----- Original Message -----
Sent: Saturday, October 23, 2004 7:38 PM
Subject: Friday filing of "change in control severance policy"
Item
1.01 Entry into a Material Definitive Agreement
On October 18,
2004, the Board of Directors of Computer Associates International, Inc.
(the “Company”), on the recommendation of the Compensation and Human
Resource Committee of the Board of Directors, approved a change in control
severance policy (the “Policy”) that covers such senior executives of the
Company as the Board of Directors may designate from time to time.
Currently, eight executives of the Company are covered by the Policy; in
addition, the Company’s permanent Chief Executive Officer and Chief
Financial Officer, when elected, are expected to be covered by the Policy.
The Policy provides
for certain payments and benefits in the event that, following a change in
control or potential change in control of the Company, a covered
executive’s employment is terminated either without cause by the Company
or for good reason by the executive. The amount of the severance payment
would range from 1.0 to 2.99 times an executive’s annual base salary and
bonus as determined from time to time by the Board of Directors, as
specified in Schedules A, B and C to the Policy. The Policy also provides
the following additional benefits: (a) pro-rated target bonus payments for
the year of termination, (b) a payment equaling the cost of 18 months’
continued health coverage, (c) one year of outplacement services, (d) if
applicable, certain relocation expenses, and (e) payments to make the
executive whole with respect to excise taxes under certain conditions.
Under the Policy, a “change in control” would include, among other things,
(a) the acquisition of more than 35% of the Company’s voting power, (b) a
change in a majority of the incumbent members of the Company’s Board of
Directors, (c) the sale of all or substantially all the Company’s assets,
(d) the consummation of certain mergers or other business combinations,
and (e) stockholder approval of a plan of liquidation or dissolution.
Although the Policy
became effective upon its adoption by the Company’s Board of Directors on
October 18, 2004, the Board of Directors intends to submit the Policy to a
stockholder vote at the Company’s 2005 Annual Meeting of Stockholders.
The foregoing
description of the Policy does not purport to be complete and is qualified
in its entirety by reference to the Policy (including the schedules and
exhibits thereto), a copy of which is filed as Exhibit 10.1 hereto and is
incorporated by reference herein.
Item
9.01 Financial Statements and Exhibits
(c) Exhibits.