Computer Associates 2008 Annual Report Download - page 105

Messrs. Vladimir and Rosenzweig in an amount up to $525,000 each. If finalized, this settlement would require approval
of the Federal Court. On July 23, 2007, Ranger filed a letter with the Federal Court objecting to the proposed settlement.
On October 29, 2007, the Federal Court denied the Special Litigation Committee’s motion to dismiss and realign,
without prejudice to renewing said motion after a decision by the appellate court regarding the Federal Court’s decisions
concerning the 60(b) motions.
In a memorandum and order dated August 2, 2007, the Federal Court denied all of the 60(b) Motions and reaffirmed
the 2003 settlements (the August 2 decision). On August 24, 2007, Ranger Governance, Ltd. (“Ranger”) and the Wyly
Litigants filed notices of appeal of the August 2 decision. On August 16, 2007, the Special Litigation Committee filed a
motion to amend or clarify the August 2 decision, and the Company joined that motion. On September 12, 2007 and
October 4, 2007, the Federal Court issued opinions denying the motions to amend or clarify. On September 18, 2007,
the Wyly Litigants and Ranger filed notices of appeal of the September 12 decision. CA filed notices of cross-appeal of
the September 12 and October 4 decisions on November 2, 2007. On December 3, 2007, Ranger filed a motion to
dismiss CA’s cross-appeals. By Order dated December 7, 2007, all of the appeals and cross-appeals were stayed
pending a decision on Ranger’s motion to dismiss. Oral argument was held on that motion on March 4, 2008 and a
decision is pending.
The Company is obligated to indemnify its officers and directors under certain circumstances to the fullest extent
permitted by Delaware law. As a part of that obligation, the Company has advanced and will continue to advance
certain attorneys’ fees and expenses incurred by current and former officers and directors in various litigations and
investigations arising out of similar allegations, including the litigation described above.
Derivative Actions Filed in 2006
On August 10, 2006, a purported derivative action was filed in the Federal Court by Charles Federman against certain
current or former directors of the Company (the 2006 Federman Action). On September 15, 2006, a purported
derivative action was filed in the Federal Court by Bert Vladimir and Irving Rosenzweig against certain current or former
directors of the Company (the 2006 Vladimir Action). By order dated October 26, 2006, the Federal Court ordered the
2006 Federman Action and the 2006 Vladimir Action consolidated. Under the order, the actions are now captioned CA,
Inc. Shareholders’ Derivative Litigation Employee Option Action. On December 31, 2007, the Company informed the Federal
Court that the parties have reached an agreement to settle the action. In connection with the settlement, CA has agreed
to maintain for a period of not less than three years certain corporate governance practices, measures and policies. CA
has also agreed to pay the attorney’s fees of Messrs. Vladimir and Rosenzweig in an amount up to $1 million in total.
On March 20, 2008, the Federal Court entered an order preliminarily approving the settlement. On May 9, 2008,
following a settlement fairness hearing, the Federal Court executed an order approving the settlement.
Texas Litigation
On August 9, 2004, a petition was filed by Sam Wyly and Ranger against the Company in the District Court of Dallas
County, Texas (the Ranger Governance Litigation), seeking to obtain a declaratory judgment that plaintiffs did not breach
two separation agreements they entered into with the Company in 2002 (the 2002 Agreements). Plaintiffs seek to
obtain this declaratory judgment in order to file a derivative suit on behalf of the Company (see “— Derivative Actions
Filed in 2004”). On February 18, 2005, Mr. Wyly filed a separate lawsuit in the United States District Court for the
Northern District of Texas (the Texas Federal Court) alleging that he is entitled to attorneys’ fees in connection with the
original litigation filed in Texas. The two actions have been consolidated. On March 31, 2005, the plaintiffs amended
their complaint to allege a claim that they were defrauded into entering the 2002 Agreements and to seek rescission of
those agreements and damages. On September 1, 2005, the Texas Federal Court granted the Company’s motion to
transfer the action to the Federal Court. On November 9, 2007, plaintiffs served a motion to reopen discovery for
90 days to permit unspecified additional document requests and depositions. The Company served its opposition to
plaintiffs’ motion on November 16, 2007. The Federal Court has not yet decided the motion.
Other Civil Actions
In June 2004, a lawsuit captioned Scienton Technologies, Inc. et al. v. Computer Associates International, Inc. was filed in the
Federal Court. The complaint seeks monetary damages in various amounts, some of which are unspecified, but which
are alleged to exceed $868 million, based upon claims for, among other things, breaches of contract, misappropriation of
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