumar and Mr. McWade met with Mr.
Huai and the Lazard representatives to discuss the next steps in
exploring a possible business combination. Later that day, Computer
Associates and the Company entered into a confidentiality agreement, and
Computer Associates began a due diligence review of the Company.
Between October 1 and October 5, Computer Associates and the
Company, and their legal and financial advisors, discussed the terms of
a merger agreement. During that time, Computer Associates conducted its
due diligence review in New York City and on Long Island, and Mr. Kumar
had several long and detailed discussions with Mr. Huai on strategic
issues, management and operations and retention of the Company s
employees. On October 4, Mr. Kumar presented the transaction to the
Computer Associates Board as an all cash transaction in a range of
values that Computer Associates believed would be appropriate to
complete a business combination with the Company. The Board unanimously
<PAGE> 18
approved the transaction and authorized Mr. Kumar to proceed to
negotiate a merger agreement, subject to due diligence and final
valuation.
On the morning of October 6, Mr. Kumar met with Mr. Huai, together
with each of their legal advisors and representatives of Lazard, to
discuss certain terms of the merger agreement and valuation. After
reaching an impasse, with Computer Associates offering a price of $30.30
per Share and the Company seeking a higher price, Computer Associates
delivered a letter to Mr. Huai and the Company s Board proposing that
Computer Associates would acquire the Company in a transaction in which
the Company s shareholders would receive $28.50 per share in cash. In
the late afternoon of October 6, the Company s legal counsel advised
Computer Associates that the Company s Board had considered the proposal
and rejected it.
Later in the evening, Mr. Kumar held discussions with
representatives of Lazard and with Mr. Huai on the outstanding issues in
the merger agreement, including valuation. Following those discussions,
Mr. Kumar sent a second letter to Mr. Huai offering to enter into a
merger transaction with the Company in which its shareholders would
receive $30.30 per share in cash. In that letter, Mr. Kumar stated:
This letter will confirm Computer Associates International,
Inc. s offer to enter into a transaction in which Cheyenne s
stockholders would receive in cash $30.30 per share. We only want
to pursue this offer with the full support of your Board of
Directors as well as your management.
As we have discussed in detail during the past week,a merger
of our companies would involve no fundamental changes in Cheyenne,
its business relationships, its management or its employees. We
respect what the management team and you have achieved. Together we
can create a combined enterprise that will offer greater
opportunities for your employees and a broader range of products for
your customers. Importantly, our plans are premised on all of
Cheyenne s employees continuing with the combined company. Because
of our close geographic location, we see a great opportunity for
continuity. We also believe that CA s financial strength, industry
leadership, strong customer base and technological expertise can add
tremendous value for Cheyenne s growth and expansion.
As you know, as of this morning we were in substantial
agreement with respect to the terms and conditions of our proposed
merger agreement. The transaction would be subject, among other
things, to the receipt of regulatory approvals and third-party
consents as well as the completion of all necessary actions to
eliminate the applicability of, or to satisfy, any anti-takeover or
other defensive provisions contained in the corporate statutes or
your company s charter and by-laws. I have discussed our interest
with members of our senior management team and our Board of
Directors, all of whom share my enthusiasm for this transaction.
We are willing to discuss any aspect of the merger with the
Board and its advisors tonight. In the absence of your Board s approval
tonight, we plan to announce prior to the open of the stock
market tomorrow that we made the offer and it was not accepted. We
would prefer to present our offer to your stockholders as the joint
effort of Computer Associates and Cheyenne Software s Board of
Directors and management.
<PAGE> 19
Later that night, Mr. Kumar had discussions with Mr. Huai on the
outstanding issues in the merger agreement and the strategic value of a
business combination. Mr. Kumar also had discussions with
representatives of Lazard about the terms of transaction, timing and
valuation.
Shortly after midnight on October 7, in a meeting with Mr. Huai
and Mr. Levine, Computer Associates increased its offer to $30.50 per
share and came to agreement over the other remaining issues in the
merger agreement. Computer Associates was later advised that the
Company s Board had unanimously approved the offer. Representatives of
the Company and Computer Associates, their legal counsel and
representatives of Lazard then met to complete the merger agreement,
which was signed shortly before the opening of the New York and American
Stock Exchanges on October 7.
11. Purpose of the Offer; Merger Agreement; Appraisal Rights.
The purpose of the Offer is to acquire control of, and the entire
equity interest in, the Company. Following the Offer, Computer
Associates and Merger Subsidiary intend to acquire any remaining equity
interest in the Company not acquired in the Offer by consummating the
Merger.
The Merger Agreement. The following description of the Merger
Agreement is qualified in its entirety by reference to the text of such
agreement, a copy of which is attached as an exhibit to the Schedule
14D-1 of Merger Subsidiary and Computer Associates filed with the
Commission in connection with the Offer (the "Schedule 14D-1") and is
incorporated in this Offer to Purchase by reference and may be inspected
in the same manner as set forth with respect to the Company in Section
7.
The Offer. The Merger Agreement provides for the making of the
Offer. The obligation of Merger Subsidiary to accept for payment or pay
for Shares is subject to the satisfaction of the Minimum Condition and
certain other conditions that are described in Section 15 hereof.
Pursuant to the Merger Agreement, Computer Associates and Merger
Subsidiary expressly reserve the right to waive the conditions to the
Offer and to make any change in the terms or conditions of the Offer;
provided that, without the written consent of the Company, no change may
be made which changes the form of consideration to be paid, decreases
the price per Share or the number of Shares being sought in the Offer,
imposes conditions to the Offer in addition to those set forth in the
Merger Agreement, changes or waives the Minimum Condition, extends the
Offer (except as set forth in the Merger Agreement), or makes any other
change to any condition to the Offer set forth in the Merger Agreement
which is adverse to the holders of Shares.
In addition, subject to Computer Associates' or the Company's
ability to terminate the Merger Agreement under certain circumstances,
if the applicable waiting period under the HSR Act shall not have
expired or been terminated as of the date the Offer would otherwise have
expired, Merger Subsidiary has agreed, pursuant to the Merger Agreement,
to extend the Offer from time to time until the earlier of (x) the date
that is 30 days after the first scheduled Expiration Date and (y) the
date that such waiting period has expired or been terminated.
Consideration to be Paid in the Merger. The Merger Agreement
provides that, following the purchase of Shares pursuant to the Offer
and upon the terms (but subject to the conditions) set forth in the
<PAGE> 20
Merger Agreement, Merger Subsidiary will be merged with and into the
Company (the "Merger"), with the Company continuing as the surviving
corporation (the "Surviving Corporation"). In the Merger, each
outstanding Share not held by Computer Associates, Merger Subsidiary or
any subsidiary of either of them or by the Company as treasury stock
(and other than Shares as to which appraisal rights have been exercised
pursuant to Section 262 of the Delaware Law ("Dissenting Shares")) will
be converted into the right to receive $30.50 in cash or any higher
price paid for each Share in the Offer, without interest. Each share of
common stock of Merger Subsidiary issued and outstanding immediately
prior to the time of the Merger will be converted into and become one
share of common stock of the Surviving Corporation, which will thereupon
become a wholly owned subsidiary of Computer Associates. The Merger
Agreement provides that (i) the closing of the Merger shall take place,
after consummation of the Offer, on the later of (a) November 30, 1996,
provided that as of such date the conditions to the Merger set forth in
the Merger Agreement shall be fulfilled or waived and (b) the first
business day on which all of the conditions to the Merger set forth in
the Merger Agreement shall be fulfilled or waived and (ii) as soon as
practicable following the closing of the Merger, the Company and Merger
Subsidiary will file a certificate of merger with the Secretary of State
of the State of Delaware and make all other filings or recordings
required by Delaware Law in connection with the Merger. The Merger
shall become effective at such time as the certificate of merger is duly
filed with the Secretary of State of the State of Delaware or, with the
consent of the Independent Director referred to below, at such later
time as is specified in the certificate of merger (the "Effective
Time").
Board Representation. The Merger Agreement provides that,
effective upon acceptance for payment by Merger Subsidiary of such
number of Shares which satisfies the Minimum Condition, Computer
Associates shall be entitled to designate the number of directors,
rounded up to the nearest whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors
on the Company's Board of Directors and (ii) the percentage that the
number of Shares owned by Computer Associates or Merger Subsidiary
(including Shares accepted for payment) bears to the total number of
Shares outstanding. The Company has agreed that it will take all action
necessary to cause Computer Associates' designees to be elected or
appointed to the Company's Board of Directors, including increasing the
number of directors or seeking and accepting resignations of incumbent
directors or both; provided that, prior to the Effective Time, the
Company's Board of Directors shall always have one member who is neither
a designee nor an affiliate of Computer Associates or Merger Subsidiary
nor an employee of the Company (an "Independent Director"). No action
proposed to be taken by the Company to amend or terminate the Merger
Agreement or waive any action by Computer Associates or Merger
Subsidiary shall be effective without the approval of the
Independent Director.
The Merger Agreement provides that, from and after the Effective
Time, the directors and officers of Merger Subsidiary at the Effective
Time will be the initial directors and officers of the Surviving
Corporation, each to hold office until his or her respective successors
are duly elected and qualified. Pursuant to the Merger Agreement, the
Certificate of Incorporation (except for a change in the name of the
corporation) and the By-Laws of Merger Subsidiary, as in effect
immediately prior to the Effective Time, will be the Certificate of
Incorporation and By-Laws of the Surviving Corporation.
<PAGE> 21
Stockholder Meeting. The Merger Agreement provides that, if
required by applicable law, the Company will call a meeting of its
Stockholders to be held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of the Merger Agreement
and the Merger. Under the Merger Agreement, at any such meeting,
Computer Associates has agreed to make a quorum and to vote all Shares
acquired in the Offer or otherwise beneficially owned by it in favor of
adoption of the Merger Agreement.
If the Minimum Condition is satisfied pursuant to the Offer,
Merger Subsidiary will hold at least a majority of the outstanding
Shares on a Fully Diluted Basis and will be able to assure that the
requisite number of affirmative votes in favor of approval and adoption
of the Merger Agreement will be received, even if no other Stockholder
votes in favor thereof. If Merger Subsidiary obtains at least 90% of
the outstanding Shares, it may effect the Merger without any notice to
and without the authorization of the Stockholders of the Company
pursuant to the "short-form" merger provisions of Delaware Law.
Representations and Warranties. The Merger Agreement contains
various representations and warranties of the parties thereto. These
include representations and warranties of the Company with respect to
corporate existence and power, corporate authorization, governmental
authorization, non-contravention, capitalization, subsidiaries,
Commission filings, financial statements, absence of certain changes,
undisclosed liabilities, litigation, taxes, employee benefits, brokers,
compliance with laws, contracts and debt instruments, intellectual
property and technology and other matters.
Computer Associates and Merger Subsidiary have also made certain
representations and warranties with respect to corporate existence and
power, corporate authorization, governmental authorization, non-
contravention, brokers, financing and other matters.
Conduct of Business Pending the Merger. The Company has agreed
that, during the period from the date of the Merger Agreement to the
Effective Time, the Company will, and will cause its subsidiaries to,
carry on their respective businesses in the ordinary course in
substantially the same manner as theretofore conducted and, to the
extent consistent therewith, use all reasonable efforts to preserve
intact their current business organizations, keep available the services
of their current officers and employees and preserve their relationships
with customers, suppliers, licensors, licensees, distributors and others
having business dealings with them. The Company has further agreed
that, during the period from the date of the Merger Agreement to the
Effective Time, the Company will not, and will not permit any of its
subsidiaries to, without the prior written approval of Computer
Associates, (i)(a) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by any direct or indirect wholly owned
subsidiary of the Company to its parent, (b) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (c) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (other than in
connection with the exercise of outstanding company stock options); (ii)
issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities (other than the issuance of
<PAGE> 22
Shares upon the exercise of company stock options outstanding on the
date of the Merger Agreement in accordance with their terms on such
date); (iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents; (iv) (a) mortgage or
otherwise encumber or subject to any lien any of the Company's
intellectual property or any other material properties or assets, (b)
except in the ordinary course of business consistent with past practice
and pursuant to existing contracts or commitments, sell,lease, transfer
or otherwise dispose of any of the Company's intellectual property or
any other material properties or assets or (c) except in the ordinary
course of business consistent with past practice or pursuant to existing
contracts or commitments, license any of the Company's intellectual
property; (v) make or agree to make any new capital expenditures
individually in excess of $250,000; (vi) make any material tax election
(unless required by law) or settle or compromise any material income tax
liability; (vii) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice and in
accordance with their terms, of (i) liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the
documents filed with the Commission or (ii) liabilities incurred in the
ordinary course of business consistent with past practice, or subject to
the fiduciary duties of the Board of Directors of the Company as advised
in writing by counsel to the Company waive the benefits of, or agree to
modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any of its subsidiaries is a party;
(viii) commence a lawsuit other than (a) for the routine collection of
bills, (b) to enforce the Merger Agreement or (c) in such cases where
the Company in good faith determines that the failure to commence suit
would result in a material impairment of a valuable aspect of the
Company's business, provided that the Company consults with Computer
Associates prior to filing such suit; (ix) (a) enter into or amend any
employment agreement, (b) enter into any customer sale or license
agreement with non-standard terms or at discounts from list prices from
that typically granted to similarly situated customers in accordance
with past practice; provided that such action with respect to a customer
sale or license agreement that is immaterial in amount and term will not
be deemed to violate this provision if the Company has (1) used its best
efforts to ensure compliance with this provision and (2) taken prompt
corrective action in the event of a violation sufficient to ensure that
no similar violation will occur in the future, (c) pay commissions to
sales employees except pursuant to quarterly draws consistent with past
practice or on the basis of executed customer contracts with respect to
products actually delivered to customers, (d) without the consent of
Computer Associates which shall not be unreasonably withheld or delayed,
enter into any contracts or series of related contracts in excess of
$500,000 for any contract or $1,000,000 for any series of related
contracts, (e) enter into or amend any agreement or arrangement for
professional services or advice except in the ordinary course of
business consistent with past practice, (f) enter into or amend any
customer agreements providing for product replacements except in the
ordinary course of business consistent with past practice or
(g) make any determination as to amounts payable under any plan,
arrangement or agreement, providing for discretionary incentive
compensation or bonus to any officer, director, employee or independent
contractor of the Company or any of its subsidiaries, (x) hire
additional employees except in accordance with existing budgets;
provided that the aggregate number of employees of the Company and its
subsidiaries shall not be increased by more than eight percent per
quarter over the number of employees on the date of the Merger
Agreement; (xi) authorize any of, or commit or agree to take any of, the
foregoing actions; or (xii) (a) take or agree or commit to take any
action that would make any representation or warranty of the Company
under the Merger Agreement inaccurate in any respect at, or as of any
time prior to, the Effective Time or (b) omit or agree or commit to omit
<PAGE> 23
to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
The Company has agreed to give Computer Associates and its
representatives access (during normal business hours and upon reasonable
notice)to the offices,properties,books and records,of the Company and
its subsidiaries, and to furnish Computer Associates and its
representatives with such other information concerning its business,
properties and personnel as such persons may reasonably request.
Pursuant to the Merger Agreement, each of Computer Associates and
the Company has agreed to (i) promptly make or cause to be made the
filings required of such party or any of its subsidiaries under the HSR
Act with respect to the transactions contemplated by the Merger
Agreement, (ii) comply at the earliest practicable date with any
request under the HSR Act for additional information, documents, or
other material received by such party or any of its subsidiaries from
any Governmental Entity (defined below in this Section) in respect of
such filings or such transactions, and (iii) cooperate with the other
party in connection with any such filing and in connection with
resolving any investigation or other inquiry of any such agency or other
Governmental Entity under any Antitrust Laws (defined below in this
Section) with respect to any such filing or any such transaction. Each
of Computer Associates and the Company has agreed, pursuant to the
Merger Agreement, to promptly inform the other of any communication
with, and any proposed understanding, undertaking, or agreement with,
any Governmental Entity regarding any such filings or any such
transaction. The Merger Agreement prohibits both Computer Associates
and the Company from participating in any meeting with any Governmental
Entity in respect of any such filings, investigation, or
other inquiry without giving the other notice of the meeting and, to the
extent permitted by such Governmental Entity, the opportunity to attend
and participate.
Each of Computer Associates and the Company has agreed, pursuant
to the Merger Agreement, to use all reasonable efforts to resolve such
objections, if any, as may be asserted by any Governmental Entity with
respect to the transactions contemplated by the Merger Agreement under
the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended,
the Federal Trade Commission Act, as amended, and any other Federal,
state or foreign statutes, rules, regulations, orders or decrees that
are designed to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade
(collectively, "Antitrust Laws"). In connection therewith, if any
administrative or judicial action or proceeding is instituted (or
threatened to be instituted) challenging any transaction contemplated by
the Merger Agreement as violative of any Antitrust Law, and, if by
mutual agreement, Computer Associates and the Company decide that
litigation is in their best interests, each of Computer Associates and
the Company have agreed, pursuant to the Merger Agreement, to cooperate
and use all reasonable efforts vigorously to contest and resist any
such action or proceeding and to have vacated, lifted, reversed, or
overturned any decree, judgment, injunction or other
order, whether temporary, preliminary or permanent (each an "Order"),
that is in effect and that prohibits, prevents, or restricts
consummation of the Merger or any such other transactions. Pursuant to
the Merger Agreement, each of Computer Associates and the Company have
agreed to use all reasonable efforts to take such action as may be
required to cause the expiration of the notice periods under the HSR Act
or other Antitrust Laws with respect to such transactions as promptly as
possible after the execution of the Merger Agreement.
<PAGE> 24
Subject to the fiduciary duties of the Board of Directors of the
Company as advised in writing by counsel to the Company, each of
Computer Associates and the Company has agreed, pursuant to the Merger
Agreement, to use all reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger, and the other transactions
contemplated by the Merger Agreement.
Notwithstanding the foregoing, the Merger Agreement provides that
(i) neither Computer Associates nor any of its subsidiaries shall be
required to divest any of their respective businesses, product lines or
assets, (ii) neither Computer Associates nor any of its subsidiaries
shall be required to take or agree to take any other action or agree to
any limitation that could reasonably be expected to have a material
adverse effect on the business, assets, financial condition, results of
operations or prospects of Computer Associates and its subsidiaries
taken as a whole or of Computer Associates combined with the Surviving
Corporation after the Effective Time, (iii) neither the Company nor its
subsidiaries shall be required to divest any of their respective
businesses, product lines or assets, or to take or agree to take any
other action or agree to any limitation that could reasonably be
expected to have a Material Adverse Effect (defined below in Section
15), (iv) no party shall be required to agree to the imposition of, or
to comply with, any condition, obligation or restriction on Computer
Associates or any of its subsidiaries or on the Surviving Corporation
or any of its subsidiaries of the type described in clause (a) or (b) of
Section 15 and (v) neither Computer Associates nor Merger Subsidiary
shall be required to waive any of the conditions to the Offer described
in Section 15 or any of the conditions to the Merger described in this
Section 11.
Agreements with respect to Employee Matters. Computer Associates
has agreed in the Merger Agreement to honor in accordance with their
terms all of the Company's employee benefit plans (including employment
agreements) previously delivered to Computer Associates and all accrued
benefits vested thereunder; provided that nothing in the Merger
Agreement shall prevent Computer Associates from terminating any such
benefit plan in accordance with its terms. Computer Associates has also
agreed to provide employees of the Company and its subsidiaries
retained by Computer Associates with employee benefits in the aggregate
no less favorable than those benefits provided to Computer Associates'
similarly situated employees; provided that Computer Associates shall be
under no obligation to retain any employee or group of employees of the
Company or its subsidiaries.
Pursuant to the Merger Agreement, at the Effective Time, each of
the then outstanding Company Options (defined below) shall by virtue of
the Merger, and without any further action on the part of any holder
thereof, become fully exercisable and vested and be assumed by Computer
Associates and converted into an option to purchase that number of
shares of common stock, par value $.10 per share ("Computer Associates
Common Stock"), of Computer Associates determined by multiplying the
number of Shares subject to such Company Option at the Effective Time by
the quotient obtained by dividing (x) $30.50 by (y) the average closing
price of Computer Associates Common Stock on the New York Stock Exchange
Composite Tape for the 20 consecutive trading days immediately prior to
the Effective Time (such quotient, the "Conversion Number"), at an
exercise price per share of Computer Associates Common Stock equal to
the quotient obtained by dividing (x) the exercise price per Share of
<PAGE> 25
such Company Option immediately prior to the Effective Time by (y) the
Conversion Number. If the foregoing calculation results in an assumed
Company Option being exercisable for a fraction of a share of Computer
Associates Common Stock, then the number of shares of Computer
Associates Common Stock subject to such option shall be rounded down to
the nearest whole number of shares. Except as otherwise set forth in the
Merger Agreement, the term, status as an "incentive stock option" under
Section 422 of the Code, if applicable, and all other terms and
conditions of Company Options will, to the extent permitted by law and
otherwise reasonably practicable, be unchanged. Pursuant to the Merger
Agreement, the Company agreed to take, or cause to be taken, all actions
which are necessary, proper or advisable under the Stock Plans (defined
below) to make effective the transactions described in this paragraph.
"Company Options" means any option granted, and not exercised or
expired, to a current or former employee, director or independent
contractor of the Company or any of its subsidiaries or any
predecessor thereof to purchase Shares pursuant to any stock option,
stock bonus, stock award, or stock purchase plan, program, or
arrangement of the Company or any of its subsidiaries or any predecessor
thereof (collectively, the "Stock Plans") or any other contract or
agreement entered into by the Company or any of its subsidiaries.
Pursuant to the Merger Agreement, Computer Associates agreed to
take all corporate action necessary to reserve for issuance a
sufficient number of shares of Computer Associates Common Stock for
delivery pursuant to the terms described in the immediately preceding
paragraph. Pursuant to the Merger Agreement, Computer Associates agreed
to cause the shares of Computer Associates Common Stock issuable upon
exercise of the assumed Company Options to be registered, or to be
issued pursuant to a then effective registration statement, no later
than 90 days after the Effective Time on Form S-8 promulgated by the
Commission, and to use its best efforts to maintain the effectiveness
of such registration statement or registration statements for so long as
such assumed Company Options remain outstanding. The Merger Agreement
provides that, with respect to those individuals who subsequent to the
Merger will be subject to the reporting requirements under Section
16(a) of the Exchange Act, Computer Associates shall administer the
Company Options assumed pursuant to the Merger Agreement in a manner
that complies with Rule 16b-3 promulgated by the SEC under the Exchange
Act, but shall have no responsibility for such compliance by the Company
or its predecessors.
Other Offers. Pursuant to the Merger Agreement, the Company has
agreed that the Company and its subsidiaries will not, and will not
authorize or permit the officers, directors, employees or other agents
of the Company and its subsidiaries to, directly or indirectly, (i)
take any action to solicit, initiate or encourage any Acquisition
Proposal (defined below) or (ii) subject to the fiduciary duties of the
Board of Directors under applicable law, as advised in writing by
counsel to the Company, engage in negotiations with, or disclose any
nonpublic information relating to the Company or any of its subsidiaries
or afford access to the properties, books or records of the Company or
any of its subsidiaries to, any person that has advised the Company or
otherwise publicized the fact that it may be considering making, or that
has made, an Acquisition Proposal; provided, nothing herein shall
prohibit the Company's Board of Directors from taking and disclosing to
the Company's stockholders a position with respect to a tender offer
pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act.
The Company has agreed to promptly notify Computer Associates after
receipt of any Acquisition Proposal or any notice that any person is
considering making an Acquisition Proposal or any request for nonpublic
information relating to the Company or any of its subsidiaries or for
access to the properties, books or records of the Company or any of its
<PAGE> 26
subsidiaries by any person that has advised the Company or otherwise
publicized the fact that it may be considering making, or that has
made, an Acquisition Proposal and will keep Computer Associates informed
of the status and details of any such Acquisition Proposal, indication
or request. "Acquisition Proposal" means any offer or proposal for, or
any written indication of interest in, a merger or other business
combination involving the Company or any of its subsidiaries or the
acquisition of any significant equity interest in, or a significant
portion of the assets of, the Company or any of its subsidiaries, other
than the transactions contemplated by the Merger Agreement.
Rights Agreement. In connection with the execution of the Merger
Agreement, the Company amended the Rights Agreement to make it and the
Rights inapplicable to the Offer and the Merger. The Merger Agreement
provides that, except with respect to amending the Rights Agreement to
make it and the Rights inapplicable to the Offer and the Merger, the
Company shall not redeem the Rights or amend or terminate the Rights
Agreement prior to the Effective Time unless required to do so by a
court of competent jurisdiction.
