Exhibit 99(c)(5)
CONSULTING AND NON-COMPETE AGREEMENT, dated as of March 29,
1999 (the "AGREEMENT"), by and between PLATINUM TECHNOLOGY
International, INC., a Delaware corporation (the "COMPANY"),
and Xxxxxxx X. Xxxxxxxxx (the "CONSULTANT").
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The Company is intending to enter into a Merger Agreement with
Computer Associates International, Inc. (the "MERGER AGREEMENT"), pursuant to
which the Company will become a subsidiary of Computer Associates International,
Inc. The Consultant is a senior executive of the Company, has unique knowledge
of the Company's business and has occupied a position of trust and confidence.
The Company and the Consultant desire that, effective upon the Merger (as
defined in the Merger Agreement), the Consultant will continue as a consultant
to the Company and will agree to refrain from competing with the Company all as
set forth in this Agreement.
In consideration of the mutual agreements, the Consultant and
the Company agree as follows:
1. SERVICES. (a) The Consultant agrees, at the request of the
Company, that for a period of up to six months from the Effective Date (but in
no event later than September 30, 1999), to remain as an employee to provide
transition services in a capacity substantially similar to Consultant's current
employment and with continuation of compensation on the same basis as current
compensation.
(b) For the Consulting Period (as defined in Section 2), the
Consultant shall provide from time to time and as requested by the Company the
consulting services set forth in Schedule A (the "SERVICES"). The Consultant
shall report to the President of Computer Associates International, Inc. The
Consultant shall devote such time and energy to the business of the Company as
reasonably required to perform the Services; the parties agree that the
performance of the Services is not intended to require full time effort (and the
Consultant is free to take other full time employment not inconsistent with the
terms of this Agreement). The Company shall not require the Consultant to travel
a greater amount than in connection with his current employment.
2. TERM. The Consultant and the Company agree that the
consulting period (the "CONSULTING PERIOD") begins on the later of the Effective
Date (as defined in Section 7) and the date the transition employment services
under Section 1(a) end and ends on the second anniversary of the Effective Date.
The Consultant acknowledges that the Consulting Period may be terminated at any
time, with or without cause or for any or no reason, at the option either of the
Company or the Consultant, on 30 days written notice, as provided in Section 4.
3. CONSULTING FEE. Commencing on the Effective Date, the
Company shall pay the Consultant a consulting fee at the annual rate of
$500,000, payable quarterly in arrears. The Company shall reimburse Consultant
for all reasonable costs and expenses incurred in connection with Consultant's
performance of the Services.
4. TERMINATION. (a) TERMINATION WITHOUT CAUSE. If the Company
terminates the Consulting Period without Cause prior to the second anniversary
of the Effective Date, the Consultant shall be entitled to continued payment of
all consulting fees.
(b) TERMINATION FOR CAUSE. If (i) the Company terminates the
Consulting Period at any time for Cause, or (ii) the Consultant terminates the
Consulting Period at any time, the Consultant shall be entitled to receive the
consulting fees paid through the date of termination. "CAUSE" shall mean (A) the
Consultant's material breach of any material term of this Agreement, including,
but not limited to, the covenants set forth in Section 5 hereof, subject to the
Consultant's right to cure any breach that is curable within a reasonable period
following notice by the Company, (B) the Consultant's conviction of a felony, or
(C) any willful misconduct by the Consultant resulting in substantial loss to
the Company, substantial damage to the Company's reputation or judicially
determined theft or misappropriation from the Company.
(c) TERMINATION UPON DEATH OR DISABILITY. If the Consultant
dies or becomes Disabled, in which event the Consulting Period shall terminate,
the Consultant (or, in the case of death, his estate), shall be entitled to
continued payment of all consulting fees as death or disability benefits.
"DISABLED" shall mean the Consultant's adjudication as mentally incompetent, or
the occurrence of a mental or physical disability for 120 or more days within
any calendar year. Any question as to the existence of his disability as to
which the Consultant and the Company cannot agree shall be determined in writing
by a qualified independent physician mutually acceptable to the Consultant and
the Company. If the Consultant and the Company cannot agree on a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing.
