William E. McCracken CA, Inc. World Headquarters One CA Plaza Islandia, New York 11749 Re: Employment Agreement Dear Bill:
Exhibit 10.1
May 6, 0000
Xxxxxxx X. XxXxxxxxx
XX, Inc.
World Headquarters
Xxx XX Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
XX, Inc.
World Headquarters
Xxx XX Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Xxxx:
This is your Employment Agreement (the “Agreement”) with CA, Inc., a Delaware corporation (the
“Company”). It sets forth the terms of your employment with the Company and its affiliates from
time to time (together, the “Group”).
1. Your Position, Performance and Other Activities
(a) Position. You will be employed in the position of Chief Executive Officer of the Company.
You agree to serve as a member of the Company’s Board of Directors (the “Board”), as well as a
member of any Board committee to which you may be elected or appointed, and the Company agrees to
nominate you to serve as a member of the Board during the term of your employment under this
Agreement.
(b) Authority, Responsibilities and Reporting. You will have the authority, responsibilities
and reporting relationships that correspond to your position, including any particular authority,
responsibilities and reporting relationships consistent with your position that the Board may
assign to you from time to time and compliance with such policies of the Company as may be adopted
from time to time.
(c) Performance. During your employment, you will devote substantially all of your business
time and attention to the Group and will use good faith efforts to discharge your responsibilities
under this Agreement to the best of your ability. During your employment, your place of
performance will be Islandia, New York and New York, New York or such other place as the Board
determines.
(d) Other Activities. During your employment, you will not render any business, commercial or
professional services to any non-member of the Group. However, you may (1) serve on corporate,
civic or charitable boards, (2) manage personal investments, or (3) deliver lectures, or fulfill
speaking engagements or teach at educational institutions, so long as (A) these activities do not
interfere with your performance of your responsibilities under this Agreement and (B) any service
on a corporate, civic or charitable board is approved by the Board.
2. Term of Your Employment
Your employment under this Agreement (a) began on January 28, 2010 (the “Start Date” of this
Agreement) and (b) will end at the close of business on the earlier of (1) the end of the
Compensation Period or (2) the effective date of early termination of your employment. Your
“Compensation Period” begins on your Start Date and is initially scheduled to end on March 31,
2012. Beginning on April 1, 2012 and on April 1 of each following year, your Compensation Period
will automatically extend for one year unless either you or the Company gives at least 90 days’
prior notice of non-extension (a “Notice of Non-Renewal”). References in this Agreement to “your
employment” are to your employment under this Agreement.
3. Your Compensation
(a) Salary. During your employment, you will receive an annual base salary (as increased from
time to time, your “Salary”). Prior to March 15, 2010, your only Salary shall be paid to you
pursuant to your existing pay arrangements as Interim Executive Chairman of the Company. Following
March 15, 2010, the amount of your Salary will be $1,000,000. The Compensation Committee of the
Board of Directors (the “Compensation Committee”) may, in its discretion, increase your Salary in
connection with its normal review process. Your Salary will be paid in accordance with the Group’s
normal practices for senior executives.
(b) Bonus.
(1) For the period beginning on the Start Date and ending on March 31, 2010, you will
be eligible to receive an initial annual cash bonus (your “Initial Bonus”). The target level
for your Initial Bonus will be 125% of your Salary (your “Target Initial Bonus”), and
payment will be equal to your Target Initial Bonus multiplied by the number of days between
your Start Date and March 31, 2010 divided by 365 (your “Initial Annual Bonus”). Your
Initial Annual Bonus will be paid at the same time as such bonuses are paid to other senior
executives of the Company.
(2) Beginning with the Company’s 2011 fiscal year, you will be eligible to receive an
annual cash bonus (your “Bonus”) for each fiscal year of the Company ending during your
employment. The target level for your Bonus in each full fiscal year of your employment
will be at least 150% of your Salary (the “Target Annual Bonus”). Performance metrics used
in determining your Bonus payment will be determined annually by the Compensation Committee
and communicated to you no later than three months into the annual performance period. Your
Bonus will be paid at the same time as such bonuses are paid to other senior executives of
the Company.
(c) Long-Term Incentive Awards. Beginning with the Company’s 2011 fiscal year, you will be
eligible to receive long-term incentive awards (“Long-Term Incentive Awards”) as determined by the
Company in accordance with the Company’s Long-Term Incentive Plan (and any successor plan). The
target award level under the Company’s Long-Term Incentive Plan for (i) the Company’s 2011 fiscal
year will be $5,000,000, and (ii) for the Company’s 2012 fiscal year, and each year thereafter
during your employment, will be no less than $5,000,000. Performance metrics used in determining
your Long-Term Incentive Award payment will be
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determined annually by the Compensation Committee and communicated to you no later than three
months into the annual performance period. Your Long-Term Incentive Awards will be made at the
same time as such awards are made to other senior executives of the Company.
(d) Sign-On Bonus. Within 30 days following May 6, 2010, you shall receive a sign-on bonus
equal to $1,300,000.
4. Other Employee Benefits
(a) Vacation. You will be entitled to paid annual vacation consistent with the Company’s
current policy.