Agreement with respect to Director and Officer Indemnification and
Insurance. Pursuant to the Merger Agreement, Computer Associates has
agreed, subject to any limitation imposed from time to time under
applicable law, that, for a period of six years after the Effective
Time, it will indemnify and hold harmless the present and former
officers, directors, employees and agents of the Company in respect of
acts or omissions occurring on or prior to the Effective Time to the
extent provided under the Company's certificate of incorporation and
bylaws in effect on the date of the Merger Agreement. Computer
Associates has further agreed that, for four years after the Effective
Time, it will cause the Surviving Corporation to provide officers' and
directors' liability insurance in respect of acts or omissions
occurring on or prior to the Effective Time covering each such person
currently covered by the Company's officers' and directors' liability
insurance policy on terms substantially similar to those of such policy
in effect on the date of the Merger Agreement, provided that in
satisfying such obligation, Computer Associates is not obligated to
cause the Surviving Corporation to pay premiums in excess of 105% of
the amount per annum the Company paid in its last full fiscal year, and
if the Surviving Corporation is unable to obtain such insurance, it
shall obtain as much comparable insurance as possible for an annual
premium equal to such maximum amount. Computer Associates has also
agreed that, in the event any such indemnified person is or becomes
involved in any capacity in any action, proceeding or investigation in
connection with any matter relating to the Merger, the Offer or the
Merger Agreement occurring on or prior to the Effective Time,
it will pay as incurred such indemnified person's reasonable legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith.
Other Agreements. Computer Associates has agreed that it will take
all action necessary to cause Merger Subsidiary to perform its
obligations under the Merger Agreement and to consummate the Offer and
the Merger on the terms and conditions set forth in the Merger
Agreement. Computer Associates also agreed, pursuant to the Merger
Agreement, to hold in confidence all confidential information concerning
the Company and its subsidiaries in accordance with the terms of the
Confidentiality Agreement, dated October 1, 1996, between Computer
Associates and the Company, a copy of which is filed as an exhibit to
the Schedule 14D-1 and is incorporated in this Offer to Purchase by
reference.
<PAGE> 27
Conditions to the Merger. Pursuant to the Merger Agreement, the
respective obligations of each party to consummate the Merger are
subject to the satisfaction or waiver, where permissible, at or before
the Effective Time of the following conditions: (i) Computer Associates
or Merger Subsidiary shall have purchased Shares in an amount equal to
at least the Minimum Condition pursuant to the Offer, (ii) the adoption
and approval of the Merger Agreement by the affirmative vote of the
Stockholders by requisite vote in accordance with Delaware Law, if such
vote is required by Delaware Law, (iii) no provision of any applicable
law or regulation and no judgment, injunction, order or decree shall
prohibit the consummation of the Merger, (iv) any applicable waiting
period under the HSR Act relating to the Merger shall have expired, and
(v) other than filing the certificate of merger in accordance with
Delaware Law, all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with or exemptions by
(collectively, "Consents") any Federal, state or local government or
any court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a "Governmental
Entity") required to consummate the Merger shall have been filed,
occurred or been obtained (other than any such Consents the failure to
occur, obtain or file, in the aggregate, could not reasonably be
expected to (a) have a Material Adverse Effect (defined below in
Section 15) or (b) prevent or materially delay the consummation of the
Merger).
Termination. The Merger Agreement may be terminated at any time
prior to the Effective Time (notwithstanding any approval of the Merger
Agreement by the Stockholders) (i) by mutual written consent of the
Company and Computer Associates, (ii) by either the Company or Computer
Associates, if the Merger has not been consummated by April 7, 1997
(provided that the party seeking to terminate the Merger Agreement shall
not have breached its obligations under the Merger Agreement in any
material respect),(iii)by either the Company or Computer Associates, if
there shall be any law or regulation that makes consummation of the
Merger illegal or otherwise prohibited or if any judgment, injunction,
order or decree enjoining Computer Associates or the Company from
consummating the Merger is entered and such judgment, injunction, order
or decree shall become final and nonappealable, (iv) by either the
Company or Computer Associates, (a) if Computer Associates shall have
failed to commence the Offer within five business days following the
date of the Merger Agreement (provided that Computer Associates shall
not be entitled to terminate the Merger Agreement in the circumstance
described in this sub-clause (a) as a result of its breach of the Merger
Agreement), (b) if Computer Associates or Merger Subsidiary shall not
have purchased any Shares pursuant to the Offer prior to February 21,
1997 or (c) if the Offer shall have been terminated without Computer
Associates or Merger Subsidiary having purchased any Shares pursuant to
the Offer, (v) by Computer Associates, upon the occurrence of any
Trigger Event (defined below), or (vi) by the Company, if the Company
shall have entered into, or shall have publicly announced its intention
to enter into, an agreement or an agreement in principle with respect
to any Acquisition Proposal.
Fees and Expenses. Each party to the Merger Agreement has agreed
to pay its own fees and expenses and there are no provisions for payment
by the Company of the fees and expenses of Computer Associates or Merger
Subsidiary or vice versa, if the Merger Agreement is terminated, except
as stated below. The Company has agreed to pay Computer Associates a
fee in immediately available funds, promptly, but in no event later than
two business days, after the termination of the Merger Agreement as a
result of the occurrence of any of the events set forth below (a
"Trigger Event") in an amount equal to (a) $37,500,000, in the case of
<PAGE> 28
the occurrence of a Trigger Event described in clause (i) or (iii)
below and (b) $20,000,000, in the case of the occurrence of a Trigger
Event described in clause (ii) below: (i) the Company shall have
entered into, or shall have publicly announced its intention to enter
into, an agreement or an agreement in principle with respect to any
Acquisition Proposal, (ii) the Company shall have breached or failed to
perform in any respect any of its obligations, covenants or agreements
under the Merger Agreement or any representation or warranty of the
Company set forth in the Merger Agreement (other than breaches or
failures to perform or comply that, in the aggregate, do not have a
Material Adverse Effect), or (iii) the Board of Directors of the Company
(or any special committee thereof) shall have withdrawn or materially
modified its approval or recommendation of the Offer, the Merger or the
Merger Agreement.
The Company has also agreed that, if the Merger Agreement is
terminated as a result of the occurrence of a Trigger Event, it shall
assume and pay, or reimburse Computer Associates for, all fees payable
and expenses incurred by Computer Associates (including the fees and
expenses of its counsel) in connection with the Merger Agreement and the
transactions contemplated by the Merger Agreement, up to a maximum of
$5,000,000.
Timing. The exact timing and details of the Merger will depend
upon legal requirements and a variety of other factors, including the
number of Shares acquired by Merger Subsidiary pursuant to the Offer.
Although Computer Associates has agreed to cause the Merger to be
consummated on the terms set forth above, there can be no assurance as
to the timing of the Merger.
Computer Associates and Merger Subsidiary reserve the right to
acquire additional Shares following the expiration or termination of the
Offer through open market transactions, private purchases, other tender
offers or otherwise, on terms and at prices that may be the same as, or
more or less favorable than, those of the Offer.
Appraisal Rights. Stockholders do not have dissenters' rights as a
result of the Offer. However,if the Merger is consummated, Stockholders
of the Company at the time of the Merger who do not vote in favor of or
consent in writing to the Merger will have the right under Delaware Law
to dissent and demand appraisal of their Shares in accordance with
Section 262 of the Delaware Law.
Under Delaware Law, dissenting stockholders who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the
Merger) and to receive payment of such fair value in cash, together with
a fair rate of interest, if any. Any such judicial determination of the
fair value of the Shares could be based upon considerations other than
or in addition to the price paid in the Offer (or the Merger) and the
market value of the Shares. Stockholders should recognize that the
value so determined could be higher or lower than the price per Share
paid pursuant to the Offer or the Merger. Moreover, Computer Associates
or Merger Subsidiary may argue in an appraisal proceeding that, for
purposes of such a proceeding, the fair value of the Shares is less
than the price paid in the Offer (or the Merger). The foregoing summary
of the rights of dissenting Stockholders does not purport to be a
complete statement of procedures to be followed by Stockholders
desiring to exercise their dissenters' rights.
<PAGE> 29
Delaware Law. In addition, the Merger would have to comply with
other applicable procedural and substantive requirements of Delaware
Law, including any duties to other stockholders imposed upon a
controlling or, if applicable, majority stockholder. Several recent
decisions by the Delaware courts, which may or may not apply to the
Merger, have held that a controlling stockholder of a company involved
in a merger has a fiduciary duty to other stockholders which requires
that the merger be "entirely fair" to such other stockholders. In
determining whether a merger is fair to minority stockholders, Delaware
courts have considered, among other things, the type and amount of the
consideration to be received by the stockholders and whether there was
fair dealing among the parties.
The Company is incorporated under the laws of the State of
Delaware, which has adopted certain laws regarding business
combinations. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally, a stockholder owning 15% or more of
a corporation's outstanding voting stock or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include
a merger and certain other transactions) with a Delaware corporation
for a period of three years following the time that such stockholder
became an interested stockholder unless (i) prior to such time the
corporation's board of directors approved either the business
combination or the transaction which resulted in such stockholder
becoming an interested stockholder, (ii) upon consummation of the
transaction which resulted in such stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the
corporation's voting stock outstanding at the time the transaction
commenced (excluding shares owned by certain employee
stock plans and persons who are directors and also officers of the
corporation) or (iii) at or subsequent to such time the business
combination is approved by the corporation's board of directors and
authorized at an annual or special meeting of stockholders, and not by
written consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock not owned by the interested stockholder. The
Board of Directors of the Company has approved the Merger Agreement and
the transactions contemplated thereby, including the Offer and the
Merger, for purposes of Section 203. Accordingly, the restrictions of
Section 203 do not apply to the transactions contemplated by this Offer
to Purchase.
Other Matters. Any merger or other similar business combination
proposed by Computer Associates would also have to comply with any
applicable Federal law. In particular, the Commission has adopted Rule
13e-3 under the Exchange Act which is applicable to certain "going
private" transactions. Computer Associates believes that Rule 13e-3
will not be applicable to the Merger unless the Merger is consummated
more than one year after termination of the Offer or if an alternative
merger transaction were to provide for stockholders to receive
consideration for their Shares in an amount less than the price per
Share paid pursuant to the Offer. If applicable, Rule 13e-3 would
require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness
of the proposed transaction and the consideration offered to minority
stockholders in such a transaction be filed with the Commission and
distributed to such stockholders prior to consummation of the
transaction.
<PAGE> 30
If for any reason the Merger is not consummated, Computer
Associates and Merger Subsidiary will evaluate their alternatives.
Such alternatives could include purchasing additional Shares in the open
market, in privately negotiated transactions, in another tender or
exchange offer or otherwise, or taking no further action to acquire
additional Shares. Any additional purchases of Shares could be at a
price greater or less than the price to be paid for Shares in the Offer
and could be for cash or other consideration. Alternatively, Merger
Subsidiary may sell or otherwise dispose of any or all Shares acquired
pursuant to the Offer or otherwise. Such transactions may be effected
on terms and at prices then determined by Computer Associates or Merger
Subsidiary, which may vary from the price to be paid for Shares in the
Offer.
In the joint press release issued by Computer Associates and the
Company in connection with the execution of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1 and is
incorporated herein by reference, Computer Associates stated, among
other things, that it intended to retain all of the Company's
employees, and that the Company would operate as a division of Computer
Associates. Computer Associates intends to conduct a review of the
Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties and policies and to consider,
subject to the terms of the Merger Agreement, what, if any, changes
would be desirable in light of the circumstances then existing, and
reserves the right to take such actions or effect such
changes as it deems desirable. Such changes could include changes in
the Company's business, operations, corporate structure,
capitalization, Board of Directors, policies or dividend policy.
Except as otherwise described in this Offer to Purchase, Computer
Associates and Merger Subsidiary have no current plans or proposals that
would relate to, or result in, any extraordinary corporate transaction
involving the Company, such as a merger, reorganization or liquidation
involving the Company or any of its subsidiaries, a sale or transfer of
a material amount of assets of the Company or any of its subsidiaries,
any material change in the Company's capitalization or dividend policy
or any other material change in the Company's business, corporate
structure, Board of Directors or management.
12. Effect of the Offer on the Market for the Shares; Stock
Quotations; Registration under the Exchange Act.
The purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the
number of holders of Shares, which could adversely affect the liquidity
and market value of the remaining Shares held by Stockholders other
than Computer Associates or Merger Subsidiary. Computer Associates
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on
the market price for or marketability of the Shares or whether it would
cause future market prices to be greater or less than the Offer price.
Depending upon the number of Shares purchased pursuant to the
Offer, the Shares may no longer meet the standards for continued
inclusion on the AMEX. If, as a result of the purchase of Shares
pursuant to the Offer, the Shares no longer meet the standards for
continued inclusion on the AMEX, the market for the Shares could be
adversely affected.
<PAGE> 31
The extent of the public market for the Shares and availability of
quotations therefor would, however, depend upon such factors as the
number of holders and/or the aggregate market value of the publicly-
held Shares at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act and other factors.
The Shares are currently "margin securities" under the regulations
of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares. Depending
upon factors similar to those described above regarding listing and
market quotations, the Shares might no longer constitute "margin
securities" for the purposes of the Federal Reserve Board's margin
regulations and, therefore, could no longer be used as collateral for
loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the
Commission if the Shares are not listed on a national securities
exchange and there are less than 300 holders of record. Termination of
the registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the
Company to holders of Shares and to the Commission and would make
certain of the provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy or information statement in connection with
stockholder action and the related requirement of an annual report to
stockholders and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to
the Shares. Furthermore, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the
ability to dispose of such securities pursuant to Rule 144 or 144A
promulgated under the Securities Act of 1933, as amended. If
registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities" or eligible
for trading on the AMEX. Merger Subsidiary intends to seek to cause the
Company to terminate registration of the Shares under the Exchange Act
as soon after consummation of the Offer as the requirements for
termination of registration of the Shares are met.
13. Dividends and Distributions.
If on or after October 7, 1996, the Company should
(notwithstanding the fact that the following actions may be prohibited
under the Merger Agreement) (i) split, combine or otherwise change the
Shares or its capitalization, (ii) acquire or otherwise cause a
reduction in the number of outstanding Shares or (iii) issue or sell any
additional Shares (other than Shares issued pursuant to and in
accordance with the terms in effect on October 7, 1996 of employee stock
options outstanding prior to such date), shares of any other class or
series of capital stock, other voting securities or any securities
convertible into, or options, rights, or warrants, conditional or
otherwise, to acquire, any of the foregoing, then, without prejudice to
Merger Subsidiary's rights under Section 15, Merger Subsidiary may, in
its sole discretion, make such adjustments in the purchase price and
other terms of the Offer as it deems appropriate including the number
or type of securities to be purchased.
If, on or after October 7, 1996, the Company should
(notwithstanding the fact that the following actions are prohibited
under the Merger Agreement) declare or pay any dividend on the Shares
<PAGE> 32
or any distribution with respect to the Shares (including the issuance
of additional Shares or other securities or rights to purchase of any
securities) that is payable or distributable to Stockholders of record
on a date prior to the transfer to the name of Merger Subsidiary or its
nominee or transferee on the Company's stock transfer records of the
Shares purchased pursuant to the Offer, then, without prejudice to
Merger Subsidiary's rights under Section 15, (i) the purchase price per
Share payable by Merger Subsidiary pursuant to the Offer may be reduced
to the extent of any such cash dividend or distribution and (ii) the
whole of any such non-cash dividend or distribution to be received by
the tendering Stockholders will (a) be received and held by the
tendering Stockholders for the account of Merger Subsidiary and will be
required to be promptly remitted and transferred by each tendering
Stockholder to the Depositary for the account of Merger Subsidiary,
accompanied by appropriate documentation of transfer, or (b) at the
direction of Merger Subsidiary, be exercised for the benefit of
Merger Subsidiary, in which case the proceeds of such exercise will
promptly be remitted to Merger Subsidiary. Pending such remittance and
subject to applicable law, Merger Subsidiary will be entitled to all
rights and privileges as owner of any such non-cash dividend or
distribution or proceeds thereof and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by Merger Subsidiary in its sole discretion.
14. Extension of Tender Period; Termination; Amendment.
Merger Subsidiary reserves the right, at any time or from time to
time, in its sole discretion, (i) to extend the period of time during
which the Offer is open if, at the scheduled expiration date of the
Offer or any extension thereof, any of the conditions to the Offer
shall not have been satisfied, until such time as such conditions are
satisfied or waived, and for a further period of time as described
below in this paragraph, in any case by giving oral or written notice
of such extension to the Depositary and by making a public announcement
of such extension or (ii) except to the extent otherwise provided in
the Merger Agreement, to amend the Offer in any respect by making a
public announcement of such amendment. There can be no assurance that
Merger Subsidiary will exercise its right to extend or amend the Offer.
Notwithstanding the foregoing, but subject to Computer Associates' or
the Company's ability to terminate the Merger Agreement under certain
circumstances (described in Section 11), if the applicable waiting
period under the HSR Act shall not have expired or been terminated as
of the date the Offer would otherwise have expired, Merger Subsidiary
has agreed, pursuant to the Merger Agreement, to extend the Offer from
time to time until the earlier of (x) the date that is 30 days after
the first scheduled Expiration Date and (y) the date that such waiting
period has expired or been terminated. Subject to the terms of the
Offer and the satisfaction (or waiver to the extent permitted
by the Merger Agreement) of the conditions to the Offer, Merger
Subsidiary shall accept for payment all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the
expiration of the Offer and shall pay for all such Shares promptly after
acceptance; provided, that Merger Subsidiary may extend the Offer for a
period of time of not more than 20 business days to meet the objective
(which is not a condition to the Offer) that there shall be validly
tendered prior to the Expiration Date (as so extended) and not withdrawn
a number of Shares, which, together with Shares then owned by Computer
Associates and Merger Subsidiary, represents at least 90% of the Fully
Diluted Shares.
If Merger Subsidiary shall decide, in its sole discretion, subject
to the terms of the Merger Agreement, to increase the consideration to
<PAGE> 33
be paid for Shares pursuant to the Offer and the Offer is scheduled to
expire at any time before the expiration of a period of 10 business days
from, and including, the date that notice of such increase is first
published, sent or given in the manner specified below, the Offer will
be extended until the expiration of such period of 10 business days.
If Merger Subsidiary makes a material change in the terms of the Offer
(other than a change in price or percentage of securities sought) or in
the information concerning the Offer, or waives a material condition of
the Offer, Merger Subsidiary will extend the Offer, if required by
applicable law, for a period sufficient to allow stockholders to
consider the amended terms of the Offer.
Merger Subsidiary also reserves the right, in its sole discretion,
subject to the terms of the Merger Agreement, in the event any of the
conditions specified in Section 15 shall not have been satisfied and so
long as Shares have not theretofore been accepted for payment, to delay
(except as otherwise required by applicable law and the rules of the
Commission including Rule 14e-1) acceptance for payment of or payment
for Shares or to terminate the Offer and not accept for payment or pay
for Shares.
If Merger Subsidiary extends the period of time during which the
Offer is open, is delayed in accepting for payment or paying for Shares
or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to Merger Subsidiary's
rights under the Offer, the Depositary may, on behalf of Merger
Subsidiary, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in Section 4. The reservation by
Merger Subsidiary of the right to delay acceptance for payment of or
payment for Shares is subject to applicable law, which requires that
Merger Subsidiary pay the consideration offered or return the Shares
deposited by or on behalf of Stockholders promptly after the termination
or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be
followed as promptly as practicable by a public announcement thereof.
In the case of an extension of the Offer, Merger Subsidiary will make a
public announcement of such extension no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which Merger Subsidiary
may choose to make any public announcement, Merger Subsidiary will have
no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News
Service.
15. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, Computer
Associates and Merger Subsidiary shall not be required to accept for
payment or pay for any Shares, and may terminate the Offer, if (i) by
the expiration of the Offer, the Minimum Condition shall not have been
satisfied, (ii) by the expiration of the Offer, the applicable waiting
period under the HSR Act shall not have expired or been terminated, or
(iii) at any time on or after October 7, 1996 and prior to the
acceptance for payment of Shares, any of the following conditions
exist:
(a) there shall be instituted or pending any action or
proceeding by any Governmental Entity or by any other person,
domestic or foreign, before any Governmental Entity or arbitrator,
(i) challenging or seeking to make illegal, to delay materially or
<PAGE> 34
otherwise directly or indirectly to restrain or prohibit the making
of the Offer, the acceptance for payment of or payment for some of
or all the Shares by Computer Associates or Merger Subsidiary or the
consummation by Computer Associates or Merger Subsidiary of the
Merger, seeking to obtain material damages or otherwise directly or
indirectly relating to the transactions contemplated by the Merger
Agreement, the Offer or the Merger, (ii) seeking to restrain or
prohibit Computer Associates' or Merger Subsidiary's ownership or
operation (or that of their respective subsidiaries or affiliates)
of all or any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of Computer
Associates and its subsidiaries, taken as a whole, or to compel
Computer Associates or any of its subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the
business or assets of the Company and its subsidiaries, taken as a
whole, or of Computer Associates and its subsidiaries, taken as a
whole, (iii) seeking to impose material limitations on the ability
of Computer Associates or any of its subsidiaries or affiliates
effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired
or owned by Computer Associates or any of its subsidiaries or
affiliates on all matters properly presented to the Company's
stockholders, (iv) seeking to require divestiture by Computer
Associates or any of its subsidiaries or affiliates of any Shares,
or (v) that otherwise, in the judgment of Computer Associates, is
likely to materially adversely affect the business, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, or Computer Associates and its
subsidiaries, taken as a whole; provided that, in the case of any
instituted or pending action or proceeding described in this
subsection (a) above by a person other than a Governmental Entity,
there is a substantial probability of a determination material and
adverse to Computer Associates or any of its subsidiaries or the
Company or any of its subsidiaries in such action or proceeding; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Merger Agreement,
the Offer or the Merger, by any Governmental Entity or arbitrator
other than the application of the waiting period provisions of the
HSR Act to the Merger Agreement, the Offer or the Merger, that, in
the judgment of Computer Associates, is likely, directly or
indirectly, to result in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a
prospective change) in the business, financial condition or results
of operations of the Company or any of its subsidiaries that, in the
reasonable judgment of Computer Associates, is or is likely to have
a Material Adverse Effect (defined below); or
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange, Inc. or on the AMEX, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States, (iii) any material limitation (whether or not
mandatory) by any Governmental Entity on the extension of credit by
banks or other lending institutions, (iv) a commencement of a war or
armed hostilities or other national or international calamity
directly or indirectly involving the United States which would
<PAGE> 35
reasonably be expected to have a Material Adverse Effect or prevent
(or materially delay) the consummation of the Offer or (v) in the
case of any of the foregoing existing at the time of commencement of
the Offer, a material acceleration or worsening thereof; or
(e) any Consent (other than the filing of a certificate of
merger or approval by the stockholders of the Company of the Merger
(if required by Delaware Law)) required to be filed, occurred or
been obtained by the Company or any of its subsidiaries or Computer
Associates or any of its subsidiaries (including Merger Subsidiary)
in connection with the execution and delivery of the Merger
Agreement, the Offer and the consummation of the transactions
contemplated by the Merger Agreement shall not have been filed,
occurred or been obtained (other than any such Consents the failure
to file, occur or obtain in the aggregate, could not reasonably be
expected to (1) have a Material Adverse Effect or (2) prevent or
materially delay the consummation of the Offer or the Merger); or
(f) the Company shall have breached or failed to perform in
any material respect any of its covenants or agreements under the
Merger Agreement, or any of the representations and warranties of
the Company set forth in the Merger Agreement that is qualified as
to materiality shall not be true when made or at any time prior to
consummation of the Offer as if made at and as of such time, or any
of the representations and warranties set forth in the Merger
Agreement that is not so qualified shall not be true in any material
respect when made or at any time prior to the consummation of the
Offer as if made at and as of such time; or
(g) the Merger Agreement shall have been terminated in
accordance with its terms; or
(h) the Board of Directors of the Company (or any special
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or the Merger
Agreement; or
(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or
agreement in principle with respect to any Acquisition Proposal;
which, in the sole judgment of Computer Associates in any such case, and
regardless of the circumstances (including any action or omission by
Computer Associates or Merger Subsidiary) giving rise to any such
condition, makes it inadvisable to proceed with such acceptance for
payment or payment. The term "Material Adverse Effect" means a material
adverse effect on the financial condition, business or results of
operations of the Company and its subsidiaries taken as a whole, except
that occurrences due solely to a disruption of the Company's or its
subsidiary's businesses solely as a result of the announcement of the
execution of the Merger Agreement and the transactions proposed to be
consummated by the Merger Agreement shall be excluded from consideration
for purposes of the effect of an action or inaction on the Company and
its subsidiaries taken as a whole.
The foregoing conditions are for the sole benefit of Computer
Associates and Merger Subsidiary and may be asserted by Computer
Associates in its sole discretion regardless of the circumstances
<PAGE> 36
(including any action or omission by Computer Associates or Merger
Subsidiary) giving rise to any such condition or (other than the Minimum
Condition) may be waived by Computer Associates and Merger Subsidiary in
their sole discretion in whole at any time or in part from time to time.
