UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
November 22, 1999
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Date of Report: (Date of earliest event reported)
Computer Associates International, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-9247 13-2857434
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(State or Other Jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Computer Associates Plaza, Islandia, New York 11749
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (516) 342-5224
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On November 8, 1999, the Delaware Chancery Court issued a ruling ordering the
return to Computer Associates International, Inc. ("Computer Associates") of 9.5
million shares of Computer Associates common stock that had been issued to
Charles Wang, Sanjay Kumar and Russell Artzt pursuant to the 1995 Key Executive
Stock Ownership Plan (the "1995 Plan"), which was approved by stockholders. The
ruling stated that the Compensation Committee of the Board of Directors of
Computer Associates had exceeded its authority in issuing the shares in question
pursuant to the 1995 Plan. On November 10, 1999, Computer Associates issued a
press release, a copy of which is filed herewith as an Exhibit, announcing the
intention of the board members named as defendants in the lawsuit, including the
members of the Compensation Committee at the time of the stock award, to appeal
the Delaware Chancery Court ruling.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
99.1 Press Release dated November 10, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Computer Associates International, Inc.
Dated: November 22, 1999 By: /s/ Ira Zar
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Ira Zar
Senior Vice President and Chief
Financial Officer
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EXHIBIT INDEX
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Exhibit No. Exhibit
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9.1 Press Release dated November 10, 1999.
<PAGE>
COMPUTER ASSOCIATES BOARD OF DIRECTORS REAFFIRMS 1995 EXECUTIVE STOCK PLAN
Board Members to Appeal Delaware Court Ruling
Company Also Says Ruling Will Not Impact Business or Executive
Management Team
ISLANDIA, N.Y., November 10, 1999 -- The Compensation Committee of the Board of
Directors of Computer Associates (NYSE: CA) at a meeting today reaffirmed its
support for the 1995 Key Executive Stock Ownership Plan. Committee members said
they will appeal the Delaware Chancery Court ruling concerning the shares
awarded under the Plan.
In addition, the company said the ruling will have no adverse impact on its
business or its executive management team. Charles B. Wang, CA's Chairman and
Chief Executive Officer, stated: "Sanjay, Russ and I remain as committed as ever
to the business of making CA, its employees, shareholders and clients
successful. While the ruling is disappointing, it will in no way distract us
from delivering the results that will maintain CA's leadership in our industry."
The Compensation Committee said that the Plan, which had been overwhelmingly
approved by CA's shareholders, was designed to reward key executives if they
succeeded in increasing shareholder value by improving operating results and
efficiently employing the Company's capital. It was intended as an award based
upon the Company's financial performance. Under the Plan as designed, a $17.4
billion increase in the market value of CA measured by specific performance
milestones triggered an award to the key executives of CA stock representing
3.75% of the Company's equity. The early vesting threshold of the 1995 Plan was
satisfied in mid 1998 and the Compensation Committee awarded 20.25 million
common shares to account for the stock splits that occurred in the years since
the Plan's adoption and the granting of the stock.
Willem F. P. de Vogel, chairman of the Compensation Committee, said: "The most
fair and logical reading of the Plan requires adjusting the number of shares to
be awarded to account for any stock splits. That is what we intended."
The Plan's reaffirmation was made by all the independent members of the board,
including the original compensation committee comprised of de Vogel, Richard
Grasso, and Irving Goldstein, as well as the current compensation committee,
which now also includes Roel Pieper and Alfonse D'Amato.
The original Compensation Committee members, who are parties in the legal
action, said that the Delaware judge's ruling is a narrow reading of the
compensation Plan, and that the court's reading of the share limitation
provision frustrates the Plan's central purpose. They added that this same
intent was echoed by the shareholders' rejection at this year's annual meeting
of CA shareholders of a proposal to limit executive compensation. These
committee members said while they respect the opinion of the court, they
disagree with the result. They stated they will appeal Monday's court ruling and
pursue all appropriate means to honor the committee's original intention.
Computer Associates International, Inc. (NYSE: CA), the world leader in mission-
critical business computing, provides software, support and integration services
in more than 100 countries around the world. CA has more than 17,500 employees
and had revenue of $5.3 billion in fiscal year 1999.
For more information about CA, please call 516-342-5224 or e-mail [email protected].
CA's World Wide Web address is www.cai.com.
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