-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I7XYc0Nm8jP754UtWXxTPJzTvIFz4yqJcUfgVHr3cOGNmcdwwkzcPhYZvBR/05WD gqmnTsKs4a7ygIi0/Zw72g== 0000950150-98-000295.txt : 19980305 0000950150-98-000295.hdr.sgml : 19980305 ACCESSION NUMBER: 0000950150-98-000295 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980304 SROS: NYSE SROS: PCX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER SCIENCES CORP CENTRAL INDEX KEY: 0000023082 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 952043126 STATE OF INCORPORATION: NV FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: SC 14D9/A SEC ACT: SEC FILE NUMBER: 005-06907 FILM NUMBER: 98556944 BUSINESS ADDRESS: STREET 1: 2100 E GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3106150311 MAIL ADDRESS: STREET 1: 2100 EAST GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER SCIENCES CORP CENTRAL INDEX KEY: 0000023082 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 952043126 STATE OF INCORPORATION: NV FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: SC 14D9/A BUSINESS ADDRESS: STREET 1: 2100 E GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3106150311 MAIL ADDRESS: STREET 1: 2100 EAST GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 SC 14D9/A 1 SCHEDULE 14D-9, AMENDMENT NO. 4 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 4 TO SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ COMPUTER SCIENCES CORPORATION (NAME OF SUBJECT COMPANY) COMPUTER SCIENCES CORPORATION (NAME OF PERSON FILING STATEMENT) ------------------------ COMMON STOCK, PAR VALUE $1.00 PER SHARE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS (TITLE OF CLASS OF SECURITIES) ------------------------ 20536310-4 (CUSIP NUMBER OF CLASS OF SECURITIES) ------------------------ HAYWARD D. FISK, ESQ. VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY COMPUTER SCIENCES CORPORATION 2100 EAST GRAND AVENUE EL SEGUNDO, CALIFORNIA 90245 (310) 615-0311 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING THIS STATEMENT) ------------------------ Copies to: RONALD S. BEARD, ESQ. GIBSON, DUNN & CRUTCHER LLP 333 SOUTH GRAND AVENUE LOS ANGELES, CA 90071-3197 (213) 229-7000 ================================================================================ 2 This Statement amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission on February 26, 1998, as amended (the "Schedule 14D-9"), relating to the offer by CAI Computer Services Corp., a Delaware corporation and a wholly owned subsidiary of Computer Associates International, Inc., a Delaware corporation, to purchase all of the issued and outstanding shares of common stock, par value $1.00 per share, including associated Series A Junior Participating Preferred Stock Purchase Rights (the "Shares"), of Computer Sciences Corporation, a Nevada corporation (the "Company"), for an amount equal to $108.00 per Share, net to the seller in cash, without interest. Capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Schedule 14D-9. ITEM 4. THE SOLICITATION OR RECOMMENDATION Item 4(b) is hereby supplemented as follows: Certain information and statements within this Schedule 14D-9 amendment constitute "forward-looking statements" which represent the Company's expectations or beliefs, including, but not limited to, statements concerning industry performance and the Company's operations, performance, financial condition, prospects, growth and strategies. These statements are subject to factors many of which are outside of the Company's control, including risks and uncertainties which could cause actual results to differ materially from the forward-looking statements contained herein. These risks and uncertainties include but are not limited to: competitive pressures; the Company's ability to attract and retain key personnel; changes in the demand for information technology outsourcing and business process outsourcing; changes in the financial condition of the Company's major commercial customers; changes in U.S. federal government spending levels for information technology services; the Company's ability to consummate strategic acquisitions and alliances; the future profitability of the Company's customer contracts; the Company's ability to continue to develop and expand its service offerings to address emerging business demand and technological trends; and general economic conditions in countries in which the Company does business. The Company's internal fiscal 1998 financial forecast, fiscal 1999 preliminary budget and fiscal 2000 financial model are summarized as follows: ------------------------------------------------------------------------------------ FISCAL 1998 FISCAL 1999 FISCAL 2000 FINANCIAL PRELIMINARY FINANCIAL $ IN MILLIONS EXCEPT EPS FORECAST BUDGET MODEL ------------------------------------------------------------------------------------ Revenue $6,576 $7,826 $9,313 ------------------------------------------------------------------------------------ Earnings before interest, income taxes, depreciation, amortization and special items ("EBITDA") 843 1,025 1,276 ------------------------------------------------------------------------------------ Earnings per share, before special items 3.43 4.20 5.55 ------------------------------------------------------------------------------------ Earnings per share 3.41 4.12 5.55 ------------------------------------------------------------------------------------
The fiscal 1998 financial forecast includes ten months' actual results and two months' forecast. Fiscal 1999 amounts represent the consolidated preliminary budget accumulated from the business-unit level in the normal course of the Company's financial planning. The financial model for fiscal 2000 is based on historical performance and current expectations for revenue growth, operating margins and capital investment by operating unit. The fiscal 1998-2000 financial information presented above represents three year compound annual growth rates of 18.4 percent for revenues and 21.1 percent for EBITDA. These growth rates are well within the three year compound annual growth rates for fiscal years 1995-1997 of 24.7 percent for revenues and 29.2 percent for EBITDA. The earnings per share forecast of $3.41 for fiscal 1998 includes a first quarter net special credit of $.02 as previously disclosed, and an estimated fourth quarter net special charge of $.04. The fiscal 1999 earnings per share preliminary budget amount includes a special charge of $.08 per share. Both the $.04 and $.08 amounts relate to previously disclosed quantifiable estimated costs incurred in connection with the Company's response to the Offer. The above amounts do not include costs related to the Offer that are not yet quantifiable. 2 3 However, such costs could be material. Earnings per share amounts do not reflect the two-for-one stock split, in the form of a 100 percent stock dividend, payable on March 23, 1998. None of the above amounts takes into account the potential impact of the Offer on the Company's operations. Such impact may include (a) the inability to obtain or complete new and potential business prospects, potential alliances, outsourcing contracts, business acquisitions and software license sales, (b) the inability to obtain new or additional business from existing customers, and (c) the loss of existing customers and employees. This impact could be material. The Company's preliminary budget for fiscal 1999 and financial model for fiscal 2000 take into account the full range of its service offerings, including consulting and other professional services, systems integration, and information technology outsourcing and business process outsourcing. Independent industry analysts have projected robust demand for these services through at least 2002. Furthermore, the preliminary budget and financial model include the changing mix of the Company's business across its commercial, federal and international markets. To coordinate the application of the Company's skill sets across its global markets, the Company has recently established several industry-oriented, or "vertical," organizations. The indicated growth in the Company's operations assumes continued expansion in vertical markets, but neither the fiscal 1999 preliminary budget nor the fiscal 2000 financial model includes any significant business acquisition or combination. The EBITDA amounts shown above reflect growth in earnings and the Company's shift toward more capital intensive businesses, such as outsourcing. For the periods shown, operating margins have been assumed to continue to improve, in keeping with the Company's historical trend. Operating margins have improved on a year to year comparison basis for eight consecutive quarters ended December 26, 1997. The above earnings per share amounts also include benefits the Company expects to realize from reductions in its currently effective income tax rate, primarily due to increases in the tax basis of certain assets currently held in a partnership, favorable utilization of net operating loss carryforwards and research and experimentation credits. If the related tax rate reduction is not realized, the above earnings per share amounts for fiscal 1999 and fiscal 2000 would be reduced by $.12 and $.16, respectively. The Company issued a press release with respect to the above matters on March 4, 1998, a copy of which is attached hereto as Exhibit (a)(5). ITEM 9. MATERIALS TO BE FILED AS EXHIBITS (a)(1) Press release issued by the Company dated February 19, 1998.