Document:

EX-10.2

EXHIBIT 10.2

PREFERRED INTEREST AMENDMENT AGREEMENT

     This Preferred Interest Amendment Agreement (this “Amendment”) is made as of this
8th day of August 2008 among NRG Common Stock Finance I LLC, a Delaware limited
liability company (“Issuer”), Credit Suisse Capital LLC (together with its successor and assigns,
“Purchaser”) and Credit Suisse Securities (USA) LLC (“Agent”), solely in its capacity as agent for
Purchaser and Issuer (Issuer, Purchaser and Agent, collectively, the “Parties”).

W I T N E S S E T H

     WHEREAS, the Parties have heretofore entered into a Preferred Interest Purchase Agreement
dated as of August 4, 2006 (the “Preferred Interest Purchase Agreement”) pursuant to which Issuer
issued to Purchaser Issuer’s Series 1 Exchangeable Limited Liability Company Preferred Interests
(the “Preferred Interests”) on August 4, 2006;

     WHEREAS, the Parties have heretofore entered into an Amendment Agreement dated as of February
27, 2008 relating to the Preferred Interest Purchase Agreement (the “Amendment Agreement”) (and,
for the avoidance of doubt, references to the Preferred Interest Purchase Agreement herein shall
mean the Preferred Interest Purchase Agreement as modified or amended by such Amendment Agreement
with respect to the Preferred Interest Purchase Agreement);

     WHEREAS, the Parties hereto desire to amend the terms and provisions of the Preferred
Interests and the Preferred Interest Purchase Agreement as set forth herein;

     NOW, THEREFORE, in consideration of their mutual covenants herein contained, the Parties,
intending to be legally bound, hereby mutually covenant and agree as follows:

     SECTION 1. Defined Terms; References. Unless otherwise specifically defined herein, each
capitalized term used herein and not otherwise defined herein has the meaning assigned to such term
in the Preferred Interest Purchase Agreement. Each reference to “hereof”, “hereunder”, “herein”
and “hereby” and each other similar reference and each reference to “this Preferred Interest
Purchase Agreement” and each other similar reference contained in the Preferred Interest Purchase
Agreement shall, after this Amendment becomes effective, refer to the Preferred Interest Purchase
Agreement as amended hereby.

     SECTION 2. Amendments. The Preferred Interest Purchase Agreement and Certificate No. 1 for
the Preferred Interests dated as of August 4, 2006 (“Certificate No. 1”) are hereby amended as
follows, with such amendments

 

 

taking effect as of the later of the final day of the Averaging Period (as defined below) or,
if Issuer is required to make a payment pursuant to Section 4(a) below, the day such payment is
made (the “Effective Date”), and subject to the further condition that as of such date Purchaser
shall have received an opinion (in form and substance satisfactory to Purchaser and its counsel),
dated as of the date hereof, of Kirkland & Ellis LLP, counsel for Issuer, substantially in the form
attached hereto as Exhibit A:

     (a) The third “Whereas” clause of the Preferred Interest Purchase Agreement is amended by
deleting the words “and exchangeable” in the first line.

     (b) Section 7(c) of the Preferred Interest Purchase Agreement is amended by deleting the words
“and exchange” in the second line.

     (c) The first paragraph of Certificate No. 1 is amended by deleting the phrase “, EXCHANGE” in
the fourth line.

     (d) The first paragraph of the reverse of Certificate No. 1 is amended by (i) deleting the
words “and exchangeable” on the second line and (ii) deleting the phrase “and/or the common stock
of NRG Energy, Inc.” that begins on the second line.

     (e) Each reference to the “Series 1 Exchangeable Limited Liability Company Preferred
Interests” in Certificate No. 1 and the form of Assignment thereto shall be replaced with the words
“Series 1 Limited Liability Company Preferred Interests.”

     (f) The Issuer shall execute on the Effective Date an amendment to the Certificate of
Designations substantially in the form of Exhibit B hereto.

     SECTION 3. Payment. On the Amendment Start Date, Issuer shall pay Purchaser cash in
immediately available funds by wire transfer to an account designated by Purchaser in an amount
equal to USD 10,621,070.99 (the “Initial Payment Amount”).