(b) Business Expenses. You will be reimbursed for all business and entertainment expenses
incurred by you in performing your responsibilities under this Agreement. Any such reimbursements
under this Section 4(b) shall be subject to the Group’s normal practice for senior executives and
will be paid to you as soon as practicable but in no event later than the end of the calendar year
following the year in which such reimbursable expenses were incurred.
(c) Facilities. During your employment, you will be provided with office space, facilities,
secretarial support and other business services consistent with your position on a basis that is at
least as favorable as that provided to other senior executives of the Group.
(d) Indemnification. To the maximum extent permitted by law, the Company will indemnify you
against any actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, arising by reason of your status as a director, officer, employee
and/or agent of the Group during your employment. In addition, to the maximum extent permitted by
law, the Company will pay or reimburse any expenses, including reasonable attorneys’ fees, you
incur in investigating and defending any actual or threatened action, suit or proceeding for which
you may be entitled to indemnification under this Section 4(d). However, you agree to repay any
expenses paid or reimbursed by the Company if it is ultimately determined that you are not legally
entitled to be indemnified by the Company. If the Company’s ability to make any payment
contemplated by this Section 4(d) depends on an investigation or determination by the board of
directors of any member of the Group, at your request the Company will use its best efforts to
cause the investigation to be made (at the Company’s expense) and to have the relevant board reach
a determination as soon as reasonably possible. This indemnification will be at least as favorable
as that provided to other senior executives and directors of the Group.
(e) Employee Benefit Plans. During your employment, you will be eligible to participate in
the Group’s employee benefit and welfare plans, including plans providing retirement benefits,
medical, dental, hospitalization, life or disability insurance and 401(k) plan on a basis that is
at least as favorable as that provided to other senior executives of the Group. You shall continue
your current participation in the Company’s Change in Control Severance Policy (the “CIC Severance
Policy”), provided that such participation and any other terms and conditions related to such
participation shall be at the discretion of the Board in accordance with the terms of such CIC
Severance Policy.
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5. Early Termination of Your Employment
(a) No Reason Required. You or the Company may terminate your employment early at any time
for any reason, or for no reason, subject to compliance with Section 5(e).
(b) Termination by the Company for Cause.
(1) “Cause” means any of the following:
(A) Your continued failure, either due to willful action or as a result of
gross neglect, to substantially perform your duties and responsibilities to the
Company and its affiliates (the “Group”) under this Agreement (other than any such
failure resulting from your incapacity due to physical or mental illness) that, if
capable of being cured, has not been cured within thirty (30) days after written
notice is delivered to you, which notice specifies in reasonable detail the manner
in which the Company believes you have not substantially performed your duties and
responsibilities.
(B) Your engagement in conduct which is demonstrably and materially injurious
to the Group, or that materially xxxxx the reputation or financial position of the
Group, unless the conduct in question was undertaken in good faith on an informed
basis with due care and with a rational business purpose and based upon the honest
belief that such conduct was in the best interest of the Group
(C) Your indictment or conviction of, or plea of guilty or nolo contendere to,
a felony or any other crime involving dishonesty, fraud or moral turpitude.
(D) Your being found liable in any SEC or other civil or criminal securities
law action or entering any cease and desist order with respect to such action
(regardless of whether or not you admit or deny liability).
(E) Your breach of your fiduciary duties to the Group which may reasonably be
expected to have a material adverse effect on the Group. However, to the extent the
breach is curable, the Company must give you notice and a reasonable opportunity to
cure.
(F) Your (i) obstructing or impeding, (ii) endeavoring to influence, obstruct
or impede or (iii) failing to materially cooperate with, any investigation
authorized by the Board or any governmental or self-regulatory entity (an
“Investigation”). However, your failure to waive attorney-client privilege relating
to communications with your own attorney in connection with an Investigation shall
not constitute “Cause.”
(G) Your purposely withholding, removing, concealing, destroying, altering or
by any other means falsifying any material which is requested in connection with an
Investigation.
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(H) Your disqualification or bar by any governmental or self-regulatory
authority from serving in the capacity contemplated by this Agreement or your loss
of any governmental or self-regulatory license that is reasonably necessary for you
to perform your responsibilities to the Group under this Agreement, if (a) the
disqualification, bar or loss continues for more than thirty (30) days and (b)
during that period, the Group uses its good faith efforts to cause the
disqualification or bar to be lifted or the license replaced. While any
disqualification, bar or loss continues during your employment, you will serve in
the capacity contemplated by this Agreement to whatever extent legally permissible
and, if your employment is not permissible, you will be placed on leave (which will
be paid to the extent legally permissible).
(I) Your unauthorized use or disclosure of confidential or proprietary
information, or related materials, or the violation of any of the terms of the
Employment and Confidentiality Agreement executed by you or any Company standard
confidentiality policies and procedures, which may reasonably be expected to have a
material adverse effect on the Group and that, if capable of being cured, has not
been cured within thirty (30) days after written notice is delivered to you by the
Company, which notice specifies in reasonable detail the alleged unauthorized use or
disclosure or violation.
(J) Your violation of the Group’s (i) Workplace Violence Policy or (ii)
policies on discrimination, unlawful harassment or substance abuse.
For this definition, no act or omission by you will be “willful” unless it is made by you in bad
faith or without a reasonable belief that your act or omission was in the best interests of the
Group.
