Exhibit 99(4)
CONSULTING AND NON-COMPETE AGREEMENT, dated as of February 5,
1999 (the "AGREEMENT"), by and between Computer Management
Sciences, Inc., a Florida corporation (the "COMPANY"), and
Xxxxx X. Xxxxx (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, 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. CONSULTING SERVICES. 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 the Company. 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.
2. TERM. The Consultant and the Company agree that the
consulting period (the "CONSULTING PERIOD") begins on the Effective Date (as
defined in Section 7) 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 an annual consulting fee of $250,000, payable
in advance on the Effective Date and the first anniversary of the Effective
Date.
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 (i) the
Consultant's breach of any material term of this Agreement, including, but not
limited to, the covenants set forth in Section 5 hereof; (ii) the Consultant's
continued willful failure or refusal, after written notice, to perform his
duties hereunder, (iii) the Consultant's conviction of a felony or of any crime
involving moral turpitude, fraud or misrepresentation, or
(iv) any gross negligence or willful misconduct by the Consultant resulting in
substantial loss to the Company, substantial damage to the Company's reputation
or theft or defalcation from the Company.
(c) TERMINATION UPON DEATH OR DISABILITY. If the Consultant
dies or becomes Disabled, in which event the Consulting Period terminates, 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 preventing the Consultant from
performing his duties 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 by the terms of this Agreement
other than Section 1.
5. NON-COMPETITION; CONFIDENTIALITY; PAYMENTS. (a) In
consideration for, and as a condition to, the Company's payment of the
non-compete payment, and in connection with the merger described herein, until
the fifth anniversary of the Effective Date, 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 1% of the
outstanding stock of any class of any such corporation):
(i) participate or engage in any activities or
business involving, or relating to, (I) the provision of information
technology consulting and custom software development services, (II)
any other business or activity engaged in by the Company on the date of
this Agreement, or any other business or activity engaged in by the
Company in the future and in which the Consultant actively participated
or (III) any business or activity of any affiliate of the Company in
which the Consultant actively participated (or, in each case of I, II
and III, in any activities or business that are incidental thereto)
within the United States of America ("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 or traditional 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 fewer than
three such
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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 and (B) soliciting or encouraging any employee of the
Company (or any of its affiliates) to leave the employment of the
Company.
(b) 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.
(c) (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)
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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 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.
(d) 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.
(e) 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 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 payment made pursuant to
Section 5(f). 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.
(f) In consideration of the Consultant's covenants under this
Section 5, the Company shall pay the Consultant on the Effective Date a
non-compete payment in the sum of $9,500,000.
(g) 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
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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, knowledge,
and information that Consultant solely or jointly knows, creates, conceives,
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 thereof), that are requested and
reasonably required by the Company to create, enforce, or evidence the Company's
rights to any Intellectual Property. If the Company is unable for any reason
whatsoever to obtain Consultant's signature or assistance, Consultant
irrevocably appoints the Company and each of its officers as his agent and
attorney-in-fact, with full power of substitution, to sign, execute, and file in
the name and on behalf of Consultant any document required to prosecute or apply
for any foreign or United States patent, copyright, trademark, or other
proprietary protection, including renewals, extensions, and divisions, and to do
all other lawful acts and things to further the issuance or prosecution of
patent, copyright, trademark, or other proprietary protection, all with the same
legal force and effect as if done or executed by Consultant.
6. COOPERATION WITH REGARD TO LITIGATION. 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.
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.
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 equipment, 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), relating to the Company's business, which are or have been in his
possession or under his control.
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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 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: Computer Management Sciences, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: X. Xxxxxx Xxxx
President and Chief
Operating Officer
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
If to the Consultant:
Xxxxx X. Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 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.
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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.
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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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/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
COMPUTER MANAGEMENT SCIENCES, INC.
By: /S/ X. XXXXXX XXXX
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Name: X. Xxxxxx Wise
Title: President and Chief
Operating Officer
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SCHEDULE A
DESCRIPTION OF CONSULTING SERVICES
Transition Services
Integration Services
Customer Relations and Retention
Employee Relations and Retention
Strategic Planning