     SECTION 4. Payment Adjustment. Promptly following the last day of the Averaging Period the
Calculation Agent shall determine the Final Payment Amount (as defined below) and notify the
Purchaser and the Issuer of such amount. On the date one Settlement Cycle following the last day
of the Averaging Period:

     (a) if the Final Payment Amount is greater than the Initial Payment Amount, as an adjustment
to the payment set forth in Section 3 above, Issuer shall make a cash payment in USD to Purchaser
in an amount equal to such difference by wire transfer of immediately available funds to an account
designated by Purchaser; or

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     (b) if the Final Payment Amount is less than the Initial Payment Amount, as an adjustment to
the payment set forth in Section 3 above, Purchaser shall make a cash payment in USD to Issuer in
an amount equal to the absolute value of such difference by wire transfer of immediately available
funds to an account designated by Issuer.

     “Amendment Start Date” means August 8, 2008.

     “Average VWAP Price” means the arithmetic average of the VWAP Prices for the Trading Days in
the Averaging Period.

     “Averaging Period” means a period of twelve consecutive Trading Days beginning on the
Amendment Start Date; provided that the Purchaser may accelerate the final day of the Averaging
Period to any Trading Day beginning on or after the sixth Trading Day following the Amendment Start
Date by notice to the Issuer on or prior to such accelerated final day. The Calculation Agent may
determine that any Scheduled Trading Day is a Disrupted Day only in part, in which case (i) the
Calculation Agent may, but need not, extend the scheduled final day of the Averaging Period, (ii)
the Calculation Agent shall determine the VWAP Price for such Disrupted Day based on Rule 10b-18
eligible transactions in NRG Common Stock on the Exchange on such day during the period on such day
that the Exchange is open and no Market Disruption Event (or circumstance described in Section 7 of
this Amendment) has occurred and is continuing and (iii) the Average VWAP Price will be determined
by the Calculation Agent using an appropriately weighted average of VWAP Prices.

     “Final Payment Amount” means the amount in USD for a given Average VWAP Price as set forth in
the table in Appendix A hereto; provided that if the Average VWAP Price is between two Average VWAP
Price amounts in the table, the Final Payment Amount shall be determined by straight-line
interpolation between the Final Payment Amounts set forth for the next higher and lower Average
VWAP Price amounts in the table.

     SECTION 5. Adjustment of Terms. In the event of any stock split, stock dividend, bankruptcy,
insolvency, reorganization, Merger Event, Tender Offer, rights offering, recapitalization, spin-off
or other material event involving the Company or the NRG Common Stock), the Calculation Agent shall
adjust the terms of this Amendment as appropriate to account for such event.

     SECTION 6. Representations, Warranties and Agreements.

     (a) Issuer and Purchaser each represents and warrants to the other that its representations
and warranties contained in Sections 4 and 5, respectively, of the Preferred Interest Purchase
Agreement are true and correct on the date hereof as if made on the date hereof.

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     (b) Issuer represents and warrants to and for the benefit of, and agrees with, Purchaser as
follows:

     (i) it has the power to execute this Amendment, to deliver this Amendment and to
perform its obligations under this Amendment and has taken all necessary action to
authorize such execution, delivery and performance;

     (ii) such execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;

     (iii) all governmental and other consents that are required to have been obtained by
it with respect to the execution and delivery of and the performance of its obligations
under this Amendment have been obtained and are in full force and effect and all
conditions of any such consents have been complied with;

     (iv) its obligations under this Amendment constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to
general equitable principles;

     (v) no Early Redemption Event with respect to the Preferred Interests has occurred
and is continuing and no such event or circumstance would reasonably be expected to occur
as a result of its entering into or performing its obligations under this Amendment;

     (vi) there is not pending or, to its knowledge, threatened against it or any of its
affiliates any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is likely to affect
the legality, validity or enforceability against it of this Amendment or its ability to
perform its obligations under this Amendment;

     (vii) it is acting for its own account, and has made its own independent decision to
enter into this Amendment and as to whether this Amendment is appropriate or proper for it
based upon its own judgment and upon advice of such advisors as it deems necessary; Issuer
acknowledges and agrees that it is not relying, and has not relied, upon any communication
(written or oral) of Purchaser or any Affiliate of Purchaser with respect to the legal,
accounting, tax or other implications of this Amendment and that it has conducted its own
analyses of the legal, accounting, tax and other implications hereof (it being understood
that

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information and explanations related to the terms and conditions of this Amendment
shall not be considered investment advice or a recommendation to enter into this
Amendment); it further acknowledges and confirms that it has taken independent tax advice
with respect to this Amendment;

     (viii) it is entering into this Amendment with a full understanding of all of the
terms and risks hereof (economic and otherwise) and is capable of evaluating and
understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks; it is also capable of assuming
(financially and otherwise), and assumes, those risks;

     (ix) it acknowledges that neither Purchaser nor any Affiliate of Purchaser is acting
as a fiduciary for or an advisor to Issuer in respect of this Amendment;