(c) Termination by you for Good Reason.
(1) “Good Reason” means any of the following:
(A) Any material and adverse change in your title;
(B) Any material and adverse reduction in your authorities or responsibilities,
or your not being a direct report to the Board, other than any isolated,
insubstantial and inadvertent failure by the Company that is not in bad faith and is
cured promptly on you giving the Company notice;
(C) Any material reduction by the Company in your Base Salary or target level
of Annual Bonus and Long-Term Incentive Awards as set forth in Sections 3(a), (b)
and (c), respectively, other than any such reduction agreed to by you in writing; or
(D) The Company’s material breach of this Agreement, including without
limitation, a breach of Section 11(c) or any purported termination by the Company of
your employment that is in breach of this Agreement.
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; provided that (i) no alleged action, reduction or breach set forth in Sections 5(c)(1)(A) —
(D) above shall be deemed to constitute “Good Reason” unless such action, reduction or breach
remains uncured, as the case may be, after the expiration of thirty (30) days following delivery to
the Company from you of a written notice, setting forth such course of conduct deemed by you to
constitute “Good Reason”; (ii) such written notice must be delivered to the Company within ninety
(90) days after you obtain knowledge of such breach constituting “Good Reason”; and (iii) you must
terminate employment within two years after you obtain knowledge of such breach constituting “Good
Reason”. The Company’s placing you on paid leave for up to ninety (90) consecutive days while it is
determining whether there is a basis to terminate your employment for Cause will not constitute
“Good Reason.”
(d) Termination on Disability or Death.
(1) The term “Disability” means your absence from your responsibilities with the
Company on a full-time basis for 180 business days in any consecutive 12 months as a result
of incapacity due to mental or physical illness or injury. If a doctor mutually acceptable
to you and the Company determines in good faith that your Disability has occurred, the
Company may give you a Termination Notice. If within 30 days of the Termination Notice you
do not return to full-time performance of your responsibilities, your employment will
terminate. If you do return to full-time performance in that 30-day period, the Termination
Notice will be cancelled for all purposes of this Agreement. Except as provided in this
Section 5(d), your incapacity due to mental or physical illness or injury will not affect
the Company’s obligations under this Agreement.
(2) Your employment will terminate automatically on your death. If you die before your
employment starts, all the provisions of this Agreement will also terminate and there will
be no liability of any kind under this Agreement.
(e) Advance Notice Generally Required. Notwithstanding anything else contained in this
Agreement to the contrary, the Company and you each acknowledge and agree that your employment with
the Company may be terminated by either the Company upon 30 days’ written notice to you (subject to
the provisions of Section 6 of this Agreement) or by you upon 90 days’ written notice to the
Company (subject to the provisions of Section 6 of this Agreement), at any time and for any reason,
with or without cause or Good Reason; provided that this Agreement may be terminated immediately
for Cause upon written notice from the Company, subject to compliance with the following sentence.
To terminate you for Cause the Company must deliver to you a copy of a resolution duly adopted by a
majority of the entire Board (excluding you) at a meeting of the Board called and held for such
purpose (after reasonable notice to you and a reasonable opportunity for you and your counsel to be
heard) that finds that in the good faith opinion of the Board, Cause has occurred and states the
basis for that belief. In addition, this Agreement shall automatically terminate upon your death
or disability (determined in accordance with the Company’s practices and policies). The Company
may determine to waive all or part of your 90 days’ notice period at its discretion. Upon
termination of your employment for any reason whatsoever, the Company shall have no further
obligations to you other than those set forth in Section 6 of this Agreement and the continuing
obligation to indemnify you as provided in Section 4(d). The effective date of the Employee’s
termination of employment shall be referred to herein as the “Termination Date.”
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6. The Company’s Obligations in Connection With Your Termination
(a) General Effect. On termination in accordance with Sections 2 and 5, your employment will
end and the Group will have no further obligations to you except as provided in this Section 6 and
the continuing obligation to indemnify you as provided in Section 4(d).
(b) By the Company Without Cause or By You With Good Reason. If, during your Compensation
Period, the Company terminates your employment without Cause or you terminate your employment for
Good Reason:
(1) The Company will pay you the following as of the end of your employment: (i) your
unpaid Salary through the date of termination, (ii) any accrued but unpaid expense
reimbursement, (iii) any unpaid but awarded Bonus and (iv) any vested benefits and other
amounts that you are otherwise entitled to receive under any employee benefit plan, policy,
practice or program of the Company or any of its affiliates, shall be payable in accordance
with such employee benefit plan, policy, practice or program, as the case may be, provided
that you shall not be entitled to receive any other payments or benefits in the nature of
severance or termination pay, except as otherwise provided herein (“Accrued Benefits”).
(2) Any unvested stock options to purchase shares of the Company’s common stock granted
to you by the Group shall immediately vest as of the date of your termination, but will not
be exercisable prior to their original vesting date set forth in the award agreement
governing such stock options. Each individual tranche of stock options shall remain
exercisable for a period of one (1) year following their original vesting date.
