EX-10.3



 




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














 





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



2









 





(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.



3










 





	 	 	 	 	 	 	 	 	 
	 	 	 	 	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.



5









 





     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.





6









 





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




 









 




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



-3-









 







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:




-4-









 






          (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.




-5-









 








          (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




-6-









 




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




-7-









 




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




-8-









 




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.




-9-









 





          (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




-10-









 




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




-11-









 




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




-12-









 




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.





-13-









 








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]





 









 








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]




 









 








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]





 









 








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.




 









 








          (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









 




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









 








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.



 









 





     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









 





     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









 





     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









 







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









 





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



	 	 	 	 	 	 	 	 	 
	 

	 	Company
	 	 	 	Executive	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	Date:

	 	 	 	 	 	Date:	 	 







Ex-6