November 22, 2004 and as Amended and
Restated through December 8, 2008
This
is your Employment
Agreement (
the “ Agreement ”) with Computer
Associates International, Inc. , a Delaware corporation (the
“ Company ”). It sets forth the terms of your
employment with the Company and its affiliates from time to time
(together, the “ Group ”).
1. Your
Position, Performance and Other Activities
(a)
Position. You will be employed in the position of Chief
Executive Officer of the Company. It is anticipated that you will
be employed in the position of Chief Executive Officer of the
Company within six (6) months of your Start Date (as defined
in Section 2). You will be appointed to the Company’s
Board of Directors (the “ Board ”) as of your
Start Date (as defined in Section 2) and the Company will use
all reasonable efforts to cause you to be nominated for re-election
each time your term expires during your employment. You agree to
serve as a member of the Board, as well as a member of any Board
committee to which you may be elected or appointed. You also agree
that you will be deemed to have resigned from the Board and each
Board committee voluntarily, without any further action by you, as
of the end of your employment.
(b)
Authority, Responsibilities and Reporting. You will have the
authority, responsibilities and reporting relationships that
correspond to your position, including any particular authority,
responsibilities and reporting relationships consistent with your
position that the Board may assign to you from time to time and
compliance with such policies of the Company as may be adopted from
time to time.
(c)
Performance. During your employment, you will devote
substantially all of your business time and attention to the Group
and will use good faith efforts to discharge your responsibilities
under this Agreement to the best of your ability. During your
employment, your place of performance will be Islandia, New York or
such other place as the Board determines.
(d)
Other Activities. During your employment, you will not
render any business, commercial or professional services to any
non-member of the Group. However, you may (1) serve on corporate,
civic or charitable boards, (2) manage personal investments,
or (3) deliver lectures, or fulfill speaking engagements or teach
at educational institutions, so long as (A) these
activities do not interfere with your performance of your
responsibilities under this Agreement and (B) any service on a
corporate, civic or charitable board is approved by the
Board.
2. Term of
Your Employment
Subject to your
satisfactory completion of pre- and post-employment background,
reference and other checks, your employment under this Agreement
will (a) begin on November 22, 2004 (the “ Start
Date ” of this Agreement) and (b) end at the close
of business on the earlier of (1) the end of the Compensation
Period or (2) the effective date of early termination of your
employment. Your “ Compensation Period ” begins
on your Start Date and is initially scheduled to end on the fifth
anniversary of your Start Date. Beginning on the fifth anniversary
of your Start Date and on each following anniversary, your
Compensation Period will automatically extend for one year unless
either you or the Company gives at least 90 days’ prior
notice of non-extension. In no event, however, will your
Compensation Period extend beyond the end of the Company’s
fiscal year in which your 65 th birthday occurs. References in this Agreement to
“ your employment ” are to your employment under
this Agreement.
(a)
Salary. During your employment, you will receive an annual
base salary (as increased from time to time, your “
Salary ”). The starting amount of your Salary is
$1,000,000. The Company will review your Salary at least annually
and may increase it at any time for any reason. However, your
Salary may not be decreased at any time (including after any
increase) without your written consent and any increase in your
Salary will not reduce or limit any other obligation to you under
this Agreement. Your Salary will be paid in accordance with the
Group’s normal practices for senior executives.
(b)
Bonus. You will be eligible to receive an annual cash bonus
(your “ Bonus ”) for each fiscal year of the
Company ending during your employment. The target level for your
Bonus in each full fiscal year of your employment will be at least
100% of your Salary (the “ Target Annual Bonus
”) and the maximum level for your Bonus will be 200% of your
Salary. You will be entitled to a minimum Bonus of $333,334 for the
Company’s fiscal year ending March 31, 2005. Your Bonus
will be paid at the same time as such bonuses are paid to other
senior executives of the Company.
(c)
Long-Term Incentive Awards. You will be eligible to receive
long-term incentive awards (“ Long-Term Incentive
Awards ”) as determined by the Company in accordance with
the Company’s Long-Term Incentive Plan (and any successor
plan) in which you will begin to participate for the performance
period starting April 1, 2005. The target award level under
the Company’s Long-Term Incentive Plan initially will be 2.5
times your Salary. The maximum award level under the
Company’s Long-Term Incentive Plan initially will be 3.75
times your Salary.