The failure by Computer Associates or Merger Subsidiary at any time to
exercise its rights under any of the foregoing conditions shall not be
deemed a waiver of any such right; the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances, and each such
right shall be deemed an ongoing right which may be asserted at any
time or from time to time. Any determination by Computer Associates
concerning the events described in this Section 15 will be final and
binding upon all parties to the Merger Agreement.
16. Certain Legal Matters; Regulatory Approvals.
General. Except as set forth in this Section 16, based on its
examination of publicly available information filed by the Company with
the Commission and other publicly available information concerning the
Company, Merger Subsidiary is not aware of any license or regulatory
permit that appears to be material to the Company's business that might
be adversely affected by Merger Subsidiary's acquisition of Shares as
contemplated herein or of any approval or other action by any government
or governmental authority or agency, domestic or foreign, that would be
required for the acquisition or ownership of Shares by Merger Subsidiary
or Computer Associates as contemplated herein. Should any such approval
or other action be required, it is currently contemplated that, except
as described below under "State Takeover Statutes", such approval or
other action will be sought. Except as described under "Antitrust",
however, there is no current intent to delay the purchase of Shares
tendered pursuant to the Offer pending the outcome of any such matter.
There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial
conditions or that if such approvals were not obtained or such other
actions were not taken adverse consequences might not result to the
Company's business or certain parts of the Company's business might not
have to be disposed of, any of which could cause Merger Subsidiary to
elect to terminate the Offer without the purchase of Shares thereunder.
Merger Subsidiary's obligation under the Offer to accept for payment and
pay for Shares is subject to certain conditions. See Section 15.
State Takeover Statutes. A number of states have adopted laws
which, to varying degrees, seek to regulate attempts to acquire
corporations that are incorporated in, or have substantial connections
with, the state. The Company, directly or through subsidiaries,
conducts business in a number of states throughout the United States,
some of which have enacted such laws. Based on publicly available
information concerning the Company, Computer Associates does not believe
that any of these laws will, by their terms, apply to the Offer or the
Merger.
In addition, the constitutional validity of state statutes
regulating acquisition attempts has been the subject of considerable
litigation. In its 1982 decision in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated an Illinois law that, among other
things, gave Illinois officials authority to block a tender offer for
any corporation having certain defined connections with the state. In
1987, however, the Supreme Court upheld an Indiana law that prevented
acquirors of a controlling stake in certain Indiana corporations from
voting the acquired shares until the other shareholders had approved the
acquisition. The Court distinguished between state statutes that affect
<PAGE> 37
acquisitions of entities incorporated outside the state and those that
address the internal governance, including the scope and exercise of
shareholder voting rights, of in-state corporations. While the lower
federal courts have relied on a similar distinction in subsequent cases,
the precise extent to which an individual state may regulate
acquisitions of out-of-state corporations remains unclear.
If any government official or third party should seek to apply any
state takeover law to the Offer or the Merger, Computer Associates will
take such action as then appears desirable, which action may include
challenging the applicability or validity of such statute in appropriate
court proceedings. In the event it is asserted that one or more state
takeover statutes is applicable to the Offer or the Merger and an
appropriate court does not determine that it is inapplicable or invalid
as applied to the Offer or the Merger, Computer Associates or Merger
Subsidiary might be required to file certain information with, or to
receive approvals from, the relevant state authorities or holders of
Shares, and Merger Subsidiary might be unable to accept for payment or
pay for Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer or the Merger. In such case,
Merger Subsidiary may not be obligated to accept for payment or pay for
any tendered Shares. See Section 15.
Antitrust. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"),
certain acquisition transactions may not be consummated unless certain
information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the FTC and
certain waiting period requirements have been satisfied. The purchase
of Shares pursuant to the Offer is subject to such requirements.
Computer Associates filed a Notification and Report Form with
respect to the Offer and the Merger with the Antitrust Division and the
FTC on October 9, 1996, and expects the Company to have filed such form
on or about October 10, 1996. Based upon a filing date of October 9,
1996 with respect to the Notification and Report Form filed by Computer
Associates, the waiting period applicable to the purchase of Shares
pursuant to the Offer would be scheduled to expire at 11:59 P.M., New
York City time, on Thursday, October 24, 1996. However, prior to such
time, the Antitrust Division or the FTC may extend the waiting period by
requesting additional information or documentary material relevant to
the Offer from Computer Associates. If such a request is made, the
waiting period will be extended until 11:59 P.M., New York City time, on
the tenth day after substantial compliance by Computer Associates with
such request. Thereafter, such waiting period can be extended only by
court order.
A request will be made for early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the
15-day HSR waiting period will be terminated early. Shares will not be
accepted for payment or paid for pursuant to the Offer until the
expiration or earlier termination of the applicable waiting period under
the HSR Act. See Section 15. Any extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4. The Merger Agreement provides that, if
by the expiration of the Offer, the applicable waiting period under the
HSR Act shall not have expired or been terminated, Merger Subsidiary
shall extend the Offer from time to time until the earlier of (x) the
date that is 30 days after the first scheduled Expiration Date and (y)
the date that such waiting period has expired or been terminated.
<PAGE> 38
The Merger would not require an additional filing under the HSR
Act if Computer Associates owns 50% or more of the outstanding Shares
at the time of the Merger or if the Merger occurs within one year after
the HSR Act waiting period applicable to the Offer expires or is
terminated.
The Antitrust Division and the FTC frequently scrutinize the
legality under the antitrust laws of transactions such as the
acquisition of Shares by Merger Subsidiary pursuant to the Offer. At
any time before or after the consummation of any such transactions, the
Antitrust Division or the FTC could take such action under the antitrust
laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer
or seeking divestiture of the Shares so acquired or divestiture of
substantial assets of Computer Associates or the Company. Private
parties (including individual States) may also bring legal actions under
the antitrust laws. Computer Associates does not believe that the
consummation of the Offer will result in a violation of any applicable
antitrust laws. However, there can be no assurance that a challenge to
the Offer on antitrust grounds will not be made, or if such a challenge
is made, what the result will be. See Section 15 for certain conditions
to the Offer, including conditions with respect to litigation and
certain governmental actions.
Foreign Approvals. According to the Company 10-K, the Company
also owns property and conducts business in a number of other foreign
countries and jurisdictions including, without limitation, Canada,
Germany, France, Brazil, Japan, Singapore, and the United Kingdom. In
connection with the acquisition of the Shares pursuant to the Offer, the
laws of certain of those foreign countries and jurisdictions may
require the filing of information with, or the obtaining of the approval
of, governmental authorities in such countries and jurisdictions. The
governments in such countries and jurisdictions might also attempt to
impose additional conditions on Computer Associates' or the Company's
operations conducted in such countries and jurisdictions as a result of
the acquisition of the Shares pursuant to the Offer. There can be no
assurance that any such approval can be obtained, that Computer
Associates will be able to cause the Company or its subsidiaries to
satisfy or comply with such laws or that compliance or non-compliance
will not have adverse consequences for Computer Associates or the
Company or any subsidiary of either of them. The Offer is subject to
certain conditions, including conditions relating to the legal matters
referred to in this Section 16. See Section 15.
Margin Credit Regulations. Federal Reserve Board Regulations G,
T, U and X (the "Margin Credit Regulations") restrict the extension or
maintenance of credit for the purpose of buying or maintaining margin
stock, if the credit is secured directly or indirectly thereby. The
borrowings under the Credit Agreements will not be directly secured by a
pledge of the Shares. In addition, Computer Associates and Merger
Subsidiary believe that such borrowings will not be "indirectly secured"
within the meaning of the Margin Credit Regulations, as interpreted.
Accordingly, Computer Associates and Merger Subsidiary believe that the
Margin Credit Regulations are not applicable to the borrowings under the
Credit Facility.
17. Fees and Expenses.
Merger Subsidiary has retained D.F. King & Co., Inc. to act as the
Information Agent and The Bank of New York to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of
<PAGE> 39
Shares by mail, telephone, telex, telegraph and personal interviews and
may request brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. The Information
Agent and the Depositary each will receive reasonable and customary
compensation for their respective services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities in connection therewith, including certain
liabilities under the federal securities laws.
Merger Subsidiary will not pay any fees or commissions to any
broker or dealer or any other person (other than the Information Agent
and the Depositary) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies will,
upon request, be reimbursed by Merger Subsidiary for reasonable and
necessary costs and expenses incurred by them in forwarding materials to
their customers.
18. Miscellaneous.
The Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Shares in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance
with the laws of such jurisdiction. However, Merger Subsidiary may, in
its discretion, take such action as it may deem necessary to make the
Offer in any such jurisdiction and extend the Offer to holders of Shares
in such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Merger Subsidiary not contained in this
Offer to Purchase or in the Letter of Transmittal and, if given or made,
such information or representation must not be relied upon as having
been authorized.
Merger Subsidiary has filed with the Commission a Tender Offer
Statement on Schedule 14D-l, together with exhibits, pursuant to Rule
14d-3 of the General Rules and Regulations under the Exchange Act,
furnishing certain additional information with respect to the Offer.
The Schedule 14D-l and any amendments thereto, including exhibits, may
be examined and copies may be obtained from the offices of the
Commission in the manner set forth with respect to the Company in
Section 7 of this Offer to Purchase (except that such information will
not be available at the regional offices of the Commission).
TSE-TSEHESE-STAESTSE,INC.
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
COMPUTER ASSOCIATES AND MERGER SUBSIDIARY
1. Directors and Executive Officers of Computer Associates. The
following table sets forth the name, age, business address and present
principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each director and
executive officer of Computer Associates. Each such person is a citizen
of the United States of America, except for Willem F.P. de Vogel who is
a citizen of The Netherlands. Unless otherwise indicated below, the
business address of each person is c/o Computer Associates
International, Inc., One Computer Associates Plaza, Islandia, New York
11788. Unless otherwise indicated, each occupation set forth opposite
an individual's name refers to employment with Computer Associates.
<TABLE>
<CAPTION>
DIRECTORS (INCLUDING EXECUTIVE
OFFICERS WHO ARE DIRECTORS)
Present Principal Occupation
Name and or Employment; Material Positions
Business Address Age Held During Past Five Years
- ---------------- --- ---------------------------------
<S> <C> <C>
Russell M. Artzt 49 Director of Computer Associates since 1980.
Executive Vice President-Research and
Development since April 1987 and the Senior
Development Officer since 1976.
Willem F.P. de Vogel 45 Director of Computer Associates since
Three Cities 1991. President of Three Cities
Research, Inc. Research, Inc., a private investment
135 East 57th management firm in New York City, since
Street New York, 1981. From August 1981 to August 1990,
New York 10022 Mr. de Vogel served as a director of
Computer Associates. He is also a
director of MLX Corp.
Irving Goldstein 58 Director of Computer Associates since
INTELSAT 1990. Director General and Chief
3400 International Executive Officer of INTELSAT, an
Drive, N.W. international satellite
Washington, D.C. telecommunications company, since
20008 February 1992. He was Chairman and
Chief Executive Officer of Communications
Satellite Corporation
from October 1985 to February 1992 and
President from May 1983 to October
1985, and was a director from May 1983
to February 1992.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Richard A. Grasso 49 Director of Computer Associates since
New York Stock January 1994. Chairman and Chief
Exchange Executive Officer of the New York Stock
11 Wall Street Exchange since June 1995. He was
New York, New York Executive Vice Chairman of the New York
10005 Stock Exchange from 1991 to 1995 and
President and Chief Operating Officer
of the New York Stock Exchange from
1988 to 1995.
Shirley Strum Kenny 61 Director of Computer Associates since
President's Office July 1994. President of State
State University of University of New York at Stony Brook
New York at Stony since 1994. She was President of
Brook Stony Brook, Queens College of the City University
New York 11794 of New York from 1989 to 1994. She is
also a director of Toys "R" Us, Inc.
Sanjay Kumar 34 Director of Computer Associates since
January 1994. President and Chief
Operating Officer since January 1994.
He was Senior Vice President--Planning
from April 1989 to December 1992 and
Executive Vice President--Operations
from January 1993 to December 1993.
Charles B. Wang 51 Director of Computer Associates since
1976. Chief Executive Officer since
1976 and Chairman of the Board since
April 1980. He is also a director of
Symbol Technologies, Inc.
</TABLE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS WHO ARE
NOT DIRECTORS
Present Principal Occupation
Name and or Employment; Material Positions
Business Address Age Held During Past Five Years
- ---------------- --- --------------------------------------
<S> <C> <C>
Belden A. Frease 57 Senior Vice President since April 1985
and Secretary since May 1991.
Charles P. McWade 51 Senior Vice President--Finance since
April 1990. He was Senior Vice
President and Treasurer from April 1988
to March 1994.
Peter A. Schwartz 52 Senior Vice President--Finance and Chief
Financial Officer since April 1987.
Ira H. Zar 35 Senior Vice President and Treasurer
since April 1994. He was Vice
<PAGE>
President--Finance from April 1990 to
March 1994 and Assistant Vice President
from April 1987 to March 1990.
2. Directors and Executive Officers of Merger Subsidiary. The
following table sets forth the name and position with Merger Subsidiary
of each director and executive officer of Merger Subsidiary and, with
respect to Steven M. Woghin, his age, present principal occupation or
employment, and material occupations, positions, offices or employments
for the past five years. For further information regarding such persons
(other than Steven M. Woghin), see paragraph 1 above.
</TABLE>
<TABLE>
<CAPTION>
Name Position with Merger Subsidiary
- ---------- ------------------------------------
<S> <C> <C>
Sanjay Kumar Director and President of Merger
Subsidiary since its incorporation on
October 4, 1996.
Peter A. Schwartz Director, Vice President and Treasurer
of Merger Subsidiary since its
incorporation on October 4, 1996.
Steven M. Woghin 49 Director, Vice President and Secretary
of Merger Subsidiary since its
incorporation on October 4, 1996.
Senior Vice President and General
Counsel of Computer Associates since
April 1995. He was Vice
President--Legal of Computer
Associates from April 1992 to March
1995. Prior to 1990 through April
1992, he was a partner in the law firm
of Arter & Hadden.
</TABLE>
None of the executive officers and directors of Computer
Associates or Merger Subsidiary currently is a director of, or holds any
position with, the Company. To the knowledge of Computer Associates
and Merger Subsidiary, none of Computer Associates' or Merger
Subsidiary's directors, executive officers, affiliates or associates
beneficially owns any equity securities, or rights to acquire any equity
securities, of the Company and none has been involved in any
transactions with the Company or any of its directors, executive
officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the Commission.
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted.
The Letter of Transmittal, certificates for Shares and any other
required documents should be sent to the Depositary at one of the
addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission (for By Hand or Overnight
Tender and Exchange Eligible Institutions Only): Courier:
Department (212) 815-6213 Tender and Exchange
P.O. Box 11248 Department
Church Street Station 101 Barclay Street
New York, New York For Information Telephone: Receive & Deliver
10286-1248 (800) 507-9357 Window
New York, New York
10286
Questions or requests for assistance or additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent at the address and telephone numbers set forth below.
Stockholders may also contact their broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect)
(800) 697-6974 (Toll Free)
EXHIBIT 99(a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(including the associated Rights)
of
CHEYENNE SOFTWARE, INC.
Pursuant to the Offer to Purchase
dated October 11, 1996
by
TSE-TSEHESE-STAESTSE, INC.
a wholly-owned subsidiary of
COMPUTER ASSOCIATES INTERNATIONAL, INC.
- ------------------------------------------------------------------------
| THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK |
| CITY TIME, ON FRIDAY, NOVEMBER 8, 1996, UNLESS THE OFFER IS EXTENDED.|
- ------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission By Hand or Overnight
Tender and Exchange (for Eligible Courier:
Department Institutions Only): Tender and Exchange
P.O. Box 11248 (212) 815-6213 Department
Church Street Station 101 Barclay Street
New York, New York Receive & Deliver
10286-1248 For Information Window
Telephone: New York, New York
(800) 507-9357 10286
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates
representing Shares (defined below) are to be forwarded with this Letter
of Transmittal or, unless an Agent's Message (defined in Section 2 of
the Offer to Purchase) is utilized, if delivery of Shares is to be made
by book-entry transfer to the Depositary's account at The Depository
Trust Company or Philadelphia Depository Trust Company (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities")
pursuant to the procedure set forth in Section 3 of the Offer to
Purchase.
Stockholders who cannot deliver certificates for their Shares or
who cannot deliver confirmation of the book-entry transfer of their
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (a "Book-Entry Confirmation") and all other documents
required by this Letter of Transmittal to the Depositary by the
Expiration Date (defined in Section 1 of the Offer to Purchase) must
tender their Shares pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. See Instruction 2.
Delivery of documents to a Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
<PAGE> 2
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------
Name(s) and Address(es) of |
Registered Holder(s) |
(Please fill in, if | Shares Tendered
blank, exactly as name(s) | (Attach additional signed
appear(s)on certificate(s)) | list if necessary)
- ----------------------------|-----------------------------------------
|Certificate | Total Number | Total
|Number(s)(1)| of Shares | Number
| | Represented by | of Shares
| | Certificate(s)(1)|Tendered(2)
- ----------------------------|------------|------------------|-----------
| | |
- ----------------------------|------------|------------------|-----------
| | |
- ----------------------------|------------|------------------|-----------
| | |
- ----------------------------|------------|------------------|-----------
|Total Shares| |
- ------------------------------------------------------------------------
(1) Need not be completed by stockholders tendering by book-entry
transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares
described above are being tendered. See Instruction 4.
-----------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY
TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
------------------------------------
The Depository Trust Company
Philadelphia Depository Trust Company
Account Number
----------------------------------------------------
Transaction Code Number
-------------------------------------------
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY
AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------
Name of Institution that Guaranteed Delivery:
---------------------
<PAGE> 3
If delivery is by book-entry transfer, Check box of Book-Entry
Transfer Facility:
The Depository Trust Company
Philadelphia Depository Trust Company
Account Number
-------------------------------------------------
Transaction Code Number
----------------------------------------
Ladies and Gentlemen:
The undersigned hereby tenders to Tse-tsehese-staestse,
Inc., a Delaware corporation ("Merger Subsidiary") and a wholly-owned
subsidiary of Computer Associates International, Inc., a Delaware
corporation ("Computer Associates"), the above described shares of
Common Stock, par value $.01 per share, of Cheyenne Software, Inc., a
Delaware corporation (the "Company"), including the associated Preferred
Share Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of April 15, 1996, as amended, between the Company
and Continental Stock Transfer & Trust Company, as Rights Agent (the
shares and the Rights collectively referred to as the "Shares")
pursuant to Merger Subsidiary's offer to purchase all outstanding Shares
at a price of $30.50 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase
dated October 11, 1996 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which, together
with any amendments or supplements thereto or hereto, collectively
constitute the "Offer"). Merger Subsidiary reserves the right to
transfer or assign, in whole or from time to time in part, to one or
more of Computer Associates or any of its wholly-owned subsidiaries the
right to purchase Shares tendered pursuant to the Offer.
Subject to and effective upon acceptance for payment of the
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and
transfers to, or upon the order of, Merger Subsidiary all right, title
and interest in and to all the Shares that are being tendered hereby
(and any and all other Shares or other securities issued or issuable in
respect thereof on or after October 7, 1996) and irrevocably constitutes
and appoints the Depositary the true and lawful agent and attorney-in-
fact of the undersigned with respect to such Shares (and all such other
Shares or securities), with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Shares (and
all such other Shares or securities), or transfer ownership of such
Shares (and all such other Shares or securities) on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in
either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of Merger Subsidiary, (b) present
such Shares (and all such other Shares or securities) for transfer on
the books of the Company and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and all such
other Shares or securities), all in accordance with the terms of the
Offer.
If, on or after October 7, 1996, the Company should declare
or pay any cash or stock dividend or other distribution on or issue any
rights with respect to the Shares, payable or distributable to
stockholders of record on a date before the transfer to the name of
Merger Subsidiary or its nominee or transferee on the Company's stock
transfer records of the Shares accepted for payment pursuant to the
Offer, then, subject to the provisions of the Offer to Purchase, (i) the
purchase price per Share payable by Merger Subsidiary pursuant to the
Offer will be reduced by the amount of any such cash dividend or cash
distribution and (ii) the whole of any such non-cash dividend,
distribution or right will be received and held by the tendering
stockholder for the account of Merger Subsidiary and shall be required
to be promptly remitted and transferred by each tendering stockholder to
<PAGE> 4
the Depositary for the account of Merger Subsidiary, accompanied by
appropriate documentation of transfer. Pending such remittance, Merger
Subsidiary will be entitled to all rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the
entire purchase price or deduct from the purchase price the amount of
value thereof, as determined by Merger Subsidiary in its sole
discretion.
The undersigned hereby irrevocably appoints Mr. Sanjay
Kumar, Mr. Peter A. Schwartz and Mr. Steven M. Woghin, and each of them,
and any other designees of Merger Subsidiary as the attorneys and
proxies of the undersigned, each with full power of substitution, to
exercise all voting and other rights of the undersigned in such manner
as each such attorney and proxy or its substitute shall in its sole
discretion deem proper with respect to, to execute any written consent
concerning any matter as each such attorney and proxy or its substitute
shall in its sole discretion deem proper with respect to, and to
otherwise act as such attorney and proxy or its substitute shall in
its sole discretion deem proper with respect to, all of the Shares
tendered hereby which have been accepted for payment by Merger
Subsidiary prior to the time of any vote or other action (and any and
all other Shares or other securities issued or issuable in respect
thereof on or after October 7, 1996), at any meeting of stockholders of
the Company (whether annual or special and whether or not an adjourned
meeting), by written consent or otherwise. This proxy is irrevocable
and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Merger Subsidiary in
accordance with the terms of the Offer. Such acceptance for payment
shall revoke any other proxy or written consent granted by the
undersigned at any time with respect to such Shares (and all such other
Shares or securities), and no subsequent proxies will be given or
written consents will be executed by the undersigned (and if given or
executed, will not be deemed to be effective). The undersigned
acknowledges that in order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, Merger
Subsidiary or Merger Subsidiary's designee must be able to
exercise full voting and other rights of a record and beneficial holder
with respect to such Shares.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and
transfer the Shares tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof on or after
October 7, 1996), that the undersigned own(s) the Shares tendered hereby
within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that such tender
of Shares complies with Rule 14e-4 under the Exchange Act, and that when
the same are accepted for payment by Merger Subsidiary, Merger
Subsidiary will acquire good and unencumbered title thereto, free and
clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claims. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Depositary or
Merger Subsidiary to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such
other Shares or securities).
All authority herein conferred or agreed to be conferred in
this Letter of Transmittal shall not be affected by, and shall survive,
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors, assigns, administrators, trustees in
bankruptcy, personal and legal representatives of the undersigned.
Except as stated in the Offer, this tender is irrevocable, provided that
Shares tendered pursuant to the Offer may be withdrawn at any time prior
to the Expiration Date or at any time on or after December 9, 1996,
unless theretofore accepted for payment.
The undersigned understands that tenders of Shares pursuant
to any one of the procedures described in Section 3 of the Offer to
Purchase and in the instructions hereto will constitute a binding
agreement between the undersigned and Merger Subsidiary upon the terms
and subject to the conditions of the Offer. The undersigned recognizes
<PAGE> 5
that under certain circumstances set forth in the Offer to Purchase,
Merger Subsidiary may not be required to accept for payment any Shares
tendered hereby.
Unless otherwise indicated under "Special Payment
Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any certificates for Shares not tendered
or not accepted for payment, in the name(s) of the registered holder(s)
appearing under "Description of Shares Tendered" (and, in the case of
Shares tendered by book-entry transfer, by credit to the account at the
Book-Entry Transfer Facility designated above). Similarly, unless
otherwise indicated under "Special Delivery Instructions", please mail
the check for the purchase price of any Shares purchased and any
certificates for Shares not tendered or not accepted for
payment (and accompanying documents, as appropriate) to the address(es)
of the registered holder(s) appearing under "Description of Shares
Tendered" shown below the undersigned's signature(s). In the event that
both "Special Payment Instructions" and "Special Delivery Instructions"
are completed, please issue the check for the purchase price of any
Shares purchased and return any certificates for Shares not tendered or
not accepted for payment (and accompanying documents, as appropriate) in
the name(s) of, and mail said check and any certificates (and
accompanying documents, as appropriate) to, the person(s) so indicated.
The undersigned recognizes that Merger Subsidiary has no obligation,
pursuant to the "Special Payment Instructions", to transfer any
Shares from the name of the registered holder(s) thereof if Merger
Subsidiary does not accept for payment any of the Shares so tendered.
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) (See Instructions 5 and 7)
To be completed ONLY if the check To be completed ONLY if the check
for the purchase price of Shares for the purchase price of Shares
purchased or certificates for purchased or certificates for
Shares not tendered or not Shares not tendered or not
purchased are to be issued in the purchased are to be mailed to
name of someone other than the someone other than the
undersigned, or if Shares undersigned or to the undersigned
tendered by book-entry transfer at an address other than that
that are not purchased are to be shown above.
returned by credit to an account
at one of the Book-Entry Transfer Mail check and/or certificates
Facilities other than that to:
designated above.
