Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     This Amended and Restated Agreement is entered into by and between CA, Inc.
(the “Company”) and Kenneth V. Handal (the “Employee”) September 25, 2006 (the
“Effective Date”) and amends and restates in its entirety the Employment
Agreement between the Company and the Employee, dated as of July 31, 2006 (the
“Prior Agreement”).
     1. Employment, Duties, Authority and Work Standards. The Company hereby
agrees to continue to employ the Employee as Executive Vice
President-Governance, Corporate Secretary, and Co-General Counsel (along with
Amy Fliegelman Olli or such other person as the Board of Directors of the
Company may designate (such person, the “Co-General Counsel”)) and the Employee
hereby accepts such positions and agrees to serve the Company in such capacities
during the Employment Period (as defined below). The Employee shall report
directly to the Company’s Chief Executive Officer. The Employee’s duties,
responsibilities and authority shall be such duties, responsibilities and
authority as are consistent with the above job titles (other than the duties and
responsibilities assigned from time to time to the Co-General Counsel) and as
the Chief Executive Officer shall from time to time specify, in his sole
discretion. Such duties shall initially comprise the position of Corporate
Secretary, the oversight of the Internal Audit, Compliance, and Global Security
and Asset Protection Departments. The Employee will (a) serve the Company (and
such of its subsidiary companies as the Company may designate) faithfully,
diligently and to the best of the Employee’s ability under the direction of the
Chief Executive Officer, (b) devote his full working time and best efforts,
attention and energy to the performance of his duties to the Company and (c) not
do anything inconsistent with his duties to the Company.
     2. Laws; Other Agreements. The Employee represents that his employment
hereunder will not violate any law or duty by which he is bound, and will not
conflict with or violate any agreement or instrument to which the Employee is a
party or by which he is bound.
     3. Compensation.
          (a) In consideration of services that the Employee will render to the
Company, the Company agrees to pay the Employee, during the Employment Period,
the sum of $500,000 per annum (less applicable withholdings) (the “Base
Salary”), payable semi-monthly concurrent with the Company’s normal payroll
cycle.
          (b) In addition to the Base Salary, during the Employment Period, the
Employee shall have an opportunity to earn an annual cash bonus (“Annual Bonus”)
under the Company’s Annual Performance Bonus program in accordance with
Section 4.4 of the Company’s 2002 Incentive Plan, as amended and restated, or
any successor thereto (the “Incentive Plan”); provided that, with respect to the
fiscal year ending March 31, 2007, the Employee’s Annual Performance Bonus
target shall equal $600,000, provided that such targeted amount and the other
terms and conditions of such Annual Performance Bonus shall be subject to
determination and approval of the Compensation and Human Resource Committee of
the Board of Directors (the “Compensation Committee”) in accordance with the
terms of the Incentive Plan. In respect of the fiscal year ending March 31,
2008, the Company’s Chief Executive Officer (the “CEO”) shall recommend to the
Compensation Committee an Annual Performance Bonus target for the Employee, in
an amount to be determined by the CEO, subject to the determination and approval
of the Compensation Committee in accordance with the terms of the Incentive
Plan.
          (c) In addition, the Employee shall also be eligible to receive a
targeted Long-Term Performance Bonus of $2,000,000 for the performance period
commencing on April 1, 2006 under the Company’s Long-Term Performance Bonus
program as set forth in Section 4.5 of the Incentive Plan, provided that such
targeted amount and the other terms and conditions of such Long-Term Performance
Bonus shall be subject to determination and approval of the Compensation
Committee in accordance with the terms of the Incentive Plan. In respect of the
fiscal year ending March 31, 2008, the CEO shall recommend to the Compensation
Committee a

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Long-Term Performance Bonus for the Employee, in an amount to be determined by
the CEO, subject to the determination and approval of the Compensation Committee
in accordance with the terms of the Incentive Plan.
     4. Benefits and Perquisites. During the term of the Employee’s employment,
the Employee shall be eligible to participate in all pension, welfare and
benefit plans and perquisites generally made available to other senior employees
of the Company. Additionally, for so long as the Employee resides in New York
City, the Company shall provide a stipend of not less than $5,000 per month for
transportation to and from the Company’s offices from the Employee’s residence
in the metropolitan New York area.
     Management will also recommend to the Board that the Employee be included
as a participant in the Company’s Change in Control Severance Policy (the “CIC
Severance Policy”), provided that such participation and any other terms and
conditions related to such participation shall be at the discretion of the Board
in accordance with the terms of such CIC Severance Policy.
     5. Termination; Termination Payments.
          (a) Unless the Employee’s employment shall sooner terminate for any
reason pursuant to paragraph 6 of this Agreement, the “Employment Period” shall
commence on August 1, 2006 and shall terminate on August 31, 2008. At the end of
the Employment Period, subject to the discretion of the Board of Directors and
the Compensation Committee, the Employee may remain with the Company on such
terms and in such position as the Employee and the Company, the Board of
Directors and the Compensation Committee may mutually agree.
          (b) In the event that the Employee’s employment is terminated during
the Employment Period (i) by the Employee for Good Reason (as defined in
Appendix A) or (ii) by the Company without Cause (as defined in Appendix A),
other than as a result of the Employee’s death or disability (within the meaning
of the Company’s long-term disability program then in effect), subject to the
Employee’s execution and delivery of a valid and effective release and waiver in
a form satisfactory to the Company, the Company shall pay the Employee a lump
sum cash amount equal to the Employee’s Base Salary for the remainder of the
Employment Period (i.e., until August 31, 2008).
          (c) Notwithstanding anything herein to the contrary, upon the
termination of the Employee’s employment for any reason, the rights of the
Employee with respect to any shares of restricted stock or options to purchase
Common Stock held by the Employee which, as of the Termination Date, have not
been forfeited shall be subject to the applicable rules of the plan or agreement
under which such restricted stock or options were granted as they exist from
time to time. In addition, upon the termination of the Employee’s employment for
any reason, the Company shall pay to the Employee his Base Salary through the
Termination Date, plus any unused vacation time accrued through the Termination
Date. Any vested benefits and other amounts that the Employee is otherwise
entitled to receive under any employee benefit plan, policy, practice or program
of the Company or any of its affiliates shall be payable in accordance with such
employee benefit plan, policy, practice or program as the case may be, provided
that the Employee shall not be entitled to receive any other payments or
benefits in the nature of severance or termination pay.
          (d) In the event that the Employee resigns other than for Good Reason,
is terminated for Cause, dies or becomes disabled (within the meaning of the
Company’s long-term disability program then in effect) during the Employment
Period, no benefits shall be payable to the Employee under paragraph 5(b) of
this Agreement, but the terms and conditions of paragraph 5(c) shall remain in
effect.
          (e) If the Employee is a participant in the Company’s CIC Severance
Policy and a “Change in Control” occurs, any payments and benefits provided in
the CIC Severance Policy that the Employee is entitled to will reduce (but not
below zero) the corresponding payment or benefit provided under this Agreement.
It is the intent of this provision to pay or to provide to the Employee the
greater of the two payments or benefits but not to duplicate them.
     6. No Duration of Employment. Notwithstanding anything else contained in
this Agreement to the contrary, the Company and the Employee each acknowledge
and agree that the Employee’s employment with the Company may be terminated by
either the Company (upon approval of the Company’s Board of Directors) upon
30 days’ written notice to the Employee

