8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

November 18, 2004

Date of Report: (Date of earliest event reported)

Computer Associates International, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-9247	13-2857434
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Computer Associates Plaza, Islandia, New York	11749
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (631) 342-6000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

The disclosure set forth in Item 5.02 below relating to appointments of principal officers is incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers

On November 18, 2004, the Board of Directors of Computer Associates International, Inc. (the “Company”) elected John A. Swainson as President and a member of the Board of Directors of the Company, effective November 22, 2004. It is anticipated that Mr. Swainson will become Chief Executive Officer of the Company within six months, replacing interim Chief Executive Officer Kenneth D. Cron.

Mr. Swainson, age 50, has been at International Business Machines Corporation (“IBM”) for the past 26 years, most recently serving as vice president of Worldwide Sales of IBM’s Software Group since July 2004. Prior to this, he served as general manager for the Application Integration and Middleware division of IBM’s Software Group, a division he started in 1997. He joined IBM in 1978 and subsequently served in a variety of sales, marketing and product development positions. He was a member of the IBM Worldwide Management Council, IBM’s Strategy Team and Senior Management Team and served on the Board of Governors for the IBM Academy of Technology. He holds a degree in engineering from the University of British Columbia.

On November 22, 2004, the Company and Mr. Swainson entered into an employment agreement (the “Swainson Agreement”). Under the terms of the Swainson Agreement, Mr. Swainson received (i) an initial stock option grant for 350,000 shares of the Company’s 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 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, Mr. Swainson will also receive a payment equal to the present value of $2,800,000, the form and manner of such payment to be mutually agreed by Mr. Swainson and the Company. Under the Swainson Agreement, Mr. Swainson will receive an initial annual base salary of $1,000,000 (payable in cash) and is eligible to receive a target annual cash bonus equal to 100% of his annual base salary and a target long-term performance bonus equal to 250% of his annual base salary. In accordance with the Company’s Long-Term Performance Bonus program (pursuant to the Company’s 2002 Incentive Plan), Mr. Swainson’s long-term performance bonus awards will be in the form of restricted stock, “Fair Market Value Stock Options” and “Premium-Priced Stock Options” (as those terms are defined in the 2002 Incentive Plan). (Under the Company’s Annual and Long-Term

Performance Bonus programs pursuant to its 2002 Incentive Plan, the payout on annual performance bonuses can be up to 200% of the target amount and the payout on long-term performance bonuses can be up to 150% of the target amount, in each case depending on whether the Company meets or exceeds certain financial and performance metrics.) He will also participate in other employee benefit programs available to executives of the Company. Mr. Swainson is guaranteed an annual bonus of at least $333,334 for the remainder of the Company’s 2005 fiscal year.

The Swainson 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 the Swainson 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 end of its term, Mr. Swainson will (i) receive a severance payment equal to one year’s salary, (ii) receive a lump-sum payment equal to 12 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 12-month period following termination. Mr. Swainson has been added as a “Schedule A” participant in the Company’s Change in Control Severance Policy; as such, he would be entitled to a severance payment equal to 2.99 times his salary and bonus, and to certain other benefits, in the event of a termination without “cause” or for “good reason” (as those terms are defined in such Policy, which is described in the Company’s Current Report on Form 8-K filed on October 22, 2004) following a change in control of the Company. The Company shall also indemnify and hold Mr. Swainson harmless for acts and omissions in connection with Mr. Swainson’s employment to the maximum extent permitted under applicable law.

The foregoing description of the Swainson Agreement does not purport to be complete and is qualified in its entirety by reference to such Agreement (including any schedules and exhibits thereto), a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

Additionally, on November 22, 2004, the Company entered into an employment agreement (the “Clarke Agreement”) with Jeff Clarke, the Company’s Chief Operating Officer and Chief Financial Officer. The Clarke Agreement provides that Mr. Clarke’s employment with the Company shall be effective from April 23, 2004 until March 31, 2006 unless earlier terminated in accordance with the Clarke Agreement or extended.

Pursuant to the Clarke Agreement, Mr. Clarke’s annual base salary is $650,000 (payable in cash). With respect to fiscal 2005, Mr. Clarke is also eligible to receive (i) a target annual cash bonus of $800,000 and (ii) a target long-term performance bonus of $3,050,000 for the period from April 1, 2004 through March 31, 2005, subject to the terms and conditions of the Company’s Annual and Long-Term Performance Bonus programs, respectively. Such amounts will be payable following the end of fiscal 2005. With respect to fiscal 2006, (i) Mr. Clarke shall be eligible to receive an annual cash bonus with a target amount and such other terms and conditions as determined by the Compensation and Human Resource Committee of the Company’s Board of Directors, and (ii) Mr. Clarke shall be eligible to receive an additional target long-term performance bonus of $3,050,000 for the period from April 1, 2004 through March 31, 2006, subject to the terms and conditions of the Company’s Annual and Long-Term Performance Bonus programs, respectively. Such amounts will be payable following the end of fiscal 2006. In accordance with the Company’s Long-Term Performance Bonus plan, Mr. Clarke’s long-term performance bonus awards will be in the form of restricted stock, “Fair Market Value Stock Options” and “Premium-Priced Stock Options” (as those terms are defined in the 2002 Incentive Plan). (Under the Company’s Annual and Long-Term Performance Bonus programs pursuant to its 2002 Incentive Plan, the payout on annual performance bonuses can be up to 200% of the target amount and the payout on long-term performance bonuses can be up to 150% of the target amount, in each case depending on whether the Company meets or exceeds certain financial and performance metrics.)