(3) You will be eligible to receive the full Bonus for the fiscal year in which
termination occurs, payable at the time bonuses are normally paid and based upon actual
performance of the Company; and
(4) If your termination occurs on or prior to March 31, 2012, the Company will continue
to pay your Salary in accordance with the Company’s normal payroll practices through March
31, 2012.
(5) In addition to the amounts specified in Sections 6(b)(1) — (4) above, if your
termination occurs on or prior to March 31, 2011:
(A) you shall receive an additional payment in an amount equal to the payment,
if any, under Section 6(b)(3) above, payable at the same time the payment under
Section 6(b)(3) is paid; and
(B) in recognition of the lost value of your Long-Term Incentive Awards for any
incomplete performance cycles, the Company will award you restricted stock units
with respect to 270,000 shares of the Company’s common stock ( “RSUs”), to be
granted under the Company’s 2007 Incentive Plan. Your RSUs will be fully vested at
the time of grant, but will not be settled or transferable, until 34%, 33% and 33%
of the underlying shares of the Company’s
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common stock are delivered to you on the first, second and third anniversaries
of your termination date, respectively.
(6) In addition to the amounts specified in Sections 6(b)(1) — (4) above, if your
termination occurs after March 31, 2011, but on or prior to March 31, 2012:
(A) in recognition of the lost value of your Long-Term Incentive Awards for any
incomplete performance cycles, the Company will award you RSUs with respect to
91,000 shares of the Company’s common stock, to be granted under the Company’s 2007
Incentive Plan. Your RSUs will be fully vested at the time of grant, but will not
be settled or transferable, until 34%, 33% and 33% of the underlying shares of the
Company’s common stock are delivered to you on the first, second and third
anniversaries of your termination date, respectively.
(7) All other outstanding awards will be governed by the terms of the applicable plans
and award agreements; provided that, in the case of outstanding one-year and three-year
performance awards under the Company’s 2007 Incentive Plan, you shall be eligible for
special retirement vesting under the provisions of such plan.
(c) Company Non-Renewal of Compensation Period. If the Company elects not to renew your
Compensation Period in accordance with Section 2:
(1) The Company will pay you your Accrued Benefits and Salary through the end of the
Compensation Period.
(2) You will be eligible to receive the full Bonus for the fiscal year in which
termination occurs, payable at time bonuses are normally paid and based upon actual
performance of the Company.
(3) Any unvested stock options to purchase shares of the Company’s common stock granted
to you by the Group shall immediately vest as of the date of your termination, but will not
be exercisable prior to their original vesting date set forth in the award agreement
governing such stock options. Each individual tranche of stock options shall remain
exercisable for a period of one (1) year following their original vesting date.
(4) In addition to the amounts specified in Sections 6(c)(1) — (3) above, if the
Company elects not to renew your Compensation Period for the one-year period beginning April
1, 2012 and ending March 31, 2013, in recognition of the lost value of your Long-Term
Incentive Awards for any incomplete performance cycles, the Company will award you RSUs with
respect to 91,000 shares of the Company’s common stock, to be granted under the Company’s
2007 Incentive Plan. Your RSUs will be fully vested at the time of grant, but will not be
settled or transferable, until 34%, 33% and 33% of the underlying shares of the Company’s
common stock are delivered to you on the first, second and third anniversaries of your
termination date, respectively.
(5) All other outstanding awards will be governed by the terms of the applicable plans
and award agreements; provided that, in the case of outstanding one-year
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and three-year performance awards under the Company’s 2007 Incentive Plan, you shall be
eligible for special retirement vesting under the provisions of such plan.
(d) For Cause or Resignation. If the Company terminates your employment for Cause or you
terminate your employment for any reason other than for Good Reason after providing 90 days’
written notice, the Company will pay your Accrued Benefits.
(e) For Your Disability or Death. If, during the Compensation Period, your employment
terminates as a result of your death or Disability:
(1) The Company will pay your Accrued Benefits.
(2) The Company will pay you a prorated Bonus for the fiscal year in which death or
Disability occurs, payable at time bonuses are normally paid and based upon actual
performance of the Company.
(3) Any unvested stock options to purchase shares of the Company’s common stock granted
to you by the Group shall immediately vest as of the date of your death or Disability, and
shall remain exercisable for a period of one (1) year following the date of your death or
Disability.
(4) All other outstanding awards will be governed by the terms of the applicable plans
and award agreements.
(f) Change in Control. If there is a “Change in Control,” as defined in the CIC Severance
Policy, and you are entitled to the payments and benefits provided in the CIC Severance Policy they
will reduce (but not below zero) the corresponding payment or benefit provided under this
Agreement. It is the intent of this provision to pay or to provide to you the greater of the two
payments or benefits but not to duplicate them.
(g) Condition. The Company will not be required to make the payments and provide the benefits
stated in this Section 6, unless within fifty-five (55) days following the termination of your
employment you execute and deliver to the Company, and do not revoke, an agreement releasing from
all liability (other than the payments and benefits contemplated by this Agreement) each member of
the Group and any of their respective past or present officers, directors, employees or agents.
This agreement will be in the form normally used by the Group senior executives at the time.
(h) Timing. The payments and benefits provided in this Section 6 will begin within sixty (60)
days of the end of your employment, subject to your compliance with the requirements of Section
6(g), but in any event no later than two and one-half (2 1/2) months
following the end of the year in which your employment terminates.