The determination of disability made in writing to the Consultant and the
Company shall be final and conclusive for all purposes.
(d) GENERAL. Upon the termination of the Consulting Period,
for any reason, (i) the Company shall have no further obligations to the
Consultant hereunder, other than as specifically set forth in this Agreement and
(ii) the Consultant shall continue to be bound (subject to the time periods and
limitations set forth herein) by the terms of this Agreement other than Section
1. Confidential Information shall remain confidential under Section 5(c) for so
long as such information is "CONFIDENTIAL INFORMATION".
5. NON-COMPETITION; CONFIDENTIALITY; PAYMENTS. (a) In
consideration for, and as a condition to, the Company's payment of the
non-compete payment and entering into this Agreement, and in connection with the
merger described herein, until the fifth anniversary of the later of the
Effective Date and the date the transition employment services under Section
1(a) end, the Consultant will not directly or indirectly, on Consultant's own
behalf or in the service of or on behalf of any other individual or entity,
either as a proprietor, employee, agent, independent contractor, consultant,
director, officer, partner or stockholder (other than a stockholder of a
corporation listed on a national securities exchange or whose stock is regularly
traded in the over-the-counter market, provided that the Consultant at no time
owns, directly or indirectly, in excess of 2% of the outstanding stock of any
class of any such corporation):
(i) participate or engage in any activities or
business developing, manufacturing, marketing or distributing any
products or services offered by the
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Company on the date of this Agreement, or any products or services
offered by the Company in the future and in which the Consultant
actively participated, recognizing that the Company offers products
and services globally ("COMPETITIVE ACTIVITIES"), including, without
limitation, (A) selling goods or rendering services of the type (or
similar to the type) sold or rendered by the Company, whether by
means of electronic, traditional or other form of commerce; (B)
soliciting any person or entity that is a current customer, that has
been a customer within the past three years or that is or was a
prospective customer prior to or during the Consulting Period, in
each case, of the Company or an affiliate of the Company (provided
that it shall not be deemed a breach of this Agreement if the
Consultant solicits such customers for goods or services unrelated
to the Competitive Activities), (C) assisting any person in any way
to do, or attempt to do, anything prohibited by clauses (A) or (B)
above and (D) be employed by any person or entity that has received
services of the type described above from the Consultant or with
which the Consultant otherwise had material contact while employed
by the Company or which received services of the type describe above
from any office or employee of the Company over which Consultant had
management responsibility, in either case to provide or supervise,
directly or indirectly, the services comprising a Competitive
Activity; or
(ii) perform any action, activity or course of
conduct which is detrimental in any material respect to the businesses
or business reputation of the Company (or any of its affiliates),
including without limitation (A) soliciting, recruiting or hiring any
employees of the Company (or any of its affiliates) or persons who have
worked for the Company (or any of its affiliates) at any time since
January 1, 1998; provided that the Consultant may hire any employee of
the Company (I) that has been terminated by the Company, (II) in
connection with a business that is not a Competitive Activity
(including any VC Business that is not a Competitive Activity), but
Consultant may not solicit or recruit for such purposes, or (III) to
work in a VC Business (as hereinafter defined), but not to work in or
for any company in which any VC Business invests or otherwise acquires
an interest, and (B) soliciting or encouraging any employee of the
Company (or any of its affiliates) to leave the employment of the
Company.
(b) Notwithstanding anything to the contrary herein,
Consultant may remain a director at those companies for which Consultant is a
director as of the Effective Date and may engage in any activities or
businesses:
(i) involving venture capital activities (a "VC Business"),
including, without limitation, activities undertaken through Platinum Venture
Partners or any similar entities as may be formed in the future, holding
directorships, and through such partnerships exercising veto power over certain
decisions in companies which venture capital investments have been made;
provided that the Consultant shall not without permission in any such venture
invest in any company whose primary business is a Competitive Activity; or
(ii) for which the Company has given permission in writing,
which shall not be unreasonably withheld (or delayed) after the third
anniversary of the Effective Date, provided Consultant's engaging in such
activities or business would not have a material adverse impact on any of the
Company's lines of business; or
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(iii) which Computer Associates International, Inc. shall have
confirmed (which confirmation shall not be unreasonably withheld or delayed) in
writing to Consultant are not inconsistent with the prohibitions of Sections
5(a) and 5(b) hereof.