(d)
Initial Incentive Awards. (1) In addition to your
Salary and Bonus, on your Start Date you will be awarded
(A) stock options to purchase 350,000 shares of the
Company’s common stock (your “ Sign-On
Options” ) and (B) 100,000 restricted shares of the
Company’s common stock (your “ Sign-On Stock
”).
(2) Your Sign-On
Options will be granted under the Company’s 2002 Incentive
Plan and will have an exercise price equal to the Start
Date
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Closing Price.
Your Sign-On Options will vest 34%, 33% and 33% on the first,
second and third anniversaries of the Start Date.
(3) Your Sign-On
Stock will be granted under the Company’s 2002 Incentive
Plan. Initially, your Sign-On Stock may not be transferred or
assigned and will be forfeited to the Company for zero
(0) consideration if your employment with the Company is
terminated for any reason prior to vesting. Your Sign-On Stock will
vest in equal installments on each of the first three one-year
anniversaries of your Start Date (such restricted stock is
“vested” when it is no longer subject to such transfer
restrictions and forfeiture provisions).
(4) Except as
provided in this Agreement, your Sign-On Options and Sign-On Stock
will be subject to the terms of the Company’s 2002 Incentive
Plan and to the terms of your award agreement under it (which will
contain the Group’s normal provisions for senior
executives).
(e)
Relocation Benefit. In accordance with the Company’s
Relocation Policy, you will be eligible to be reimbursed for your
reasonable costs incurred in connection with your relocation to the
Company’s headquarters in Islandia, New York. In addition,
you shall receive temporary corporate housing in accordance with
the Company’s policies and you shall be eligible to receive
relocation benefits in accordance with the Company’s
policies, in each case, until no later than November 22,
2006.
(f)
Restricted Stock Units . In addition to your Sign-On Stock,
on your Start Date you will be awarded restricted stock units with
respect to 100,000 shares of the Company’s common stock (your
“ RSUs ”). Your RSUs will be granted under the
Company’s 2002 Incentive Plan. Your RSUs may not be
transferred or assigned until six (6) months after the date on
which your employment with the Group terminates for any reason. Six
(6) months after your date of termination, your RSUs will
fully vest, be transferable and be paid to you. You will also
receive dividend equivalent rights entitling you to be paid, at the
same time as other shareholders of the Company, any dividends
declared and paid in respect of the 100,000 shares of the
Company’s common stock underlying your RSUs.
(g)
Signing Bonus . Within 30 days of your Start Date, you
will receive a signing bonus equal to $2.5 million in cash.
Additionally, you will receive the present value of
$2.8 million, the form and manner of such payment to be agreed
by you and the Company; provided, however, if you and the Company
fail to agree on a form and manner of this payment within
60 days of the Start Date, the Company has the right to make
the $2.8 million payment in cash.
4. Other
Employee Benefits
(a)
Vacation. You will be entitled to paid annual vacation
during your employment (totaling at least four (4) weeks a
year) on a basis that is at least as favorable as that provided to
other senior executives of the Group.
(b)
Business Expenses. You will be reimbursed for all business
and entertainment expenses incurred by you in performing your
responsibilities under this Agreement. The Company is responsible
for ensuring that business expenses
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under 4(b) are
reimbursed to you as soon as practicable but in no event later than
the end of the calendar year following the year in which such
reimbursable expenses were incurred. Any such reimbursements under
4(b) shall be subject to the Group’s normal practice for
senior executives.
(c)
Facilities. During your employment, you will be provided
with office space, facilities, secretarial support and other
business services consistent with your position on a basis that is
at least as favorable as that provided to other senior executives
of the Group.
(d)
Indemnification. To the extent permitted by law, the Company
will indemnify you against any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or
investigative, arising by reason of your status as a director,
officer, employee and/or agent of the Group during your employment.
In addition, to the extent permitted by law, the Company will pay
or reimburse any expenses, including reasonable attorney’s
fees, you incur in investigating and defending any actual or
threatened action, suit or proceeding for which you may be entitled
to indemnification under this Section 4(d). However, you agree
to repay any expenses paid or reimbursed by the Company if it is
ultimately determined that you are not legally entitled to be
indemnified by the Company. If the Company’s ability to make
any payment contemplated by this Section 4(d) depends on an
investigation or determination by the board of directors of any
member of the Group, at your request the Company will use its best
efforts to cause the investigation to be made (at the
Company’s expense) and to have the relevant board reach a
determination as soon as reasonably possible. This indemnification
will be at least as favorable as that provided to other senior
executives and directors of the Group.