+ (a)(2) Letter from Van B. Honeycutt to Charles Wang, dated February 19, 1998.+ (a)(3) Press release issued by the Company, dated March 2, 1998.+ (a)(4) Letter from Van B. Honeycutt to the Company's Stockholders dated March 2, 1998.+ (a)(5) Press release issued by the Company, dated March 4, 1998.* (c)(1) Excerpts from the Company's Proxy Statement dated July 2, 1997.+ (c)(2) The Company's Supplemental Executive Retirement Plan, as amended and restated effective as of February 27, 1998.+ (c)(3) The Company's Severance Plan for Senior Management and Key Employees, as amended and restated effective as of February 18, 1998.+ (c)(4) Rights Agreement dated as of February 18, 1998 by and between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+ (c)(5) The Company's Deferred Compensation Plan, as amended and restated effective as of February 2, 1998.+ (c)(6) The Company's Bylaws, as amended and restated February 18, 1998.+ (c)(7) Complaint for Injunctive and Declaratory Relief in Computer Associates International, Inc. v. Computer Sciences Corporation, case no. CV-S-98-00278-LDG.+ 3 4 (c)(8) Ex Parte Motion for Expedited Hearing on Claims for Declaratory Relief in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(9) Brief in Support of Motion for Expedited Hearing on Claims for Declaratory Relief and on the Merits of the Relief Requested in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(10) Response of the Company to the Ex Parte Motion for Expedited Hearing on Claims for Declaratory Relief in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(11) Supplemental and Amended Complaint in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(12) Complaint for (1) Unfair, Unlawful, and Fraudulent Business Acts and Practices in violation of California Business and Professions Code Sections 17200 et seq.; (2) Economic Duress; (3) Intentional Interference with Prospective Economic Advantage and Contractual Relations; and (4) Conspiracy in Computer Sciences Corporation v. Computer Associates International, Inc., case no. BC186394.+ (c)(13) Form of Stock Option Agreement.+ (c)(14) Form of Restricted Stock Agreement.+ (c)(15) Amended and Restated Rights Agreement dated as of December 21, 1988, as amended and restated as of February 18, 1998, by and between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+ (c)(16) The Company's 1990 Nonemployee Director Retirement Plan, as amended and restated effective February 2, 1998.+ (c)(17) Reply of Parent in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(18) Order of the United States District Court for the District of Nevada, dated February 26, 1998.+ (c)(19) Complaint for (1) violation of federal securities laws, (2) misappropriation of trade secrets, (3) conspiracy to misappropriate trade secrets, (4)interference with advantageous business relations, (5) conspiracy to interfere with advantageous business relations, (6) breach of fiduciary duty, (7) aiding and abetting breach of fiduciary duty and (8) unfair competition in Computer Sciences Corporation v. Computer Associates International, Inc., CAI Computer Services Corp., Bear, Stearns and Co., Inc., Michael Urfirer, Charles B. Wang and Sanjay Kumar (Case No. 98-1440 ABC)+ - ------------------------ + Previously filed. * Filed herewith. 4 5 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. COMPUTER SCIENCES CORPORATION By: /s/ VAN B. HONEYCUTT ------------------------------------ Van B. Honeycutt Chairman, President and Chief Executive Officer Dated: March 4, 1998 5 6 EXHIBIT INDEX (a)(1) Press release issued by the Company, dated February 19, 1998.+ (a)(2) Letter from Van B. Honeycutt to Charles Wang, dated February 19, 1998.+ (a)(3) Press release issued by the Company, dated March 2, 1998.+ (a)(4) Letter from Van B. Honeycutt to the Company's Stockholders dated March 2, 1998.+ (a)(5) Press release issued by the Company, dated March 4, 1998.* (c)(1) Excerpts from the Company's Proxy Statement dated July 2, 1997.+ (c)(2) The Company's Supplemental Executive Retirement Plan, as amended and restated effective as of February 27, 1998.+ (c)(3) The Company's Severance Plan for Senior Management and Key Employees, as amended and restated effective as of February 18, 1998.