(c) The Consultant shall not, without the written consent of
the Company, disclose to any other person or use, whether directly or
indirectly, any Confidential Information relating to or used by the Company or
any of its affiliates, whether in written, oral or other form, except in
connection with the performance of his duties hereunder. "CONFIDENTIAL
INFORMATION" shall mean information about the Company or any of its affiliates,
and their clients and customers that is not disclosed by the Company or any of
its affiliates for financial reporting purposes and that was learned by the
Consultant in the course of employment by the Company or any of its affiliates
or in the course of performing the services under this Agreement, including
(without limitation) any proprietary knowledge, product and service designs,
trade secrets, manuals, technical information and plans, contracts, systems,
procedures, databases, electronic files, disks and printouts, correspondence,
internal reports, personnel files, information about employees of the Company
and its affiliates relating to their education, experience, skills, abilities,
compensation and benefits, and inter-personal relationships with suppliers to
and customers of the Company and its affiliates, sales and advertising material,
business plans, marketing plans, financial data (including without limitation
the revenues, costs or profits associated with services), customer and industry
lists, customer information, customer lists coupled with product or service
pricing, customer contacts, supplier contacts and other contact information,
pricing policies, supplies, agents, risk analyses, engineering information and
computer reports, computer software, computer systems, computer formats,
computer screen designs and computer input and output specifications, inclusive
of any pertinent documentation, techniques, processes, technical information and
know-how. The Consultant acknowledges that such Confidential Information is
specialized, unique in nature and of great value to the Company and its
affiliates, and that such information gives the Company and its affiliates a
competitive advantage. The Consultant's obligations under this Section 5(b)
shall survive the termination of the Consulting Period and of this Agreement and
shall be fully enforceable thereafter in accordance with the terms of this
Agreement.
(d) (i) Confidential Information does not include information
which (A) is or becomes part of the public domain other than as a result of the
Consultant's disclosure, or (B) becomes available to the Consultant on a
nonconfidential basis from a source other than the Company, provided that source
is not bound with respect to that information by a confidentiality agreement
with the Company or otherwise prohibited from transmitting that information by a
contractual, legal or other obligation.
(ii) If the Consultant is requested or (in the opinion of his
counsel) required by law or judicial order to disclose any Confidential
Information, the Consultant shall provide the Company with prompt notice of any
such request or requirement so that the Company may seek an appropriate
protective order or waiver of the Consultant's compliance with the provisions of
this Section 5(c). The Consultant will not oppose any reasonable action by, and
will cooperate with, the Company to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Confidential Information. If, failing the entry of a protective order or the
receipt of a waiver hereunder, the Consultant is, in the opinion of his counsel,
compelled by law to disclose a portion of the Confidential Information, the
Consultant
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may disclose to the relevant tribunal without liability hereunder that portion
of the Confidential Information which counsel advises the Consultant he is
legally required to disclose, and each of the parties hereto agrees to exercise
such party's best efforts to obtain assurance that confidential treatment will
be accorded such Confidential Information.
(e) If an award by a court or arbitration panel declares that
any term or provision of this Section 5 is excessive in duration or scope or is
unreasonable or unenforceable, the parties agree that the court or arbitration
panel making such determination shall have the power to reduce the scope,
duration or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified.
(f) In the event of a breach or threatened breach by the
Consultant of the provisions of this Section 5, the Consultant acknowledges that
the Company will suffer irreparable injury and may not have an adequate remedy
at law and therefore may be entitled to a temporary restraining order or a
preliminary or permanent injunction restraining the Consultant from such breach
without the requirement of posting security or proving actual damages as well as
an equitable accounting of all profits or benefits arising out of such
violation. In addition, in the event of a breach that is not immaterial at any
time by the Consultant of the provisions of this Section 5, the Consultant
agrees as liquidated damages hereunder to repay the full amount of the
non-compete payments made pursuant to Section 5(g). Nothing contained in this
Section 5 or elsewhere in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies available at law or equity for such
breach or threatened breach by the Consultant.