(e)
Employee Benefit Plans. During your employment, you will be
eligible to participate in the Group’s employee benefit and
welfare plans, including plans providing retirement benefits,
medical, dental, hospitalization, life or disability insurance, on
a basis that is at least as favorable as that provided to other
senior executives of the Group.
5. Early
Termination of Your Employment
(a)
No Reason Required. You or the Company may terminate your
employment early at any time for any reason, or for no reason,
subject to compliance with Section 5(e).
(b)
Termination by the Company for Cause.
(1) “
Cause ” means any of the following:
(A) Your continued
failure, either due to willful action or as a result of gross
neglect, to substantially perform your duties and responsibilities
to the Group under this Agreement (other than any such failure
resulting from your incapacity due to physical or mental illness)
that, if capable of being cured, has not been cured within thirty
(30) days after written notice is delivered to you by the
Board, which notice specifies in reasonable detail the manner in
which the
4
Company
believes you have not substantially performed your duties and
responsibilities.
(B) Your
engagement in conduct which is demonstrably and materially
injurious to the Group, or that materially harms the reputation or
financial position of the Group, unless the conduct in question was
undertaken in good faith on an informed basis with due care and
with a rational business purpose and based upon the honest belief
that such conduct was in the best interest of the Group.
(C) Your
indictment or conviction of, or plea of guilty or nolo
contendere to, a felony or any other crime involving
dishonesty, fraud or moral turpitude.
(D) Your being
found liable in any SEC or other civil or criminal securities law
action or entering any cease and desist order with respect to such
action (regardless of whether or not you admit or deny
liability).
(E) Your breach of
your fiduciary duties to the Group which may reasonably be expected
to have a material adverse effect on the Group. However , to
the extent the breach is curable, the Company must give you notice
and a reasonable opportunity to cure.
(F) Your
(i) obstructing or impeding, (ii) endeavoring to
influence, obstruct or impede or (iii) failing to materially
cooperate with, any investigation authorized by the Board or any
governmental or self-regulatory entity (an “
Investigation ”). However, your failure to waive
attorney-client privilege relating to communications with your own
attorney in connection with an Investigation shall not constitute
“Cause”.
(G) Your removing,
concealing, destroying, purposely withholding, altering or by any
other means falsifying any material which is requested in
connection with an Investigation.
(H) Your
disqualification or bar by any governmental or self-regulatory
authority from serving in the capacity contemplated by this
Agreement or your loss of any governmental or self-regulatory
license that is reasonably necessary for you to perform your
responsibilities to the Group under this Agreement, if
(i) the disqualification, bar or loss continues for more than
30 days and (ii) during that period the Group uses its
good faith efforts to cause the disqualification or bar to be
lifted or the license replaced. While any disqualification, bar or
loss continues during your employment, you will serve in the
capacity contemplated by this Agreement to whatever extent legally
permissible and, if your employment is not permissible, you will be
placed on leave (which will be paid to the extent legally
permissible).
(I) Your
unauthorized use or disclosure of confidential or proprietary
information, or related materials, or the violation of any
of
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the terms of
the Company’s standard confidentiality policies and
procedures, in the case of any item identified in this clause
(I) which may reasonably be expected to have a material
adverse effect on the Group and that, if capable of being cured,
has not been cured within thirty (30) days after written
notice is delivered to you by the Company, which notice specifies
in reasonable detail the alleged unauthorized use or disclosure or
violation.
(J) Your violation
of the Group’s (i) Workplace Violence Policy or (ii)
policies on discrimination, unlawful harassment or substance
abuse.
For this
definition, no act or omission by you will be “willful”
unless it is made by you in bad faith or without a reasonable
belief that your act or omission was in the best interests of the
Group.