Name
Issue check and/or certificates ----------------------------
to: (Please Print)
Address
Name -------------------------
---------------------------
(Please Print) ---------------------------------
(Include Zip Code)
Address
------------------------
- -------------------------------
(Include Zip Code)
- -------------------------------
(Taxpayer Identification or
Social Security No.)
Credit unpurchased Shares
tendered by book-entry transfer
to the account set forth below:
The Depository Trust Company
Philadelphia Depository Trust Company
Account Number
------------------------
<PAGE> 7
- ------------------------------------------------------------------------
SIGN HERE
(Please complete Substitute Form W-9 below)
- ------------------------------------------------------------------------
Signature(s) of Holder(s) of Shares
- -----------------------------------------------------------------------
Dated: , 1996
(Must be signed by registered holder(s) exactly as name(s) appear(s)
on stock certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates
and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer
of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information.
See Instruction 5.)
Name(s)
------------------------------------------------------------
(Please Print)
- -------------------------------------------------------------------
Capacity (full title) (See Instruction 5)
--------------------------
Address
------------------------------------------------------------
- -------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
----------------------------------------
Tax Identification or Social Security No.:
-------------------------
Guarantee of Signature(s)
(If Required - See Instructions 1 and 5)
Authorized Signature
-----------------------------------------------
Name
---------------------------------------------------------------
Name of Firm
------------------------------------------------------
Address
------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
----------------------------------------
Dated: , 1996
<PAGE> 8
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a bank,
broker, dealer, credit union, savings association or other entity that
is a member of a recognized Medallion Program approved by The Securities
Transfer Association, Inc. (an "Eligible Institution"). Signatures on
this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in
one of the Book-Entry Transfer Facilities whose name appears on a
security position listing as the owner of Shares) tendered herewith and
such holder(s) have not completed the instruction entitled "Special
Payment Instructions" on this Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. In all
other cases, all signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if delivery of
Shares is to be made by book-entry transfer pursuant to the procedure
set forth in Section 3 of the Offer to Purchase. Certificates for all
physically delivered Shares, or a Book-Entry Confirmation of all Shares
delivered electronically, as the case may be, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
or, in connection with a book-entry transfer, an Agent's Message, and
any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the
front page of this Letter of Transmittal by the Expiration Date. If a
stockholder's certificate for Shares is not immediately available or
time will not permit all required documents to reach the Depositary by
the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such stockholder's Shares may nevertheless
be tendered pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by Merger Subsidiary must be received
by the Depositary by the Expiration Date and (c) the certificates for
all physically delivered Shares, or a Book-Entry Confirmation, as well
as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) (or, in the case of a book-entry delivery, an Agent's
Message) and any other documents required by this Letter of Transmittal,
must be received by the Depositary within three trading days on the
American Stock Exchange, Inc. after the date of execution of such Notice
of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase.
The method of delivery of Shares and all other required
documents, including delivery through any Book-Entry Transfer Facility,
is at the option and risk of the tendering stockholder, and the delivery
will be deemed made only when actually received by the Depositary. If
certificates for Shares are sent by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be
accepted, and no fractional Shares will be purchased. By executing this
Letter of Transmittal (or facsimile thereof), the tendering stockholder
waives any right to receive any notice of the acceptance for payment of
the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
<PAGE> 9
certificate numbers and/or the number of Shares should be listed on a
separate schedule attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the
number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered". In such case, a new certificate for the remainder of
the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise provided
in the appropriate box on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All
Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must
correspond with the name(s) as written on the face of the certificates
without alteration, enlargement or any change whatsoever.
If any of the Shares tendered hereby is held of record by
two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any of the Shares tendered hereby are registered in
different names on different certificates, it will be necessary to
complete, sign and submit as many separate Letters of Transmittal as
there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates
or separate stock powers are required unless payment of the purchase
price is to be made, or Shares not tendered or not purchased are to be
returned, in the name of any person other than the registered holder(s).
Signatures on any such certificates or stock powers must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Shares tendered hereby,
certificates must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on the certificates for such Shares. Signature(s)
on any such certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any certificate or stock
power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate
when signing, and proper evidence satisfactory to Merger Subsidiary of
the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6,
Merger Subsidiary will pay any stock transfer taxes with respect to the
sale and transfer of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name
of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such person
will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the certificates listed in this
Letter of Transmittal.
<PAGE> 10
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares
not tendered or not purchased are to be returned, in the name of a
person other than the person(s) signing this Letter of Transmittal or if
the check or any certificates for Shares not tendered or not purchased
are to be mailed to someone other than the person(s) signing this Letter
of Transmittal or to the person(s) signing this Letter of Transmittal at
an address other than that shown above, the appropriate boxes on this
Letter of Transmittal should be completed. Stockholders tendering
Shares by book-entry transfer may request that Shares not purchased be
credited to such account at any of the Book-Entry Transfer Facilities as
such Stockholder may designate under "Special Payment Instructions". If
no such instructions are given, any such Shares not purchased will be
returned by crediting the account at the Book-Entry Transfer Facilities
designated above.
8. Waiver of Conditions. Subject to the terms of the Offer, Merger
Subsidiary reserves the absolute right in its sole discretion to waive
any of the specified conditions of the Offer (other than the Minimum
Condition), in whole or in part, in the case of any Shares tendered.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. Federal
income tax law, a stockholder whose tendered Shares are accepted for
payment is required to provide the Depositary with such stockholder's
correct taxpayer identification number ("TIN") on Substitute Form W-9
below. If the Depositary is not provided with the correct TIN, the
Internal Revenue Service may subject the stockholder or other payee to a
$50 penalty. In addition, payments that are made to such stockholder or
other payee with respect to Shares purchased pursuant to the Offer may
be subject to 31% backup withholding.
Certain stockholders (including among others, all
corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, the stockholder must
submit a Form W-8, signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the
Depositary. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to
withhold 31% of any such payments made to the stockholder or other
payee. Backup withholding is not an additional tax. Rather, the tax
liability of persons subject to backup withholding will be reduced by
the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the Internal Revenue Service,
provided that the required information is given to the Internal Revenue
Service.
The box in Part 3 of the Substitute Form W-9 may be checked
if the tendering stockholder has not been issued a TIN and has applied
for a TIN or intends to apply for a TIN in the near future. If the box
in Part 3 is checked, the stockholder or other payee must also complete
the Certificate of Awaiting Taxpayer Identification Number below in
order to avoid backup withholding. Notwithstanding that the box in Part
3 is checked and the Certificate of Awaiting Taxpayer Identification
Number is completed, the Depositary will withhold 31% on all payments
made prior to the time a properly certified Taxpayer Identification
Number is provided to the Depositary. However, such amounts will be
refunded to such Stockholder if a Taxpayer Identification Number is
provided to the Depositary within 60 days.
The stockholder is required to give the Depositary the TIN
(e.g., social security number or employer identification number) of the
record owner of the Shares or of the last transferee appearing on the
transfers attached to, or endorsed on, the Shares. If the Shares are in
more than one name or are not in the name of the actual owner, consult
<PAGE> 11
the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional guidance on which number
to report.
10. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase and this Letter
of Transmittal may be obtained from the Information Agent at its address
or telephone number set forth below. Questions may be directed to the
Information Agent.
11. Lost, Destroyed or Stolen Certificates. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder
should promptly notify the Depositary. The stockholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot
be processed until the procedures for replacing lost or destroyed
certificates have been followed.
12. Acceptance of Tendered Shares. Upon the terms and subject
to the conditions of the Offer, Merger Subsidiary will have accepted for
payment (and thereby purchased) Shares validly tendered and not
withdrawn when, as and if Merger Subsidiary gives oral or written notice
to the Depositary of its acceptance of the tenders of such Shares
pursuant to the Offer.
13. Withdrawal Rights. Tendered Shares may be withdrawn only
pursuant to the procedure set forth in Section 4 of the Offer to
Purchase.
Important: This Letter of Transmittal or a facsimile copy
hereof or, in the case of a book-entry delivery, an Agent's Message
(together with certificates for, or a Book-Entry Confirmation with
respect to, tendered Shares with any required signature guarantees and
all other required documents) must be received by the Depositary, or the
Notice of Guaranteed Delivery must be received by the Depositary, by the
Expiration Date.
<PAGE> 12
- ----------------------------------------------------------------------
PAYER'S NAME: The Bank of New York
- ----------------------------------------------------------------------
Part 1--PLEASE PROVIDE Social Security Number
SUBSTITUTE YOUR TIN IN THE BOX AT or Employer Identification
RIGHT AND CERTIFY BY Number
SIGNING AND DATING BELOW.
FORM W-9 -----------------
Department of
the Treasury
Internal
Revenue
Service
Payer's
Request for
Taxpayer
Identification
Number ("TIN")
Part 2--Certification--Under penalties of perjury, I
certify that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me) and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, or (b)
I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject
to backup withholding as a result of a failure
to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject
to backup withholding. Certification
Instructions--You must cross out Item (2) above
if you have been notified by the IRS that you
are currently subject to backup withholding
because of under-reporting interest
or dividends on you tax return. However, if
after being notified by the IRS that you were
subject to backup withholding you received
another notification from the IRS that you are
no longer subject to backup withholding, do not
cross out such Item (2).
Part 3-
SIGNATURE DATE , 1996
------ ----
Awaiting TIN
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE> 13
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or
delivered an application to receive a taxpayer identification number to
the appropriate Internal Revenue Service Center or Social Security
Administration Office, or (2) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable
payments made to me will be withheld, but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature Date , 1996
----------------------- ---------
<PAGE> 14
The Depositary for the Offer is
THE BANK OF NEW YORK
By Mail: Facsimile Transmission By Hand or Overnight
Tender and Exchange (for Eligible Courier:
Department Institutions Only): Tender and Exchange
P.O. Box 11248 (212) 815-6213 Department
Church Street Station 101 Barclay Street
New York, New York Receive & Deliver
10286-1248 Window
For Information Telephone: New York, New York
(800) 507-9357 10286
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect)
(800) 697-6974 (Toll Free)
Exhibit 99(a)(3)
NOTICE OF GUARANTEED DELIVERY
for
Tender of Shares of Common Stock
(including the associated Rights)
of
CHEYENNE SOFTWARE, INC.
This Notice of Guaranteed Delivery, or one substantially in
the form hereof, must be used to accept the Offer (defined below) if (i)
certificates representing shares of Common Stock, par value $.01
per share, of Cheyenne Software, Inc., a Delaware corporation (the
"Company"), including the associated Preferred Share Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of
April 15, 1996, as amended, between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the shares and the Rights
collectively referred to as the "Shares"), are not immediately
available, (ii) the procedure for book-entry transfer cannot be
completed on a timely basis or (iii) time will not permit all required
documents to reach The Bank of New York (the "Depositary") prior to the
expiration of the Offer. This Notice of Guaranteed Delivery may be
delivered by hand, facsimile transmission or mail to the Depositary.
See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission By Hand or Overnight
Tender and Exchange (for Eligible Courier: Tender and Exchange
Department Institutions Only): Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive & Deliver
New York, New York Window
10286-1248 New York, New York
For Information Telephone: 10286
(800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON
A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE
INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON
THE APPROPRIATE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Tse-tsehese-staestse,
Inc., a Delaware corporation ("Merger Subsidiary") and a wholly-owned
subsidiary of Computer Associates International, Inc., a
Delaware corporation, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated October 11, 1996 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, together
with any supplements or amendments thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, _____________ shares
of Common Stock, par value $.01 per share, of Cheyenne Software, Inc., a
Delaware corporation (the "Company"), including the associated Preferred
Share Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of April 15, 1996, as amended, between the Company
and Continental Stock Transfer & Trust Company, as Rights Agent (the
shares and the Rights collectively referred to as the "Shares"),
pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase.
Certificate No(s).: Name(s) of Record Holder(s):
(if available)
- ------------------------------- ---------------------------------
- ------------------------------- ---------------------------------
(Please type or print)
(Check one box if Shares will be Address(es):
tendered by book-entry transfer) ---------------------
---------------------------------
[ ] The Depository Trust Company (Zip Code)
[ ] Philadelphia Depository Trust Company --------------
Area Code and Tel. No.:
----------
(Daytime telephone number)
Account Number: Signature(s):
------------------- --------------------
Dated: , 1996
---------------------- --------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution (defined in Section
3 of the Offer to Purchase), hereby (i) represents that the tender of
shares effected hereby complies with Rule 14e-4 under the Securities
Exchange Act of 1934, as amended and (ii) guarantees delivery to the
Depositary, at one of its addresses set forth above, of certificates
representing the Shares tendered hereby, in proper form for transfer, or
a confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities
(defined in Section 3 of the Offer to Purchase), in either case together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or, in the case of a book-entry transfer, an Agent's
Message (defined in Section 2 of the Offer to Purchase), together with
any other documents required by the Letter of Transmittal, all within
three trading days on the American Stock Exchange, Inc. after the date
hereof.
Name of Firm:
----------------------- --------------------------
(Authorized Signature)
Address:
---------------------------- Name:
---------------------
- ------------------------------------ (Please type or print)
(Zip Code) Title:
---------------------
Area Code and Tel. No.: Date: , 1996
------------- ---------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
Exhibit 99(a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Rights)
of
CHEYENNE SOFTWARE, INC.
at
$30.50 Net Per Share
by
TSE-TSEHESE-STAESTSE, INC.
a wholly owned subsidiary of
COMPUTER ASSOCIATES INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 8, 1996, UNLESS THE OFFER IS EXTENDED.
October 11, 1996
To Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees:
We are enclosing the material listed below in connection
with the offer by Tse-tsehese-staestse, Inc., a Delaware corporation
("Merger Subsidiary") and a wholly-owned subsidiary of Computer
Associates International, Inc., a Delaware corporation, to purchase all
outstanding shares of Common Stock, par value $.01 per share, of
Cheyenne Software, Inc., a Delaware corporation (the "Company"),
including the associated Preferred Share Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of April 15, 1996, as
amended, between the Company and Continental Stock Transfer & Trust
Company, as Rights Agent (the shares and the Rights collectively
referred to as the "Shares"), at $30.50 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in Merger
Subsidiary's Offer to Purchase, dated October 11, 1996 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, together with
any supplements or amendments thereto, collectively constitute the
"Offer").
For your information and for forwarding to your clients for
whom you hold Shares registered in your name or in the name of your
nominee, we are enclosing the following documents:
1. Offer to Purchase;
2. Letter of Transmittal for your use and for the
information of your clients;
3. Notice of Guaranteed Delivery to be used to accept
the Offer if the Shares and all other required documents
cannot be delivered to the Depositary by the Expiration
Date (defined in Section 1 of the Offer to Purchase) or
<PAGE> 2
if the procedure for book-entry transfer cannot be
completed by the Expiration Date;
4. A form of letter which may be sent to your clients
for whose accounts you hold Shares registered in your
name or in the name of your nominee, with space provided
for obtaining such clients' instructions with regard to
the Offer;
5. Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing
information relating to backup federal income tax
withholding; and
6. Return envelope addressed to The Bank of New York,
the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER, 8, 1996, UNLESS THE
OFFER IS EXTENDED.
In order to take advantage of the Offer, (i) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
or an Agent's Message (defined in Section 2 of the Offer to Purchase) in
connection with a book-entry delivery of Shares, and all other required
documents should be sent to the Depositary, and (ii) either certificates
representing the tendered Shares should be delivered to the Depositary,
or such Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book-Entry Transfer
Facilities (described in Section 3 of the Offer to Purchase), all in
accordance with the instructions set forth in the Letter of Transmittal
and the Offer to Purchase.
Merger Subsidiary will not pay any fees or commissions to
any broker or dealer or other person (other than the Information Agent
and the Depositary as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. Merger Subsidiary will,
however, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable and necessary costs and expenses incurred
by them in forwarding materials to their customers. Merger Subsidiary
will pay all stock transfer taxes applicable to its purchase of Shares
pursuant to the Offer, subject to Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer should
be addressed to, and additional copies of the enclosed materials may be
obtained from, the Information Agent at the addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
TSE-TSEHESE-STAESTSE, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU THE AGENT OF TSE-TSEHESE-STAESTSE, INC., COMPUTER ASSOCIATES
INTERNATIONAL, INC., THE INFORMATION AGENT OR THE DEPOSITARY OR ANY
AFFILIATE OF ANY OF THEM OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
<PAGE> 3
WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
Exhibit 99(a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Rights)
of
CHEYENNE SOFTWARE, INC.
at
$30.50 Net Per Share
by
TSE-TSEHESE-STAESTSE, INC.
a wholly owned subsidiary of
COMPUTER ASSOCIATES INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 8, 1996, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase,
dated October 11, 1996 (the "Offer to Purchase"), and the related Letter
of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") relating to an offer by
Tse-tsehese-staestse, Inc., a Delaware corporation ("Merger Subsidiary")
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 $.01 per share, of
Cheyenne Software, Inc., a Delaware corporation (the "Company"),
including the associated Preferred Share Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of April 15, 1996, as
amended, between the Company and Continental Stock Transfer & Trust
Company, as Rights Agent (the shares and the Rights collectively
referred to as the "Shares"), at a purchase price of $30.50 per Share,
net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer. Holders of Shares whose certificates for such
Shares are not immediately available or who cannot deliver their
certificates and all other required documents to the Depositary, or
complete the procedure for book-entry transfer set forth in
Section 3 of the Offer to Purchase, prior to the Expiration Date
(defined in Section 1 of the Offer to Purchase) must tender their Shares
according to the guaranteed delivery procedures set forth in Section 3
of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT.
A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
<PAGE> 2
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO
TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender
any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $30.50 per Share, net to you in cash
without interest thereon, upon the terms and subject to the conditions
set forth in the Offer.
2. The Board of Directors of the Company has unanimously
determined that the Offer and the transactions contemplated by the
Merger Agreement (defined in the Introduction to the Offer to Purchase)
are fair to, and in the best interests of, the stockholders of the
Company, has unanimously approved the Offer and the transactions
contemplated by the Merger Agreement, and unanimously recommends that
the stockholders of the Company accept the Offer and tender their
Shares.
3. The Offer and withdrawal rights expire at 12:00 Midnight,
New York City time, on Friday, November 8, 1996, unless the Offer is
extended. In all cases, payment for Shares accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
(i) certificates for such Shares (or a confirmation of a book-entry
transfer of such Shares as described in Section 2 of the Offer to
Purchase), (ii) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or an Agent's Message (defined in
Section 2 of the Offer to Purchase) in connection with a book-entry
transfer and (iii) any other documents required by the Letter of
Transmittal.
4. The Offer is conditioned upon, among other things, (i)
there being validly tendered by the Expiration Date and not withdrawn a
number of Shares which, together with the Shares then owned by Merger
Subsidiary and Computer Associates, would represent at least a majority
of the Fully Diluted Shares (defined in the Introduction to the Offer to
Purchase) and (ii) the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
5. Merger Subsidiary will pay any stock transfer taxes
applicable to the sale of Shares to Merger Subsidiary pursuant to the
Offer, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
If you wish to have us tender any or all of your Shares,
please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope
to return your instructions to us is enclosed. If you authorize tender
of your Shares, all such Shares will be tendered unless otherwise
specified on the detachable part hereof. Your instructions should be
forwarded promptly to permit us to submit a tender on your behalf by the
expiration of the Offer. If you do not instruct us to tender your
Shares, they will not be tendered.
<PAGE> 3
The Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Shares in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance
with the laws of such jurisdiction.
<PAGE> 4
Instructions with respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Rights)
of
CHEYENNE SOFTWARE, INC.
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase, dated October 11, 1996, and the related
Letter of Transmittal, relating to the offer by Tse-tsehese-staestse,
Inc., a Delaware corporation and a wholly-owned subsidiary of Computer
Associates International, Inc., a Delaware corporation, to purchase all
outstanding shares of Common Stock, par value $.01 per share, of
Cheyenne Software, Inc., a Delaware corporation (the "Company"),
including the associated Preferred Shares Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of April 15, 1996, as
amended, between the Company and Continental Stock Transfer & Trust
Company, as Rights Agent (the shares and the Rights collectively
referred to as the "Shares").
This will instruct you to tender the number of Shares
indicated below held by you for the account of the undersigned, upon the
terms and subject to the conditions set forth in such Offer to Purchase
and the related Letter of Transmittal.
Dated: _________________, 1996
Number of Shares
to be Tendered ---------------------------------
______ Shares* (Signature)
---------------------------------
Please Print Names(s)
---------------------------------
Address
--------------------------
---------------------------------
Include Zip Code
Area Code and
Telephone No.
---------------------
Taxpayer Identification
or Social Security No.
------------
----------------------------------
_________________________
* Unless otherwise indicated, it will be assumed that all Shares
held by us for your account are to be tendered.
Exhibit 99(a)(6)
Contact: Doug Robinson, CA Investor Relations, (516) 342-2745
Bob Gordon, CA Public Relations, (516) 342-2391
Elliot Levine, Cheyenne Software, (516) 465-4411
Jeff Finkle, Cheyenne Software, (516) 465-5580
COMPUTER ASSOCIATES TO ACQUIRE CHEYENNE SOFTWARE, INC.
Storage Management, Anti-Virus, And Communications Software
To Strengthen CA's Management Solutions
Deal Valued At Approximately $1.2 Billion
ISLANDIA, NY, October 7, 1996 - Computer Associates International, Inc.
(NYSE: CA) and Cheyenne Software, Inc. (AMEX: CYE) have entered into a
merger agreement for CA to acquire Cheyenne Software through a cash
tender offer. A wholly-owned subsidiary of CA will offer to purchase
all outstanding shares of Cheyenne's common stock for $30.50 per share.
The merger has been unanimously approved by the Boards of Directors of
both Cheyenne and CA. CA will fund the acquisition through cash
balances and existing credit facilities.
"We are extremely excited by the synergistic nature of this
acquisition," said CA Chairman and CEO Charles B. Wang. "Cheyenne is
the recognized leader in storage management solutions for the Windows NT
and NetWare environments. The addition of its product suite will
strengthen our efforts in the desktop and LAN environments. Cheyenne's
products, along with CA's Unicenter family of enterprise management
products, will offer an unbeatable combination for solving the complex
management problems that clients are facing today."
"In addition to a strong product offering, Cheyenne's employees are an
integral part of the value in this acquisition. In recognition of their
skills and talents, CA intends to retain all of Cheyenne's employees.
It is expected that Cheyenne will operate as a division of CA, and that
it will continue to aggressively support its current distribution
channel strategy."
"This is a tremendous opportunity for our clients, business partners,
employees, and shareholders," said Cheyenne Chairman and CEO ReiJane
Huai. "CA's unparalleled development and support capabilities and
financial resources will now be available to our clients, along with
Cheyenne's award-winning solutions in storage management, anti-virus,
and communications software. Equally exciting is the fact that all of
us at Cheyenne will have the opportunity to participate in the next
chapter of Cheyenne's growth."
<PAGE>
In the tender offer, CA seeks to purchase at least a majority of
Cheyenne's outstanding shares. Consummation of the tender offer will be
subject to the expiration or termination of any applicable antitrust
waiting period and the receipt of all regulatory approvals. Following
completion of the tender offer, the subsidiary of CA will be merged into
Cheyenne, and all of Cheyenne's shares not owned by CA will be converted
into the right to receive $30.50 per share in cash.
Computer Associates International, Inc. (NYSE: CA), with headquarters in
Islandia, NY, is the world leader in mission-critical software. The
company develops, licenses, and supports more than 500 integrated
products that include enterprise computing and information management,
application development, manufacturing and financial applications. CA
has 9000 people in 130 offices in 40 countries and had revenue of more
than $3.5 billion in fiscal year 1996. CA can be reached by visiting
http://www.cai.com on the World Wide Web, emailing [email protected], or
calling 1-516-342-5224.
Cheyenne Software, Inc. is an international developer of essential
software solutions for NetWare, Windows NT, UNIX Macintosh, OS/2,
Windows 3.1 and Windows 95 operating systems. Its enterprise-wide
offerings include an array of storage management, security, and
communications products, including Cheyenne HSM, JETserve, InocuLAN,
FAXserve, and its flagship product line, the ARCserve family of network
backup software. Cheyenne can be contacted at (800) 243-9462 (U.S. or
Canada) or (516) 465-4000, or by visiting its WWW home page at:
http://www.cheyenne.com
###
All referenced product names are trademarks of their respective
companies.
Exhibit 99(a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER
TO GIVE THE PAYER. -- Social Security numbers have nine digits separated
by two hyphens: i.e. 000-00-0000. Employer identification numbers have
nine digits separated by only one hyphen: i.e. 00-0000000. The table
below will help determine the number to give the payer.
