EXHIBIT 10.16
Consulting and Non-Compete Agreement, dated as of June 1, 1999 (the
"Agreement"), by and between Computer Associates International, Inc.,
a Delaware corporation (the "CA"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the
"Consultant").
CA and PLATINUM technology International, inc. ("Platinum") entered into a
Merger Agreement (the "Merger Agreement"), pursuant to which Platinum will
become a subsidiary of CA. The Consultant is a senior executive of Platinum,
has unique knowledge of Platinum's business and has occupied a position of trust
and confidence. CA and the Consultant desire that, effective upon the merger
described in the Merger Agreement, the Consultant will continue as a consultant
to the CA to assist CA with respect to such matters and act as a liaison between
CA and Platinum for all purposes related to the orderly consolidation of the
operations of CA and Platinum, and will agree to refrain from competing with CA,
all as set forth in this Agreement.
In consideration of the mutual agreements, the Consultant and CA agree as
follows:
1. Services. (a) The Consultant agrees, at the request of CA, 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 Consultant's current
compensation.
(b) For the Consulting Period (as defined in Section 2), the
Consultant shall provide from time to time and as requested by CA, the
consulting services set forth in Schedule A (the "Services"). The Consultant
shall report to a Senior Vice President of CA. The Consultant shall devote such
time and energy to the business of CA 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). CA shall not
require the Consultant to travel a greater amount than in connection with his
current employment.
2. Term. The Consultant and CA agree that the consulting period (the
"Consulting Period") will begin on the later of: (i) the Effective Date (as
defined in Section 7); and (ii) the date the transition employment services
under Section 1(a) end; and the Consulting Period will end on the second (2/nd/)
anniversary of such 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 CA or the Consultant, on 30 days written notice,
as provided in Section 4.
3. Consulting Fee. Commencing on the Effective Date, CA shall pay the
Consultant a consulting fee at the annual rate of $260,000, payable in two (2)
equal payments made within thirty (30) days from: (i) the Effective Date; and
(ii) the first anniversary of the Effective Date. CA 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 CA terminates the
Consulting Period without Cause prior to the second (2/nd/) anniversary of the
Effective Date, the Consultant shall be entitled to continued payment of all
consulting fees.
(b) Termination for Cause. If (i) CA 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 CA, (B) the Consultant's conviction of a felony, or (C) any
willful misconduct by the Consultant resulting in substantial loss to CA,
substantial damage to CA's reputation or judicially determined theft or
misappropriation from CA.
(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 CA cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to the Consultant and CA.
If the Consultant and CA 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 CA shall be final and conclusive for all
purposes.
(d) General. Upon the termination of the Consulting Period, for any
reason, (i) CA 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, CA's payment of the non-compete payment and entering
into this Agreement, and in connection with the merger described herein, until
the second (2/nd/) 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):
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(i) participate or engage in any activities or business developing,
manufacturing, marketing or distributing any products or services offered
by CA as of the Effective Date (such "products or services offered by CA as
of the Effective Date" shall relate only to those products and services
acquired by CA as a result of its acquisition of Platinum), or any products
or services offered by CA subsequent to the Effective Date and in which the
Consultant actively participated, recognizing that CA 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 CA, 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 CA or an affiliate of CA (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 CA, Platinum, its and their subsidiaries, its and
their predecessor or successor entities and assigns (collectively,
"Employer") or which received services of the type described above from any
office or employee of Employer 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 CA (or any of its affiliates), including without limitation:
(A) soliciting, recruiting or hiring any employees of CA (or any of its
affiliates) or persons who have worked for CA (or any of its affiliates) at
any time since January 1, 1998; and (B) soliciting or encouraging any
employee of CA (or any of its affiliates) to leave the employment of CA.
(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 in 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
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(ii) for which CA has given permission in writing, which shall not be
unreasonably withheld (or delayed) after the first (1/st/) anniversary of
the Effective Date, provided Consultant's engaging in such activities or
business would not have a material adverse impact on any of CA's lines of
business.