+ (c)(4) Rights Agreement dated as of February 18, 1998 by and between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+ (c)(5) The Company's Deferred Compensation Plan, as amended and restated effective as of February 2, 1998.+ (c)(6) The Company's Bylaws, as amended and restated February 18, 1998.+ (c)(7) Complaint for Injunctive and Declaratory Relief in Computer Associates International, Inc. v. Computer Sciences Corporation, case no. CV-S-98-00278-LDG.+ (c)(8) Ex Parte Motion for Expedited Hearing on Claims for Declaratory Relief in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(9) Brief in Support of Motion for Expedited Hearing on Claims for Declaratory Relief and on the Merits of the Relief Requested in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(10) Response of the Company to the Ex Parte Motion for Expedited Hearing on Claims for Declaratory Relief in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(11) Supplemental and Amended Complaint in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(12) Complaint for (1) Unfair, Unlawful, and Fraudulent Business Acts and Practices in violation of California Business and Professions Code Sections 17200 et seq.; (2) Economic Duress; (3) Intentional Interference with Prospective Economic Advantage and Contractual Relations; and (4) Conspiracy in Computer Sciences Corporation v. Computer Associates International, Inc., case no. BC186394.+ (c)(13) Form of Stock Option Agreement.+ (c)(14) Form of Restricted Stock Agreement.+ (c)(15) Amended and Restated Rights Agreement dated as of December 21, 1988, as amended and restated as of February 18, 1998, by and between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+ (c)(16) The Company's 1990 Nonemployee Director Retirement Plan, as amended and restated February 2, 1998.+ (c)(17) Reply of Parent in Computer Associates International, Inc. v. Computer Sciences Corporation.+ (c)(18) Order of the United States District Court for the District of Nevada, dated February 26, 1998.+ (c)(19) Complaint for (1) violation of federal securities laws, (2) misappropriation of trade secrets, (3) conspiracy to misappropriate trade secrets, (4)interference with advantageous business relations, (5) conspiracy to interfere with advantageous business relations, (6) breach of fiduciary duty, (7) aiding and abetting breach of fiduciary duty and (8) unfair competition in Computer Sciences Corporation v. Computer Associates International, Inc., CAI Computer Services Corp., Bear, Stearns and Co., Inc., Michael Urfirer, Charles B. Wang and Sanjay Kumar (Case No. 98-1440 ABC)+ - ------------------------ + Previously filed. * Filed herewith. 6 EX-99.(A)(5) 2 PRESS RELEASE 1 EXHIBIT (a)(5) FOR IMMEDIATE RELEASE COMPUTER SCIENCES DETAILS STRONG GROWTH EXPECTATIONS OFFER BY COMPUTER ASSOCIATES DOES NOT REPRESENT FAIR VALUE FOR CSC EL SEGUNDO, CALIF., MARCH 4, 1998 - Computer Sciences Corporation (NYSE: CSC) (the "Company") today reiterated that Computer Associates' (NYSE: CA) tender offer of $108 per share for CSC stock falls far short of rewarding stockholders for the value of the Company. To support the Company's position, CSC filed forward-looking statements with the Securities and Exchange Commission ("SEC") earlier today. Van B. Honeycutt, Chairman, President and CEO, and Leon J. Level, Vice President and Chief Financial Officer, will meet today in New York City with financial analysts as part of CSC's effort to provide its stockholders with information regarding the Company's performance expectations. "As the target of an unwanted hostile takeover attempt by CA, we are in an extraordinary situation," said Honeycutt. "Our stockholders are entitled to know specifically what lies behind our conviction that Computer Associates' bid falls far short of rewarding our stockholders for the underlying value of Computer Sciences." The Company's internal fiscal 1998 financial forecast, fiscal 1999 preliminary budget and fiscal 2000 financial model are summarized as follows:
Fiscal 1998 Fiscal 1999 Fiscal 2000 Financial Preliminary Financial ($ in millions, except EPS) Forecast Budget Model -------- ------ ----- Revenue $6,576 $7,826 $9,313 Earnings before interest, income taxes, depreciation, amortization and special items ("EBITDA") 843 1,025 1,276 Earnings per share, before special items 3.43 4.20 5.55 Earnings per share 3.41 4.12 5.55