<TABLE>
<CAPTION>
- ---------------------------------- ----------------------------------
For this type Give the name and For this type Give the name
of account: SOCIAL SECURITY of account: and EMPLOYER
number of -- IDENTIFICATION
number of--
- ---------------------------------- ----------------------------------
<S> <C> <C> <C>
1.An The individual 6. A valid trust, The legal entity
individual's estate, or (Do not furnish
account pension trust the identifying
number of the
2.Two or The actual owner personal
more of the account or, representative
individuals if combined funds, or trustee
(joint any one of the unless the legal
account) individuals(1) entity itself is
not designated
3.Custodian The minor(2) in the account
account of a title.)(4)
minor (Uniform
Gift to Minors 7. Corporate The corporation
Act) account
4.(a)The usual The grantor- 8. Religious, The organization
revocable trustee(1) charitable, or
savings trust educational
account(grantor organization
is also account
trustee)
9. Partnership The partnership
(b)So-called The actual owner(1)
trust account 10.Association, The organization
that is not a club, or other
legal or valid tax-exempt
trust under organization
State law
11.A broker or The broker or
5.Sole The owner(3) registered nominee
proprietorship nominee
account
12.Account with The public
the Department entity
of Agriculture
in the name
of a public
entity (such
as a State
or local
government,
school
district, or
prison) that
receives
agricultural
program
payments
13.Sole The owner(3)
proprietor-
ship account
<FN>
(1) List first and circle the name of the person whose number you
furnish.
<FN>
(2) Circle the minor's name and furnish the minor's social security
number.
<FN>
(3) Show the name of the owner. You may also enter your business
name. You may use your Social Security Number or Employer
Identification Number.
<FN>
(4) List first and circle the name of the legal trust, estate, or
pension trust.
<FN>
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
</TABLE>
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
<TABLE>
<CAPTION>
OBTAINING A NUMBER
<S> <C>
If you don't have a taxpayer Payments of tax-exempt
interest(including
identification number or you exempt-interest
don't know your number, obtain dividends under section
852).
Form SS-5, Application for a Payments described in
Social Security Number Card, or section 6049(b)(5) to
Form SS-4, Application for non-resident aliens.
Employer Identification Number, Payments on tax-free
at the local office of the Social covenant bonds under
Security Administration or the section 1451.
Internal Revenue Service and Payments made by certain
apply for a number. foreign organizations.
Mortgage interest paid to
PAYEES EXEMPT FROM BACKUP an individual.
WITHHOLDING
Exempt payees described
Payees specifically exempted from above should file Form
backup withholding on ALL W-9 to avoid possible
payments include the following: erroneous backup
withholding. FILE THIS
A corporation. FORM WITH THE PAYER,
A financial institution. FURNISH YOUR TAXPAYER
An organization exempt from IDENTIFICATION NUMBER,
tax under section 501(a), or WRITE "EXEMPT" ON THE FACE
an individual retirement plan OF THE FORM, AND RETURN
or a custodial account under IT TO THE PAYER. IF THE
Section 403(b)(7). PAYMENTS ARE INTEREST,
The United States or any DIVIDENDS, OR PATRONAGE
agency or instrumentality DIVIDENDS, ALSO SIGN AND
thereof. DATE THE FORM.
A State, the District of
Columbia, a possession of the Certain payments, other
United States, or any than interest, dividends,
subdivision or and patronage dividends,
instrumentality thereof. that are not subject to
A foreign government, a information reporting, are
political subdivision of a also not subject to backup
foreign government, or any withholding. For details,
agency or instrumentality see the regulations under
thereof. sections 6041, 6041A(a),
An international organization 6045, and 6050A.
or any agency, or
instrumentality thereof. PRIVACY ACT NOTICE --
A registered dealer in Section 6109 requires
securities or commodities most recipients of
registered in the U.S. or a dividend, interest, or
possession of the U.S. other payments to give
A real estate investment taxpayer identification
trust. numbers to payers who
A common trust fund operated must report the payments
by a bank under section to IRS. IRS uses the
584(a). numbers for identification
An exempt charitable purposes. Payers must
remainder trust, or a non- be given the numbers
exempt trust described in whether or not recipients
section 4947(a)(1). are required to file tax
An entity registered at all returns. Payers must
times under the Investment generally withhold 31% of
Company Act of 1940. taxable interest,
A foreign central bank of dividend and certain
issue. other payments to a payee
A futures commission merchant who does not furnish a
registered with the Commodity taxpayer identification
Futures Trading Commission. number to a payer.
A middleman known in the Certain penalties may
investment community as a also apply.
nominee or listed in the most
recent publication of the PENALTIES
American Society of Corporate
Secretaries, Inc. Nominee (1) PENALTY FOR FAILURE
List. TO FURNISH TAXPAYER
IDENTIFICATION NUMBER --
Payments of dividends and patronage If you fail to furnish
dividends not generally subject to your taxpayer
backup withholding include the identification number to
following: a payer, you are subject
to a penalty of $50 for
Payments to nonresident each such failure unless
aliens subject to withholding your failure is due to
under section 1441. reasonable cause and
Payments to partnerships not not to willful neglect.
engaged in a trade or
business in the U.S. and (2) CIVIL PENALTY FOR
which have at least one FALSE INFORMATION WITH
nonresident partner. RESPECT TO WITHHOLDING --
Payments of patronage If you make a false
dividends where the amount statement with no
received is not paid in reasonable basis which
money. results in no imposition
Payments made by certain of backup withholding,
foreign organizations. you are subject to a
penalty of $500.
Payments of interest not generally
subject to backup withholding (3) CRIMINAL PENALTY FOR
include the following: FALSIFYING INFORMATION --
Falsifying certifications
Payments of interest on or affirmations may
obligations issued by subject you to criminal
individuals. Note: You may penalties including
be subject to backup fines and/or imprisonment.
withholding if this interest
is $600 or more and is paid FOR ADDITIONAL INFORMATION
in the course of the payer's CONTACT YOUR TAX
trade or business and you CONSULTANT OR THE
have not provided your INTERNAL REVENUE SERVICE.
correct taxpayer
identification number to the
payer.
</TABLE>
Exhibit 99(a)(8)
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to
Purchase dated October 11, 1996 and the related Letter of Transmittal
and any amendments or supplements thereto and is being made to all
holders of Shares. The Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares in any jurisdiction in
which the making of the Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require that the Offer be
made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of Merger Subsidiary by one or more registered brokers
licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Rights)
of
Cheyenne Software, Inc.
at
$30.50 Net Per Share
by
Tse-tsehese-staestse, Inc.
a wholly-owned subsidiary of
Computer Associates International, Inc.
Tse-tsehese-staestse, Inc., a Delaware corporation ("Merger
Subsidiary") and a wholly-owned subsidiary of Computer Associates
International, Inc., a Delaware corporation ("Computer Associates"), is
offering to purchase all outstanding shares of Common Stock, par value
$.01 per share, of Cheyenne Software, Inc., a Delaware corporation (the
"Company"), including the associated Preferred Share Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of
April 15, 1996, as amended, between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the shares and the Rights
collectively referred to as the "Shares"), at $30.50 per Share, net to
the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated October 11, 1996 (the "Offer to
Purchase") and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer"). Tendering stockholders of the Company will not be obligated
to pay brokerage fees or commissions or, except as set forth in the
Letter of Transmittal, transfer taxes on the purchase of Shares pursuant
to the Offer.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 8, 1996, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) there
being validly tendered by the expiration of the Offer and not withdrawn
a number of Shares which, together with the Shares then owned by
Computer Associates and Merger Subsidiary, would represent at least a
majority of the total number of outstanding Shares on a fully diluted
basis and (2) the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of October 7, 1996 (the "Merger Agreement"), among the
Company, Computer Associates and Merger Subsidiary, which has been
unanimously approved by the Company's Board of Directors. The Merger
Agreement provides, among other things, that, after consummation of the
Offer, and upon the later of (i) November 30, 1996, provided that as of
such date the conditions to the Merger set forth in the Merger Agreement
shall be fulfilled or waived and (ii) the first business day on which
such conditions to the Merger shall be fulfilled or waived, Merger
Subsidiary will be merged into the Company (the "Merger"), with the
Company continuing as the surviving corporation (the "Surviving
Corporation"). Pursuant to the Merger Agreement, at the effective time
of the Merger (the "Effective Time"), each outstanding Share (other than
Shares owned by Computer Associates, Merger Subsidiary or any subsidiary
of either of them or held by the Company as treasury stock (which shall
be canceled) or by stockholders exercising appraisal rights under the
Delaware General Corporation Law) will be converted into the right to
receive $30.50 in cash or any higher price paid for each Share in the
Offer, without interest.
The Board of Directors of the Company has unanimously
determined that the Offer and the transactions contemplated by the
Merger Agreement are fair to, and in the best interests of, the
stockholders of the Company, has unanimously approved the Offer and the
transactions contemplated by the Merger Agreement, and unanimously
recommends that the Stockholders of the Company accept the Offer and
tender their Shares.
Merger Subsidiary reserves the right, at any time and from
time to time, in its sole discretion, to extend the period of time
during which the Offer is open if, at the scheduled expiration date of
the Offer or any extension thereof, any of the conditions to the Offer
shall not have been satisfied, until such time as such conditions are
satisfied or waived, and for a further period of time of not more than
20 business days, regardless of whether or not any of the conditions to
the Offer have been satisfied, to meet the objective (which is not a
condition to the Offer) that there be validly tendered and not withdrawn
at least 90% of the Shares on a fully diluted basis. Any such extension
will be made by giving oral or written notice thereof to the Depositary
(defined below) and will be followed as promptly as practicable by
public announcement thereof.
For purposes of the Offer, Merger Subsidiary shall be deemed
to have accepted for payment tendered Shares when, as and if Merger
Subsidiary gives oral or written notice to The Bank of New York (the
"Depositary") of its acceptance of the tenders of such Shares. In all
cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or of a confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities (defined in the Offer to Purchase)), (ii)
a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or an Agent's Message (defined in the Offer to
Purchase) in connection with a book-entry transfer, and (iii) any other
required documents.
Tenders of Shares made pursuant to the Offer may be
withdrawn at any time prior to the expiration of the Offer. Thereafter,
such tenders are irrevocable, except that they may be withdrawn on or
after December 9, 1996 unless theretofore accepted for payment as
provided in the Offer to Purchase. If Merger Subsidiary extends the
period of time during which the Offer is open, is delayed in accepting
for payment or paying for Shares or is unable to accept for payment or
pay for Shares pursuant to the Offer for any reason, then, without
prejudice to Merger Subsidiary's rights under the Offer, the Depositary
may, on behalf of Merger Subsidiary, retain all Shares tendered, and
such Shares may not be withdrawn except as otherwise provided in the
Offer to Purchase. For a withdrawal to be effective, a written or
facsimile transmission notice of withdrawal must be timely received by
the Depositary at one of its addresses set forth in the Offer to
Purchase and must specify the name of the person who tendered the Shares
to be withdrawn and the number of Shares to be withdrawn. If the Shares
to be withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with (except in the case of Shares tendered by an Eligible
Institution (defined in the Offer to Purchase)) signatures guaranteed by
an Eligible Institution must be submitted prior to the release of such
Shares. In addition, such notice must specify, in the case of Shares
tendered by delivery of certificates, the name of the registered holder
(if different from that of the tendering stockholder) and the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn or, in the case of Shares tendered by book-entry transfer, the
name and number of the account at one of the Book-Entry Transfer
Facilities to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by again following one of the
procedures described in the Offer to Purchase at any time prior to the
expiration of the Offer.
The information required to be disclosed by paragraph
(e)(1)(vii) of Rule 14d-6 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
The Company has provided Merger Subsidiary with the
Company's stockholder list and security position listings for the
purpose of disseminating the Offer to holders of Shares. The Offer to
Purchase and the related Letter of Transmittal will be mailed to record
holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal
to beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal
contain important information which should be read before any decision
is made with respect to the Offer.
Requests for copies of the Offer to Purchase and the related
Letter of Transmittal and other tender offer materials may be directed
to the Information Agent as set forth below, and copies will be
furnished promptly at Merger Subsidiary's expense. No fees or
commissions will be payable by Merger Subsidiary to brokers, dealers or
other persons (other than the Information Agent) for soliciting tenders
of Shares pursuant to the Offer.
The Information Agent is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect)
1-800-697-6974 (Toll Free)
October 11, 1996
EXHIBIT 99(C)(1)
AGREEMENT AND PLAN OF MERGER
Dated as of October 7, 1996
Among
COMPUTER ASSOCIATES INTERNATIONAL, INC.,
TSE-TSEHESE-STAESTSE, INC.
And
CHEYENNE SOFTWARE, INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
THE OFFER
<S> <C>
SECTION 1.1. The Offer................................1
SECTION 1.2. Company Action...........................2
SECTION 1.3. Directors................................2
ARTICLE II
THE MERGER
SECTION 2.1. The Merger...............................3
SECTION 2.2. Conversion of Shares.....................4
SECTION 2.3. Surrender and Payment....................4
SECTION 2.4. Dissenting Shares........................5
SECTION 2.5. Stock Options............................5
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation.............6
SECTION 3.2. Bylaws...................................6
SECTION 3.2. Directors and Officers...................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties
of the Company......................................6
(a) Organization, Standing and Corporate Power......7
(b) Subsidiaries....................................7
(c) Capital Structure...............................7
(d) Authority; Noncontravention.....................8
(e) SEC Documents; Financial Statements; No
Undisclosed Liabilities.......................9
(f) Disclosure Documents............................9
(g) Absence of Certain Changes or Events...........10
(h) Litigation.....................................11
(i) Absence of Changes in Stock and Benefit Plans..11
(j) Participation and Coverage in Benefit Plan.....11
(k) ERISA Compliance...............................12
(l) Taxes..........................................13
(m) State Takeover Statutes; Rights Agreement......14
(n) Brokers; Schedule of Fees and Expenses.........14
(o) Permits; Compliance with Laws..................14
(p) Contracts; Debt Instruments....................14
(q) Opinion of Financial Advisor...................16
(r) Interests of Officers and Directors...........16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
(s) Technology.....................................16
(t) Change of Control..............................17
SECTION 4.2. Representations and Warranties
of Parent and Merger Subsidiary.....................17
(a) Organization, Standing and Corporate Power......17
(b) Authority; Noncontravention.....................17
(c) Disclosure Documents............................18
(d) Brokers.........................................18
(e) Delaware Law....................................18
(f) Financing.......................................18
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.1. Conduct of Business....................19
SECTION 5.2. Stockholder Meeting; Proxy Material....20
SECTION 5.3. Access to Information..................21
SECTION 5.4. Other Offers...........................21
SECTION 5.5. State Takeover Statutes; Rights
Agreement..............................21
ARTICLE VI
COVENANTS OF PARENT AND MERGER SUBSIDIARY
SECTION 6.1. Obligations of Merger Subsidiary.......22
SECTION 6.2. Voting of Shares.......................22
SECTION 6.3. Indemnification........................22
SECTION 6.4. Employees..............................22
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1. HSR Act Filings; Reasonable Efforts;
Notification..........................23
SECTION 7.2. Public Announcements...................24
SECTION 7.3. Confidentiality........................25
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1. Conditions to the Obligations of
Each Party............................25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
ARTICLE IX
TERMINATION
<S> <C>
SECTION 9.1. Termination............................25
SECTION 9.2. Effect of Termination..................26
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1. Nonsurvival of Representations
and Warranties.......................26
SECTION 10.2. Notices...............................26
SECTION 10.3. Amendments; No Waivers................27
SECTION 10.4. Fees and Expenses.....................28
SECTION 10.5. Successors and Assigns................28
SECTION 10.6. Governing Law.........................28
SECTION 10.7. Counterparts; Effectiveness...........28
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of October 7, 1996
among Computer Associates International, Inc., a Delaware
corporation ("Parent"), Tse-Tsehese-Staestse, Inc., a
Delaware corporation and a wholly owned subsidiary of Parent
("Merger Subsidiary"), and Cheyenne Software, Inc., a
Delaware corporation (the "Company").
The parties agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer. (a) Provided that nothing shall
have occurred that would result in a failure to satisfy any of the
conditions set forth in Annex I hereto, Merger Subsidiary shall, as
promptly as practicable after the date hereof, but in no event later
than five business days following the public announcement of the terms
of this Agreement, commence an offer (the "Offer") to purchase all of
the outstanding shares of common stock, par value $.01 per share (the
"Shares"), including the associated Rights (defined below in Section
4.1(c)) of the Company at a price of $30.50 per Share (including such
associated Rights), net to the seller in cash. The Offer shall be
subject to the condition that there shall be validly tendered in
accordance with the terms of the Offer prior to the expiration date of
the Offer and not withdrawn a number of Shares which, together with the
Shares then owned by Parent and Merger Subsidiary, represents at least a
majority of the total number of outstanding Shares, assuming the
exercise of all outstanding options, rights and convertible securities
(if any) and the issuance of all Shares that the Company is obligated to
issue (such total number of outstanding Shares being hereinafter
referred to as the "Fully Diluted Shares") (the "Minimum Condition") and
to the other conditions set forth in Annex I hereto. Parent and Merger
Subsidiary expressly reserve the right to waive the conditions to the
Offer and to make any change in the terms or conditions of the Offer;
provided that, without the written consent of the Company, no change may
be made which changes the form of consideration to be paid, decreases
the price per Share or the number of Shares sought in the Offer, imposes
conditions to the Offer in addition to those set forth in Annex I,
changes or waives the Minimum Condition, extends the Offer (except as
set forth in the following sentence), or makes any other change to any
condition to the Offer set forth in Annex I which is adverse to the
holders of Shares. Subject to the terms of the Offer in this Agreement
and the satisfaction (or waiver to the extent permitted by this
Agreement) of the conditions to the Offer, Merger Subsidiary shall
accept for payment all Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the applicable
expiration date of the Offer and shall pay for all such Shares promptly
after acceptance; provided that Merger Subsidiary may extend the Offer
if, at the scheduled expiration date of the Offer or any extension
thereof any of the conditions to the Offer shall not have been
satisfied, until such time as such conditions are satisfied or waived,
and Merger Subsidiary may extend the Offer for a further period of time
of not more than 20 business days to meet the objective (which is not a
condition to the Offer) that there be validly tendered, in accordance
with the terms of the Offer, prior to the expiration date of the Offer
(as so extended) and not withdrawn a number of Shares, which together
with Shares then owned by Parent and Merger Subsidiary, represents at
least 90% of the Fully Diluted Shares. Subject to Section 9.1, if the
condition set forth in clause (ii) of the first paragraph of Annex I is
not satisfied as of the date the Offer would otherwise have expired,
Merger Subsidiary shall extend the Offer until the earlier of (i) the
date that is 30 days after the first scheduled expiration date and (ii)
the date the condition set forth in clause (ii) of the first paragraph
of Annex I is satisfied.
(b) As soon as practicable on the date of commencement of
the Offer, Parent and Merger Subsidiary shall (i) file with the SEC
(defined below in Section 4.1(a)) a Tender Offer Statement on Schedule
14D-l with respect to the Offer which will contain the offer to purchase
<PAGE> 2
and form of the related letter of transmittal (together with any
supplements or amendments thereto, collectively the "Offer Documents")
and (ii) cause the Offer Documents to be disseminated to holders of
Shares. Parent, Merger Subsidiary and the Company each agrees promptly
to correct any information provided by it for use in the Offer Documents
if and to the extent that it shall have become false or misleading in
any material respect. Parent and Merger Subsidiary agree to take all
steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws.
The Company and its counsel shall be given a reasonable opportunity to
review and comment on the Schedule 14D-l prior to its being filed with
the SEC.
SECTION 1.2. Company Action. (a) The Company hereby
consents to the Offer and represents that its Board of Directors, at a
meeting duly called and held, has (i) unanimously determined that this
Agreement and the transactions contemplated hereby, including the Offer
and the Merger (defined below in Section 2.1), are fair to and in the
best interest of the Company's stockholders, (ii) unanimously approved
this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, which approval satisfies in full the requirements
of Section 203 of the General Corporation Law of the State of Delaware
(the "Delaware Law"), and (iii) unanimously resolved to recommend
acceptance of the Offer and approval and adoption of this Agreement and
the Merger by its stockholders. The Company further represents that
Lazard Freres & Co. LLC has delivered to the Company's Board of
Directors its opinion that the consideration to be paid in the Offer and
the Merger is fair to the holders of Shares from a financial point of
view. The Company has been advised that all of its directors and
executive officers presently intend either to tender their Shares
pursuant to the Offer or to vote in favor of the Merger. The Company
will promptly furnish Parent and Merger Subsidiary with a list of its
stockholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of Shares and
lists of securities positions of Shares held in stock depositories, in
each case as of the most recent practicable date, and will provide to
Parent and Merger Subsidiary such additional information (including,
without limitation, updated lists of stockholders, mailing labels and
lists of securities positions) and such other assistance as Parent or
Merger Subsidiary may reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is
commenced the Company will file with the SEC and disseminate to holders
of Shares a Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") which shall reflect the recommendations of the
Company's Board of Directors referred to above, subject to the fiduciary
duties of the Board of Directors of the Company as advised in writing by
Wachtell, Lipton, Rosen & Katz, counsel to the Company. The Company,
Parent and Merger Subsidiary each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false or misleading in any material
respect. The Company agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel
shall be given a reasonable opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC.
SECTION 1.3. Directors. (a) Effective upon the acceptance
for payment by Merger Subsidiary of a majority of the Shares pursuant to
the Offer, Parent shall be entitled to designate the number of
directors, rounded up to the next whole number, on the Company's Board
of Directors that equals the product of (i) the total number of
directors on the Company's Board of Directors (giving effect to the
election of any additional directors pursuant to this Section) and (ii)
the percentage that the number of Shares owned by Parent or Merger
Subsidiary (including Shares accepted for payment) bears to the total
number of Shares outstanding, and the Company shall take all action
necessary to cause Parent's designees to be elected or appointed to the
Company's Board of Directors, including, without limitation, increasing
the number of directors, or seeking and accepting resignations of
<PAGE> 3
incumbent directors, or both; provided that, prior to the Effective Time
(defined below in Section 2.1), the Company's Board of Directors shall
always have one member who is neither a designee nor an affiliate of
Parent or Merger Subsidiary nor an employee of the Company (an
"Independent Director"). If the number of Independent Directors is
reduced below one for any reason prior to the Effective Time, the
departing Independent Director shall be entitled to designate a person
to fill such vacancy. No action proposed to be taken by the Company to
amend or terminate this Agreement or waive any action by Parent or
Merger Subsidiary shall be effective without the approval of the
Independent Director. At such times, the Company will use its best
efforts to cause individuals designated by Parent to constitute the same
percentage as such individuals represent on the Company's Board of
Directors of (x) each committee of the Board, (y) each board of
directors of each subsidiary (defined below in Section 4.1(a)) and (z)
each committee of each such board.
(b) The Company's obligations to appoint designees to the
Board of Directors shall be subject to Section 14(f) of the Exchange Act
(defined below in Section 4.1(d)) and Rule 14f-l promulgated thereunder.
The Company shall promptly take all actions required pursuant to Section
14(f) and Rule 14f-l in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 such information
with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-l to fulfill its obligations
under this Section 1.3. Parent will supply to the Company in writing
and be solely responsible for any information with respect to itself and
its nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. (a) At the Effective Time, Merger
Subsidiary shall be merged (the "Merger") with and into the Company in
accordance with the Delaware Law, whereupon the separate existence of
Merger Subsidiary shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) The closing of the Merger (the "Closing") shall take
place on the later of (x) November 30, 1996 and (y) the first business
day on which all of the conditions set forth in Article VIII hereof
shall be fulfilled or waived in accordance with this Agreement. As soon
as practicable following the Closing, the Company and Merger Subsidiary
will file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by
Delaware Law in connection with the Merger. The Merger shall become
effective at such time as the certificate of merger is duly filed with
the Secretary of State of the State of Delaware or, with the consent of
the Independent Director, at such later time as is specified in the
certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities and
duties of the Company and Merger Subsidiary, all as provided under
Delaware Law.
SECTION 2.2. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or
owned by Parent, Merger Subsidiary or any subsidiary of either of them
immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall be converted
<PAGE> 4
into and become one share of common stock of the Surviving Corporation
with the same rights, powers and privileges as the shares so converted
and shall constitute the only outstanding shares of capital stock of the
Surviving Corporation; and
(c) each Share outstanding immediately prior to the
Effective Time shall, except as otherwise provided in Section 2.2(a) or
as provided in Section 2.4 with respect to Shares as to which appraisal
rights have been exercised, be converted into the right to receive
$30.50 in cash or any higher price paid for each Share in the Offer,
without interest (the "Merger Consideration").
SECTION 2.3. Surrender and Payment. (a) Prior to the
Effective Time, Parent shall appoint a bank or trust company (the
"Exchange Agent") for the purpose of exchanging certificates
representing Shares for the Merger Consideration. Parent will make
available to the Exchange Agent, as needed, the Merger Consideration to
be paid in respect of the Shares (the "Exchange Fund"). For purposes of
determining the Merger Consideration to be made available, Parent shall
assume that no holder of Shares will perfect his right to appraisal of
his Shares. Promptly after the Effective Time, Parent will send, or
will cause the Exchange Agent to send, to each holder of Shares at the
Effective Time a letter of transmittal for use in such exchange (which
shall specify that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the certificates
representing Shares to the Exchange Agent). The Exchange Agent shall,
pursuant to irrevocable instructions, make the payments provided in this
Section 2.3. The Exchange Fund shall not be used for any other purpose,
except as provided in this Agreement.