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(subject to the provisions of paragraph 5 of this Agreement) or by the Employee
upon 60 days’ written notice to the Company (subject to the provisions of
paragraph 5 of this Agreement), at any time and for any reason, with or without
cause; provided that this Agreement may be terminated for Cause immediately upon
written notice from the Company to the Employee; and
provided further that the Company may determine to waive all or part of the
Employee’s 60 days’ notice period at its discretion. In addition, this Agreement
shall automatically terminate upon Employee’s death or disability (determined in
accordance with the Company’s practices and policies). Upon termination of the
Employee’s employment for any reason whatsoever, the Company shall have no
further obligations to the Employee other than those set forth in paragraph 5 of
this Agreement. The effective date of the Employee’s termination of employment
shall be referred to herein as the “Termination Date.”
     7. General.
          (a) Any notice required or permitted to be given under this Agreement
shall be made either:
               (i) by personal delivery to the Employee or, in the case of the
Company, to the Company’s principal office (“Principal Office”) located at One
CA Plaza, Islandia, New York 11749, Attention: Executive Vice President – Human
Resources, or
               (ii) in writing and sent by registered mail, postage prepaid, to
the Employee’s residence, or, in the case of the Company, to the Company’s
Principal Office.
          (b) This Agreement shall be binding upon the Employee and his heirs,
executors, assigns, and administrators and shall inure to the benefit of the
Company, its successors and assigns and any subsidiary or parent of the Company.
          (c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles. Any action relating to this Agreement shall be brought exclusively
in the state or federal courts of the State of New York, County of Suffolk.
          (d) This Agreement (which supersedes and replaces the Prior Agreement
in its entirety), the Employment and Confidentiality Agreement executed by the
Employee on or about the Effective Date and the other documents referred to
herein represent the entire agreement between the Employee and the Company
related to the Employee’s employment and supersede any and all previous oral or
written communications, representations or agreements related thereto. This
Agreement may only be modified, in writing, jointly by the Employee and a duly
authorized representative of the Company. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
          (e) The provisions of this Agreement shall be severable in the event
that any of the provisions hereof (including any provision within a single
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not in any way be impaired and shall remain enforceable
to the fullest extent permitted by law. In addition, waiver by any party hereto
of any breach or default by the other party of any of the terms of this
Agreement shall not operate as a waiver of any other breach or default, whether
similar to or different from the breach or default waived. No waiver of any
provision of this Agreement shall be implied from any course of dealing between
the parties hereto or from any failure by either party hereto to assert its or
his rights hereunder on any occasion or series of occasions.
CAUTION TO EXECUTIVE: This Agreement affects important rights. DO NOT sign it
unless you have read it carefully and are satisfied that you understand it
completely.

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                          CA, INC.    
 
               
/s/ Kenneth V. Handal 9/25/06
 
Kenneth V. Handal
      By:
Name:   /s/ Andrew Goodman
 
Andrew Goodman    
 
      Title:   Executive Vice President, HR 9/25/06    

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Appendix A
     For purposes of this Agreement, “Cause” means any of the following:
          (1) The Employee’s continued failure, either due to willful action or
as a result of gross neglect, to substantially perform his duties and
responsibilities to the Company and its affiliates (the “Group”) under this
Agreement (other than any such failure resulting from the Employee’s 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 the Employee,
which notice specifies in reasonable detail the manner in which the Company
believes the Employee has not substantially performed his duties and
responsibilities.
          (2) The Employee’s 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.
          (3) The Employee’s indictment or conviction of, or plea of guilty or
nolo contendere to, a felony or any other crime involving dishonesty, fraud or
moral turpitude.
          (4) The Employee’s 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 he admits or denies
liability).
          (5) The Employee’s breach of his 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 the Employee
notice and a reasonable opportunity to cure.
          (6) The Employee’s (i) obstructing or impeding, (ii) endeavoring to
influence, obstruct or impede or (iii) failing to materially cooperate with, any
investigation authorized by the Board (an “Investigation”). However, the
Employee’s failure to waive attorney-client privilege relating to communications
with his own attorney in connection with an Investigation shall not constitute
“Cause”.
          (7) The Employee’s withholding, removing, concealing, destroying,
altering or by any other means falsifying any material which is requested in
connection with an Investigation.
          (8) The Employee’s disqualification or bar by any governmental or
self-regulatory authority from serving in the capacity contemplated by this
Agreement or his loss of any governmental or self-regulatory license that is
reasonably necessary for him to perform his responsibilities to the Group under
this Agreement, if (a) the disqualification, bar or loss continues for more than
30 days and (b) 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 the Employee’s employment, he
will serve in the capacity contemplated by this Agreement to whatever extent
legally permissible and, if his employment is not permissible, he will be placed
on leave (which will be paid to the extent legally permissible).
          (9) The Employee’s unauthorized use or disclosure of confidential or
proprietary information, or related materials, or the violation of any of the
terms of the Employment and Confidentiality Agreement executed by the Employee
or any Company standard confidentiality policies and procedures, 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 the Employee by the Company, which notice
specifies in reasonable detail the alleged unauthorized use or disclosure or
violation.
          (10) The Employee’s 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 the Employee will be “willful”
unless it is made by the Employee in bad faith or without a reasonable belief
that his act or omission was in the best interests of the Group.

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     For purposes of this Agreement, “Good Reason” shall mean any of the
following:
          (1) Any material and adverse change in the Employee’s title;
          (2) Any material and adverse reduction in the Employee’s authorities
or responsibilities other than any isolated, insubstantial and inadvertent
failure by the Company that is not in bad faith and is cured promptly on the
Employee’s giving the Company notice (and for purposes of clarification, a
change in the number of direct reports will not constitute a material and
adverse reduction in the Employee’s authorities or responsibilities);
          (3) Any reduction by the Company in the Employee’s Base Salary or
target level of Annual Bonus as set forth in Sections 3(a) and (b),
respectively, other than any such reduction agreed to by the Employee in
writing;
          (4) The Company’s material breach of this Agreement;
          provided that, no alleged action, reduction or breach set forth in
(1) through (4) above (each an “Event”) shall be deemed to constitute “Good
Reason” unless such Event remains uncured, as the case may be, after the
expiration of thirty (30) days following delivery to the Company from the
Employee of a written notice, specifying the Event deemed by the Employee to
constitute “Good Reason”. The Employee acknowledges and agrees that no Event has
occurred prior to the date of this Agreement. The Company’s placing the Employee
on paid leave for up to 90 consecutive days while it is determining whether
there is a basis to terminate the Employee’s employment for Cause will not
constitute Good Reason.