(i) Adjustment. In the event that after the date hereof and the date of your termination of
employment the Company adjusts outstanding RSUs pursuant to Section 5.3 of the Company’s 2007
Incentive Plan, then the number of shares of the Company’s common stock underlying your RSU awards
in Sections 6(b)(5)(B), 6(b)(6)(A) or 6(c)(4) of this Agreement shall be subject to the same such
adjustment. Any Bonus or Long-Term Incentive Award
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Payment to be made after your termination of employment shall be subject to negative
discretion as determined by the Board; provided, however, that negative discretion shall only be
applied if, and to the extent, it is applied generally to the executive management team.
7. Proprietary Information
(a) Definition. “Proprietary Information” means confidential or proprietary information,
knowledge or data concerning (1) the Group’s businesses, strategies, operations, financial affairs,
organizational matters, personnel matters, budgets, business plans, marketing plans, studies,
policies, procedures, products, ideas, processes, software systems, trade secrets and technical
know-how, (2) any other matter relating to the Group and (3) any matter relating to clients of the
Group or other third parties having relationships with the Group. Proprietary Information includes
(1) information regarding any aspect of your tenure as an employee of the Group or the termination
of your employment, (2) the names, addresses, and phone numbers and other information concerning
clients and prospective clients of the Group, (3) investment techniques and trading strategies used
in, and the performance records of, client accounts or other investment products, and (4)
information and materials concerning the personal affairs of employees of the Group. In addition,
Proprietary Information may include information furnished to you orally or in writing (whatever the
form or storage medium) or gathered by inspection, in each case before or after the date of this
Agreement. However, Proprietary Information does not include information (1) that was or becomes
generally available to the public, other than as a result of a disclosure by you, directly or
indirectly, or as a result of the violation by a third party of the Group’s confidentiality rights,
or (2) that you can establish was independently developed by you without reference to any
Proprietary Information.
(b) Use and Disclosure. You will obtain or create Proprietary Information in the course of
your involvement in the Group’s activities and may already have Proprietary Information. You agree
that the Proprietary Information is the exclusive property of the Group, and that, during your
employment, you will use and disclose Proprietary Information only for the Group’s benefit and in
accordance with any restrictions placed on its use or disclosure by the Group. After your
employment, you will not use or disclose any Proprietary Information. In addition, nothing in this
Agreement will operate to weaken or waive any rights that the Group may have under statutory or
common law, or any other agreement, to the protection of trade secrets, confidential business
information and other confidential information.
(c) Limitations. Nothing in this Agreement prohibits you from providing truthful testimony or
information concerning the Group to governmental, regulatory or self-regulatory authorities. Also,
the parties (and their respective employees, representatives and agents) may disclose to any and
all persons, without any limitation of any kind, the tax treatment and tax structure of this
Agreement and all materials of any kind (including opinions and other tax analysis) that are
provided to either party related to such tax treatment and structure.
8. Ongoing Restrictions on Your Activities
(a) General Effect. This Section 8 applies during your employment and for the 24-month period
after your employment ends. This Section uses the following defined terms:
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“Competitive Enterprise” means any business enterprise that either (1) engages in any
material activity that competes anywhere with any material activity in which the Group is
then engaged or (2) holds a 5% or greater equity, voting or profit participation interest in
any enterprise that engages in such a competitive activity.
“Client” means any client or prospective client of the Group to whom you provided
services, or for whom you transacted business, or whose identity became known to you in
connection with your relationship with or employment by the Group.
“Solicit” means any direct or indirect communication of any kind, regardless of who
initiates it, that in any way invites, advises, encourages or requests any person to take or
refrain from taking any action. A general employment advertisement by an entity of which
you are a part is excluded from the definition of Solicit.
(b) Your Importance to the Group and the Effect of this Section 8. You acknowledge that:
(1) In the course of your involvement in the Group’s activities, you will have access
to Proprietary Information and the Group’s client base and will profit from the goodwill
associated with the Group. On the other hand, in view of your access to Proprietary
Information and your importance to the Group, if you compete with the Group for some time
after your employment, the Group will likely suffer significant harm. In return for the
benefits you will receive from the Group and to induce the Group to enter into this
Agreement, and in light of the potential harm you could cause the Group, you agree to the
provisions of this Section 8. The Company would not have entered into this Agreement if you
did not agree to this Section 8.
(2) In light of Section 8(b)(1), if you breach any provision of this Section 8, the
loss to the Company would be material but the amount of loss would be uncertain and not
readily ascertainable.
(3) This Section 8 limits your ability to earn a livelihood in a Competitive Enterprise
and your relationships with Clients. You acknowledge, however, that complying with this
Section 8 will not result in severe economic hardship for you or your family.
(c) Your Payment Obligations. If you fail to comply with this Section 8 during the
Compensation Period and for a 24-month period thereafter, you will forfeit all remaining payments
owed to you under Section 6.