     (x) (A) none of it and its officers and directors is aware of any material nonpublic
information regarding the Company or the NRG Common Stock, (B) all reports and other
documents filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) when considered as a
whole (with the more recent such reports and documents deemed to amend inconsistent
statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading and (C) it is entering into this Amendment in good
faith and not as part of a plan or scheme to evade compliance with the federal securities
laws, including without limitation Rule 10b5-1 promulgated under the Exchange Act;

     (xi) it is not entering into this Amendment to create actual or apparent trading
activity in the NRG Common Stock (or any security convertible into or exchangeable for NRG
Common Stock) or to manipulate the price of the NRG Common Stock (or any security
convertible into or exchangeable for NRG Common Stock) or otherwise in violation of the
Exchange Act;

     (xii) without limiting the generality of Section 6(b)(ii), this Amendment will not
violate Rule 13e-1 or Rule 13e-4 under the Exchange Act;

     (xiii) it is not, and after giving effect to the transactions contemplated hereby
will not be, required to register as an “investment company” as such term is defined in
the Investment Company Act of 1940, as amended;

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     (xiv) during the Averaging Period, it shall not, and shall cause its affiliates and
affiliated purchasers (each as defined in Rule 10b-18) not to, directly or indirectly
(including, without limitation, by means of any cash-settled or other derivative
instrument) purchase, offer to purchase, place any bid or limit order that would effect a
purchase of, or commence any tender offer relating to, NRG Common Stock (or an equivalent
interest, including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable or exercisable for NRG
Common Stock, except through Purchaser;

     (xv) each of it and the Company is, and shall be as of the date of any payment or
delivery by it hereunder, solvent and able to pay its debts as they come due, with assets
having a fair value greater than liabilities and with capital sufficient to carry on the
businesses in which it engages;

     (xvi) during the Averaging Period, the NRG Common Stock shall not be subject to a
“restricted period,” as such term is defined in Regulation M under the Exchange Act;

     (xvii) it shall not, at any time during the Averaging Period, communicate, directly
or indirectly, any material nonpublic information concerning itself or the NRG Common
Stock or purchases of NRG Common Stock by Purchaser (or its agent or affiliate) to any
Relevant CSNY Personnel (as defined below); “Relevant CSNY Personnel” means any employee
of Purchaser or any affiliate, except employees that Purchaser has notified Issuer in
writing are not “Relevant CSNY Personnel”;

     (xviii) it shall not enter into or alter any hedging transaction relating to the NRG
Common Stock corresponding to this Amendment; it also acknowledges and agrees that any
amendment, modification, waiver or termination of this Amendment or the Preferred Interest
Purchase Agreement must be effected in accordance with the requirements for the amendment
or termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act; without
limiting the generality of the foregoing, any such amendment, modification, waiver or
termination shall be made in good faith and not as part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the Exchange Act;

     (xix) none of it, the Company and their respective affiliated purchasers (as defined
in Rule 10b-18) have made any block purchases (as defined in Rule 10b-18) during the
calendar week in which the Amendment Start Date occurs or any of the four calendar weeks
preceding such week; and

     (xx) it shall (i) notify Purchaser prior to the opening of trading in the NRG Common
Stock on any day on which the Company makes any

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public announcement (as defined in Rule
165(f) under the Securities Act) of any merger, acquisition, or similar transaction
involving a recapitalization relating to the Company (other than any such transaction in
which the consideration consists solely of cash and there is no valuation period), (ii)
promptly notify Purchaser following any such announcement that such announcement has been
made, and (iii) promptly deliver to Purchaser following the making of any such
announcement a certificate indicating (A) the Company’s average daily Rule 10b-18
purchases (as defined in Rule 10b-18) during the three full calendar months preceding the
date of the announcement of such transaction and (B) the Company’s block purchases (as
defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18 during the
three full calendar months preceding the date of the announcement of such transaction. In
addition, Issuer shall promptly notify Purchaser of the earlier to occur of the completion
of such transaction and the completion of the vote by target stockholders. Issuer
acknowledges that any such public announcement may cause Purchaser to elect to treat one
or more Trading Days as Disrupted Days pursuant to Section 7 below. Accordingly, Issuer
acknowledges that its actions in relation to any such announcement or transaction must
comply with the standards set forth in subclause (xviii) above.