(b) Each holder of Shares that have been converted into a
right to receive the Merger Consideration, upon surrender to the
Exchange Agent of a certificate or certificates representing such
Shares, together with a properly completed letter of transmittal
covering such Shares and such other documents as may be reasonably
requested, will be entitled to receive the Merger Consideration payable
in respect of such Shares. Until so surrendered, each such certificate
shall, after the Effective Time, represent for all purposes, only the
right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be
paid to a person other than the registered holder of the Shares
represented by the certificate or certificates surrendered in exchange
therefor, it shall be a condition to such payment that the certificate
or certificates so surrendered shall be properly endorsed or otherwise
be in proper form for transfer and that the person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes
required as a result of such payment to a person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For
purposes of this Agreement, "person" means an individual, a corporation,
a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any
agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving
Corporation, they shall be canceled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this
Article II.
(e) Any portion of the Exchange Fund made available to the
Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned
to Parent, upon demand, and any such holder who has not exchanged his
Shares for the Merger Consideration in accordance with this Section 2.3
prior to that time shall thereafter look only to Parent for payment of
the Merger Consideration in respect of his Shares. Notwithstanding the
foregoing, Parent shall not be liable to any holder of Shares for any
amount paid to a public official pursuant to applicable abandoned
property laws. Any amounts remaining unclaimed by holders of Shares
<PAGE> 5
immediately prior to such time as such amounts would otherwise escheat
to or become property of any governmental entity shall, to the extent
permitted by applicable law, become the property of Parent free and
clear of any claims or interest of any person previously entitled
hereto.
(f) Any portion of the Merger Consideration made available
to the Exchange Agent pursuant to Section 2.3(a) to pay for Shares for
which appraisal rights have been perfected shall be returned to Parent,
upon demand.
SECTION 2.4. Dissenting Shares. Notwithstanding Section
2.2, Shares outstanding immediately prior to the Effective Time and held
by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares in
accordance with Delaware Law shall not be converted into a right to
receive the Merger Consideration, unless such holder fails to perfect or
withdraws or otherwise loses his right to appraisal. If after the
Effective Time such holder fails to perfect or withdraws or loses his
right to appraisal, such Shares shall be treated as if they had been
converted as of the Effective Time into a right to receive the Merger
Consideration. The Company shall give Parent prompt notice of any
demands received by the Company for appraisal of Shares, and Parent
shall have the right to participate in all negotiations and proceedings
with respect to such demands. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or
settle or offer to settle, any such demands.
SECTION 2.5. Stock Options. (a) At the Effective Time,
each of the then outstanding Company Options (defined below) shall by
virtue of the Merger, and without any further action on the part of any
holder thereof, become fully exercisable and vested and be assumed by
Parent and converted into an option to purchase that number of shares of
common stock, par value $.10 per share ("Parent Common Stock"), of
Parent determined by multiplying the number of Shares subject to such
Company Option at the Effective Time by the quotient obtained by
dividing (x) $30.50 by (y) the average closing price of Parent Common
Stock on the New York Stock Exchange Composite Tape for the 20
consecutive trading days immediately prior to the Effective Time (such
quotient, the "Conversion Number"), at an exercise price per share of
Parent Common Stock equal to the quotient obtained by dividing (x) the
exercise price per Share of such Company Option immediately prior to the
Effective Time by (y) the Conversion Number. If the foregoing
calculation results in an assumed Company Option being exercisable for a
fraction of a share of Parent Common Stock, then the number of shares of
Parent Common Stock subject to such option shall be rounded down to the
nearest whole number of shares. Except as otherwise set forth in this
Section 2.5, the term, status as an "incentive stock option" under
Section 422 of the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder (the "Code"), if applicable, and all
other terms and conditions of Company Options will, to the extent
permitted by law and otherwise reasonably practicable, be unchanged.
The Company shall take, or cause to be taken, all actions which are
necessary, proper or advisable under the Stock Plans to make effective
the transactions contemplated by this Section 2.5. "Company Options"
means any option granted, and not exercised or expired, to a current or
former employee, director or independent contractor of the Company or
any of its subsidiaries or any predecessor thereof to purchase Shares
pursuant to any stock option, stock bonus, stock award, or stock
purchase plan, program, or arrangement of the Company or any of its
subsidiaries or any predecessor thereof (collectively, the "Stock
Plans") or any other contract or agreement entered into by the Company
or any of its subsidiaries.
(b) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery pursuant to the terms set forth in this Section 2.5.
Parent shall cause the shares of Parent Common Stock issuable upon
exercise of the assumed Company Options to be registered, or to be
issued pursuant to a then effective registration statement, no later
than 90 days after the Effective Time on Form S-8 promulgated by the SEC
and shall use its best efforts to maintain the effectiveness of such
registration statement or registration statements for so long as such
<PAGE> 6
assumed Company Options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Exchange Act, Parent
shall administer the Company Options assumed pursuant to this Section
2.5 in a manner that complies with Rule 16b-3 promulgated by the SEC
under the Exchange Act, but shall have no responsibility for such
compliance by the Company or its predecessors.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation. The certificate
of incorporation of Merger Subsidiary in effect at the Effective Time
shall be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law, except that the name of
the Surviving Corporation shall be changed to the name of the Company.
SECTION 3.2. Bylaws. The bylaws of Merger Subsidiary in
effect at the Effective Time shall be the bylaws of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 3.3. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and
qualified in accordance with applicable law, (i) the directors of Merger
Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (ii) the officers of the Merger Subsidiary at the
Effective Time shall be the officers of the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the Company.
The Company represents and warrants to Parent and Merger Subsidiary as
follows:
(a) Organization, Standing and Corporate Power. Each of
the Company and each of its Significant Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated and has the requisite
corporate power and authority to carry on its business as now being
conducted. Each of the Company and each of its Significant Subsidiaries
is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) could not
reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the Company
and its subsidiaries taken as a whole except that occurrences due solely
to a disruption of the Company's or its subsidiary's businesses solely
as a result of the announcement of the execution of this Agreement and
the transactions proposed to be consummated by this Agreement shall be
excluded from consideration for purposes of the effect of an action or
inaction on the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company has delivered to Parent
complete and correct copies of its Certificate of Incorporation and By-
Laws and the certificates of incorporation and by-laws of its
Significant Subsidiaries which are incorporated in the United States, in
each case as amended to the date of this Agreement. For purposes of
this Agreement, a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of
which) is owned directly or indirectly by such first person; and a
<PAGE> 7
"Significant Subsidiary" means any subsidiary of a person that
constitutes a significant subsidiary of such person within the meaning
of Rule 1-02 of Regulation S-X of the Securities and Exchange Commission
(the "SEC").
(b) Subsidiaries. Section 4.1(b) of the disclosure
schedule delivered by the Company to Parent and Merger Subsidiary prior
to the execution of this Agreement (the "Disclosure Schedule") lists
each subsidiary of the Company and its respective jurisdiction of
incorporation and indicates whether such subsidiary is a Significant
Subsidiary. All the outstanding shares of capital stock of each such
subsidiary have been validly issued and are fully paid and nonassessable
and are owned by the Company, by another subsidiary of the Company or by
the Company and another such subsidiary, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "Liens") and free of any other
limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock), other than such
Liens, limitations or restrictions arising in the ordinary and normal
course under applicable law. Except for the capital stock of its
subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other ownership interest in any person.
(c) Capital Structure. The authorized capital stock of the
Company consists of 75,000,000 shares of Common Stock and 5,000,000
shares of preferred stock, par value $.01 per share (the "Preferred
Stock"). At the time of execution of this Agreement, (i) 37,711,424
shares of Common Stock were issued and outstanding, including associated
Preferred Share Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of April 15, 1996 (the "Rights Agreement"),
between the Company and Continental Stock Transfer and Trust Company, as
Rights Agent (the "Rights Agent"), (ii) no shares of Preferred Stock
were issued and outstanding, (iii) 2,343,900 shares of Common Stock were
held by the Company in its treasury or by any of the Company's
subsidiaries, and (iv) 5,003,136 shares of Common Stock were reserved
for issuance pursuant to outstanding Company Options. Except as set
forth above, at the time of execution of this Agreement, no shares of
capital stock or other voting securities of the Company are issued,
reserved for issuance or outstanding. All outstanding shares of capital
stock of the Company are, and all shares which may be issued pursuant to
the Stock Plans will be, when issued, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
Other than the Shares, there are not any bonds, debentures, notes or
other indebtedness or securities of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which shareholders of the Company may vote.
Except as set forth above and in Section 4.1(c) of the Disclosure
Schedule, there are not any securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any
kind to which the Company or any of its subsidiaries is a party or by
which any of them is bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other voting securities
of the Company or of any of its subsidiaries or obligating the Company
or any of its subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. There are no outstanding rights,
commitments, agreements, arrangements or undertakings of any kind
obligating the Company or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock or other voting
securities of the Company or any of its subsidiaries or any securities
of the type described in the two immediately preceding sentences (other
than in connection with the exercise of outstanding Company Options).
The Company has delivered to Parent complete and correct copies of the
Stock Plans and all forms of Company Options. Section 4.1(c) of the
Disclosure Schedule sets forth a complete and accurate list of all
Company Options outstanding as of the date of this Agreement and the
exercise price of each outstanding Company Option.
(d) Authority; Noncontravention. The Company has the
requisite corporate power and authority to enter into this Agreement
<PAGE> 8
and, except for any required approval by the Company's stockholders in
connection with the consummation of the Merger, to consummate the
transactions contemplated by this Agreement. The execution and delivery
of this Agreement by the Company and the consummation by the Company of
the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the Company,
except for any required approval by the Company's stockholders in
connection with the consummation of the Merger. This Agreement has been
duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding agreement of Parent and Merger
Subsidiary, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. The
execution and delivery of this Agreement does not, and the consummation
of the transactions contemplated by this Agreement and compliance with
the provisions of this Agreement will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under, (i) the
Certificate of Incorporation or By-Laws of the Company or the comparable
charter or organizational documents of any of its Significant
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its
subsidiaries or their respective properties or assets or (iii) subject
to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its
subsidiaries or their respective properties or assets, other than, in
the case of clause (ii) or (iii) above, any such conflicts, violations,
defaults, rights or Liens that individually or in the aggregate could
not reasonably be expected to (A) have a Material Adverse Effect, (B)
impair the ability of the Company to perform its obligations under this
Agreement or (C) prevent or materially delay consummation of any of the
transactions contemplated by this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with
or exemption by (collectively, "Consents") any federal, state or local
government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to the
Company or any of its subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation by the
Company of the transactions contemplated by this Agreement, except for
(i) the filing of a premerger notification and report form by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder (the "HSR Act"),
(ii) compliance with any applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act"), (iii) the filing of a certificate of
merger in accordance with Delaware Law and appropriate documents with
the relevant authorities of other states in which the Company is
qualified to do business, (iv) such notices, filings and consents as may
be required under relevant state property transfer laws, and (v) such
other consents, approvals, orders, authorizations, registrations,
declarations and filings as (A) may be required under the laws of any
foreign country in which the Company or any of its subsidiaries conducts
any business or owns any property or assets or (B) as to which the
failure to obtain or make could not reasonably be expected to (x) have a
Material Adverse Effect or (y) prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement.
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities. The Company has filed all required reports, schedules,
forms, statements and other documents with the SEC since July 1, 1993
(the "SEC Documents"). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Securities Act"), or the Exchange Act, as the case may
be, applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company
included in the SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and
<PAGE> 9
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Company Filed SEC Documents,
neither the Company nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) and there is no existing condition, situation or set of
circumstances which are required by generally accepted accounting
principles to be set forth on a consolidated balance sheet of the
Company and its consolidated subsidiaries or in the notes thereto,
except for liabilities which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(f) Disclosure Documents. (i) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"),
including, without limitation, the Schedule 14D-9, the proxy or
information statement of the Company (the "Company Proxy Statement"), if
any, to be filed with the SEC in connection with the Merger, and any
amendments or supplements thereto will, when filed, comply as to form in
all material respects with the applicable requirements of the Exchange
Act.
(ii) At the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the
Company and at the time such stockholders vote on adoption of this
Agreement, the Company Proxy Statement, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading. At the time of the filing of any
Company Disclosure Document other than the Company Proxy Statement and
at the time of any distribution thereof, such Company Disclosure
Document will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties contained in
this Section 4.1(f)(ii) will not apply to statements or omissions
included in the Company Disclosure Documents based upon information
furnished to the Company in writing by Parent or Merger Subsidiary
specifically for use therein.
(iii) The information with respect to the Company or any
subsidiary that the Company furnishes to Parent or Merger Subsidiary in
writing specifically for use in the Offer Documents will not, at the
time of the filing thereof, at the time of any distribution thereof and
at the time of the consummation of the Offer, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading.
(g) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior to the
date of this Agreement (the "Company Filed SEC Documents") and in
Section 4.1(g) of the Disclosure Schedule, since June 30, 1996, the
Company has conducted its business only in the ordinary course
consistent with past practice, and there has not been (i) any event,
occurrence or development of a state of circumstances which has had or
could reasonably be expected to have a Material Adverse Effect, (ii) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of
the Company's capital stock or any repurchase, redemption or other
acquisition by the Company or any of its subsidiaries of any outstanding
shares of capital stock or other securities of the Company or any of its
subsidiaries, (iii) any split, combination or reclassification of any of
<PAGE> 10
its capital stock or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock, (iv) (A) any granting by the Company or any
of its subsidiaries to any current or former director, officer or
employee of the Company or any of its subsidiaries of any increase in
compensation or benefits or severance or termination pay or benefits,
except in the ordinary course of business consistent with past practice
or as was required under employment, severance or termination agreements
or plans in effect as of June 30, 1996, or (B) any entry by the Company
or any of its subsidiaries into any employment, deferred compensation,
severance or termination agreement with any such current or former
director, officer or employee, except in the ordinary course of business
consistent with past practice, (v) any damage, destruction or loss,
whether or not covered by insurance, that has had or could have a
Material Adverse Effect, (vi) any change in accounting methods,
principles or practices by the Company or any of its subsidiaries,
except insofar as may have been required by a change in generally
accepted accounting principles, (vii) any amendment of any material term
of any outstanding security of the Company or any of its subsidiaries,
(viii) any incurrence, assumption or guarantee by the Company or any of
its subsidiaries of any indebtedness for borrowed money in the amount of
more than $1,000,000 in the aggregate, (ix) any creation or assumption
by the Company or any of its subsidiaries of any Lien on any asset other
than in the ordinary course of business consistent with past practice,
but in no event in the amount of more than $500,000 for any one
transaction or $1,000,000 in the aggregate, (x) any making of any loan,
advance or capital contributions to or investment in any person other
than in the ordinary course of business consistent with past practice,
but in no event in the amount of more than $500,000 for any one
transaction or $1,000,000 in the aggregate and other than investments in
marketable securities made in the ordinary course of business consistent
with past practice, (xi) any transaction or commitment made, or any
contract or agreement entered into, by the Company or any of its
subsidiaries relating to its assets or business (including the
acquisition or disposition of any assets or the merger or consolidation
with any person) or any relinquishment by the Company or any of its
subsidiaries of any contract or other right, in either case, material to
the Company and its subsidiaries taken as a whole, other than
transactions and commitments in the ordinary course of business
consistent with past practice and those contemplated by this Agreement,
but (without the consent of Parent which shall not be unreasonably
withheld or delayed) in no event representing commitments on behalf of
the Company or any of its subsidiaries of more than $500,000 for any
transaction or $1,000,000 for any series of transactions, (xii) any
material labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any of its subsidiaries, which
employees were not subject to a collective bargaining agreement at June
30, 1996, or any material lockouts, strikes, slowdowns, work stoppages
or threats thereof by or with respect to such employees or (xiii) any
agreement, commitment, arrangement or undertaking by the Company or any
of its subsidiaries to perform any action described in clauses (i)
through (xii).
(h) Litigation. Except as disclosed in the Company Filed
SEC Documents or in Section 4.1(h) of the Disclosure Schedule, there is
no suit, action or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
subsidiaries that, individually or in the aggregate, could reasonably be
expected to (i) have a Material Adverse Effect, (ii) impair the ability
of the Company to perform its obligations under this Agreement or (iii)
prevent or materially delay the consummation of the Offer, the Merger or
any of the other transactions contemplated by this Agreement, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any
of its subsidiaries having, or which, insofar as reasonably can be
foreseen, in the future would have, any such effect. Section 4.1(h) of
the Disclosure Schedule sets forth as of the date hereof, with respect
to any pending suit, action or proceeding to which the Company or any
its subsidiaries is a party and which involves claims which if adversely
determined would exceed $500,000, the forum, the parties thereto, the
subject matter thereof and the amount of damages claimed.
<PAGE> 11
(i) Absence of Changes in Stock and Benefit Plans. Except
as disclosed in the Company Filed SEC Documents or Section 4.1(i) of the
Disclosure Schedule, since June 30, 1996, there has not been (i) any
adoption or amendment by the Company or any of its subsidiaries of any
Stock Plan or any acceleration, amendment or change of the period of
exercisability or vesting of any Company Options or restricted stock,
stock bonus or other awards under the Stock Plans (including any
discretionary acceleration of the exercise periods or vesting by the
Company's Board of Directors or any committee thereof or any other
persons administering a Stock Plan) or authorization of cash payments in
exchange for any Company Options, restricted stock, stock bonus or other
awards granted under any of such Stock Plans; or (ii) any adoption or
amendment by the Company or any of its subsidiaries of any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, stock appreciation right, retirement,
vacation, severance, disability, death benefit, hospitalization,
medical, workers' compensation, supplementary unemployment benefits or
other plan, arrangement or understanding providing benefits to any
current or former employee, officer or director of the Company or any of
its subsidiaries or any beneficiary thereof entered into, maintained or
contributed to, as the case may be, by the Company or any of its
subsidiaries (collectively, "Benefit Plans") where the expense of such
Benefit Plan, or amendment thereto, as the case may be, is material,
other than those Benefit Plans maintained outside of the United States
primarily for the benefit of persons substantially all of whom are non-
resident aliens with respect to the United States ("Foreign Benefit
Plans").
(j) Participation and Coverage in Benefit Plan. Except for
amendments and other actions described in Section 4.1(i) of the
Disclosure Schedule, except with respect to changes required by
applicable law, and except as disclosed in the Company Filed SEC
Documents or Section 4.1(j) of the Disclosure Schedule, there has been
no written interpretation or announcement (whether or not written) by
the Company or any of its subsidiaries relating to, or change in
employee participation or coverage under, any Benefit Plan, other than a
Foreign Benefit Plan, which would increase materially the expense of
maintaining such Benefit Plan above the level of the expense incurred in
respect thereof for the fiscal year ended on June 30, 1996.
(k) ERISA Compliance. (i) Section 4.1(k) of the
Disclosure Schedule contains a list of (A) all "employee pension benefit
plans" (defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), "employee welfare benefit
plans" (defined in Section 3(l) of ERISA) and all other Benefit Plans
maintained, or contributed to, by the Company or any of its subsidiaries
or ERISA affiliates (defined below) for the benefit of any current or
former employees, officers or directors of the Company or any of its
subsidiaries or ERISA affiliates or under which the Company or any of
its subsidiaries or ERISA affiliates has any liability other than
Foreign Benefit Plans ("U.S. Benefit Plans") and (B) all Stock Plans.
For purposes of this Agreement, "ERISA affiliate" of the Company means
any person which, together with the Company or any of its subsidiaries,
would be treated as a single employer under Section 414 of the Code.
The only Benefit Plans described in clause (A) of the preceding sentence
which constitute an "employee pension benefit plan" defined in Section
3(2) of ERISA (the "Pension Plans") are identified as such in Section
4.1(k) of the Disclosure Schedule.
(ii) Each material U.S. Benefit Plan has been maintained
and administered in compliance in all material respects with its terms
and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations, and is, to the extent required by
applicable law or contract, fully funded without having any material
deficit or material unfunded actuarial liability. Any Benefit Plan
intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified and,
except as set forth in Section 4.1(k) of the Disclosure Schedule,
nothing has occurred to cause the loss of such qualified status except
where such occurrence could reasonably be expected to be cured without
the incurrence by the Company of any liability or expense that would be
material to the Company and its subsidiaries.
<PAGE> 12
(iii) No Benefit Plan is covered by Title IV of ERISA or
Section 412 of the Code. Neither the Company nor any of its
subsidiaries has incurred or expects to incur any liability under Title
IV of ERISA that has not already been satisfied or any liability or
penalty under Section 4975 or 4980B of the Code or Section 502(i) of
ERISA that has not already been satisfied.
(iv) Except as disclosed in Section 4.1(k)(iv) of the
Disclosure Schedule, there are no pending or anticipated claims against
or otherwise involving any of the Benefit Plans and no suit, action or
other litigation has been brought against or with respect to any Benefit
Plan (excluding, in each case, claims for benefits incurred in the
ordinary course of Benefit Plan activities) which would be material to
the Company and its Subsidiaries.
(v) All material contributions, reserves or premium
payments required to be made as of the date hereof to or with respect to
the Benefit Plans have been made or provided for except to the extent
failure to do so would not impair the continued operation of the
relevant Benefit Plan.
(vi) Except as required by law or as disclosed in Section
4.1(k)(vi) of the Disclosure Schedule, neither the Company nor any of
its subsidiaries has any material obligations for post-retirement or
post-termination health and life benefits under any U.S. Benefit Plan.
(l) Taxes. As used in this Agreement, "tax" or "taxes"
shall include all Federal, state, local and foreign income, property,
sales, excise and other taxes, tariffs or governmental charges or
assessments of any nature whatsoever as well as any interest, penalties
and additions thereto. Except as disclosed in Schedule 4.1(l) of the
Disclosure Schedule:
(i) The Company and each of its subsidiaries have timely
filed all tax returns, statements, reports and forms required to be
filed with any tax authority and in accordance with all applicable laws.
All such tax returns are correct and complete in all material respects.
All taxes owed by the Company and any of its subsidiaries (whether or
not shown on any tax return) have been paid other than where failure to
do so could reasonably be expected to be cured without the incurrence by
the Company of any material liability. There are no material Liens on
any of the assets of the Company or any of its subsidiaries that arose
in connection with any failure (or alleged failure) to pay any tax.
(ii) The Company and each of its subsidiaries has withheld
and timely paid all taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party other than where
failure to do so could reasonably be expected to be cured without the
incurrence by the Company of any material liability.
(iii) Neither the Company nor any of its subsidiaries
expects any authority to assess any additional taxes against the Company
or any of its subsidiaries for any period for which tax returns have
been filed. No dispute or claim concerning any tax liability of the
Company or any of its subsidiaries has been proposed or claimed in
writing by any authority.
(iv) Neither the Company nor any of its subsidiaries has
waived any statute of limitations in respect of taxes or agreed to any
extension of time with respect to a tax assessment or deficiency.
(v) Neither the Company nor any of its subsidiaries has
filed a consent pursuant to Section 341(f) of the Code concerning
collapsible corporations. Neither the Company nor any of its
subsidiaries is a party to any tax allocation or sharing agreement.
Neither the Company nor any of its subsidiaries has any material
liability for the taxes of any person (other than the Company and any of
<PAGE> 13
its subsidiaries that is currently a member of the Company's affiliated
group filing a consolidated federal income tax return) under Treas. Reg.
1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise.
(vi) As of the date of the most recent financial statements
included in the Company Filed SEC Documents, the unpaid taxes of the
Company and its subsidiaries did not exceed the liability for taxes
(rather than any reserve for deferred taxes established to reflect
timing differences between book and tax income) set forth on the face of
such financial statements.
(vii) Neither the Company nor any of its subsidiaries is
required to include in income any adjustment pursuant to Section 481(a)
of the Code (or similar provisions of other law or regulations) in its
current or in any future taxable period by reason of a change in
accounting method; nor does the Company or any of its subsidiaries have
any knowledge that the Internal Revenue Service (or other taxing
authority) has proposed or is considering proposing, any such change in
accounting method. Neither the Company nor any of its subsidiaries is a
party to any agreement, contract, or arrangement that, individually or
collectively, could give rise to the payment of any material amount
(whether in cash or property, including Shares) that would not be
deductible pursuant to the terms of Sections 162(a)(1), other than
amounts which may be required to be capitalized pursuant to Section 263
or other applicable sections of the Code, 162(m), 162(n) or 280G of the
Code.