(c) (i) The Consultant shall not, without the written consent of CA,
disclose to any other person or use, whether directly or indirectly, any
Confidential Information relating to or used by Employer, whether in written,
oral or other form, except in connection with the performance of his duties
hereunder. "Confidential Information" shall mean information about Employer or
any of its affiliates, and their clients and customers that is not disclosed by
Employer for financial reporting purposes and that was learned by the Consultant
in the course of employment by Employer 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 Employer relating to their education, experience,
skills, abilities, compensation and benefits, and inter-personal relationships
with suppliers to and customers of Employer, 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 Employer, and that such
information gives Employer a competitive advantage. The Consultant's
obligations under this Section 5(c) 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.
(ii) 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 Employer, provided that source is
not bound with respect to that information by a confidentiality agreement with
Employer or otherwise prohibited from transmitting that information by a
contractual, legal or other obligation.
(iii) 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 CA with prompt notice of any such
request or requirement so that CA 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, CA to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be
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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 CA 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 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(f). Nothing contained in this Section 5 or elsewhere in this
Agreement shall be construed as prohibiting CA 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, CA shall pay the Consultant the following non-compete payments: (i) $400,000
payable within thirty (30) days from the Effective Date; and (ii) $100,000
payable within 30 days of the first anniversary of the Effective Date.
(g) By executing this Agreement, Consultant assigns and transfers to
Employer all his right, title, and interest in and to all intellectual property
created, developed, conceived, or reduced to practice while employed as a
Consultant or employee of Employer arising in connection with the Services.
While he is employed by Employer and when he ceases to be employed by Employer,
Consultant shall fully and promptly disclose in writing to Employer, and hold in
trust for the sole right and benefit of Employer, 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,
Employer (collectively "Intellectual Property"), whether or not patentable or
capable
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of copyright or trademark registration, and whether or not created, conceived,
developed, or reduced to practice at the request of Employer or during normal
working hours. While employed by Employer 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 Employer to create, enforce, or evidence Employer's rights to any
Intellectual Property.
6. Cooperation. (a) The Consultant agrees to cooperate with Employer at
all times (including following termination of the Consulting Period for any
reason) by making himself reasonably available to testify on behalf of Employer,
in any action, suit or proceeding, whether civil, criminal, administrative, or
investigative and to assist Employer in any such action, suit, or proceeding by
providing information and meeting and consulting with Employer or
representatives or counsel to Employer, as reasonably requested by such
representatives or counsel. The Consultant shall be reimbursed by CA 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 CA and Platinum in
connection with filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1978 and in connection with resolving any investigation or other inquiry of
any governmental entity under the antitrust laws.
7. Conditions to Effectiveness. The Effective Date of this Agreement
(the "Effective Date") shall be the date that the merger of CA and a wholly-
owned subsidiary of CA, becomes effective pursuant to the Merger Agreement. In
the event the Merger Agreement terminates, this Agreement shall terminate.
8. Duties on Termination. At CA's request at any time or upon
termination of the Consulting Period for any reason, the Consultant agrees to
deliver promptly to CA 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 Employer'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:
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If to CA: Computer Associates International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to the Consultant: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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,
arrangements, representations and understandings between the parties or their
predecessors and/or affiliates relating to Consultant's employment, severance
benefits, termination payments, and the like. The Consultant acknowledges and
agrees that neither CA 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.
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 CA. Any such
assignment in the absence of such written consent shall be void. CA may assign
this Agreement to any successor to CA or a substantial part of CA's business or
assets 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 CA 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 CA has or may have against the Consultant
solely in connection with expenses incurred or non-monetary CA resources used,
by the Consultant in the performance of his ordinary course duties as an officer
and/or employee of CA, provided that Consultant is not released from any
liability pursuant to this Agreement. Upon the Effective Date, CA is hereby
released from, and the Consultant waives any and all liability, claims, damages,
causes of action, judgments (including any of the foregoing with respect to
costs, penalties, losses and expenses) the Consultant incurred, or non-monetary
CA resources used, in the performance of his ordinary course duties as an
officer and/or employee of CA, provided that CA 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 described
in the Merger Agreement. For purposes of this Section 16, the term "CA" shall
be construed to include CA, Platinum, its and their subsidiaries, and its and
their predecessor or successor entities and assigns.
CA 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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Consultant
Computer Associates International, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice 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