Computer Associates 2006 Annual Report Download - page 94

Long-Term Incentive Plan — Awards in Last Fiscal Year
The following table provides information on awards under the Company’s Long-Term Incentive Plan to the Named
Executive Officers relating to the fiscal year ended March 31, 2006.
Name
Number of
Shares, Units
or Other
Rights(1)
Performance
or Other
Period Until
Maturation
or Payout Threshold (#) Target (#) Maximum (#)
Estimated Future Payouts
Under Non-Stock Price-Based Plans
John A. Swainson .......... 64,200 3/31/08 0 64,200 128,400
Russell M. Artzt ........... 38,500 3/31/08 0 38,500 77,000
Michael Christenson ........ 28,300 3/31/08 0 28,300 56,600
Jeff Clarke ............... 45,000 3/31/08 0 45,000 90,000
Greg Corgan.............. 25,700 3/31/08 0 25,700 51,400
Gary Quinn .............. 19,300 3/31/08 0 19,300 38,600
(1) As part of the Long-Term Incentive Bonus program for fiscal year 2006, participants are eligible to receive unrestricted shares of Common
Stock after the completion of a three-year performance period beginning on April 1, 2005 and ending on March 31, 2008. The targets for
this three-year cycle are based on (i) average three-year adjusted net income growth and (ii) average three-year return on invested capital,
each responsible for determining one-half of the payout under the award. The actual award can range from 0 to 200% of the target amount.
The right to receive shares is forfeited upon a termination of employment that occurs prior to March 31, 2008, unless it is a termination
without cause (as defined under the program), in which case the executive may be eligible for a pro-rated grant at the end of the performance
period based on the portion of the period during which the executive was employed. In all cases, the Compensation and Human Resource
Committee of the Board of Directors has discretion to reduce the amount of any award for any reason.
Employment Agreements; Severance Arrangements; Change in Control Arrangements
John A. Swainson (President and Chief Executive Officer)
John A. Swainson was named President and Chief Executive Officer-elect of the Company in November 2004, and
was subsequently named Chief Executive Officer in February 2005. Under his employment agreement,
Mr. Swainson received (i) an initial stock option grant for 350,000 shares of Common Stock with an exercise
price equal to the fair market value of the Common Stock on the date of grant and a ten-year term, vesting
approximately one-third per year beginning one year after the date of grant; (ii) an initial restricted stock grant of
100,000 shares of Common Stock vesting approximately one-third per year beginning one year after the date of
grant; (iii) a cash signing bonus of $2,500,000; and (iv) restricted stock units with respect to 100,000 shares of
Common Stock, which include dividend equivalents rights on underlying shares based on dividends paid to
stockholders and which will be delivered six months after Mr. Swainson’s employment terminates for any reason. In
respect of certain benefits he would have received had he remained employed with IBM, the Company credited to a
deferred compensation account and deposited $2,835,000 into a “rabbi trust” (as described below in the “Chief
Executive Officer Compensation” section of the Compensation and Human Resource Committee Report on
Executive Compensation). Under his employment agreement, Mr. Swainson was awarded an initial annual base
salary of $1,000,000 (payable in cash) and is eligible to receive a target annual cash bonus equal to at least 100% of
his annual base salary. Details relating to his fiscal year 2006 Annual and Long-Term Incentive bonuses are set forth
below in the Compensation and Human Resource Committee Report on Executive Compensation. He also
participates in other employee benefit programs available to executives of the Company. Mr. Swainson is also
entitled to reimbursement for any expenses incurred with his relocation and the Company agreed to provide him
with temporary corporate housing until no later than November 22, 2006.
Mr. Swainson’s employment agreement has an initial term of five years and is scheduled to expire on November 22,
2009, unless terminated earlier or extended in accordance with its terms. If Mr. Swainson’s employment is
terminated by the Company without “cause” or by Mr. Swainson for “good reason” (as those terms are defined in his
agreement) prior to the expiration of the term, he will (i) receive a severance payment equal to two years’ salary and
bonus, (ii) receive a lump-sum payment equal to 18 months’ COBRA continuation coverage and (iii) have
accelerated vesting of his outstanding equity awards that would have vested, absent the end of employment, during
the 24-month period following termination. If the Company chooses not to extend Mr. Swainson’s agreement at the
74