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COMPUTER ASSOCIATES INTERNATIONAL, INC.
CHANGE IN CONTROL SEVERANCE POLICY
          1. Purpose. The purpose of the Computer Associates International, Inc.
Change in Control Severance Policy (the “Policy”) is to secure the continued
services of certain senior executives of the Company and to ensure their
continued dedication to their duties in the event of any threat or occurrence of
a Change in Control (as defined in Section 2).
          2. Definitions. As used in this Policy, the following terms shall have
the respective meanings set forth below:
          (a) “Annual Performance Bonus” means the annual cash bonus awarded
under the Company’s incentive plan, as in effect from time to time (as of the
date of adoption of this Policy the “annual performance bonus” within the
meaning of Section 4.4 of the Company’s 2002 Incentive Plan, amended and
restated effective as of March 31, 2004 (the “Company Incentive Plan”)).
          (b) “Base Salary” means the higher of (i) the Participant’s highest
annual rate of base salary during the twelve-month period immediately prior to
the Participant’s Date of Termination or (ii) the average of the Participant’s
annual base salary earned during the past three (3) completed fiscal years of
the Company immediately preceding the Participant’s Date of Termination
(annualized in the event the Participant was not employed by the Company (or its
affiliates) for the whole of any such fiscal year).
          (c) “Board” means the Board of Directors of the Company and, after a
Change in Control, the “board of directors” of the Parent Corporation or
Surviving Corporation, as the case may be, as defined for purposes of
Section 2(f).
          (d) “Bonus Amount” means the higher of (i) the Participant’s target
Annual Performance Bonus for the fiscal year in which the Participant’s Date of
Termination occurs (or if the Participant’s Qualifying Termination is on account
of Good Reason pursuant to a reduction in a Participant’s compensation or
compensation opportunity under Section 2(k)(ii), the Participant’s target Annual
Performance Bonus for the prior fiscal year if higher) or (ii) the average of
the Annual Performance Bonuses earned by the Participant from the Company (or
its affiliates) during the last three (3) completed fiscal years of the Company
(or such shorter period of time during which the Participant was employed by the
Company) immediately preceding the Participant’s Date of Termination (annualized
in the event the Participant was not employed by the Company (or its affiliates)
for the whole of any such fiscal year).
          (e) “Cause” means (i) the willful and continued failure of the
Participant to perform substantially his duties with the Company (other than any
such failure resulting from the Participant’s incapacity due to physical or
mental illness or any

 

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such failure subsequent to the Participant being delivered a notice of
termination without Cause by the Company or delivering a notice of termination
for Good Reason to the Company) after a written demand for substantial
performance is delivered to the Participant by or on behalf of the Board which
specifically identifies the manner in which the Board believes that the
Participant has not substantially performed his duties, (ii) the willful
engaging by the Participant in illegal conduct or gross misconduct which is
demonstrably and materially injurious to the Company or its affiliates,
(iii) the engaging by the Participant in conduct or misconduct that materially
harms the reputation or financial position of the Company, (iv) the Participant
(x) obstructs or impedes, (y) endeavors to influence, obstruct or impede or
(z) fails to materially cooperate with, an Investigation, (v) the Participant
withholds, removes, conceals, destroys, alters or by other means falsifies any
material which is requested in connection with an Investigation, or attempts to
do so or solicits another to do so, (vi) the commission of a felony by the
Participant or (vii) the Participant is found liable in any SEC or other civil
or criminal securities law action or enters into any cease and desist orders
with respect to such action regardless of whether the Participant admits or
denies liability. For purposes of this paragraph (d), no act or failure to act
by the Participant shall be considered “willful” unless done or omitted to be
done by the Participant in bad faith and without reasonable belief that the
Participant’s action or omission was in the best interests of the Company or its
affiliates. Any act, or failure to act, in accordance with authority duly given
by the Board, based upon the advice of counsel for the Company (including
counsel employed by the Company) shall be conclusively presumed to be done, or
omitted to be done, by the Participant in good faith and in the best interests
of the Company. Cause shall not exist unless and until the Company has delivered
to the Participant a copy of a resolution duly adopted by three-quarters (3/4)
of the entire Board (excluding the Participant from both the numerator and
denominator if the Participant is a Board member) at a meeting of the Board
called and held for such purpose (after reasonable notice to the Participant and
an opportunity for the Participant, together with counsel, to be heard before
the Board), finding that in the good faith opinion of the Board an event set
forth in clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) has occurred and
specifying the particulars thereof in detail.
          (f) “Change in Control” means the occurrence of any one of the
following events:
          (i) individuals who, on the effective date of the Policy, constitute
the Board (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the effective date of the Policy whose election or nomination for
election was approved by a vote of a majority of the Incumbent Directors then on
the Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of

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proxies or consents by or on behalf of any person other than the Board shall be
deemed to be an Incumbent Director;
          (ii) any “person” (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 35% or more of the
combined voting power of the Company’s then outstanding securities eligible to
vote generally in the election of directors (the “Company Voting Securities”);
provided, however, that the event described in this paragraph (ii) shall not be
deemed to be a Change in Control by virtue of any of the following acquisitions:
(A) by the Company or any Subsidiary, (B) by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary, (C) by
any underwriter temporarily holding securities pursuant to an offering of such
securities, (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (iii)), (E) pursuant to any acquisition by the Participant or any
group of persons including the Participant (or any entity controlled by the
Participant or any group of persons including the Participant); or (F) a
transaction (other than one described in (iii) below) in which Company Voting
Securities are acquired from the Company, if a majority of the Incumbent
Directors approve a resolution providing expressly that the acquisition pursuant
to this clause (F) does not constitute a Change in Control under this paragraph
(ii);
          (iii) the consummation of a merger, consolidation, statutory share
exchange, reorganization, sale of all or substantially all the Company’s assets
or similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company’s stockholders, whether
for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(A) at least 60% of the total voting power of (x) the corporation resulting from
such Business Combination (the “Surviving Corporation”), or (y) if applicable,
the ultimate parent corporation that directly or indirectly has beneficial
ownership of at least 95% of the voting securities eligible to elect directors
of the Surviving Corporation (the “Parent Corporation”), is represented by
Company Voting Securities that were outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of 35%
or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Corporation (or, if there is

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no Parent Corporation, the Surviving Corporation) and (C) at least a majority of
the members of the board of directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) following the consummation of
the Business Combination were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction” and any Business Combination which does not satisfy all of the
criteria specified in (A) (B) and (C) shall be deemed a “Qualifying
Transaction”); or
          (iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
          Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any person acquires beneficial ownership of more than
35% of the Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company or its affiliates which reduces the number of
Company Voting Securities outstanding; provided, that if after the consummation
of such acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur. For purposes of this Change
in Control definition, “corporation” shall include any limited liability
company, partnership, association, business trust and similar organization,
“board of directors” shall refer to the ultimate governing body of such
organization and “director” shall refer to any member of such governing body.
          (g) “Company” means Computer Associates International, Inc.
          (h) “Date of Termination” means (i) the effective date on which the
Participant’s employment by the Company terminates as specified in a prior
written notice by the Company or the Participant, as the case may be, to the
other, delivered pursuant to Section 9 or (ii) if the Participant’s employment
by the Company terminates by reason of death, the date of death of the
Participant.
          (i) “Disability” shall mean long-term disability under the terms of
Company’s long-term disability plan, as then in effect.
          (j) “Equity Incentive Compensation” means all equity-based
compensation (including stock options and restricted stock) awarded under the
Company’s incentive plan, as in effect from time to time (as of the date of
adoption of this Policy the “restricted stock,” “stock options” and “other
equity-based awards” within the meaning of Sections 4.5, 4.6 and 4.7,
respectively, of the Company Incentive Plan).
          (k) “Good Reason” means, without the Participant’s express written
consent, the occurrence of any of the following events after a Change in
Control:

