Combine first 5 ingredients in a large bowl. Add vanilla, vinegar, and butter; beat well. Slowly stir in water; beat well.
Pour batter into an ungreased 13- x 9- x 2-inch baking pan. Bake at 350° for 35 to 40 minutes or until a wooden pick inserted in center comes out clean. Cool. Spread Caramel Frosting over cake.