     (c) Purchaser represents and warrants to and for the benefit of, and agrees with, Issuer as
follows:

     (i) it has the power to execute this Amendment, to deliver this Amendment and to
perform its obligations under this Amendment and has taken all necessary action to
authorize such execution, delivery and performance;

     (ii) such execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;

     (iii) all governmental and other consents that are required to have been obtained by
it with respect to this Amendment have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; and

     (iv) its obligations under this Amendment constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency and similar
laws affecting creditors’ rights generally and to general equitable principles.

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     (d) The Parties intend for the Amendment to comply with the requirements of Rule
10b5-1(c)(1)(i)(B) under the Exchange Act and to constitute a binding contract, instruction or plan
satisfying the requirements of 10b5-1(c) and to be interpreted to comply with the requirements of
Rule 10b5-1(c).

     SECTION 7. Additional Averaging Period Disruption. If on any Scheduled Trading Day during the
Averaging Period, Purchaser determines that (i) its or its affiliates’ market activities in
connection with this Amendment may raise material risks under applicable securities laws or (ii) a
Hedging Disruption has occurred, Purchaser may, in its discretion, elect to treat such Trading Day
as a Disrupted Day in whole or in part as appropriate with regard to such relevant securities laws
or Hedging Disruption, as the case may be, and Purchaser shall so notify Issuer.

     SECTION 8. Counterparts. This Amendment may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same instrument.

     SECTION 9. Governing Law; Jurisdiction. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.

     SECTION 10. Preferred Interest Purchase Agreement. Except as otherwise specified in
this Amendment, the Preferred Interest Purchase Agreement shall remain in full force and effect.

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     IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

	 	 	 	 	 
	 

	 	ISSUER:	 	 
	 
	 	 	 	 
	 

	 	NRG COMMON STOCK FINANCE I LLC	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Clint Freeland
 

Name: Clint Freeland
	 	 
	 

	 	Title: Director and President	 	 
	 
	 	 	 	 
	 

	 	PURCHASER:	 	 
	 
	 	 	 	 
	 

	 	CREDIT SUISSE CAPITAL LLC	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Marisa Scauzillo
 

Name: Marisa Scauzillo
	 	 
	 

	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Vittorio Scialoja
 

Name: Vittorio Scialoja
	 	 
	 

	 	Title: Authorized Signatory	 	 

 

 

	 	 	 	 	 
	 

	 	AGENT:	 	 
	 
	 	 	 	 
	 

	 	CREDIT SUISSE SECURITIES (USA) LLC	 	 
	 
	 	 	 	 
	 

	 	By: s/ Marisa Scauzillo
 

Name: Marisa Scauzillo
	 	 
	 

	 	Title: Authorized SignatoryEX-10.1

Exhibit 10.1

CA, INC.

CHANGE IN CONTROL SEVERANCE POLICY

(AMENDED AND RESTATED EFFECTIVE SEPTEMBER 10, 2008)

          1. Purpose. The purpose of the CA, 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 2007 Incentive Plan,
effective as of June 12, 2007 (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 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 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 CA, 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 4.6, 4.7 and 4.8, respectively, of the
Company Incentive Plan).

 

 

          (k) “Good Reason” means the occurrence of one or more of the following circumstances,
without the Participant’s express written consent, and which circumstance(s) are not remedied by
the Company within thirty (30) days of receipt of a written notice from the Participant describing
in reasonable detail the Good Reason event that has occurred (which notice must be provided within
ninety (90) days of the Participant’s obtaining knowledge of the event), provided that the
Participant must terminate employment within the two (2) years following the Participant’s
obtaining knowledge of the event:

          (i) (A) any material 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 authority
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, provided that
any such change constitutes a reduction of 5% or more in the Participant’s total
compensation paid by the Company;

          (iii) the failure of the Company to continue in effect any employee benefit plan,
compensation plan, welfare benefit plan or 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, in each case which would materially adversely affect the Participant, unless
the Participant is permitted to participate in other plans providing the Participant with
materially equivalent benefits in the aggregate (at materially equivalent or lower cost
with respect to welfare benefit plans);

          (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); or

          (v) a material breach by the Company of the terms of the Participant’s employment
agreement.

 

 

          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.

          (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 with
the Company (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) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as
amended, and the final Treasury Regulations issued thereunder.

          (u) “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 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 Resources 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”), which shall be provided to
the Participant no later than two (2) days after the Date of Termination and must be executed by
the Participant, become

 

 

effective and not be revoked by the Participant by the fifty-fifth (55th) day
following the Date of Termination, the Company shall provide to the Participant:

          (a) 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) a cash 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) 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) 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.

