EX-10.2



 





Exhibit 10.2




Execution Copy




EMPLOYMENT AGREEMENT




          This Agreement is entered into by and between Computer Associates
International, Inc. (the “Company”) and Jeff Clarke (“Executive”) as of
November 22, 2004. On April 23, 2004, Executive was appointed to the position
of Chief Operating Officer (the “COO Position”) of the Company. Executive
continues to serve as the Chief Financial Officer of the Company (the “CFO
Position”). In consideration of the Company offering, and Executive accepting,
the COO Position, Executive and the Company agree as follows:



     1. Work Standards. Executive will continue to (a) serve the Company (and
such of its subsidiary companies as the Company may designate) faithfully,
diligently and to the best of Executive’s ability under the direction of the
Chief Executive Officer (including any interim Chief Executive Officer) of the
Company, (b) devote his 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. Executive’s employment pursuant to the terms of this
Agreement shall be effective as of April 23, 2004 and shall end on March 31,
2006, unless earlier terminated in accordance with paragraph 8 of this
Agreement or extended by mutual written agreement between the Company and
Executive.



     2. Laws; Other Agreements. Executive 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 Executive is a
party or by which he is bound.



     3. Compensation.



          (a) In consideration of services that Executive has rendered and will
render to the Company in the future, the Company agrees to pay Executive the
sum of $650,000 per annum (less applicable withholdings) commencing on April
23, 2004, payable semi-monthly concurrent with the Company’s normal payroll
cycle. The Company will pay this amount until Executive’s employment hereunder
terminates.



          (b) (i) In addition, with respect to the fiscal year ending March 31,
2005, Executive shall be eligible to receive:



               (A) a 2005 Annual Performance Bonus (payable in cash) pursuant to Section
4.4 of the Company’s 2002 Incentive Plan, as amended (as so amended, the “2002
Plan”), with an Annual Performance Bonus target of $800,000.00, which Annual
Performance Bonus shall otherwise be subject to the terms and conditions of the
Company’s 2005 Annual Performance Bonus program set forth in the resolutions
approving the Performance Bonuses described in paragraphs 3(b)(i) and (ii)
that were adopted (the “Resolutions”) by the Compensation and Human Resource
Committee (the “Compensation Committee”) of the Board of Directors; and



               (B) a targeted Long-Term Performance Bonus of $3,050,000.00 for the period
from April 1, 2004 through March 31, 2005, which Long-Term Performance Bonus
shall otherwise be subject to the terms and conditions applicable to the fiscal
year ending March 31, 2005 under the Company’s 2005-2007 Long-Term Performance
Bonus program set forth in the Resolutions. Subject to paragraph 3(c), such
Long-Term Performance Bonus shall vest and the portion of the Performance Bonus
payable in options shall become exercisable in accordance with the terms set
forth in the Resolutions.



               (ii) In addition, with respect to the fiscal year ending March 31, 2006:



               (A) Executive shall be eligible to receive a 2006 Annual Performance Bonus
for the period from April 1, 2005 through March 31, 2006, with a target amount
and such other terms and conditions as determined by the Compensation
Committee; and



               (B) Executive shall be eligible to receive a targeted Long-Term
Performance Bonus of $3,050,000.00 for the period from April 1, 2004 through
March 31, 2006, which Long-Term Performance Bonus shall otherwise be subject to
the terms and conditions applicable to the performance period ending March 31,
2006 under the Company’s 2005-2007 Long-Term Performance Bonus program



 









 




set forth in the Resolutions. Subject to paragraph 3(c), such Long-Term
Performance Bonus shall vest and the portion of the Performance Bonus payable
in options shall become exercisable in accordance with the terms set forth in
the Resolutions.