(d) Non-Competition. During your Compensation Period and for a 24-month period after
termination of your employment, you will not directly or indirectly:
(1) hold a 10% or greater equity, voting or profit participation interest in a
Competitive Enterprise; or
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(2) associate (including as a director, officer, employee, partner, consultant, agent
or advisor) with a Competitive Enterprise and in connection with your association engage, or
directly or indirectly manage or supervise personnel engaged, in any activity:
(A) that is substantially related to any activity that you were engaged in,
(B) that is substantially related to any activity for which you had direct or
indirect managerial or supervisory responsibility, or
(C) that calls for the application of specialized knowledge or skills
substantially related to those used by you in your activities;
in each case, for the Group at any time during the year before the end of your employment (or,
if earlier, the year before the date of determination).
(e) Non-Solicitation of Clients. During your Compensation Period and for a 24-month period
after termination of your employment, you will not attempt to:
(1) Solicit any Client to transact business with a Competitive Enterprise or to reduce
or refrain from doing any business with the Group (excluding any business that is not a
material activity of the Group),
(2) transact business with any Client that would cause you to be a Competitive
Enterprise or that would cause any Client to reduce or refrain from doing any business with
the Group, or
(3) interfere with or damage any relationship between the Group and a Client.
(f) Non-Solicitation of Group Employees. During your Compensation Period and for a 24-month
period after termination of your employment, you will not attempt to Solicit anyone who is then an
employee of the Group (or who was an employee of the Group within the prior three (3) months) to
resign from the Group or to apply for or accept employment with any Competitive Enterprise, except
that you may Solicit your administrative assistant.
(g) Notice to New Employers. Before you either apply for or accept employment with any other
person or entity while any of Section 8(d), (e) or (f) is in effect, you will provide the
prospective employer with written notice of the provisions of this Section 8 and will deliver a
copy of the notice to the Group.
9. No Public Statements or Disparagement
You agree that you will not make any public statement that would libel, slander or disparage any
member of the Group or any of their respective past or present officers, directors, employees or
agents. This Section 9 is subject to Section 7(c).
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10. Effect on Other Agreements; Entire Agreement
This Agreement along with your Interim Executive Chairman pay arrangements are the entire agreement
between you and the Company with respect to the relationship contemplated by this Agreement and
supersedes any earlier agreement, written or oral, with respect to the subject matter of this
Agreement. In entering into this Agreement, no party has relied on or made any representation,
warranty, inducement, promise or understanding that is not in this Agreement. You hereby
acknowledge that you are not subject to any obligation which would in any way restrict the
performance of your duties hereunder.
11. Successors
(a) Payments on Your Death. If you die and any amounts become payable under this Agreement,
we will pay those amounts to your estate.
(b) Assignment by You. You may not assign this Agreement without the Company’s consent.
Also, except as required by law, your right to receive payments or benefits under this Agreement
may not be subject to execution, attachment, levy or similar process. Any attempt to effect any of
the preceding in violation of this Section 11(b), whether voluntary or involuntary, will be void.
(c) Assumption by any Surviving Company. Before the effectiveness of any merger,
consolidation, statutory share exchange or similar transaction (including an exchange offer
combined with a merger or consolidation) involving the Company (a “Reorganization”) or any sale,
lease or other disposition (including by way of a series of transactions or by way of merger,
consolidation, stock sale or similar transaction involving one or more subsidiaries) of all or
substantially all of the Company’s consolidated assets (a “Sale”), the Company will cause (1) the
Surviving Company to unconditionally assume this Agreement in writing and (2) a copy of the
assumption to be provided to you. After the Reorganization or Sale, the Surviving Company will be
treated for all purposes as the Company under this Agreement. The “Surviving Company” means (i) in
a Reorganization, the entity resulting from the Reorganization or (ii) in a Sale, the entity that
has acquired all or substantially all of the assets of the Company.
12. Disputes
(a) Employment Matter. This Section 12 applies to any controversy or claim between you and
the Group arising out of or relating to or concerning this Agreement or any aspect of your
employment with the Group or the Seller or the termination of that employment (together, an
“Employment Matter”).
(b) Mandatory Arbitration. Subject to the provisions of this Section 12, any Employment
Matter will be finally settled by arbitration in the County of New York administered by the
American Arbitration Association under its Commercial Arbitration Rules then in effect. However,
the rules will be modified in the following ways: (1) the decision must not be a compromise but
must be the adoption of the submission by one of the parties, (2) each arbitrator will agree to
treat as confidential evidence and other information presented to the same extent as the
information is required to be kept confidential under Section 7, (3) there will be no authority to
amend or modify the terms of this Agreement except as
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provided in Section 14(c) (and you and the Group agree not to request any such amendment or
modification), (4) a decision must be rendered within 10 business days of the parties’ closing
statements or submission of post-hearing briefs and (5) the arbitration will be conducted before a
panel of three arbitrators, one selected by you within 10 days of the commencement of arbitration,
one selected by the Company in the same period and the third selected jointly by these arbitrators
(or, if they are unable to agree on an arbitrator within 30 days of the commencement of
arbitration, the third arbitrator will be appointed by the American Arbitration Association;
provided that the arbitrator shall be a partner or former partner at a nationally recognized law
firm).
(c) Limitation on Damages. You and the Group agree that there will be no punitive damages
payable as a result of any Employment Matter and agree not to request punitive damages.