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          (i) (A) any change in the duties, responsibilities or status
(including reporting responsibilities) of the Participant that is inconsistent
in any material and adverse respect with the Participant’s position(s), duties,
responsibilities or status with the Company immediately prior to such Change in
Control (including any material and adverse diminution of such duties or
responsibilities); provided, however, that Good Reason shall not be deemed to
occur upon a change in duties, responsibilities (other than reporting
responsibilities) or status that is solely and directly a result of the Company
no longer being a publicly traded entity and does not involve any other event
set forth in this Section 2(k) or (B) a material and adverse change in the
Participant’s titles or offices (including, if applicable, membership on the
Board) with the Company as in effect immediately prior to such Change in
Control;
          (ii) a more than 10% reduction by the Company in the Participant’s
rate of annual base salary or Annual Performance Bonus, Long-Term Performance
Bonus or Equity Incentive Compensation target opportunities (including any
material and adverse change in the formula for such targets) as in effect
immediately prior to such Change in Control;
          (iii) the failure of the Company to (A) continue in effect any
significant employee benefit plan, compensation plan, welfare benefit plan or
material fringe benefit plan in which the Participant is participating
immediately prior to such Change in Control or the taking of any action by the
Company which would adversely affect the Participant’s participation in or
materially reduce the Participant’s benefits under any such plan, unless the
Participant is permitted to participate in other plans providing the Participant
with substantially equivalent benefits in the aggregate (at substantially
equivalent or lower cost with respect to welfare benefit plans), or (B) provide
the Participant with paid vacation in accordance with the most favorable
vacation policies of the Company as in effect for the Participant immediately
prior to such Change in Control (including the crediting of all service for
which the Participant had been credited under such vacation policies prior to
the Change in Control); or
          (iv) the failure of the Company to obtain the assumption of the
Company’s obligations hereunder from any successor as contemplated in
Section 8(b).
          An isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company within ten (10) days after receipt of
notice thereof given by the Participant shall not constitute Good Reason. The
Participant’s right to terminate employment for Good Reason shall not be
affected by the Participant’s incapacities due to mental or physical illness and
the Participant’s continued employment shall not constitute consent to, or a
waiver of rights with respect to, any event or condition constituting Good
Reason.

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          (l) “Home Country” shall mean a Participant’s country of residence
immediately before the Participant commenced employment with the Company.
          (m) “Investigation” means an investigation authorized by the Board, a
self-regulatory organization empowered with self-regulatory responsibilities
under federal or state laws or a governmental department or agency.
          (n) “Long-Term Performance Bonus” means the long-term bonus awarded
under the Company’s incentive plan, as in effect from time to time (as of the
date of adoption of this Policy the “long-term performance bonus” within the
meaning of Section 4.5 of the Company Incentive Plan).
          (o) “Participant” means each of the senior executives of the Company
who are selected by the Board for coverage by this Policy and identified on
Schedules A, B and C from time to time.
          (p) “Potential Change in Control” means the execution or entering into
of any agreement by the Company the consummation of which can be expected to be
a Qualifying Transaction.
          (q) “Qualifying Termination” means a termination of the Participant’s
employment (i) by the Company other than for Cause or (ii) by the Participant
for Good Reason. Termination of the Participant’s employment on account of
death, Disability or Retirement shall not be treated as a Qualifying
Termination. Notwithstanding the preceding sentence, the death of the
Participant after notice of termination for Good Reason or without Cause has
been validly provided shall be deemed to be a Qualifying Termination.
          (r) “Retirement” means the Participant’s mandatory retirement (not
including any mandatory early retirement) in accordance with the Company’s
retirement policy generally applicable to its salaried employees, as in effect
immediately prior to the Change in Control, or in accordance with any retirement
arrangement established with respect to the Participant with the Participant’s
written consent.
          (s) “Subsidiary” means any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of
directors (or members of any similar governing body) or in which the Company has
the right to receive 50% or more of the distribution of profits or 50% of the
assets or liquidation or dissolution.
          (t) “Termination Period” means the period of time beginning with a
Change in Control and ending two (2) years following such Change in Control.
Notwithstanding anything in this Policy to the contrary, if (i) the
Participant’s employment is terminated prior to a Change in Control (or, if
applicable, a Potential Change of Control) for reasons that would have
constituted a Qualifying Termination if

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they had occurred following a Change in Control; (ii) the Participant reasonably
demonstrates that such termination (or Good Reason event) was at the request of
a third party who had indicated an intention or taken steps reasonably
calculated to effect a Change in Control; and (iii) a Change in Control (or a
Potential Change in Control) involving such third party (or a party competing
with such third party to effectuate a Change in Control) does occur within six
(6) months from the date of such termination (or, in the case of a Potential
Change in Control, such Potential Change in Control occurs within three
(3) months of such termination), then for purposes of this Policy, the date
immediately prior to the date of such termination of employment or event
constituting Good Reason shall be treated as a Change in Control. For purposes
of determining the timing of payments and benefits to the Participant under
Section 4, the date of the actual Change in Control (or, if applicable, the
Potential Change of Control) shall be treated as the Participant’s Date of
Termination under Section 2(h), and for purposes of determining the amount of
payments and benefits owed to the Participant under Section 4, the date the
Participant’s employment is actually terminated shall be treated as the
Participant’s Date of Termination under Section 2(h).
          3. Eligibility. The Board shall determine in its sole discretion which
senior executives of the Company shall be Participants and whether a Participant
shall be listed on Schedule A, B or C, and the Board may remove the name of any
senior executive from Schedule A, B or C and participation in this Policy at any
time in its sole discretion; provided, however, that a Participant may not be
removed from Schedule A, B or C without his or her prior written consent within
the two-year period after a Change in Control or within the period of time
beginning on a date three (3) months prior to a Potential Change in Control and
ending on the termination of the agreement that constituted the Potential Change
in Control. The Board may delegate its authority to identify the Participants on
Schedule A, B or C and to remove a Participant from Schedule A, B or C to the
Compensation and Human Resource Committee (or any successor committee) of the
Board.
          4. Payments Upon Termination of Employment. If during the Termination
Period the employment of the Participant is terminated pursuant to a Qualifying
Termination, then, subject to the Participant’s execution of a Separation
Agreement and Release in the form attached to this Policy as Exhibit A (the
“Separation Agreement and Release”), the Company shall provide to the
Participant:
          (a) within ten (10) days following the Date of Termination (or, if
later, the execution by the Participant of the Separation Agreement and
Release), a lump sum cash payment equal to the result of multiplying (i) the sum
of (A) the Participant’s Base Salary, plus (B) the Participant’s Bonus Amount by
(ii) either 2.99 for a Participant identified on Schedule A, or 2.00 for a
Participant identified on Schedule B or 1.00 for a Participant identified on
Schedule C; and
          (b) within ten (10) days following the Date of Termination (or, if
later, the execution by the Participant of the Separation Agreement and
Release), a cash