               (c) (i) In the event that Executive (A) voluntarily resigns his COO
Position with the Company other than “for good reason” (as defined in paragraph
5(b) of this Agreement) or (B) is terminated “for cause” (as defined in
paragraph 5(a) of this Agreement), in any such case prior to March 31, 2006,
Executive shall (x) forfeit any and all rights he may have to receive any of
the benefits provided for in this paragraph 3 (other than any amounts or awards
for which all required services have been rendered and any applicable
Performance Cycle has ended but which have not yet been paid) and (y) be
obligated to repay the Company for any moving and/or relocation expenses in
accordance with the terms of the Moving & Relocation Expense Reimbursement
Agreement entered into between Executive and the Company (the “Relocation
Agreement”). All stock options and restricted stock held by Executive in the
event of the termination of Executive’s employment as described in this
paragraph 3(c)(i) shall be subject to the terms and conditions of the 2002 Plan
(and any successor plan) and any applicable resolutions.



               (ii) In the event that Executive (x) voluntarily resigns his COO Position
with the Company “for good reason” (as defined in paragraph 5(b) of this
Agreement), (y) is terminated from the COO Position other than “for cause” (as
defined in paragraph 5(a) of this Agreement), or (z) terminates his employment
on account of death or Disability (as defined in the 2002 Plan), in any such
case prior to March 31, 2006, then:



               (A) Executive shall be entitled to receive a lump sum payment (less
applicable withholding taxes) in an amount equal to $4,500,000 (which
represents the sum of (1) $650,000 plus (2) his 2005 Annual Performance Bonus
target as set forth in paragraph 3(b)(i)(A) (i.e. $800,000) and (3) his
Long-Term Performance Bonus target (i.e., $3,050,000) for the Performance Cycle
ending with the close of the fiscal year during which his termination occurs),
provided that if Executive resigns his COO Position “for good reason” (as
defined in paragraph 5(b) of this Agreement) based on a reduction of any of
Executive’s bonuses that meets the requirements of clause (iii) of the
definition of “good reason”, the $4,500,000 payment described in this clause
(A) shall be reduced by the sum of any bonuses actually paid to Executive in
respect of the period as to which such reduction took place, payable in cash
within 30 days after the end of the six month period following Executive’s
termination of employment with the Company, or earlier if the Company
determines that making such payment after termination but before the expiration
of such six month period is permitted by law;



               (B) management shall recommend that (1) the 235,000 options granted
pursuant to Executive’s March 18, 2004 offer letter and any unvested Restricted
Stock, Fair Market Value Options and Premium-Priced Options granted to
Executive pursuant to the Long-Term Performance Bonuses described in paragraphs
3(b)(i) and (ii) shall vest in full immediately upon the termination of
Executive’s employment hereunder, (2) the 235,000 options and any Fair Market
Value Options and Premium-Priced Options granted to Executive pursuant to the
Long-Term Performance Bonuses described in paragraphs 3(b)(i) and (ii) shall
remain exercisable for one year following such termination of employment, and
(3) all Restricted Stock issued, and all stock received on exercise of options
granted, to Executive pursuant to the Long-Term Performance Bonuses described
in paragraphs 3(b)(i) and (ii) shall no longer be subject to any holding period
(except as may be required by any state or federal securities laws); and



               (C) Executive shall be relieved of all obligations to repay any moving
and/or relocation expenses under the Relocation Agreement.



               (iii) For clarification purposes only, in the event that Executive resigns
or is terminated from his CFO Position for any reason or no reason at any time,
but remains in his COO Position, no benefits shall be payable under this
paragraph 3 on account of such resignation or termination but the terms and
conditions of paragraph 3 shall continue to remain in full force and effect.



               (iv) In the event that Executive continues to be employed through March
31, 2006, Executive shall be entitled to any Annual Performance Bonus and
Long-Term Performance Bonus payable under the terms of the 2002 Plan and the
Resolutions for the fiscal year ending March 31, 2006 in accordance with
paragraph 3(b)(ii), without regard to whether Executive’s employment with the
Company is subsequently terminated before any such Performance Bonuses are
paid.