(m) State Takeover Statutes; Rights Agreement. (i) The
Board of Directors of the Company has approved the Offer, the Merger and
this Agreement, and such approval is sufficient to render inapplicable
to the Offer, the Merger, this Agreement and the other transactions
contemplated hereby, the provisions of Section 203 of Delaware Law. To
the best of the Company's knowledge, no other "fair price",
"moratorium", "control share acquisition", or other anti-takeover
statute or similar statute or regulation, applies or purports to apply
to the Offer, the Merger, this Agreement or any of the other
transactions contemplated hereby.
(ii) The Company has delivered to Parent a complete and
correct copy of the Rights Agreement, including all amendments and
exhibits thereto. The Company has taken, and as soon as possible after
the date hereof (but in no event later than two business days after the
date hereof), the Rights Agent will take, all actions necessary or
appropriate to amend the Rights Agreement to ensure that the execution
of this Agreement, the announcement or making of the Offer, the
acquisition of Shares pursuant to the Offer and the Merger and the other
transactions contemplated in this Agreement will not cause Parent or any
of its affiliates to be considered an Acquiring Person (defined in the
Rights Agreement), the occurrence of a Distribution Date or Shares
Acquisition Date (each defined in the Rights Agreement) or the
separation of the Rights from the underlying Shares, and will not give
the holders thereof the right to acquire securities of any party hereto.
(n) Brokers; Schedule of Fees and Expenses. No broker,
investment banker, financial advisor or other person, other than Lazard
Freres & Co. LLC and Broadview Associates LLC, the fees and expenses of
which will be paid by the Company (and a copy of whose engagement
letters and a calculation of the fees that would be due thereunder has
been provided to Parent), is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its
subsidiaries. Assuming consummation of the Offer and the Merger, no
such engagement letter obligates the Company to continue to use their
services or pay fees or expenses in connection with any future
transaction.
(o) Permits; Compliance with Laws. Each of the Company and
its subsidiaries has in effect all federal, state, local and foreign
governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits") necessary
<PAGE> 14
for it to own, lease or operate its properties and assets and to carry
on its business as now conducted, and there has occurred no default
under any such Permit, except for the absence of Permits and for
defaults under Permits which absence or defaults, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Company and its subsidiaries have been, and are, in
compliance in all material respects with all applicable statutes, laws
or material ordinances, regulations, rules, judgments, decrees or orders
of any Governmental Entity, and neither the Company nor any of its
subsidiaries has received any notice from any Governmental Entity or any
other person that either the Company or any of its subsidiaries is in
violation of, or has violated, in any material respect any applicable
statutes, laws or material ordinances, regulations, rules, judgments,
decrees or orders.
(p) Contracts; Debt Instruments. (i) Except as otherwise
disclosed in Section 4.1(p)(i)(A)-(F) of the Disclosure Schedule,
neither the Company nor any of its subsidiaries is a party to or subject
to:
(A) any union contract, or any employment, consulting, severance,
termination, or indemnification agreement, contract or arrangement
providing for future payments, written or oral, with any current or
former officer, consultant, director or employee which (1) exceeds
$200,000 per annum or (2) requires aggregate annual payments or total
payments over the life of such agreement, contract or arrangement to
such current or former officer, consultant, director or employee in
excess of $100,000 or $250,000, respectively, and is not terminable by
it or its subsidiary on 30 days' notice or less without penalty or
obligation to make payments related to such termination;
(B) any joint venture contract or arrangement or any other
agreement which has involved or is expected to involve a sharing of
revenues of $1,000,000 per annum or more with other persons;
(C) any lease for real or personal property in which the amount
of payments which the Company is required to make on an annual basis
exceeds $1,000,000;
(D) to the Company's knowledge, any material agreement, contract,
policy, license, Permit, document, instrument, arrangement or commitment
which has not been terminated or performed in its entirety and not
renewed which may be, by its terms, terminated, impaired or adversely
affected by reason of the execution of this Agreement, the closing of
the Offer or the Merger, or the consummation of the other transactions
contemplated hereby;
(E) any agreement, contract, policy, license, Permit, document,
instrument, arrangement or commitment that limits in any material
respect the freedom of the Company or any subsidiary of the Company to
compete in any line of business or with any person or in any geographic
area or which would so limit in any material respect the freedom of the
Company or any subsidiary of the Company after the Effective Time; or
(F) any other agreement, contract, policy, license, Permit,
document, instrument, arrangement or commitment not made in the ordinary
course of business which is material to the Company and its subsidiaries
taken as a whole.
(ii) Neither the Company nor any subsidiary of the Company
is in default in any material respect under the terms of any exclusive
license or distribution agreement or arrangement that, by its terms,
provides for payments to the Company or any of its subsidiaries of
$500,000 or more per annum. To the knowledge of the Company, as of the
date hereof, none of the parties to any of the contracts identified in
Section 4.1(p)(i)(A)-(F) of the Disclosure Schedule or otherwise
<PAGE> 15
disclosed in the Company Filed SEC Documents has terminated, or in any
way expressed an intent to materially reduce or terminate the amount of,
its business with the Company or any of its subsidiaries in the future.
(iii) Set forth in Section 4.1(p)(iii) of the Disclosure
Schedule is (A) a list of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments pursuant to
which any indebtedness of the Company or any of its subsidiaries in an
aggregate principal amount in excess of $500,000 is outstanding or may
be incurred and (B) the respective principal amounts currently
outstanding thereunder. For purposes of this Section 4.1(p)(iii),
"indebtedness" shall mean, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, or
with respect to deposits or advances of any kind to such person, (B) all
obligations of such person evidenced by bonds, debentures, notes or
similar instruments, (C) all obligations of such person upon which
interest charges are customarily paid, (D) all obligations of such
person under conditional sale or other title retention agreements
relating to property purchased by such person, (E) all obligations of
such person issued or assumed as the deferred purchase price of property
or services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary
course of such person's business), (F) all capitalized lease obligations
of such person, (G) all obligations of others secured by any Lien on
property or assets owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (H) all obligations of
such person under interest rate or currency swap transactions (valued at
the termination value thereof), (I) all letters of credit issued for the
account of such person (excluding letters of credit issued for the
benefit of suppliers to support accounts payable to suppliers incurred
in the ordinary course of business), (J) all obligations of such person
to purchase securities (or other property) which arises out of or in
connection with the sale of the same or substantially similar securities
or property, and (K) all guarantees and arrangements having the economic
effect of a guarantee of such person of any indebtedness of any other
person.
(q) Opinion of Financial Advisor. The Company has received
the opinion of Lazard Freres & Co. LLC, dated the date hereof, a copy of
which has been or, within three business days of the date hereof, will
be provided to Parent, to the effect that, as of such date, the
consideration to be paid in the Offer and the Merger is fair to the
Company's stockholders from a financial point of view.
(r) Interests of Officers and Directors. None of the
Company's or any of its subsidiaries' officers or directors has any
interest in any property, real or personal, tangible or intangible,
including inventions, patents, copyrights, trademarks, trade names,
trade secrets or know-how, used in or pertaining to the business of the
Company or that of its subsidiaries, or any supplier, distributor or
customer of the Company or any of its subsidiaries, except for the
normal rights of a stockholder and rights under existing employee
benefit plans and except for any such interest which would not be
required to be disclosed under the Exchange Act.
(s) Technology. (i) The Company and its subsidiaries
exclusively own, or are licensed to use, the rights to all patents,
trademarks, trade names, service marks, copyrights and any applications
therefor, maskworks, net lists, schematics, inventories, technology,
trade secrets, source codes, know-how, computer software programs or
applications and tangible or intangible proprietary information or
material that in any material respect are used or proposed by the
Company to be used in the business of the Company and any of its
subsidiaries as currently conducted or proposed by the Company to be
conducted (the "Company Intellectual Property Rights"). Section
4.1(s)(i) of the Disclosure Schedule lists, as of the date hereof, all
material: (A) patents, trademarks, trade names, service marks,
registered and unregistered copyrights, and any applications therefor
included in the Company Intellectual Property Rights, the Company's
currently marketed software products and a list of which, if any, of
such products have been registered for copyright protection with the
United States Copyright Office and any foreign offices; and (B) licenses
and other agreements to which the Company or any of its subsidiaries is
<PAGE> 16
a party and pursuant to which the Company or any of its subsidiaries is
authorized to use any Company Intellectual Property Right. Neither the
Company nor any of its subsidiaries is, or as a result of the execution,
delivery or performance of the Company's obligations hereunder will be,
in material violation of, or lose any rights pursuant to, any material
license or agreement described in Section 4.1(s) of the Disclosure
Schedule.
(ii) As of the date hereof, no claims with respect to the
Company Intellectual Property Rights have been asserted or, to the
knowledge of the Company, are threatened by any person nor does the
Company or any subsidiary of the Company know of any valid grounds for
any bona fide claims against the use by the Company or any subsidiary of
the Company of any Company Intellectual Property Rights. All granted
and issued patents and all registered trademarks and service marks
listed in Section 4.1(s)(i) of the Disclosure Schedule and all
copyrights held by the Company or any of its subsidiaries are valid,
enforceable and subsisting. To the Company's knowledge, as of the date
hereof, there has not been and there is not any material unauthorized
use, infringement or misappropriation of any of the Company Intellectual
Property Rights by any third party, employee or former employee.
(iii) No Company Intellectual Property Right is subject to
any outstanding order, judgment, decree, stipulation or agreement
restricting in any manner the licensing thereof by the Company or any of
its subsidiaries. Neither the Company nor any of its subsidiaries has
entered into any agreement to indemnify any other person against any
charge of infringement of any Company Intellectual Property Right,
except infringement indemnities agreed to in the ordinary course
included as part of the Company's license agreements. Neither the
Company nor any of its subsidiaries has entered into any agreement
granting any third party the right to bring infringement actions with
respect to, or otherwise to enforce rights with respect to, any Company
Intellectual Property Right owned by the Company. The Company and its
subsidiaries have the exclusive right to file, prosecute and maintain
all applications and registrations with respect to the Company
Intellectual Property Rights owned by the Company.
(t) Change of Control. Except as set forth in Section
4.1(i), 4.1(p)(i)(A) or 4.1(t) of the Disclosure Schedule, the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not (i) result in or increase in any material
respect the amount of any payment or benefit (including a payment or
benefit contingent on the occurrence of one or more events including,
without limitation, termination of employment) becoming due to any
current or former employee, director or independent contractor of the
Company or any of its subsidiaries, from the Company or any of its
subsidiaries under the terms of any Stock Plan, Benefit Plan or
employment or change of control agreement, or (ii) result in the
acceleration of the time of payment, exercise or vesting of any such
payment or benefits.
SECTION 4.2. Representations and Warranties of Parent and
Merger Subsidiary. Parent and Merger Subsidiary represent and warrant
to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of
Parent and Merger Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its
business as now being conducted.
(b) Authority; Noncontravention. Parent and Merger
Subsidiary have all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate action on the part of
Parent and Merger Subsidiary. This Agreement has been duly executed and
delivered by Parent and Merger Subsidiary and, assuming this Agreement
constitutes a valid and binding agreement of the Company, constitutes a
valid and binding obligation of such party, enforceable against such
<PAGE> 17
party in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
by this Agreement and compliance with the provisions of this Agreement
will not, conflict with, or result in any violation of, or default (with
or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or
to loss of a material benefit under, or result in the creation of any
Lien upon any of the properties or assets of Parent or any of its
subsidiaries under, (i) the certificate of incorporation or by-laws of
Parent or Merger Subsidiary or the comparable charter or organizational
documents of any other subsidiary of Parent, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to
Parent or Merger Subsidiary or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to
in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent, Merger Subsidiary or
any other subsidiary of Parent or their respective properties or assets,
other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights or Liens that individually or in the
aggregate would not (A) have a material adverse effect on Parent and its
subsidiaries taken as a whole, (B) impair the ability of Parent and
Merger Subsidiary to perform their respective obligations under this
Agreement or (C) prevent the consummation of any of the transactions
contemplated by this Agreement. No Consent is required by or with
respect to Parent, Merger Subsidiary or any other subsidiary of Parent
in connection with the execution and delivery of this Agreement or the
consummation by Parent or Merger Subsidiary, as the case may be, of any
of the transactions contemplated by this Agreement, except for (i) the
filing of a premerger notification and report form under the HSR Act,
(ii) compliance with any applicable requirements of the Exchange Act,
(iii) the filing of a certificate of merger in accordance with Delaware
Law and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business, (iv) such
notices, filings and consents as may be required under relevant state
property transfer laws and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as (A) may be
required under the laws of any foreign country in which the Company or
any of its subsidiaries conducts any business or owns any property or
assets or (B) as to which the failure to obtain or make could not
reasonably be expected to (x) have a Material Adverse Effect or (y)
prevent or materially delay the consummation of any of the transactions
contemplated by this Agreement.
(c) Disclosure Documents. (i) The information with respect
to Parent and its subsidiaries that Parent furnishes to the Company in
writing specifically for use in any Company Disclosure Document will not
contain, any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not
misleading (A) in the case of the Company Proxy Statement at the time
the Company Proxy Statement or any amendment or supplement thereto is
first mailed to stockholders of the Company and at the time the
stockholders vote on adoption of this Agreement, and (B) in the case of
any Company Disclosure Document other than the Company Proxy Statement,
at the time of the filing thereof and at the time of any distribution
thereof.
(ii) The Offer Documents, when filed, will comply as to
form in all material respects with the applicable requirements of the
Exchange Act and will not at the time of the filing thereof, at the time
of any distribution thereof or at the time of consummation of the Offer,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading,
provided, that this representation and warranty will not apply to
statements or omissions in the Offer Documents based upon information
furnished to Parent or Merger Subsidiary in writing by the Company
specifically for use therein.
(d) Brokers. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
<PAGE> 18
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Parent or Merger Subsidiary.
(e) Delaware Law. As of the time immediately prior to the
execution of this Agreement, neither Parent nor any of its subsidiaries
was (i) an "interested stockholder", as such term is defined in Section
203 of the Delaware Law or (ii) an Acquiring Person under the Rights
Agreement.
(f) Financing. Parent will provide or cause to be provided
to Merger Subsidiary the funds necessary to consummate the Offer and the
Merger in accordance with their terms and the terms of this Agreement.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.1. Conduct of Business. During the period from
the date of this Agreement to the Effective Time, the Company shall, and
shall cause its subsidiaries to, carry on their respective businesses in
the ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent therewith, use all reasonable
efforts to preserve intact their current business organizations, keep
available the services of their current officers and employees and
preserve their relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with them.
Without limiting the generality of the foregoing, during the period from
the date of this Agreement to the Effective Time, the Company shall not,
and shall not permit any of its subsidiaries to, without the prior
written approval of Parent:
(a) (i) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by any direct or indirect wholly owned
subsidiary of the Company to its parent, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (iii) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (other than in
connection with the exercise of Company Options);
(b) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
(other than the issuance of Shares upon the exercise of Company Options
outstanding on the date of this Agreement in accordance with their terms
on such date);
(c) amend its certificate of incorporation, by-laws or
other comparable charter or organizational documents;
(d) (i) mortgage or otherwise encumber or subject to any
Lien, any of the Company Intellectual Property Rights or any other
material properties or assets, (ii) except in the ordinary course of
business consistent with past practice and pursuant to existing
contracts or commitments, sell, lease, transfer or otherwise dispose of
any of the Company Intellectual Property Rights or any other material
properties or assets, or (iii) except in the ordinary course of business
consistent with past practice or pursuant to existing contracts or
commitments, license any of the Company Intellectual Property Rights;
<PAGE> 19
(e) make or agree to make any new capital expenditures
individually in excess of $250,000;
(f) make any material tax election (unless required by law)
or settle or compromise any material income tax liability;
(g) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice and in
accordance with their terms, of (i) liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the Company
Filed SEC Documents or (ii) liabilities incurred in the ordinary course
of business consistent with past practice, or, subject to the fiduciary
duties of the Board of Directors of the Company as advised in writing by
Wachtell, Lipton, Rosen & Katz, counsel to the Company, waive the
benefits of, or agree to modify in any manner, any confidentiality,
standstill or similar agreement to which the Company or any of its
subsidiaries is a party;
(h) commence a lawsuit other than (i) for the routine
collection of bills or (ii) to enforce this Agreement or (iii) in such
cases where the Company in good faith determines that the failure to
commence suit would result in a material impairment of a valuable aspect
of the Company's business, provided that the Company consults with
Parent prior to filing such suit;
(i) (i) enter into or amend any employment agreement, (ii)
enter into any customer sale or license agreement with non-standard
terms or at discounts from list prices from that typically granted to
similarly situated customers in accordance with past practice; provided
that such action with respect to a customer sale or license agreement
that is immaterial in amount and term will not be deemed to violate this
provision if the Company has (A) used its best efforts to ensure
compliance with this provision and (B) taken prompt corrective action in
the event of a violation sufficient to ensure that no similar violation
will occur in the future, (iii) pay commissions to sales employees
except pursuant to quarterly draws consistent with past practice or on
the basis of executed customer contracts with respect to products
actually delivered to customers, (iv) without the consent of Parent
which shall not be unreasonably withheld or delayed, enter into any
contract or series of related contracts in excess of $500,000 for any
contract or $1,000,000 for any series of related contracts, (v) enter
into or amend any agreement or arrangement for professional services or
advice except in the ordinary course of business consistent with past
practice, (vi) enter into any customer agreements providing for product
replacements except in the ordinary course of business consistent with
past practice or (vii) make any determination as to amounts payable
under any plan, arrangement, or agreement, providing for discretionary
incentive compensation or bonus to any officer, director, employee or
independent contractor of the Company or any of its subsidiaries;
(j) hire additional employees except in accordance with
existing budgets; provided that the aggregate number of employees of the
Company and its subsidiaries shall not be increased by more than eight
percent per quarter over the number of employees on the date of this
Agreement;
(k) authorize any of, or commit or agree to take any of,
the foregoing actions; or
(l) (i) take or agree or commit to take any action that
would make any representation or warranty of the Company hereunder
inaccurate in any respect at, or as of any time prior to, the Effective
Time or (ii) omit or agree or commit to omit to take any action
necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time.
<PAGE> 20
SECTION 5.2. Stockholder Meeting; Proxy Material. The
Company shall cause a meeting of its stockholders (the "Company
Stockholder Meeting") to be duly called and held as soon as reasonably
practicable following Merger Subsidiary's acquisition of Shares in the
Offer for the purpose of voting on the approval and adoption of this
Agreement and the Merger unless a vote of stockholders of the Company is
not required by Delaware Law. The Directors of the Company shall,
subject to their fiduciary duties as advised in writing by Wachtell,
Lipton, Rosen & Katz, counsel to the Company, recommend approval and
adoption of this Agreement and the Merger by the Company's stockholders.
In connection with such meeting, the Company (i) will promptly prepare
and file with the SEC, will use all reasonable efforts to have cleared
by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials
for such meeting, (ii) subject to the fiduciary duties of the Board of
Directors of the Company as advised in writing by Wachtell, Lipton,
Rosen & Katz, counsel to the Company, will use its best efforts to
obtain the necessary approvals by its stockholders of this Agreement and
the transactions contemplated hereby and (iii) will otherwise comply
with all legal requirements applicable to such meeting.
SECTION 5.3. Access to Information. From the date hereof
until the Effective Time, the Company will give Parent, its counsel,
financial advisors, auditors and other authorized representatives access
(during normal business hours and upon reasonable notice) to the
offices, properties, books and records of the Company and the
subsidiaries, will furnish to Parent, its counsel, financial advisors,
auditors and other authorized representatives such financial and
operating data and other information as such persons may reasonably
request and will instruct the Company's employees, counsel and financial
advisors to cooperate with Parent in its investigation of the business
of the Company and the subsidiaries; provided that no investigation
pursuant to this Section 5.3 shall affect any representation or warranty
given by the Company to Parent hereunder.
SECTION 5.4. Other Offers. Until the termination of this
Agreement, the Company and its subsidiaries will not, and will not
authorize or permit the officers, directors, employees or other agents
of the Company and its subsidiaries to, directly or indirectly, (i) take
any action to solicit, initiate or encourage any Acquisition Proposal
(defined below) or (ii) subject to the fiduciary duties of the Board of
Directors of the Company under applicable law, as advised in writing by
Wachtell, Lipton, Rosen & Katz, counsel to the Company, engage in
negotiations with, or disclose any nonpublic information relating to the
Company or any of its subsidiaries or afford access to the properties,
books or records of the Company or any of its subsidiaries to, any
person that has advised the Company or otherwise publicized the fact
that such person may be considering making, or that has made, an
Acquisition Proposal; provided, nothing herein shall prohibit the
Company's Board of Directors from taking and disclosing to the Company's
stockholders a position with respect to a tender offer pursuant to Rules
14d-9 and 14e-2 promulgated under the Exchange Act. The Company will
promptly notify Parent after receipt of any Acquisition Proposal or any
notice that any person is considering making an Acquisition Proposal or
any request for nonpublic information relating to the Company or any of
its subsidiaries or for access to the properties, books or records of
the Company or any of its subsidiaries by any person that has advised
the Company or otherwise publicized the fact that such person may be
considering making, or that has made, an Acquisition Proposal and will
keep Parent informed of the status and details of any such Acquisition
Proposal, indication or request. For purposes of this Agreement,
"Acquisition Proposal" means any offer or proposal for, or any written
indication of interest in, a merger or other business combination
involving the Company or any of its subsidiaries or the acquisition of
any significant equity interest in, or a significant portion of the
assets of, the Company or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
SECTION 5.5. State Takeover Statutes; Rights Agreement.
(a) If any "fair price", "control share acquisition", "moratorium" or
other anti-takeover statute, or similar statute or regulation shall
become applicable to the Offer, the Merger or this Agreement, or any
other transactions contemplated hereby, the Company and its Board of
<PAGE> 21
Directors shall take all action necessary to ensure that the Offer, the
Merger and the other transactions contemplated hereby, may be
consummated as promptly as practicable on the terms contemplated hereby
and otherwise to minimize the effect of such statute or regulation on
the Offer, the Merger and the other transactions contemplated hereby.
(b) Except as otherwise provided in Section 4.1(m)(ii), the
Company shall not redeem the Rights or amend (other than to delay the
Distribution Date or to render the Rights inapplicable to the Offer and
the Merger) or terminate the Rights Agreement prior to the Effective
Time unless required to do so by a court of competent jurisdiction.
ARTICLE VI
COVENANTS OF PARENT AND MERGER SUBSIDIARY
SECTION 6.1. Obligations of Merger Subsidiary. Parent will
take all action necessary to cause Merger Subsidiary to perform its
obligations under this Agreement and to consummate the Offer and the
Merger on the terms and conditions set forth in this Agreement.
SECTION 6.2. Voting of Shares. Parent agrees to make a
quorum and vote all Shares acquired in the Offer or otherwise
beneficially owned by it in favor of adoption of this Agreement at the
Company Stockholder Meeting.
SECTION 6.3. Indemnification. For six years after the
Effective Time, Parent will indemnify and hold harmless the present and
former officers, directors, employees and agents of the Company (the
"Indemnified Parties") in respect of acts or omissions occurring on or
prior to the Effective Time to the extent provided under the Company's
certificate of incorporation and bylaws in effect on the date hereof;
provided that such indemnification shall be subject to any limitation
imposed from time to time under applicable law. For four years after
the Effective Time, Parent will cause the Surviving Corporation to
provide officers' and directors' liability insurance in respect of acts
or omissions occurring on or prior to the Effective Time covering each
such person currently covered by the Company's officers' and directors'
liability insurance policy on terms substantially similar to those of
such policy in effect on the date hereof, provided that in satisfying
its obligation under this Section, Parent shall not be obligated to
cause the Surviving Corporation to pay premiums in excess of 105% of the
amount per annum the Company paid in its last full fiscal year, which
amount has been disclosed to Parent and if the Surviving Corporation is
unable to obtain the insurance required by this Section 6.3, it shall
obtain as much comparable insurance as possible for an annual premium
equal to such maximum amount. Without limitation of the foregoing, in
the event any such Indemnified Party is or becomes involved in any
capacity in any action, proceeding or investigation in connection with
any matter relating to the Merger, the Offer or this Agreement occurring
on or prior to the Effective Time, Parent shall pay as incurred such
Indemnified Party's reasonable legal and other expenses (including the
cost of any investigation and preparation) incurred in connection
therewith.
SECTION 6.4. Employees. (a) Parent agrees to honor in
accordance with their terms all Benefit Plans (including employment
agreements) previously delivered to Parent and all accrued benefits
vested thereunder; it being understood and agreed that nothing in this
Section 6.4(a) shall prevent Parent from terminating any such Benefit
Plan in accordance with its terms. For purposes of this Section 6.4(a),
any Benefit Plan that is a Company Filed SEC Document shall be deemed to
have been delivered to Parent.
(b) Parent agrees to provide employees of the Company and
its subsidiaries retained by Parent with employee benefits in the
aggregate no less favorable than those benefits provided to Parent's
similarly situated employees; provided that Parent shall be under no
obligation to retain any employee or group of employees of the Company
or its subsidiaries.