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payment equal to the Participant’s target Annual Performance Bonus for the
fiscal year in which the Participant’s Date of Termination occurs, multiplied by
a fraction the numerator of which shall be the number of days the Participant
was employed by the Company during the fiscal year in which the Date of
Termination occurred and the denominator of which is 365; and
          (c) within ten (10) days following the Date of Termination (or, if
later, the execution by the Participant of the Separation Agreement and
Release), a cash payment equal to the Participant’s target Long-Term Performance
Bonus for any incomplete performance cycle(s) as of the Participant’s Date of
Termination, multiplied by a fraction the numerator of which shall be the number
of days the Participant was employed by the Company during the applicable
performance cycle and the denominator of which shall be the total number of days
in the performance cycle; and
          (d) within ten (10) days following the Date of Termination (or, if
later, the execution by the Participant of the Separation Agreement and
Release), a cash payment equal to the Company’s monthly premium cost of health
care for Participant and/or the Participant’s family at the Date of Termination,
multiplied by eighteen (18); and
          (e) for a period of one (1) year following the Participant’s Date of
Termination, the Company shall make outplacement services available to the
Participant in accordance with its outplacement policy in effect immediately
before the Change in Control (or if no such policy is in effect, the Participant
may choose a provider of outplacement services, provided that the total cost of
such outplacement services for the Participant shall not exceed $10,000 USD);
and
          (f) if on the Date of Termination the Participant is working in a
country other than the Participant’s Home Country and the Participant wishes to
relocate to such Participant’s Home Country within one (1) year following the
Date of Termination, the Company shall provide relocation benefits to the
Participant and his or her dependants in accordance with the Company’s
relocation program as in effect immediately before the Change in Control (or if
no such program is in effect, the Company shall reimburse the Participant for
reasonable relocation benefits incurred by the Participant and his or her
dependants in returning to the Participant’s Home Country to the extent that
such costs do not exceed $75,000 USD); and
          (g) to the extent provided in Appendix A, if the Participant is
subject to the excise tax imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Excise Tax”), a gross-up payment in accordance
with the provisions of Appendix A.
          Except as otherwise expressly provided pursuant to this Policy, this
Policy shall be construed and administered in a manner which avoids duplication
of compensation and benefits which may be provided under any other plan,
program, policy, or other

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arrangement or individual contract. In the event a Participant is covered by any
other plan, program, policy, individually negotiated agreement or other
arrangement, in effect as of his or her Date of Termination, that may duplicate
the payments and benefits provided for in this Section 4, the Board is
specifically empowered to reduce or eliminate the duplicative benefits provided
for under the Policy.
          5. Withholding Taxes. The Company may withhold from all payments due
to the Participant (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
          6. Reimbursement of Expenses. Except as provided in Section 16(a) of a
Participant’s Employment and Confidentiality Agreement, if any contest or
dispute shall arise under this Policy involving termination of a Participant’s
employment with the Company or involving the failure or refusal of the Company
to perform fully in accordance with the terms hereof, the Company shall
reimburse the Participant on a current basis for all reasonable legal fees and
related expenses, if any, incurred by the Participant in connection with such
contest or dispute (regardless of the result thereof), together with interest in
an amount equal to the prime rate as reported in The Wall Street Journal, but in
no event higher than the maximum legal rate permissible under applicable law,
such interest to accrue thirty (30) days from the date the Company receives the
Participant’s statement for such fees and expenses through the date of payment
thereof, regardless of whether or not the Participant’s claim is upheld by a
court of competent jurisdiction or an arbitration panel; provided, however, that
the Participant shall be required to repay immediately any such amounts to the
Company to the extent that a court or an arbitration panel issues a final and
non-appealable order setting forth the determination that the position taken by
the Participant was frivolous or advanced by the Participant in bad faith.
          7. Scope of Policy. Nothing in this Policy shall be deemed to entitle
the Participant to continued employment with the Company or its Subsidiaries,
and if a Participant’s employment with the Company shall terminate prior to a
Change in Control, the Participant shall have no further rights under this
Policy (except as otherwise provided hereunder); provided, however, that any
termination of a Participant’s employment during the Termination Period shall be
subject to all of the provisions of this Policy.
          8. Successors; Binding Agreement.
          (a) This Policy shall not be terminated by any Business Combination.
In the event of any Business Combination, the provisions of this Policy shall be
binding upon the Surviving Corporation, and such Surviving Corporation shall be
treated as the Company hereunder.

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          (b) The Company agrees that in connection with any Business
Combination, it will cause any successor entity to the Company unconditionally
to assume all of the obligations of the Company hereunder. Failure of the
Company to obtain such assumption prior to the effectiveness of any such
Business Combination that constitutes a Change in Control, shall be a breach of
this Policy and shall constitute Good Reason hereunder and shall entitle the
Participant to compensation and other benefits from the Company in the same
amount and on the same terms as the Participant would be entitled hereunder if
the Participant’s employment were terminated following a Change in Control by
reason of a Qualifying Termination. For purposes of implementing the foregoing,
the date on which any such Business Combination becomes effective shall be
deemed the date Good Reason occurs, and shall be the Date of Termination if
requested by a Participant.
          (c) The benefits provided under this Policy shall inure to the benefit
of and be enforceable by the Participant’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Participant shall die while any amounts would be payable to the
Participant hereunder had the Participant continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Policy to such person or persons appointed in writing by the Participant to
receive such amounts or, if no person is so appointed, to the Participant’s
estate.
          9. Notice. (a) For purposes of this Policy, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five (5) days after deposit in
the United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
          If to the Participant: the address listed as the Participant’s address
in the Company’s personnel files.
If to the Company:
Computer Associates International, Inc.
Attention: Corporate Secretary
One Computer Associates Plaza
Islandia, NY 11749
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
          (b) A written notice of the Participant’s Date of Termination by the
Company or the Participant, as the case may be, to the other, shall (i) indicate
the specific termination provision in this Policy relied upon, (ii) to the
extent applicable, set forth in

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reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Participant’s employment under the provision so indicated and
(iii) specify the termination date (which date shall be not less than fifteen
(15) nor more than sixty (60) days after the giving of such notice). The failure
by the Participant or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Participant or the Company hereunder or preclude the
Participant or the Company from asserting such fact or circumstance in enforcing
the Participant’s or the Company’s rights hereunder.
          10. Full Settlement; Resolution of Disputes and Costs.
          (a) The Company’s obligation to make any payments provided for in this
Policy and otherwise to perform its obligations hereunder shall be in lieu and
in full settlement of all other severance payments to the Participant under any
other severance or employment agreement between the Participant and the Company,
and any severance plan of the Company. In no event shall the Participant be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to the Participant under any of the provisions of this
Policy and, except as provided in the Separation Agreement and Release, such
amounts shall not be reduced whether or not the Participant obtains other
employment.
          (b) Any dispute or controversy arising under or in connection with
this Policy shall be settled exclusively by arbitration in New York by three
arbitrators in accordance with the commercial arbitration rules of the American
Arbitration Association (“AAA”) then in effect. One arbitrator shall be selected
by the Company, the other by the Participant and the third jointly by these
arbitrators (or if they are unable to agree within thirty (30) days of the
commencement of arbitration the third arbitrator will be appointed by the AAA).
Judgment may be entered on the arbitrators’ award in any court having
jurisdiction. In the event of any such dispute or controversy arising during a
Termination Period, the Company shall bear all costs and expenses arising in
connection with any arbitration proceeding on the same terms as set forth in
Section 6 of this Policy. Notwithstanding anything in this Policy to the
contrary, any court, tribunal or arbitration panel that adjudicates any dispute,
controversy or claim arising between a Participant and the Company, or any of
their delegates or successors, in respect of a Participant’s Qualifying
Termination, will apply a de novo standard of review to any determinations made
by such person. Such de novo standard shall apply notwithstanding the grant of
full discretion hereunder to any such person or characterization of any such
decision by such person as final, binding or conclusive on any party.
          11. Employment with Subsidiaries. Employment with the Company for
purposes of this Policy shall include employment with any Subsidiary.
          12. Survival. The respective obligations and benefits afforded to the
Company and the Participant as provided in Sections 4 (to the extent that
payments or