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               (v) Notwithstanding anything to the contrary herein, Executive shall be
entitled to the payments under this paragraph 3(c) only to the extent not
already provided under another plan or policy of the Company.



          (d) Capitalized terms used in paragraphs 3(b) and (c) and not defined are
used as defined in the 2002 Plan.



     4. Benefits and Perquisites. During the term of Executive’s employment,
Executive shall be eligible to participate in all pension, welfare and benefit
plans and perquisites generally made available to other senior executives of
the Company.



     5. Termination by Company for Cause or Executive for Good Reason.



          (a) For purposes of this Agreement, termination “for cause” shall mean
that the Company terminates Executive’s employment for any of the following
reasons:



               (i) Executive’s continued failure, either due to willful action or as a
result of gross neglect, to substantially perform his duties with the Company
(other than any such failure resulting from his incapacity due to physical or
mental illness) that, if capable of being cured, has not been cured within 30
days after written notice is delivered to Executive by or on behalf of the
Compensation Committee, which notice specifies in reasonable detail the manner
in which the Compensation Committee believes that Executive has not
substantially performed his duties,



               (ii) the engaging by Executive in conduct which is demonstrably and
materially injurious to the Company or its affiliates, monetarily or otherwise,
unless the conduct in question was undertaken in good faith, and with a
rational business purpose and based upon the reasonable belief that such
conduct was in the best interest of the Company or its affiliates, as the case
may be,



               (iii) Executive’s indictment or conviction (or plea of guilty or nolo
contedere) for any felony or any other crime (other than a petty misdemeanor)
involving dishonesty, fraud or moral turpitude,



               (iv) Executive’s breach of fiduciary duty to the Company or its affiliates
which may in the good faith determination of the Compensation Committee
reasonably be expected to have a material adverse effect on the Company or its
affiliates,



               (v) violation of the Company’s policies relating to compliance with
applicable laws which may in the good faith determination of the Compensation
Committee reasonably be expected to have a material adverse effect on the
Company or its affiliates,



               (vi) violation of the Company’s policies on discrimination, unlawful
harassment or substance abuse,



               (vii) violation of the Company’s Workplace Violence Policy, or



               (viii) unauthorized use or disclosure of confidential or proprietary
information or related materials, or the violation of any of the terms of the
Company’s standard confidentiality policies and procedures, which, in either
case, (A) may reasonably be expected to have a material adverse effect on the
Company or its affiliates and (B) if capable of being cured, has not been cured
within 30 days after written notice is delivered to Executive by or on behalf
of the Compensation Committee, which notice specifies in reasonable detail the
alleged unauthorized use or disclosure or violation.


For purposes of clause (i) of this definition, no act, or failure to act, on
Executive’s part shall be deemed “willful” unless done, or omitted to be done,
by Executive not in good faith and without reasonable belief that his act, or
failure to act, was in the best interest of the Company or its affiliates, as
the case may be.




          (b) For purposes of this Agreement, termination “for good reason” shall
mean any action or series of actions by the Company which, taken together if a
series of actions, directly or indirectly results in (i) any material and
adverse change in Executive’s position, title or equivalent title with the
Company (other than removal of Executive from the position of Chief Financial
Officer), (ii) any material and