<PAGE> 22
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1. HSR Act Filings; Reasonable Efforts;
Notification. (a) Each of Parent and the Company shall (i) promptly
make or cause to be made the filings required of such party or any of
its subsidiaries under the HSR Act with respect to the transactions
contemplated by this Agreement, (ii) comply at the earliest practicable
date with any request under the HSR Act for additional information,
documents, or other material received by such party or any of its
subsidiaries from the Federal Trade Commission or the Department of
Justice or any other Governmental Entity in respect of such filings or
such transactions, and (iii) cooperate with the other party in
connection with any such filing and in connection with resolving any
investigation or other inquiry of any such agency or other Governmental
Entity under any Antitrust Laws (defined below) with respect to any such
filing or any such transaction. Each party shall promptly inform the
other party of any communication with, and any proposed understanding,
undertaking, or agreement with, any Governmental Entity regarding any
such filings or any such transaction. Neither party shall participate
in any meeting with any Governmental Entity in respect of any such
filings, investigation, or other inquiry without giving the other party
notice of the meeting and, to the extent permitted by such Governmental
Entity, the opportunity to attend and participate.
(b) Each of Parent and the Company shall use all reasonable
efforts to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to the transactions contemplated by
this Agreement under the HSR Act, the Sherman Act, as amended, the
Clayton Act, as amended, the Federal Trade Commission Act, as amended,
and any other federal, state or foreign statutes, rules, regulations,
orders or decrees that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of
trade (collectively, "Antitrust Laws"). In connection therewith, if any
administrative or judicial action or proceeding is instituted (or
threatened to be instituted) challenging any transaction contemplated by
this Agreement as violative of any Antitrust Law, and, if by mutual
agreement, Parent and the Company decide that litigation is in their
best interests, each of Parent and the Company shall cooperate and use
all reasonable efforts vigorously to contest and resist any such action
or proceeding and to have vacated, lifted, reversed, or overturned any
decree, judgment, injunction or other order, whether temporary,
preliminary or permanent (each an "Order"), that is in effect and that
prohibits, prevents, or restricts consummation of any such transaction.
Each of Parent and the Company shall use all reasonable efforts to take
such action as may be required to cause the expiration of the notice
periods under the HSR Act or other Antitrust Laws with respect to such
transactions as promptly as possible after the execution of this
Agreement.
(c) Subject to the fiduciary duties of the Board of
Directors of the Company as advised in writing by Wachtell, Lipton,
Rosen & Katz, counsel to the Company, each of the parties agrees to use
all reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner
practicable, the Offer, the Merger and the other transactions
contemplated by this Agreement, including (i) the obtaining of all other
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all other necessary
registrations and filings (including other filings with Governmental
Entities, if any), (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) the preparation of the
Company Disclosure Documents and the Offer Documents, and (iv) the
execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement.
<PAGE> 23
(d) Notwithstanding anything to the contrary in Section
7.1(a), (b) or (c), (i) neither Parent nor any of its subsidiaries shall
be required to divest any of their respective businesses, product lines
or assets, (ii) neither Parent nor any of its subsidiaries shall be
required to take or agree to take any other action or agree to any
limitation that could reasonably be expected to have a material adverse
effect on the business, assets, financial condition, results of
operations or prospects of Parent and its subsidiaries taken as a whole
or of Parent combined with the Surviving Corporation after the Effective
Time, (iii) neither the Company nor its subsidiaries shall be required
to divest any of their respective businesses, product lines or assets,
or to take or agree to take any other action or agree to any limitation
that could reasonably be expected to have a Material Adverse Effect, and
(iv) no party shall be required to agree to the imposition of or to
comply with, any condition, obligation or restriction on Parent or any
of its subsidiaries or on the Surviving Corporation or any of its
subsidiaries of the type referred to in clause (a) or (b) of Annex I and
(v) neither Parent nor Merger Subsidiary shall be required to waive any
of the conditions to the Offer set forth in Annex I or any of the
conditions to the Merger set forth in Section VIII.
(e) Each party shall give prompt notice to the other
parties upon learning of (i) any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate in any respect
or (ii) the failure by it to comply with or satisfy in any respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.
(f) The Company shall give prompt notice to Parent, and
Parent or Merger Subsidiary shall give prompt notice to the Company, of:
(i) any notice or other communication from any person
alleging that the consent of such person is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any
Governmental Entity in connection with the transactions contemplated by
this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened
against, relating to or involving or otherwise affecting it or any of
its subsidiaries (x) which, in the case of the Company, if pending on
the date of this Agreement would have been required to have been
disclosed pursuant to Section 4.1(g), 4.1(h), 4.1(i), 4.1(k), 4.1(l) or
4.1(s) or (y) in the case of any party, which relate to the consummation
of the transactions contemplated by this Agreement.
SECTION 7.2. Public Announcements. Parent and Merger
Subsidiary, on the one hand, and the Company, on the other hand, will
consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any press release or other
public statements with respect to the transactions contemplated by this
Agreement, including the Offer and the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any national
securities exchange. The parties agree that the initial press release
to be issued with respect to the transactions contemplated by this
Agreement will be in the form previously agreed to by the parties.
SECTION 7.3. Confidentiality. Parent and its subsidiaries
will hold, and will cause their Representatives (defined in the
Confidentiality Agreement, dated October 1, 1996 (the "Confidentiality
<PAGE> 24
Agreement"), between Parent and the Company) to hold, any Evaluation
Material (defined in the Confidentiality Agreement) (including any
stockholder information provided pursuant to this Agreement) in
confidence in accordance with the terms of the Confidentiality
Agreement.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1. Conditions to the Obligations of Each Party.
The obligations of the Company, Parent and Merger Subsidiary to
consummate the Merger are subject to the satisfaction of the following
conditions:
(i) if required by Delaware Law, this Agreement shall have
been adopted by the stockholders of the Company in accordance with such
Law;
(ii) any applicable waiting period under the HSR Act
relating to the Merger shall have expired;
(iii) no provision of any applicable law or regulation and
no judgment, injunction, order or decree shall prohibit the consummation
of the Merger;
(iv) Parent or Merger Subsidiary shall have purchased
Shares in an amount equal to at least the Minimum Condition pursuant to
the Offer; and
(v) other than the filing of the certificate of merger in
accordance with Delaware Law, all Consents required to permit the
consummation of the Merger including those set forth in Sections 4.1(d)
and 4.2(b) shall have been filed, occurred or been obtained (other than
any such Consents the failure to file, occur or obtain in the aggregate,
could not reasonably be expected to (i) have a Material Adverse Effect
or (ii) prevent or materially delay the consummation of the Merger).
ARTICLE IX
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of
the Company):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Merger has not
been consummated by April 7, 1997 (provided that the party seeking to
terminate this Agreement shall not have breached its obligations under
this Agreement in any material respect);
(c) by either the Company or Parent, if there shall be any
law or regulation that makes consummation of the Merger illegal or
otherwise prohibited or if any judgment, injunction, order or decree
enjoining Parent or the Company from consummating the Merger is entered
and such judgment, injunction, order or decree shall become final and
nonappealable;
(d) by either the Company or Parent, (x) if Parent shall
have failed to commence the Offer within five business days following
the date of this Agreement (provided that Parent shall not be entitled
to terminate this Agreement pursuant to this sub-clause (x) as a result
<PAGE> 25
of its breach of this Agreement), (y) if Parent or Merger Subsidiary
shall not have purchased any Shares pursuant to the Offer prior to
February 21, 1997 or (z) if the Offer shall have been terminated without
Parent or Merger Subsidiary having purchased any Shares pursuant to the
Offer;
(e) by Parent, upon the occurrence of any Trigger Event
described in clauses (i) through (iii) of Section 10.4(b); or
(f) by the Company, upon the occurrence of any Trigger
Event described in clause (i) of Section 10.4(b).
SECTION 9.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.1, this Agreement shall become void and
of no effect with no liability on the part of any party hereto or their
respective officers and directors, except that the agreements contained
in Sections 7.3, 10.4 and 10.6 shall survive the termination hereof.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1. Nonsurvival of Representations and
Warranties. None of the representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement
shall survive the Effective Time. This Section 10.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
SECTION 10.2. Notices. All notices, requests and other
communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier
(providing proof of delivery) or by telecopy (with copies by overnight
courier) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Merger Subsidiary, to
Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11788-7000
Attention: Sanjay Kumar
President and Chief Operating Officer
Fax: (516) 342-3300
with a copy to:
Howard, Darby & Levin
1330 Avenue of the Americas
New York, New York 10019
Attention: Scott F. Smith
Fax: 212-841-1010
<PAGE> 26
(b) if to the Company, to
Cheyenne Software, Inc.
3 Expressway Plaza
Roslyn Heights, New York 11577
Attention: ReiJane Huai
Chairman and Chief Executive Officer
Fax: (516) 465-5977
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Barry A. Bryer
Fax: 212-403-2000
SECTION 10.3. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if,
and only if, such amendment or waiver is in writing and signed, in the
case of an amendment, by the Company, Parent and Merger Subsidiary or in
the case of a waiver, by the party against whom the waiver is to be
effective; provided that after the adoption of this Agreement by the
stockholders of the Company, no such amendment or waiver shall, without
the further approval of such stockholders, alter or change (i) the
amount or kind of consideration to be received in exchange for any
shares of capital stock of the Company, (ii) any term of the certificate
of incorporation of the Surviving Corporation or (iii) any of the terms
or conditions of this Agreement if such alteration or change would
adversely affect the holders of any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
SECTION 10.4. Fees and Expenses.
(a) Except as otherwise provided in this Section, all costs
and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
(b) The Company agrees to pay Parent a fee in immediately
available funds, promptly, but in no event later than two business days,
after the termination of this Agreement as a result of the occurrence of
any of the events set forth below (a "Trigger Event") in an amount equal
to (x) $37,500,000, in the case of the occurrence of a Trigger Event
described in clause (i) or (iii) below and (y) $20,000,000, in the case
of the occurrence of a Trigger Event described in clause (ii) below:
(i) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal;
<PAGE> 27
(ii) the Company shall have breached or failed to perform in any
respect any of its obligations, covenants or agreements under this
Agreement or any representation or warranty of the Company set forth in
this Agreement (other than any breaches or failures to perform or comply
that, in the aggregate, do not have a Material Adverse Effect); or
(iii) the Board of Directors of the Company (or any special
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or this Agreement.
(c) If this Agreement is terminated as a result of the
occurrence of a Trigger Event, in addition to any amounts paid or
payable by the Company to Parent pursuant to Section 10.4(b), the
Company shall assume and pay, or reimburse Parent for, all fees payable
and expenses incurred by Parent (including the fees and expenses of its
counsel) in connection with this Agreement and the transactions
contemplated hereby, up to a maximum of $5,000,000.
SECTION 10.5. Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, provided
that no party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of the
other parties hereto except that Merger Subsidiary may transfer or
assign, in whole or from time to time in part, to one or more of Parent
or any of its wholly-owned subsidiaries, the right to purchase Shares
pursuant to the Offer, but any such transfer or assignment will not
relieve Merger Subsidiary of its obligations under the Offer or
prejudice the rights of tendering stockholders to receive payment for
Shares validly tendered and accepted for payment pursuant to the Offer.
SECTION 10.6. Governing Law. This Agreement shall be
construed in accordance with and governed by the law of the State of New
York, except that the consummation and effectiveness of the Merger shall
be governed by, and construed in accordance with, Delaware Law.
SECTION 10.7. Counterparts; Effectiveness; Interpretation.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall
become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto. When a reference is
made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
<PAGE> 28
The parties hereto have caused this Agreement to be signed
by their respective authorized officers as of the date first written
above.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By:______/s/ Sanjay Kumar________________
Name: Sanjay Kumar
Title: President and Chief Operating Officer
TSE-TSEHESE-STAESTSE, INC.
By:______/s/ Sanjay Kumar________________
Name: Sanjay Kumar
Title: President
CHEYENNE SOFTWARE, INC.
By:______/s/ ReiJane Huai________________
Name: ReiJane Huai
Title: Chairman and Chief Executive Officer
<PAGE>
ANNEX I
Notwithstanding any other provision of the Offer, Parent and
Merger Subsidiary shall not be required to accept for payment or pay for
any Shares, and may terminate the Offer, if (i) by the expiration of the
Offer, the Minimum Condition shall not have been satisfied, (ii) by the
expiration of the Offer, the applicable waiting period under the HSR Act
shall not have expired or been terminated, or (iii) at any time on or
after October 7, 1996 and prior to the acceptance for payment of Shares
pursuant to the Offer, any of the following conditions exist:
(a) there shall be instituted or pending any action or proceeding
by any Governmental Entity or by any other person, domestic or foreign,
before any Governmental Entity or arbitrator, (i) challenging or seeking
to make illegal, to delay materially or otherwise directly or indirectly
to restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some of or all the Shares by Parent or Merger
Subsidiary or the consummation by Parent or Merger Subsidiary of the
Merger, seeking to obtain material damages or otherwise directly or
indirectly relating to the transactions contemplated by this Agreement,
the Offer or the Merger, (ii) seeking to restrain or prohibit Parent's
or Merger Subsidiary's ownership or operation (or that of their
respective subsidiaries or affiliates) of all or any material portion of
the business or assets of the Company and its subsidiaries, taken as a
whole, or of Parent and its subsidiaries, taken as a whole, or to compel
Parent or any of its subsidiaries or affiliates to dispose of or hold
separate all or any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, (iii) seeking to impose material
limitations on the ability of Parent or any of its subsidiaries or
affiliates effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Parent or any of its subsidiaries or affiliates on
all matters properly presented to the Company's stockholders, (iv)
seeking to require divestiture by Parent or any of its subsidiaries or
affiliates of any Shares, or (v) that otherwise, in the judgment of
Parent, is likely to materially adversely affect the business, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, or Parent and its subsidiaries, taken as a whole;
provided that, in the case of any instituted or pending action or
proceeding described in this subsection (a) above by a person other than
a Governmental Entity, there is a substantial probability of a
determination material and adverse to Parent or any of its subsidiaries
or the Company or any of its subsidiaries in such action or proceeding;
or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to this Agreement, the Offer or
the Merger, by any Governmental Entity or arbitrator other than the
application of the waiting period provisions of the HSR Act to this
Agreement, the Offer or the Merger, that, in the judgment of Parent, is
likely, directly or indirectly, to result in any of the consequences
referred to in clauses (i) through (v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a
prospective change) in the business, financial condition or results of
operations of the Company or any of its subsidiaries that, in the
reasonable judgment of Parent, is or is likely to have a Material
Adverse Effect; or
<PAGE>
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange or the American Stock Exchange, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States, (iii) any material limitation (whether or not
mandatory) by any Governmental Entity on the extension of credit by
banks or other lending institutions, (iv) a commencement of a war or
armed hostilities or other national or international calamity directly
or indirectly involving the United States which would reasonably be
expected to have a Material Adverse Effect or prevent (or materially
delay) the consummation of the Offer or (v) in the case of any of the
foregoing existing at the time of commencement of the Offer, a material
acceleration or worsening thereof; or
(e) any Consent (other than the filing of a certificate of merger
or approval by the stockholders of the Company of the Merger (if
required by Delaware Law)) required to be filed, occurred or been
obtained by the Company or any of its subsidiaries or Parent of any of
its subsidiaries (including Merger Subsidiary) in connection with the
execution and delivery of this Agreement, the Offer and the consummation
of the transactions contemplated by this Agreement shall not have been
filed, occurred or been obtained (other than any such Consents the
failure to file, occur or obtain in the aggregate, could not reasonably
be expected to (i) have a Material Adverse Effect or (ii) prevent or
materially delay the consummation of the Offer or the Merger); or
(f) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under this
Agreement, or any of the representations and warranties of the Company
set forth in this Agreement that is qualified as to materiality shall
not be true when made or at any time prior to consummation of the Offer
as if made at and as of such time, or any of the representations and
warranties set forth in this Agreement that is not so qualified shall
not be true in any material respect when made or at any time prior to
the consummation of the Offer as if made at and as of such time; or
(g) this Agreement shall have been terminated in accordance with
its terms; or
(h) the Board of Directors of the Company (or any special
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or this Agreement;
or
(i) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or agreement in
principle with respect to any Acquisition Proposal;
which, in the sole judgment of Parent in any such case, and regardless
of the circumstances (including any action or omission by Parent or
Merger Subsidiary) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and
Merger Subsidiary and may be asserted by Parent in its sole discretion
regardless of the circumstances (including any action or omission by
Parent or Merger Subsidiary) giving rise to any such condition or (other
than the Minimum Condition) may be waived by Parent and Merger
Subsidiary in their sole discretion in whole at any time or in part from
time to time. The failure by Parent or Merger Subsidiary at any time to
<PAGE>
exercise its rights under any of the foregoing conditions shall not be
deemed a waiver of any such right; the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances, and each such
right shall be deemed an ongoing right which may be asserted at any time
or from time to time. Any determination by Parent concerning the events
described in this Section will be final and binding upon all parties.
EXHIBIT 99(c)(2)
CHEYENNE SOFTWARE, INC.
3 Expressway Plaza
Roslyn Heights, New York 11577
October 1, 1996
Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11788-7000
Attention: Sanjay Kumar
Gentlemen:
In connection with your consideration of a possible business
combination transaction (a Transaction ) with Cheyenne Software, Inc.
(the Company ), the Company and you expect to make available to one
another from time to time certain nonpublic information concerning each
other s respective business, financial condition, operations, assets and
liabilities. As a condition to such information being furnished to each
party and such party s directors, officers, employees, agents or
advisors (including, without limitation, attorneys, accountants,
consultants, bankers and financial advisors) (collectively,
Representatives ), each party agrees to treat any nonpublic information
concerning the other party (whether prepared by the disclosing party,
its Representatives or otherwise and irrespective of the form of
communication) which is furnished hereunder to a party or to its
Representatives now or in the future by or on behalf of the disclosing
party (collectively referred to in this Agreement as the Evaluation
Material ) in accordance with the provisions of this Agreement, and to
take or abstain from taking certain other actions hereinafter set forth.
The parties acknowledge and agree that any existing confidentiality
agreements between them related to technological issues shall not be
affected by this Agreement and shall remain in full force and effect,
but in the case of a conflict between this Agreement and any such
agreement with respect to information provided under this Agreement,
this Agreement shall govern, but only to the extent that it is more
restrictive than such other agreement.
(1) Evaluation Material. The term Evaluation Material also
shall be deemed to include all notes, analyses, compilations, studies,
interpretations or other documents prepared by each party or its
Representatives which contain, reflect or are based upon, in whole or in
part, the Evaluation Material furnished to such party or its
Representatives pursuant to this Agreement. The term Evaluation
Material does not include information which (i) is or becomes generally
available to the public other than as a result of a breach of this
Agreement by the receiving party or its Representatives, (ii) was within
the receiving party s possession prior to its being furnished to the
receiving party by or on behalf of the disclosing party; provided that
the source of such information was not known by the receiving party to
be bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, the disclosing
party or any other party, (iii) is or becomes available to the receiving
party on a non-confidential basis from a source other than the
disclosing party or any of its Representatives; provided that such
source was not known by the receiving party to be bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, the disclosing party or any other
<PAGE> 2
party with respect to such information, (iv) is disclosed by the
disclosing party to a third party without a duty of confidentiality with
respect to such information, or (v) is independently developed by the
receiving party without use of Evaluation Material.
(2) Use of Evaluation Material. Each party agrees that it and
its Representatives shall use the other party s Evaluation Material
solely for the purpose of evaluating a possible Transaction between the
parties, and that the disclosing party s Evaluation Material will be
kept confidential and each party and its Representatives will not
disclose or use for purposes other than the evaluation of a possible
Transaction any of the other party s Evaluation Material in any manner
whatsoever; provided that any of such information may be disclosed to
the receiving party s Representatives who need to know such information
for the sole purpose of evaluating a possible Transaction between the
parties (it being understood that such Representatives shall be informed
by the receiving party of the confidential nature of such information
and that by receiving such information they are agreeing to be bound by
this Agreement). Each party agrees to be responsible for any breach of
this Agreement by any of its Representatives.
(3) Non-Disclosure of Discussions. In addition, each party
agrees that, without the prior written consent of the other party, it
and its Representatives will not disclose to any other person the fact
that any Evaluation Material has been made available hereunder, that
discussions or negotiations are taking place concerning a possible
Transaction involving the parties or any of the terms, conditions or
other facts with respect thereto (including the status thereof);
provided that a party may make such disclosure if in the opinion of such
party s outside counsel, such disclosure is necessary to avoid
committing a violation of law or of any rule or regulation of any
securities association, stock exchange or national securities quotation
system on which such party s securities are listed or trade. In such
event, the disclosing party shall use its best efforts to give advance
notice to the other party.
(4) Required Disclosure. In the event that a party or its
Representatives are requested or required (by oral questions,
interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar
process) to disclose any of the other party s Evaluation Material or any
of the facts disclosure of which is prohibited under paragraph (3) of
this Agreement, the party requested or required to make the disclosure
shall provide the other party with prompt notice of any such request or
requirement so that the other party may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or
the receipt of a waiver by such other party, the party requested or
required to make the disclosure or any of its Representative should
nonetheless, in the opinion of such party s or (in the case of
disclosure requested or required of a Representative) such
Representative s outside counsel, disclose the other party s Evaluation
Material, the party requested or required to make the disclosure or its
Representative may, without liability hereunder, disclose only that
portion of the other party s Evaluation Material which such counsel
advises is legally required to be disclosed; provided that the party
requested or required to make the disclosure exercises its reasonable
efforts to preserve the confidentiality of the other party s Evaluation
Material, including, without limitation, by cooperating with the other
party to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the other party s
Evaluation Material.
(5) Termination of Discussions. If either party decides that it
does not wish to proceed with negotiating a Transaction with the other
<PAGE> 3
party, the party so deciding will promptly inform the other party of
that decision. In that case, or at any time upon the request of either
disclosing party for any reason, each receiving party will promptly
deliver to the disclosing party or, at the option of the receiving
party, destroy all written (and electronic) Evaluation Material (and all
copies thereof and extracts therefrom) furnished to the receiving party
or its Representatives by or on behalf of the disclosing party pursuant
hereto. In the event of such a decision or request, all other Evaluation
Material prepared by the requesting party shall be destroyed and no copy
thereof shall be retained, and in no event shall either party be
obligated to disclose or provide the Evaluation Material prepared by it
or its Representatives to the other party. Notwithstanding the return
or destruction of the Evaluation Material, each party and its
Representatives will continue to be bound by their obligations of
confidentiality and other obligations hereunder.
(6) No Representation of Accuracy. Each party understands and
acknowledges that neither party nor any of its Representatives makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material made available by it or to it.
Each party agrees that neither party nor any of its Representatives
shall have any liability to the other party or to any of its
Representatives relating to or resulting from the use of or reliance
upon such other party s Evaluation Material or any errors therein or
omissions therefrom. Only those representations or warranties which are
made in a final definitive agreement regarding the Transaction, when, as
and if executed, and subject to such limitations and restrictions as may
be specified therein, will have any legal effect.
(7) Definitive Agreements. Each party understands and agrees
that no contract or agreement providing for any Transaction involving
the parties shall be deemed to exist between the parties unless and
until a final definitive agreement has been executed and delivered.
Each party also agrees that unless and until a final definitive
agreement regarding a Transaction between the parties has been executed
and delivered, neither party will be under any legal obligation of any
kind whatsoever with respect to such a Transaction by virtue of this
Agreement except for the matters specifically agreed to herein. For
purposes of this paragraph, the term definitive agreement does not
include an executed letter of intent or any other preliminary written
agreement. Both parties further acknowledge and agree that each party
reserves the right, in its sole discretion, to provide or not provide
Evaluation Material to the receiving party under this Agreement, to
reject any and all proposals made by the other party or any of its
Representatives with regard to a Transaction between the parties, and to
terminate discussions and negotiations at any time.
(8) Injunctive Relief. It is further understood and agreed that
money damages would not be a sufficient remedy for any breach of this
Agreement by either party or any of its Representatives and that the
non-breaching party shall be entitled to equitable relief, including
injunction and specific performance, as a remedy for any such breach.
Such remedies shall not be deemed to be the exclusive remedies for a
breach of this Agreement but shall be in addition to all other remedies
available at law or equity.
(9) Waiver; Invalidity. It is understood and agreed that no
failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or future exercise
thereof or the exercise of any other right, power or privilege
hereunder. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be
affected or impaired thereby.
<PAGE> 4
Please confirm your agreement with the foregoing by signing and
returning one copy of this letter to the undersigned, whereupon it shall
become our binding agreement to be governed by New York law.
Very truly yours,
CHEYENNE SOFTWARE, INC.
By:/s/ ReiJane Huai
--------------------
Name: ReiJane Huai
Title: Chairman and Chief
Executive Officer
Accepted and Agreed as of
the date first written above:
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By: /s/ Sanjay Kumar
--------------------------
Name: Sanjay Kumar
Title: President and Chief Operating Officer