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benefits are owed as a result of a termination of employment that occurs during
the term of this Policy) 5, 6, 8(c) and 10 shall survive the termination of this
Policy.
          13. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS POLICY SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE PRINCIPLE OF CONFLICTS OF LAWS, AND APPLICABLE FEDERAL LAWS. THE INVALIDITY
OR UNENFORCEABILITY OF ANY PROVISION OF THIS POLICY SHALL NOT AFFECT THE
VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS POLICY, WHICH OTHER
PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.
          14. Amendment and Termination. The Board may amend or terminate the
Policy at any time; provided, however, that during the period commencing on a
Change in Control and ending on the second anniversary of the Change in Control,
the Policy may not be amended or terminated by the Board in any manner which is
materially adverse to the interests of any Participant then listed on
Schedule A, B or C without the prior written consent of such Participant;
provided, further, that any termination or amendments to the Policy that are
adverse to the interests of any Participant then listed on Schedule A, B or C,
and that occur during the period of time beginning on a date three (3) months
prior to a Potential Change in Control and ending on the termination of the
agreement that constituted the Potential Change in Control, shall be void.
          15. Interpretation and Administration. The Policy shall be
administered by the Board. The Board may delegate any of its powers under the
Policy to the Compensation and Human Resource Committee of the Board (or any
successor committee). The Board or the Compensation and Human Resource Committee
(or any successor committee) shall have the authority (i) to exercise all of the
powers granted to it under the Policy, (ii) to construe, interpret and implement
the Policy, (iii) to prescribe, amend and rescind rules and regulations relating
to the Policy, (iv) to make all determinations necessary or advisable in
administration of the Policy and (v) to correct any defect, supply any omission
and reconcile any inconsistency in the Policy. Actions of the Board or the
Compensation and Human Resource Committee (or any successor committee) shall be
taken by a majority vote of its members.
          16. Claims and Appeals. Participants may submit claims for benefits by
giving notice to the Company pursuant to Section 9 of this Policy. If a
Participant believes that he or she has not received coverage or benefits to
which he or she is entitled under the Policy, the Participant may notify the
Board in writing of a claim for coverage or benefits. If the claim for coverage
or benefits is denied in whole or in part, the Board shall notify the applicant
in writing of such denial within thirty (30) days (which may be extended to
sixty (60) days under special circumstances), with such notice setting forth:
(i) the specific reasons for the denial; (ii) the Policy provisions upon which
the denial is

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based; (iii) any additional material or information necessary for the applicant
to perfect his or her claim; and (iv) the procedures for requesting a review of
the denial. Upon a denial of a claim by the Board, the Participant may:
(i) request a review of the denial by the Board or, where review authority has
been so delegated, by such other person or entity as may be designated by the
Board for this purpose; (ii) review any Policy documents relevant to his or her
claim; and (iii) submit issues and comments to the Board or its delegate that
are relevant to the review. Any request for review must be made in writing and
received by the Board or its delegate within sixty (60) days of the date the
applicant received notice of the initial denial, unless special circumstances
require an extension of time for processing. The Board or its delegate will make
a written ruling on the applicant’s request for review setting forth the reasons
for the decision and the Policy provisions upon which the denial, if
appropriate, is based. This written ruling shall be made within thirty (30) days
of the date the Board or its delegate receives the applicant’s request for
review unless special circumstances require an extension of time for processing,
in which case a decision will be rendered as soon as possible, but not later
than sixty (60) days after receipt of the request for review. All extensions of
time permitted by this Section 16 will be permitted at the sole discretion of
the Board or its delegate. If the Board does not provide the Participant with
written notice of the denial of his or her appeal, the Participant’s claim shall
be deemed denied.
          17. Type of Policy. This Policy is intended to be, and shall be
interpreted as an unfunded employee welfare plan under Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and
Section 2520.104-24 of the Department of Labor Regulations, maintained primarily
for the purpose of providing employee welfare benefits, to the extent that it
provides welfare benefits, and under Sections 201, 301 and 401 of ERISA, as a
plan that is unfunded and maintained primarily for the purpose of providing
deferred compensation, to the extent that it provides such compensation, in each
case for a select group of management or highly compensated employees.
          18. Nonassignability. Benefits under the Policy may not be assigned by
the Participant. The terms and conditions of the Policy shall be binding on the
successors and assigns of the Company.
          19. Effective Date. The Policy shall be effective as of October 18,
2004.

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Schedule A
(2.99 Multiple)
Chief Executive Officer (John A. Swainson)
Executive Vice President and Chief Operating Officer (Michael J. Christenson)
Executive Vice President and Chief Financial Officer (Nancy Cooper)
[Employees may be added or eliminated from time to time]

 

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Schedule B
(2.00 Multiple)
Executive Vice President-Governance, Co-General Counsel and Corporate
Secretary (Kenneth V. Handal)
Executive Vice President and Chief Administrative Officer (James Bryant)
Executive Vice President and Co-General Counsel (Amy Fliegelman Olli)
[Employees may be added or eliminated from time to time]

 

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Schedule C
(1.00 Multiple)
Executive Vice President, Business Unit Operations (Russell Artzt)
Senior Vice President of CA Technology Services (Una O’Neill)
Executive Vice President, Worldwide Human Resources (Andrew Goodman)
Executive Vice President and Chief Technology Officer (Alan Nugent)
Senior Vice President of APJ Sales (Gavin Selkirk)
George J. Fischer (Senior Vice President & General Manager, North America)
John Ruthven (Senior Vice President, Worldwide Sales Operations)
Andrew Dutton (Senior Vice President and General Manager, Europe/Middle
East/Africa)
[Employees may be added or eliminated from time to time]

 

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Appendix A
Additional Reimbursement Payments by the Company
          (a) Anything in this Policy to the contrary notwithstanding, in the
event it shall be determined that any payment, award, benefit or distribution
(or any acceleration of any payment, award, benefit or distribution) by the
Company (or any of its affiliated entities) or any entity which effectuates a
Change in Control (or any of its affiliated entities) to or for the benefit of
the Participant (whether pursuant to the terms of this Policy or otherwise, but
determined without regard to any additional payments required under this
Appendix A) (the “Payments”) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or
any interest or penalties are incurred by the Participant with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Company
shall pay to the Participant an additional payment (a “Reimbursement Payment”)
in an amount such that after payment by the Participant of all taxes (including
any Excise Tax) imposed upon the Reimbursement Payment, the Participant retains
an amount of the Reimbursement Payment equal to the Excise Tax imposed upon the
Payments. For purposes of determining the amount of the Reimbursement Payment,
the Participant shall be deemed to (i) pay federal income taxes at the highest
marginal rates of federal income taxation for the calendar year in which the
Reimbursement Payment is to be made and (ii) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Reimbursement Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.
          Notwithstanding the foregoing provisions of this Appendix A, if it
shall be determined that the Participant is entitled to a Reimbursement Payment,
but that the Payments would not be subject to the Excise Tax if the Payments
were reduced by an amount that is no more than 10% of the portion of the
Payments that would be treated as “parachute payments” under Section 280G of the
Code, then the amounts payable to the Participant under this Policy shall be
reduced (but not below zero) to the maximum amount that could be paid to the
Participant without giving rise to the Excise Tax (the “Safe Harbor Cap”), and
no Reimbursement Payment shall be made to the Participant. The reduction of the
amounts payable hereunder, if applicable, shall be made by reducing first the
payments under Section 4(a), unless an alternative method of reduction is
elected by the Participant. For purposes of reducing the Payments to the Safe
Harbor Cap, only amounts payable under this Policy (and no other Payments) shall
be reduced. If the reduction of the amounts payable hereunder would not result
in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under
this Policy shall be reduced pursuant to this provision.