(d) Injunctions and Enforcement of Arbitration Awards. You or the Group may bring an action
or special proceeding in a state or federal court of competent jurisdiction sitting in the County
of New York to enforce any arbitration award under Section 12(b). Also, the Group may bring such
an action or proceeding, in addition to its rights under Section 12(b) and whether or not an
arbitration proceeding has been or is ever initiated, to temporarily, preliminarily or permanently
enforce any part of Sections 7 and 8. You agree that (1) your violating any part of Sections 7 and
8 would cause damage to the Group that cannot be measured or repaired, (2) the Group therefore is
entitled to an injunction, restraining order or other equitable relief restraining any actual or
threatened violation of those Sections, (3) no bond will need to be posted for the Group to receive
such an injunction, order or other relief, (4) no proof will be required that monetary damages for
violations of those Sections would be difficult to calculate and that remedies at law would be
inadequate and (5) the General Counsel of the Company is irrevocably appointed as your agent for
service of process in connection with any such action or proceeding (the General Counsel will
promptly advise you of any such service of process).
(e) Jurisdiction and Choice of Forum. You and the Group irrevocably submit to the exclusive
jurisdiction of any state or federal court located in the County of New York over any Employment
Matter that is not otherwise arbitrated or resolved according to Section 12(b). This includes any
action or proceeding to compel arbitration or to enforce an arbitration award. Both you and the
Group (1) acknowledge that the forum stated in this Section 12(e) has a reasonable relation to this
Agreement and to the relationship between you and the Group and that the submission to the forum
will apply even if the forum chooses to apply non-forum law, (2) waive, to the extent permitted by
law, any objection to personal jurisdiction or to the laying of venue of any action or proceeding
covered by this Section 12(e) in the forum stated in this Section, (3) agree not to commence any
such action or proceeding in any forum other than the forum stated in this Section 12(e) and (4)
agree that, to the extent permitted by law, a final and non-appealable judgment in any such action
or proceeding in any such court will be conclusive and binding on you and the Group. However,
nothing in this Agreement precludes you or the Group from bringing any action or proceeding in any
court for the purpose of enforcing the provisions of Sections 12(b) and this 12(e).
(f) Waiver of Jury Trial. To the extent permitted by law, you and the Group waive any and all
rights to a jury trial with respect to any Employment Matter.
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(g) Governing Law. This Agreement will be governed by and construed in accordance with the
law of the State of New York applicable to contracts made and to be performed entirely within that
State.
(h) Costs. To the extent permitted by law, the Company will reimburse any reasonable
expenses, including reasonable attorneys’ fees, you incur as a result of any Employment Matter,
provided that you prevail on a material issue in such dispute. Additionally, the Company will
reimburse your reasonable attorneys’ fees, not to exceed $50,000, incurred to negotiate this
Employment Agreement. Any reimbursements made to you by the Company under this Section 12(h) will
be paid to you as soon as practicable but in no event later than the end of the calendar year
following the year in which such reimbursable expenses were incurred.
13. Representations.
(a) You represent that your employment hereunder will not violate any law or duty by which you
are bound, and will not conflict with or violate any agreement or instrument to which you are a
party or by which you are bound.
(b) You acknowledge that (1) all cash and equity incentive awards granted to you shall be
subject to recapture under the Company’s clawback policy as currently in effect and as may be
amended from time to time and (2) you will be subject to the Company’s stock ownership guidelines
as currently in effect and as may be amended from time to time.
14. | General Provisions. |
(a) Construction.
(1) References (A) to Sections are to sections of this Agreement unless otherwise
stated; (B) to any contract (including this Agreement) are to the contract as amended,
modified, supplemented or replaced from time to time; (C) to any statute, rule or regulation
are to the statute, rule or regulation as amended, modified, supplemented or replaced from
time to time (and, in the case of statutes, include any rules and regulations promulgated
under the statute) and to any section of any statute, rule or regulation include any
successor to the section; (D) to any governmental authority include any successor to the
governmental authority; (E) to any plan include any programs, practices and policies; (F) to
any entity include any corporation, limited liability company, partnership, association,
business trust and similar organization and include any governmental authority; and (G) to
any affiliate of any entity are to any person or other entity directly or indirectly
controlling, controlled by or under common control with the first entity.
(2) The various headings in this Agreement are for convenience of reference only and in
no way define, limit or describe the scope or intent of any provisions or Sections of this
Agreement.
(3) Unless the context requires otherwise, (A) words describing the singular number
include the plural and vice versa, (B) words denoting any gender include all
15
genders and (C) the words “include,” “includes” and “including” will be deemed to be
followed by the words “without limitation.”
(4) It is your and the Group’s intention that this Agreement not be construed more
strictly with regard to you or the Group.
(b) Withholding. You and the Group will treat all payments to you under this Agreement as
compensation for services. Accordingly, the Group may withhold from any payment any taxes that are
required to be withheld under any law, rule or regulation.
(c) Severability. If any provision of this Agreement is found by any court of competent
jurisdiction (or legally empowered agency) to be illegal, invalid or unenforceable for any reason,
then (1) the provision will be amended automatically to the minimum extent necessary to cure the
illegality or invalidity and permit enforcement and (2) the remainder of this Agreement will not be
affected. In particular, if any provision of Section 8 is so found to violate law or be
unenforceable because it applies for longer than a maximum permitted period or to greater than a
maximum permitted area, it will be automatically amended to apply for the maximum permitted period
and maximum permitted area.