(2) To terminate
your employment “for Cause”, the Board must determine
in good faith that Cause has occurred, the Company must comply with
Section 5(e) and the Company must deliver to you a copy of a
resolution duly adopted by a majority of the entire Board
(excluding you) at a meeting of the Board called and held for such
purpose (after reasonable notice to you and a reasonable
opportunity for you and your counsel to be heard) that finds that
in the good faith opinion of the Board, Cause has occurred and
states the basis for that belief.
(c)
Termination by You for Good Reason.
(1) “
Good Reason ” means any of the following:
(A) Any material
and adverse change in your position with the Group (including by
reason of the Company’s failure to cause you to be nominated
to the Board).
(B) Any material
failure by the Company to provide you with authority,
responsibilities and reporting relationships as provided in Section
1(b) or any material and adverse reduction in your authority,
responsibility or reporting relationships or the assignment of any
duties inconsistent in any material respect with your position,
authority, duties or responsibilities, in each case other
than any isolated, insubstantial and inadvertent failure by the
Company that is not in bad faith and is cured promptly on your
giving the Company notice.
(C) Any material
reduction by the Company in your Salary or Target Annual Bonus,
other than any such reduction agreed to by you in writing or
any insubstantial or inadvertent reduction by the Company that is
cured promptly on your giving the Company notice.
(D) Any material
failure by the Company to comply with Section 3, other
than any isolated, insubstantial and inadvertent failure by the
Company that is not in bad faith and is cured promptly on your
giving the Company notice.
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(E) Any purported
termination by the Company of your employment that is in breach of
this Agreement.
(F) Any failure by
the Company to comply with Section 11(c).
(2) The
Company’s placing you on paid leave for up to 90 consecutive
days while it is determining whether there is a basis to terminate
your employment for Cause will not constitute Good
Reason.
(3) To terminate
your employment “for Good Reason”, Good Reason must
have occurred and you must comply with Section 5(e).
However , (A) if you do not give a Termination Notice
within 90 days after you have knowledge that an event
constituting Good Reason has occurred, the event will no longer
constitute Good Reason; (B) you must give the Company notice
and a 30-day period to cure the event constituting Good Reason
under Section 5(c)(1); and (C) you must terminate your
employment within the two years after the initial existence of an
event constituting Good Reason.
(d)
Termination on Disability or Death.
(1) The term
“ Disability ” means your absence from your
responsibilities with the Company on a full-time basis for 180
business days in any consecutive 12 months as a result of
incapacity due to mental or physical illness or injury. If a doctor
mutually acceptable to you and the Company determines in good faith
that your Disability has occurred, the Company may give you
Termination Notice. If within 30 days of the Termination
Notice you do not return to full-time performance of your
responsibilities, your employment will terminate. If you do return
to full-time performance in that 30-day period, the Termination
Notice will be cancelled for all purposes of this Agreement. Except
as provided in this Section 5(d), your incapacity due to
mental or physical illness or injury will not affect the
Company’s obligations under this Agreement.
(2) Your
employment will terminate automatically on your death. If you die
before your employment starts, all the provisions of this Agreement
will also terminate and there will be no liability of any kind
under this Agreement.
(e)
Advance Notice Generally Required.
(1) To terminate
your employment before the end of your Compensation Period, either
you or the Company must provide a Termination Notice to the other.
A “ Termination Notice ” is a written notice
that states the specific provision of this Agreement on which
termination is based, including, if applicable, the specific clause
of the definition of Cause or Good Reason and a reasonably detailed
description of the facts that permit termination under that clause.
(The failure to include any fact in a Termination Notice that
contributes to a showing of Cause or Good Reason does not preclude
either party from asserting that fact in enforcing its rights under
this Agreement.)
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(2) You and the
Company agree to provide 90 days’ advance Termination
Notice of any early termination, unless your employment is
terminated by the Company for Cause or because of your Disability
or death. Accordingly, the effective date of early termination of
your employment will be 90 days after Termination Notice is
given except that (A) the effective date will be the
date of the Company’s Termination Notice if your employment
is terminated by the Company for Cause, although the Company may
provide a later effective date in the Termination Notice,
(B) the effective date will be 30 days after Termination
Notice is given if your employment is terminated because of your
Disability, and (C) the effective date will be the time of
your death if your employment is terminated because of your death.
The Company may elect to place you on paid leave for all or part of
the advance notice period.
6. The
Company’s Obligations in Connection With Your
Termination
(a)
General Effect. On termination in accordance with
Secti
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