 

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          (b) Subject to the provisions of Paragraph (a), all determinations
required to be made under this Appendix A, including whether and when a
Reimbursement Payment is required, the amount of such Reimbursement Payment, the
amount of any Option Redetermination (as defined below), the reduction of the
Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving
at such determinations, shall be made by a public accounting firm that is
retained by the Company as of the date immediately prior to the Change in
Control (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Participant within fifteen (15)
business days of the receipt of notice from the Company or the Participant that
there has been a Payment, or such earlier time as is requested by the Company
(collectively, the “Determination”). For the avoidance of doubt, the Accounting
Firm may use the Option Redetermination amount in determining the reduction of
the Payments to the Safe Harbor Cap. Notwithstanding the foregoing, in the event
(i) the Board shall determine prior to the Change in Control that the Accounting
Firm is precluded from performing such services under applicable auditor
independence rules or (ii) the Audit Committee of the Board determines that it
does not want the Accounting Firm to perform such services because of auditor
independence concerns or (iii) the Accounting Firm is serving as accountant or
auditor for the person(s) effecting the Change in Control, the Board shall
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company, and the Company shall enter into any
agreement reasonably requested by the Accounting Firm in connection with the
performance of the services hereunder. The Reimbursement Payment under this
Appendix A with respect to any Payments shall be made no later than thirty
(30) days following such Payment. If the Accounting Firm determines that no
Excise Tax is payable by a Participant, it shall furnish the Participant with a
written opinion to such effect, and to the effect that failure to report the
Excise Tax, if any, on the Participant’s applicable federal income tax return
will not result in the imposition of a negligence or similar penalty. In the
event the Accounting Firm determines that the Payments shall be reduced to the
Safe Harbor Cap, it shall furnish the Participant with a written opinion to such
effect. The Determination by the Accounting Firm shall be binding upon the
Company and the Participant.
          As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the Determination, it is possible that Reimbursement
Payments which will not have been made by the Company should have been made
(“Underpayment”) or Reimbursement Payments are made by the Company which should
not have been made (“Overpayment”), consistent with the calculations required to
be made hereunder. In the event the amount of the Reimbursement Payment is less
than the amount necessary to reimburse the Participant for the Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or
for the benefit of the Participant. In the event the amount of the Reimbursement
Payment exceeds the amount necessary to reimburse the Participant

A-2

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for the Excise Tax, the Accounting Firm shall determine the amount of the
Overpayment that has been made and any such Overpayment (together with interest
at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid
by the Participant (to the extent the Participant has received a refund if the
applicable Excise Tax has been paid to the Internal Revenue Service) to or for
the benefit of the Company. The Participant shall cooperate, to the extent his
or her expenses are reimbursed by the Company, with any reasonable requests by
the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax. In the event that the Company
makes a Reimbursement Payment to the Participant and subsequently the Company
determines that the value of any accelerated vesting of stock options held by
the Participant shall be redetermined within the context of Treasury Regulation
§1.280G-1 Q/A 33 (the “Option Redetermination”), the Participant shall (i) file
with the Internal Revenue Service an amended federal income tax return that
claims a refund of the overpayment of the Excise Tax attributable to such Option
Redetermination and (ii) promptly pay the refunded Excise Tax to the Company;
provided that the Company shall pay all reasonable professional fees incurred in
the preparation of the Participant’s amended federal income tax return. If the
Option Redetermination occurs in the same year that the Reimbursement Payment is
included in the Participant’s taxable income, then in addition to returning the
refund to the Company, the Participant will also promptly return to the Company
any tax benefit realized by the return of such refund and the return of the
additional tax benefit payment (all determinations pursuant to this sentence
shall be made by the Accounting Firm). In the event that amounts payable to the
Participant under this Policy were reduced pursuant to the second paragraph of
Paragraph (a) and subsequently the Participant determines there has been an
Option Redetermination that reduces the value of the Payments attributable to
such options, the Company shall promptly pay to the Participant any amounts
payable under this Policy that were not previously paid solely as a result of
the second paragraph of Paragraph (a) up to the Safe Harbor Cap.

A-3

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Exhibit A
FORM OF CIC SEPARATION AGREEMENT AND RELEASE (HEREIN “AGREEMENT”)
          Computer Associates International, Inc. (the “Company”) and
                     (“Executive”) agree as follows:
     1. Executive’s employment with the Company will terminate effective [Date].
     2. Executive agrees to make himself reasonably available to the Company to
respond to requests by the Company for information concerning litigation,
regulatory inquiry or investigation, involving facts or events relating to the
Company that may be within his knowledge. Executive will cooperate fully with
the Company in connection with any and all future litigation or regulatory
proceedings brought by or against the Company to the extent the Company
reasonably deems Executive’s cooperation necessary. Executive will be entitled
to reimbursement of reasonable out-of-pocket expenses (not including counsel
fees) incurred in connection with fulfilling his obligations under this
Section 2.
     3. In consideration of Executive’s undertakings herein, the Company will
pay an amount equal to $                     in accordance with Section 4 of the
Company’s Change in Control Severance Policy (the “CIC Severance Policy”), less
required deductions (including, but not limited to, federal, state and local tax
withholdings) as separation/severance pay (the “Severance Payment”). The
Severance Payment will be paid in accordance with the CIC Severance Policy.
Payment of the Severance Payment is contingent upon the execution of this
Agreement by Executive and Executive’s compliance with all terms and conditions
of this Agreement and the CIC Severance Policy. Executive agrees that if this
Agreement does not become effective, the Company shall not be required to make
any further payments to Executive pursuant to this Agreement or the CIC
Severance Policy and shall be entitled to recover all payments already made by
it (including interest thereon).
     4. Executive understands and agrees that any amounts that Executive owes
the Company, including any salary or other overpayments related to Executive’s
employment with the Company, will be offset and deducted from Executive’s final
paycheck from the Company. Executive specifically authorizes the Company to
offset and deduct any such amounts from his final paycheck. Executive agrees and
acknowledges that, to the extent the amount of Executive’s final paycheck is not
sufficient to repay the full amount that Executive owes to the Company, if any,
the full remaining amount owed to the Company, if any, will be offset and
deducted from the amount of the Severance Payment. Executive specifically
authorizes the Company to offset and deduct any such amounts from his Severance
Payment.

 

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     5. Executive agrees that, after payment of Executive’s final paycheck on
[Date] and the Severance Payment, Executive will have received all compensation
and benefits that are due and owing to Executive by the Company, including but
not limited to salary, vacation pay, bonus, commissions and incentive/override
compensation but excluding any benefits or services provided pursuant to
Sections 4(e) and 4(f) of the CIC Severance Policy.
     6. Executive represents that he has returned to the Company all property or
information, including, without limitation, all reports, files, memos, plans,
lists, or other records (whether electronically stored or not) belonging to the
Company or its affiliates, including copies, extracts or other documents derived
from such property or information. Executive will immediately forfeit all rights
and benefits under this Agreement and the CIC Severance Policy, including,
without limitation, the right to receive any Severance Payment if Executive,
directly or indirectly, at any time (i) discloses to any third party or entity
any trade secrets or other proprietary or confidential information pertaining to
the Company or any of its affiliates or uses such secrets or information without
the prior written consent of the General Counsel of the Company or (ii) takes
any actions or makes or publishes any statements, written or oral, or
instigates, assists or participates in the making or publication of any such
statements which libel, slander or disparage the Company or any of its past or
present directors, officers or employees. Nothing in this Agreement shall
prevent or prohibit Executive or the Company from responding to an order,
subpoena, other legal process or regulatory inquiry directed to them or from
providing information to or making a filing with a governmental or regulatory
body. Executive agrees that upon learning of any order, subpoena or other legal
process seeking information that would otherwise be prohibited from disclosure
under this Agreement, he will promptly notify the Company, in writing, directed
to the Company’s General Counsel. In the event disclosure is so required,
Executive agrees not to oppose any action by the Company to seek or obtain a
protective order or other appropriate remedy.
     7. Executive agrees that Executive’s Employment and Confidentiality
Agreement (the “Employment and Confidentiality Agreement”) shall continue to be
in full force and effect, including but not limited to all non-competition and
non-solicitation provisions contained therein.
     8. Executive hereby represents that he has not filed any action, complaint,
charge, grievance or arbitration against the Company or any of its affiliates in
connection with any matters relating, directly or indirectly, to his employment,
and covenants and agrees not to file any such action, complaint or arbitration
or commence any other judicial or arbitral proceedings against the Company or
any of its affiliates with respect to events occurring prior to the termination
of his employment with the Company or any affiliates thereof.
     9. Effective on [Date], the Company will cease all health benefit coverage
and other benefit coverage for Executive.