(d) No Set-off or Mitigation. Except as provided in Section 8(c) or if your employment is
terminated by the Company for Cause, your and the Company’s respective obligations under this
Agreement will not be affected by any set-off, counterclaim, recoupment or other right you or any
member of the Group may have against each other or anyone else. You do not need to seek other
employment or take any other action to mitigate any amounts owed to you under this Agreement.
(e) Notices. All notices, requests, demands and other communications under this Agreement
must be in writing and will be deemed given (1) on the business day sent, when delivered by hand or
facsimile transmission (with confirmation) during normal business hours, (2) on the business day
after the business day sent, if delivered by a nationally recognized overnight courier or (3) on
the third business day after the business day sent if delivered by registered or certified mail,
return receipt requested, in each case to the following address or number (or to such other
addresses or numbers as may be specified by notice that conforms to this Section 14(e)):
If to you, to your address then on file with the Company’s payroll department.
If to the Company or any other member of the Group, to:
CA, Inc.
World Headquarters
Xxx XX Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
World Headquarters
Xxx XX Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
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(f) Consideration. This Agreement is in consideration of the mutual covenants contained in
it. You and the Group acknowledge the receipt and sufficiency of the consideration to this
Agreement and intend this Agreement to be legally binding.
(g) Amendments and Waivers. Any provision of this Agreement may be amended or waived but only
if the amendment or waiver is in writing and signed, in the case of an amendment, by you and the
Company or, in the case of a waiver, by the party that would have benefited from the provision
waived. Except as this Agreement otherwise provides, no failure or delay by you or the Group to
exercise any right or remedy under this Agreement will operate as a waiver, and no partial exercise
of any right or remedy will preclude any further exercise.
(h) Third-Party Beneficiaries. Subject to Section 11, this Agreement will be binding on,
inure to the benefit of and be enforceable by the parties and their respective heirs, personal
representatives, successors and assigns. This Agreement does not confer any rights, remedies,
obligations or liabilities to any entity or person other than you and the Company and your and the
Company’s permitted successors and assigns, although (1) this Agreement will inure to the benefit
of the Group and (2) Section 11(a) will inure to the benefit of the most recent persons named in a
notice under that Section.
(i) Counterparts. This Agreement may be executed in counterparts, each of which will
constitute an original and all of which, when taken together, will constitute one agreement.
However, this Agreement will not be effective until the date both parties have executed this
Agreement.
(j) Section 409A. The parties agree that this Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder (“Section 409A”) or an exemption from Section 409A. In the event that after
execution of this Agreement either party makes a determination inconsistent with the preceding
sentence, it shall promptly notify the other party of the basis for its determination. The parties
agree to renegotiate in good faith the terms of this Agreement at no additional cost to the
Company, if you determine that this Agreement as structured would have adverse tax consequences to
you under applicable law. To extent that you would otherwise be entitled to any payment under this
Agreement or any plan or arrangement of the Company or its affiliates, that constitutes “deferred
compensation” subject to Section 409A and that if paid during the six months beginning on the
Termination Date would be subject to the Section 409A additional tax because you are a “specified
employee” (within the meaning of Section 409A and as determined by the Company), the payment will
be paid to you on the earlier of the six-month anniversary of the Termination Date, a change in
ownership or effective control of the Company (within the meaning of Section 409A and to the extent
permitted by Section 409A) or your death. Similarly, to the extent that you would otherwise be
entitled to any benefit (other than a payment) during the six months beginning on the Termination
Date 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-month anniversary of the Termination Date, a change
in ownership or effective control of the Company (within the meaning of Section 409A and to the
extent permitted by Section 409A) or your death. In addition, any payment or benefit due upon a
termination of employment that represents a “deferral of compensation” within the meaning of
Section 409A shall be paid or provided to you only upon a “separation from service” as defined in
Treas. Reg.
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1.409A-1(h). To the extent applicable, each severance payment made under this Agreement shall
be deemed to be separate payments, amounts payable under Section 6 of this Agreement shall be
deemed not to be a “deferral of compensation” subject to Section 409A to the extent provided in the
exceptions in Treas. Reg. 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 Treas.
Reg. 1.409A-1 through 1.409A-6.
Notwithstanding anything to the contrary in this Agreement or elsewhere, any payment or
benefit under this Agreement or otherwise that is exempt from Section 409A pursuant to Treas. Reg.
1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to you only to the extent that the expenses
are not incurred, or the benefits are not provided, beyond the last day of the second taxable year
following the taxable year in which the “separation from service” occurs; and provided further,
that such expenses shall be reimbursed no later than the last day of the third taxable year
following the taxable year in which your “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 Agreement 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 calendar year (except for any
life-time 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
you 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.
Accepted and agreed to:
|
Very truly yours, | |||
/s/ Xxxxxxx X. XxXxxxxxx
|
/s/ Xxxxxx Xxxxxxx
|
|||
Xxxxxxx X. XxXxxxxxx May 6, 2010 |
Xxxxxx Xxxxxxx Executive Vice President, Global Human Resources CA, Inc. |
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