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