(g) In consideration of the Consultant's covenants under this
Section 5, the Company shall pay the Consultant a non-compete payment at the
annual rate of $1,800,000 in the first year, $1,800,000 in the second year,
$2,300,000 in the third year, $2,300,000 in the fourth year and $2,300,000 in
the fifth year, quarterly in arrears, commencing on the Effective Date.
(h) By executing this Agreement, Consultant assigns and
transfers to the Company all his right, title, and interest in and to all
intellectual property created, developed, conceived, or reduced to practice
while employed as a Consultant by the Company or its predecessor(s) arising in
connection with the Services. While he is employed by the Company and when he
ceases to be employed by the Company, Consultant shall fully and promptly
disclose in writing to the Company, and hold in trust for the sole right and
benefit of the Company, all ideas, plans, designs, methods, techniques,
discoveries, inventions, developments, improvements, trade secrets, computer
programs and software, and other proprietary data, records, and information that
Consultant solely or jointly develops or reduces to practice while employed by,
and arising in connection with the Services to, the Company (collectively
"Intellectual Property"), whether or not patentable or capable of copyright or
trademark registration, and whether or not created, conceived, developed, or
reduced to practice at the request of the Company or during normal working
hours. While employed by the Company and at all times thereafter, Consultant
shall do all things, and execute all documents (including applications for
patents, copyrights, and trademarks, and for renewals extensions, and divisions
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thereof), that are requested and reasonably required by the Company to create,
enforce, or evidence the Company's rights to any Intellectual Property.
6. COOPERATION. (a) The Consultant agrees to cooperate with
the Company at all times (including following termination of the Consulting
Period for any reason) by making himself reasonably available to testify on
behalf of the Company or its affiliates, in any action, suit or proceeding,
whether civil, criminal, administrative, or investigative and to assist the
Company or any of its affiliates in any such action, suit, or proceeding by
providing information and meeting and consulting with the Company or
representatives or counsel to the Company or its affiliates, as reasonably
requested by such representatives or counsel. The Consultant shall be reimbursed
by the Company for any expenses (including, but not limited to, legal fees)
reasonably incurred by the Consultant in connection with his compliance with the
foregoing covenant.
(b) Consultant shall fully cooperate with the Company and
Computer Associates International, Inc. in connection with filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1978 and in connection with
resolving any investigation or other inquiry of any governmental entity under
the antitrust laws.
(c) In the event the Company fails to observe the requirements
of Section 5.1 of the Merger Agreement, whether or not enforceable or in force
under such agreement, and the aggregate loss or damage is greater than
$1,500,000, then the Consultant shall be liable for 22% of each dollar of
liability under this Section 6 (including, without limitation, forfeitures under
Section 6(d) for such failure in excess of $1,500,000. The maximum amount of
liability under this Section for the Consultant shall be an amount equal to the
sum of the total payments under this Agreement and the value of the 350,000
options issued to the Consultant in 1999.
(d) The Consultant agrees that, in the event the Department of
Justice or other governmental entity causes a delay in the closing of the
Merger, with his approval, the Company has amended the terms of the grant of
350,000 options in 1999 to include the following terms:
o none of the options are exercisable until simultaneously
with the closing of the Offer described in the Merger
Agreement
o if all antitrust issues with the Department of Justice
or other governmental entity to permit the completion of
the Merger shall have been resolved within the four
months following the substantial compliance by Computer
Associates International, Inc. and the Company with
respect to the Xxxx-Xxxxx-Xxxxxx Act of 1978 as provided
in Section 7.1(e)(i), all options shall be exercisable
o if all antitrust issues with the Department of Justice
or other governmental entity to permit the completion of
the Merger shall have been resolved within the period
described in Section 7.1(e)(iii) of the Merger
Agreement, 50% of the options shall be exercisable and
the balance shall be forfeited
o if all antitrust issues with the Department of Justice
or other governmental entity to permit the completion of
the Merger shall have been resolved within
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the period described in Section 7.1(e)(iv) of the Merger
Agreement, 25% of the options shall be exercisable and
the balance shall be forfeited.