Ex-2

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     10. GENERAL RELEASE – Effective as of the Effective Date, and in return for
the consideration set forth above, Executive agrees not to sue or file any
action, claim, or lawsuit against the Company, agrees not to pursue, seek to
recover or recover any alleged damages, seek to obtain or obtain any other form
of relief or remedy with respect to, and cause the dismissal or withdrawal of,
any lawsuit, action, claim, or charge against the Company, and Executive agrees
to waive all claims and release and forever discharge the Company, its officers,
directors, subsidiaries, affiliates, parents, attorneys, shareholders and
employees from any claims, demands, actions, causes of action or liabilities for
compensatory damages or any other relief or remedy, and obligations of any kind
or nature whatsoever, based on any matter, cause or thing, relating in any way,
directly or indirectly, to his employment, from the beginning of time through
the Effective Date of this Agreement, whether known or unknown, fixed or
contingent, liquidated or unliquidated, and whether arising from tort, statute,
or contract, including, but not limited to, any claims arising under or pursuant
to the California Fair Employment and Housing Act, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1871, the Civil Rights Act of 1991, the
Americans with Disabilities Act, the Rehabilitation Act, the Family and Medical
Leave Act of 1993, the Occupational Safety & Health Act, the Employee Retirement
Income Security Act of 1974, the Older Workers Benefit Protection Act of 1990,
the Worker Adjustment and Retraining Notification Act, the Fair Labor Standards
Act, the Age Discrimination in Employment Act of 1967 (“ADEA”), New York State
Labor Law, New York State Human Rights Law, New York Human Rights Law, and any
other state, federal, city, county or local statute, rule, regulation, ordinance
or order, or the national or local law of any foreign country, any claim for
future consideration for employment with the Company, any claims for attorneys’
fees and costs and any employment rights or entitlement law, and any claims for
wrongful discharge, intentional infliction of emotional distress, defamation,
libel or slander, payment of wages, outrageous behavior, breach of contract or
any duty allegedly owed to Executive, discrimination based upon race, color,
ethnicity, sex, age, national origin, religion, disability, sexual orientation,
or another unlawful criterion or circumstance, and any other theory of recovery.
It is the intention of the parties to make this release as broad and as general
as the law permits.
     [Executive acknowledges that he is aware of, has read, has had explained to
him by his attorneys, understands and expressly waives any and all rights he has
or may have under Section 1542 of the California Civil Code, which provides as
follows:
“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.” ] *
 

*   Include bracketed language for California employees.

Ex-3

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     11. Executive acknowledges that he may later discover facts different from
or in addition to those which he knows or believes to be true now, and he agrees
that, in such event, this Agreement shall nevertheless remain effective in all
respects, notwithstanding such different or additional facts or the discovery of
those facts.
     12. This Agreement may not be introduced in any legal or administrative
proceeding, or other similar forum, except one concerning a breach of this
Agreement or the CIC Severance Policy.
     13. Executive acknowledges that Executive has made an independent
investigation of the facts, and does not rely on any statement or representation
of the Company in entering into this Agreement, other than those set forth
herein.
     14. Executive agrees that, without limiting the Company’s remedies, should
he commence, continue, join in, or in any other manner attempt to assert any
claim released in connection herewith, or otherwise violate in a material
fashion any of the terms of this Agreement, the Company shall not be required to
make any further payments to the Executive pursuant to this Agreement or the CIC
Severance Policy and shall be entitled to recover all payments already made by
it (including interest thereon), in addition to all damages, attorneys’ fees and
costs the Company incurs in connection with Executive’s breach of this
Agreement. Executive further agrees that the Company shall be entitled to the
repayments and recovery of damages described above without waiver of or
prejudice to the release granted by him in connection with this Agreement, and
that his violation or breach of any provision of this Agreement shall forever
release and discharge the Company from the performance of its obligations
arising from the Agreement.
     15. Executive has been advised and acknowledges that he has been given
forty-five (45) days to consider signing this Agreement, he has seven (7) days
following his signing of this Agreement to revoke and cancel the terms and
conditions contained herein, and the terms and conditions of this Agreement
shall not become effective or enforceable. until the revocation period has
expired (the “Effective Date”).
     16. Executive acknowledges that Executive has been advised hereby to
consult with, and has consulted with, an attorney of his choice prior to signing
this Agreement.
     17. Executive acknowledges that Executive has fully read this Agreement,
understands the contents of this Agreement, and agrees to its terms and
conditions of his own free will, knowingly and voluntarily, and without any
duress or coercion.
     18. Executive understands that this Agreement includes a final general
release, and that Executive can make no further claims against the Company or
the persons listed in Section 10 of this Agreement relating in any way, directly
or indirectly, to his employment. Executive also understands that this Agreement
precludes Executive from recovering any damages or other relief as a result of
any lawsuit, grievance, charge or

Ex-4

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claim brought on Executive’s behalf against the Company or the persons listed in
Section 10 of this Agreement.
     19. Executive acknowledges that Executive is receiving adequate
consideration (that is in addition to what Executive is otherwise entitled to)
for signing this Agreement.
     20. This Agreement and the CIC Severance Policy constitute the complete
understanding between Executive and the Company regarding the subject matter
hereof and thereof. No other promises or agreements regarding the subject matter
hereof and thereof will be binding unless signed by Executive and the Company.
     21. Executive and the Company agree that all notices or other
communications required or permitted to be given under the terms of this
Agreement shall be given in accordance with Section 9 of the CIC Severance
Policy.
     22. Executive and the Company agree that any disputes relating to any
matters covered under the terms of this Agreement shall be resolved in
accordance with Section 10 of the CIC Severance Policy.
     23. By entering into this Agreement, the Company does not admit and
specifically denies any liability, wrongdoing or violation of any law, statute,
regulation or policy, and it is expressly understood and agreed that this
Agreement is being entered into solely for the purpose of amicably resolving all
matters of any kind whatsoever between Executive and the Company.
     24. In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
     25. The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.
     26. Unless expressly specified elsewhere in this Agreement, this Agreement
shall be governed by and construed and interpreted in accordance with the laws
of the State of New York without reference to the principles of conflict of law.

Ex-5

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     27. This Agreement may be executed in one or more counterparts.

                 
 
  Company       Executive    
 
               
By:
               
 
 
 
     
 
   
Date:
          Date:    

Ex-6