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adverse reduction in Executive’s supervisory or other authority or
responsibility other than any isolated, insubstantial and inadvertent failure
by the Company that is not in bad faith and is cured promptly on Executive’s
giving the Company notice, (iii) any reduction by the Compensation Committee in
the amount of Executive’s 2005 or 2006 Annual Performance Bonus or Executive’s
Long-Term Performance Bonus for the period ending March 31, 2005 or the period
ending March 31, 2006, as applicable, that results in the amount of any such
Performance Bonus being less than 75% of the amount determined pursuant to the
formulae specified in the Resolutions, as applicable, other than (1) any such
reduction that is consistent with reductions for all executive vice presidents
and above level officers eligible for awards under the 2005 or 2006 Annual
Performance Bonus programs or the 2005-2007 Long-Term Performance Bonus
programs, as applicable, (2) any such reduction agreed to by Executive in
writing or (3) any insubstantial or inadvertent reduction by the Compensation
Committee that is not in bad faith and is cured promptly on Executive’s giving
the Company notice, (iv) the Company’s material breach of this Agreement,
provided that no alleged action, change, reduction or breach set forth in
preceding clauses (i), (ii) or (iii) or in this clause (iv), respectively,
shall be deemed to constitute “good reason” unless such action, reduction or
breach remains uncured, as the case may be, after the expiration of thirty (30)
days following delivery to Company from Executive of a written notice, setting
forth such course of conduct deemed by Executive to constitute “good reason”,
or (v) the failure of the Company to require any purchaser of or successor to
substantially all of the assets of the Company or any enterprise with which or
into which the Company may be merged to assume the Company’s obligations under
this Agreement.




     6. Indemnification. For so long as Executive is employed by the Company
pursuant to this Agreement and at all time thereafter, the Company shall
indemnify and hold Executive harmless for acts and omissions in Executive’s
capacity as Chief Operating Officer and Chief Financial Officer, as applicable,
to the maximum extent permitted under applicable law.



     7. Authorization to Modify Restrictions. Executive acknowledges that the
restrictions contained in this Agreement are reasonable, but agrees that if a
court having proper jurisdiction holds a particular restriction unreasonable,
that restriction shall be modified to the extent necessary in the opinion of
such court to make it reasonable, and that the remaining provisions of this
Agreement shall nonetheless remain in full force and effect.



     8. No Duration of Employment. Notwithstanding anything else contained in
this Agreement to the contrary, the Company and Executive each acknowledge and
agree that Executive’s employment with the Company may be terminated by either
the Company (subject only to the provisions of paragraph 3(c) of this
Agreement) or Executive (subject only to the provisions of paragraph 3(c) of
this Agreement) at any time and for any reason, with or without cause, upon 10
days’ written notice to the other party, provided that this Agreement may be
terminated “for cause” immediately upon written notice from the Company to
Executive. In addition, this Agreement shall automatically terminate upon
Executive’s death or Disability. Upon termination of Executive’s employment
for any reason whatsoever, the Company shall have no further obligations to
Executive other than those set forth in paragraphs 3 and 6 of this Agreement.



     9. General.



          (a) Any notice required or permitted to be given under this Agreement
shall be made either:



               (i) by personal delivery to Executive or, in the case of the Company, to
the Company’s principal office (“Principal Office”) located at One Computer
Associates Plaza, Islandia, New York 11749, Attention: Senior Vice President -
Human Resources, or



               (ii) in writing and sent by registered mail, postage prepaid, to
Executive’s residence, or, in the case of the Company, to the Company’s
Principal Office.


Any provision of this Agreement calling for notice to be delivered by or on
behalf of the Compensation Committee shall be satisfied by any notice that is
executed on behalf of the Compensation Committee by any director or officer of
the Company acting pursuant to the authorization of the Compensation Committee
and otherwise delivered in accordance with this paragraph 9(a).




          (b) This Agreement shall be binding upon Executive 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.



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          (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, the Relocation Agreement and the other documents
referred to herein represent the entire agreement between Executive and the
Company related to Executive’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 Executive and a
duly authorized representative of the Company.



          (e) Without limiting the scope of paragraph 7 of this Agreement, 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 be any way impaired and shall remain enforceable to the
fullest extent permitted by law.


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.




	 	 	 	 	 
	 	 	COMPUTER ASSOCIATES
	 	 	INTERNATIONAL, INC.
	 
	 	 	 	 
	/s/ Jeff Clarke

	 	By:
	 	/s/ Kenneth D. Cron
	
 

	 	 	 	
 
	Jeff Clarke	 	Name: Kenneth D. Cron
	 	 	Title: Chief Executive Officer








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