7. CONDITIONS TO EFFECTIVENESS. The Effective Date of this
Agreement (the "EFFECTIVE DATE") shall be the date that the merger of the
Company and a wholly-owned subsidiary of Computer Associates International,
Inc., becomes effective pursuant to the Merger Agreement. In the event the
Merger Agreement terminates, this Agreement shall terminate.
8. DUTIES ON TERMINATION. At the Company's request at any time
or upon termination of the Consulting Period for any reason, the Consultant
agrees to deliver promptly to the Company all notebooks, documents, memoranda,
reports, files, samples, books, correspondence, lists, computer tapes or disks,
or other written or graphic records, and the like (and all copies thereof), from
the Company's business, which are or have been in his possession or under his
control.
9. SEVERABILITY. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
10. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be given by first-class mail, certified
or registered with return receipt requested, by reputable overnight carrier or
hand delivery acknowledged in writing by the recipient personally, and shall be
deemed to have been duly given three days after mailing or immediately upon duly
acknowledged hand delivery to the respective persons named below:
If to the Company: PLATINUM TECHNOLOGY International, INC.
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
with a copy to:
Computer Associates International, Inc.
Xxx Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx
President and Chief Operating Officer
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If to the Consultant:
Xxxxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Either party may change such party's address for notices by notice duly given
pursuant hereto.
11. GOVERNING LAW. This agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the internal laws of the State of New York without reference
to the principles of conflicts of laws.
12. ENTIRE AGREEMENT. Except as specifically set forth herein,
this Agreement represents the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements,
representations and understandings. The Consultant acknowledges and agrees that
neither the Company nor anyone acting on its behalf has made, and is not making,
and in executing this Agreement, the Consultant has not relied upon, any
representations, promises or inducements except to the extent the same is
expressly set forth in this Agreement. No amounts payable under this Agreement
shall be considered as compensation under the Consultant's former employment
agreement.
13. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. ASSIGNMENT OF RIGHTS BY THE CONSULTANT. The Consultant may
not assign any rights hereunder without the prior written consent of the
Company. Any such assignment in the absence of such written consent shall be
void. The Company may assign this Agreement to any successor to the Company or a
substantial part of the Company's business or assets provided that upon such
assignment references to the "Company" shall mean Company as it existed prior to
such assignment and further provided that any such assignment shall not expand
Consultant's obligations hereunder.
15. AMENDMENTS; WAIVERS. (a) This Agreement may not be
modified, amended, altered or supplemented except upon the written agreement
executed by the parties hereto.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
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16. MUTUAL RELEASE. Upon the Effective Date, the Consultant
is hereby released from and the Company waives, any and all liability,
claims, damages, causes of action, judgments (including any of the foregoing
with respect to costs, penalties, losses and expenses) which the Company has
or may have against the Consultant solely in connection with expenses
incurred, or non-monetary Company resources used, by the Consultant in the
performance of his ordinary course duties as an officer of the Company,
provided that Consultant is not released from any liability pursuant to this
Agreement. Upon the Effective Date, the Company is hereby released from, and
the Consultant waives (including any of the foregoing with respect to costs,
penalties, any and all liability, claims, damages, causes of action,
judgments, losses and expenses which the Consultant may have against the
Company solely in connection with expenses the Consultant incurred, or
non-monetary Company resources used, in the performance of his ordinary
course duties as an officer of the Company, provided that the Company is not
released from any liability pursuant to this Agreement, any option agreements
or any other written agreement entered into by the Consultant in connection
with the Merger.
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The Company has caused this Agreement to be executed and
delivered by its duly authorized officer and the Consultant has executed and
delivered this Agreement as of the date set forth above.
/s/ Xxxxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX
CONSULTANT
PLATINUM TECHNOLOGY INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: President
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SCHEDULE A
DESCRIPTION OF CONSULTING SERVICES
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Transition Services
Integration Services
Customer Relations and Retention
Employee Relations and Retention
Strategic Planning