The fiscal 1998 financial forecast includes ten months' actual results and two months' forecast. Fiscal 1999 amounts represent the consolidated preliminary budget accumulated from the business-unit level in the normal course of the Company's financial planning. The financial model for fiscal 2000 is based on historical performance and - MORE - 2 current expectations for revenue growth, operating margins and capital investment by operating unit. Earnings per share amounts do not reflect the two-for-one stock split, in the form of a 100 percent stock dividend, payable on March 23, 1998. The forward-looking statements contained herein assume no significant acquisitions by CSC and do not take into account the potential impact of CA's offer on CSC's business. Level said that CSC expects growth in the current fiscal year (which ends April 3, 1998) of 18 percent in earnings per share, before special items, to $3.43, which is in the upper range of analyst estimates. The fiscal 1998-2000 financial information presented above represents three-year compound annual growth rates of 18.4 percent for revenues and 21.1 percent for EBITDA. These growth rates are well within the three-year compound annual growth rates for fiscal years 1995-1997 of 24.7 percent for revenues and 29.2 percent for EBITDA. "We have won or implemented $6.7 billion in large outsourcing contracts over the past twelve months, and our new business development pipeline is full. We have a high level of confidence that we will win a significant percentage of the opportunities we are currently seeking," Level said. Honeycutt said: "We are also seeing considerable internal growth in our vertical business groups and in such areas as Year 2000 services, enterprise-wide solutions and electronic commerce. The visibility of such strong growth has the potential to effect significant appreciation in our stock price and underscores the inadequacy of the CA offer, particularly when compared with valuation multiples found in the marketplace generally and in other takeover transactions." The forward-looking statements contained herein are based on a number of assumptions and are subject to uncertainties and risks set forth in Amendment No. 4 to Schedule 14D-9 filed with the SEC this morning. CSC cautioned that developments outside the Company's control can have a material effect on results of operations and urged readers to carefully consider the assumptions, uncertainties and risks described in the Company's SEC filing. CSC provides clients with a wide range of professional services, including management consulting, information systems consulting and integration, and operations support. The Company has more than 44,000 employees in nearly 600 offices worldwide. For the 12 months ended December 26, 1997, CSC had $6.3 billion in revenue. More information about CSC is available at http://www.csc.com. - MORE - 3 INFORMATION CONCERNING PARTICIPANTS CSC, the members of its Board of Directors, and certain other employees of CSC may be deemed to be participants in the solicitation of proxies, as such terms are defined in the rules of the Securities and Exchange Commission. The Board of Directors consists of the following persons, each of whom owns, directly or indirectly, or has the right to acquire, the number of shares of CSC common stock set forth after his or her name: Irving W. Bailey, II (2,000 shares of common stock, 2,289 restricted stock units or options), Van B. Honeycutt (37,242 shares of common stock, 409,363 options), William R. Hoover (244,905 shares of common stock), Richard C. Lawton (1,500 shares of common stock), Leon J. Level (11,265 shares of common stock, 93,400 options), Thomas A. McDonnell (9,271 restricted stock units or options), F. Warren McFarlan (2,400 shares of common stock, 2,968 restricted stock units or options), James R. Mellor (600 shares of common stock, 3,245 restricted stock units or options) and William P. Rutledge (200 shares of common stock, 1,371 restricted stock units or options). In addition, the following other employees of CSC, each of whom owns, directly or indirectly, or has the right to acquire, the number of shares of CSC common stock set forth after his or her name, may engage in solicitations on behalf of CSC: Edward P. Boykin (18,775 shares of common stock, 60,800 options), Milton E. Cooper (12,372 shares of common stock, 138,000 options), J. Spencer Davis (64 shares of common stock, 800 options), Scott M. Delanty (447 shares of common stock, 14,000 options), Gerard E. Dube (454 shares of common stock, 37,000 options), Hayward D. Fisk (276 shares of common stock, 16,400 options), J. Douglas Gray (45 shares of common stock, 67,000 options), Ronald W. Mackintosh (21,000 shares of common stock, 99,000 options), Thomas R. Madison Jr. (1,154 shares of common stock, 85,000 