 

 

The cash payments specified in paragraphs (a), (b), (c) and (d) of this Section 4 shall be paid no
later than the sixtieth (60th) day (or the next following business day if the sixtieth
day is not a business day) following the Date of Termination.

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 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.

          (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:

CA, Inc.

Attention: Corporate Secretary

One CA 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 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 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 Resources
Committee of the Board (or any successor committee). The Board or the Compensation and Human
Resources 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 Resources 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 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. Section 409A. To the extent a Participant would otherwise be entitled to any
payment that under this Policy, or any plan or arrangement of the Company or its affiliates,
constitutes “deferred compensation” subject to Section 409A and that if paid during the six months
beginning on the date of termination of a Participant’s employment would be subject to the Section
409A additional tax because the Participant is a “specified employee” (within the meaning of
Section 409A and as

 

 

determined by the Company) the payment will be paid to the Participant on the earlier of the
six-month anniversary of the Participant’s date of termination or the Participant’s death or
disability (within the meaning of Section 409A). Similarly, to the extent the Participant would
otherwise be entitled to any benefit (other than a payment) during the six months beginning on
termination of the Participant’s employment that would be subject to the Section 409A additional
tax, the benefit will be delayed and will begin being provided on the earlier of the six-months
from the Participant’s date of termination or death. In addition, any payment or benefit due upon
a termination of the Participant’s employment that represents a “deferral of compensation” within
the meaning of Section 409A shall be paid or provided to the Participant only upon a “separation
from service” as defined in Treasury Regulation Section 1.409A-1(h). Each severance payment made
under this Policy shall be deemed to be separate payments, amounts payable under Section 4 of this
Policy shall be deemed not to be a “deferral of compensation” subject to Section 409A to the extent
provided in the exceptions in Treasury Regulation Sections 1.409A-1(b)(4) (“short-term deferrals”)
and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)) and other
applicable provisions of Treasury Regulation Section 1.409A-1 through A-6.

Notwithstanding anything to the contrary in this Policy or elsewhere, any payment or benefit under
this Policy or otherwise that is exempt from Section 409A pursuant to final Treasury Regulation
Section 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Participant only to the extent
that the expenses are not incurred, or the benefits are not provided, beyond the last day of the
Participant’s second taxable year following the Participant’s taxable year in which the “separation
from service” occurs; and provided further that such expenses are reimbursed no later than the last
day of the Participant’s third taxable year following the taxable year in which the Participant’s
“separation from service” occurs.  Except as otherwise expressly provided herein, to the extent any
expense reimbursement or the provision of any in-kind benefit under this Policy is determined to be
subject to Section 409A, the amount of any such expenses eligible for reimbursement, or the
provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for
reimbursement in any other taxable year (except for any lifetime or other aggregate limitation
applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of
the calendar year following the calendar year in which the Participant incurred such expenses, and
in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to
liquidation or exchange for another benefit.

          20. Effective Date. The Policy shall be effective as of October 18, 2004.

 

 

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 (but in any event no later than

A-2

 

by the end of the Participant’s taxable year next following the Participant’s taxable year in
which the Underpayment of Excise Tax is remitted). In the event the amount of the Reimbursement
Payment exceeds the amount necessary to reimburse the Participant 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 on a current basis 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 pay to the Participant (on the first business day
of the calendar year following the year the Option Redetermination is made) 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 plus interest, from the date the Participant files the
amended return as provided above, at the 3 month Treasury Bill rate.

A-3

 

Exhibit A

FORM OF CIC SEPARATION AGREEMENT AND RELEASE (HEREIN “AGREEMENT”)

          CA, 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.

 

 

     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.

 

 

     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
sign 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

 

 

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.

 

 

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

	 	 	 	 	 
	 

	 	Company
	 	Executive
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	Date:

	 	 	 	Date:

 

 

Schedule A

(2.99 Multiple)

Chief Executive Officer (John Swainson)

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 and General Counsel (Amy Fliegelman Olli)

Executive Vice President and Chief Administrative Officer (James E. Bryant)

[Employees may be added or eliminated from time to time]

 

 

Schedule C

(1.00 Multiple)

Executive Vice President and General Manager of Worldwide Sales (George J. Fischer)

Executive Vice President, Enterprise IT Management Group (Ajei Gopal)

Executive Vice President, Global Risk & Compliance and Corporate Secretary (Kenneth Handal)

Executive Vice President, Governance Group (Jacob Lamm)

Executive Vice President, Worldwide Sales Operations (John Ruthven)

Corporate Senior Vice President, Corporate Controller (Richard Beckert)

[Employees may be added or eliminated from time to time]

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