options), C. Bruce Plowman (599 shares of common stock, 9,200 options), Thomas C. Robinson (30,000 shares of common stock, 70,000 options), James P. Saviano (1,788 shares of common stock, 40,800 options), Arthur H. Spiegel III (41 shares of common stock, 20,000 options), Paul T. Tucker (891 shares of common stock, 25,000 options), W. Brinson Weeks (3,004 shares of common stock, 17,400 options), and Thomas Williams (18,723 shares of common stock, 43,800 options). Share, restricted stock unit and option data do not reflect the two-for-one stock split, in the form of a 100 percent stock dividend, payable on March 23, 1998. In addition, certain of the above-named directors and employees of CSC are beneficiaries of compensation and benefit plans maintained by CSC, including certain severance arrangements, which are described in the Company's Proxy Statement, dated July 2, 1997, and the Schedule 14D-9 filed with the Securities and Exchange Commission on February 26, 1998, as amended, and which provide benefits in the event of a change in control of CSC. Goldman, Sachs & Co. ("Goldman Sachs") and J.P. Morgan & Co. ("J.P. Morgan") have been retained by CSC to act as its financial advisors with respect to the acquisition proposal which a wholly-owned subsidiary of Computer Associates International, Inc. ("CAI") has made for the stock of CSC; Goldman Sachs also has been retained as - MORE - 4 financial advisor to assist CSC in responding to any other acquisition proposals it may receive or any other attempts to acquire control of CSC. Pursuant to the terms of their engagement letters, Goldman Sachs and J.P. Morgan will receive the following fees for their services: (a) a quarterly retainer fee of $2,500,000 for Goldman Sachs and $1,000,000 for J.P Morgan, payable on the first day of each three-month period during which they provide such services; and (b) a fee of $10,000,000 for Goldman Sachs and $4,000,000 for J.P. Morgan (with the quarterly retainer fees paid under clause (a) above credited on a one-time basis against such fees), payable on February 11, 1999, and February 13, 1999, respectively, in the event that CAI (and, in the case of J.P. Morgan, any other person) has not, directly or indirectly, become the beneficial owner of more than 50 percent of the outstanding Shares on or prior to such date. The Goldman Sachs engagement letter also provides that in the event that CSC determines to undertake a specific transaction as referred to in such letter, Goldman Sachs will have the right to act on CSC's behalf in connection with such transaction on customary terms and conditions, including customary fee provisions. The J.P. Morgan engagement letter provides that in the event CSC determines to proceed with a sale, merger, consolidation, business combination, or certain other specified transactions, during the term of the engagement CSC will enter into an amendment to the engagement letter providing for fees to J.P. Morgan in an amount to be determined after taking into account the results obtained and the custom and practice among investment bankers acting in similar transactions. CSC has also agreed to reimburse Goldman Sachs and J.P. Morgan for their reasonable out-of-pocket expenses, including fees and expenses of counsel, and to indemnify Goldman Sachs and J.P. Morgan and certain related persons against certain liabilities in connection with their engagement. In connection with the Goldman Sachs and J.P. Morgan engagements, CSC anticipates that Gene T. Sykes, Managing Director of Goldman Sachs, Mark Dzialga, Vice President of Goldman Sachs, Gregg R. Lemkau, Associate of Goldman Sachs, Joseph Walker, Managing Director of J.P. Morgan, David Courtney, Managing Director of J.P. Morgan, Todd Marin, Managing Director of J.P. Morgan, and Dag Skattum, Managing Director of J.P. Morgan, none of whom will receive additional compensation for such solicitation, may communicate in person, by telephone or otherwise with a limited number of institutions, brokers or other persons who are shareholders. Neither Goldman Sachs nor J.P. Morgan will receive any fee for, or in connection with, such solicitation activities by its employees apart from the fees it is otherwise entitled to receive as described above. None of the above-named employees of Goldman Sachs and J.P. Morgan owns any shares of CSC's common stock. MEDIA CONTACT: C. Bruce Plowman, Computer Sciences Corporation (310) 615-0311 Robert Mead, BSMG Worldwide (212) 445-8208 INVESTOR CONTACT: J. Spencer Davis, Computer Sciences Corporation (310) 615-0311 -----END PRIVACY-ENHANCED MESSAGE-----