If Mr. Clarke resigns as Chief Operating Officer other than for “good reason” or is terminated as Chief Operating Officer for “cause” (as those terms are defined in the Clarke Agreement) prior to March 31, 2006, he shall forfeit any right to the above-referenced amounts (except to the extent already earned) and shall be obligated to repay any moving and relocation expenses paid by the Company. If he voluntarily resigns as Chief Operating Officer for good reason, is terminated as Chief Operating Officer other than for cause, or terminates his employment on account of death or “disability” (as defined in the Clarke Agreement) prior to March 31, 2006, (x) he shall be entitled to receive a lump sum cash payment equal to $4,500,000, which represents the sum of (i) $650,000 plus (ii) his 2005 annual bonus target ($800,000), plus (iii) his long-term performance bonus target ($3,050,000); (y) management shall recommend that the options covering 235,000 shares of the Company’s Common Stock granted pursuant to Mr. Clarke’s March 18, 2004 offer letter (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2004) and any other unvested restricted stock and stock options shall vest, and the stock options shall be exercisable for one year following the termination of such employment; and (z) Mr. Clarke shall be relieved of any obligation to repay the company for his moving and relocation expenses. Mr. Clarke currently holds the titles of Chief Operating Officer and Chief Financial Officer. If Mr. Clarke’s employment as Chief Financial Officer (but not Chief Operating Officer) is terminated, whether by Mr. Clarke or the Company, the provisions described in this paragraph will not be triggered.

The Company shall indemnify and hold Mr. Clarke harmless for acts and omissions in connection with Mr. Clarke’s employment to the maximum extent permitted under applicable law.

The foregoing description of the Clarke Agreement does not purport to be complete and is qualified in its entirety by reference to such Agreement (including any schedules and exhibits thereto), a copy of which is filed as Exhibit 10.2 hereto and is incorporated by reference herein.

Mr. Clarke also entered into a Moving and Relocation Expense Agreement, substantially in the form of Exhibit 10.6.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year

On November 18, 2004, the Board of Directors amended the Company’s By-laws to restate Article IV (“Officers”), Section 6 (“President”) in its entirety. The purpose of the amendment was to clarify the role of the President. A copy of the Company’s By-laws, as amended, is filed as Exhibit 3.1 hereto.

Item 7.01 Regulation FD Disclosure

On November 23, 2004, the Company issued a press release announcing the hiring of Mr. Swainson. A copy of this press release is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

Exhibit 3.1  By-Laws of the Company, as amended effective November 18, 2004.

Exhibit 10.1  Employment Agreement, dated November 22, 2004, between Computer Associates International, Inc. and John A. Swainson.

Exhibit 10.2  Employment Agreement, dated November 22, 2004, between Computer Associates International, Inc. and Jeff Clarke.

Exhibit 10.3  Form of Stock Option Agreement (previously filed as Exhibit 10.2 to the Quarterly Report on Form 10-Q of Computer Associates International, Inc. for the fiscal quarter ended September 30, 2004 and incorporated herein by reference).

Exhibit 10.4  Form of Restricted Stock Award (previously filed as Exhibit 10.3 to the Quarterly Report on Form 10-Q of Computer Associates International, Inc. for the fiscal quarter ended September 30, 2004 and incorporated herein by reference).

Exhibit 10.5  Restricted Stock Unit Agreement for John A Swainson.

Exhibit 10.6  Form of Moving and Relocation Expense Agreement.

Exhibit 99.1  Press Release, dated November 23, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Computer Associates International, Inc.
Dated: November 24, 2004	By:	/s/ Kenneth V. Handal
		Kenneth V. Handal
		Executive Vice President and General Counsel

EX-3.1

Exhibit 3.1

BY-LAWS

OF

COMPUTER ASSOCIATES INTERNATIONAL, INC.

(As Amended, Effective as of November 18, 2004)

ARTICLE I. OFFICES

     The registered office of the corporation in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, Wilmington, Delaware, New Castle County, 19808, and the resident agent of the corporation thereat shall be United States Corporation Company. The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors may designate or as the business of the corporation may require from time to time.

ARTICLE II. STOCKHOLDERS

     Section 1. Annual Meeting. An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. If the election of Directors shall not be held on the day designated herein for any annual meeting of the stockholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the stockholders as soon thereafter as conveniently may be.

     Section 2. Special Meeting. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called only by the President or by the Board of Directors.

     Section 3. Place of Meeting. The Board of Directors may designate any place within or without the State of Delaware as the place of meeting for any annual meeting or special meeting. If no such designation is made, the place of meeting shall be as specified in the call of the meeting and if not so specified, then at the registered office of the corporation in the State of Delaware.

     Section 4. Notice of Meeting. Written or printed notice stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered, unless otherwise provided in the DGCL, the certificate of incorporation of the Corporation, or these bylaws, not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the President, or the Secretary, or of the officer or persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the

adjournment is taken, unless the adjournment is for more than 30 days or unless, after adjournment, a new record date is fixed for the adjourned meeting, in either of which cases notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting.

     Section 5. Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than 10 days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than 60 days prior to such other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the secretary, request the board of directors to fix a record date. The board of directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the board of directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation as provided in Section 228(a) of the Delaware General Corporation Law.

     Section 6. Voting Lists. The officer or agent having charge of the stock ledger of the corporation shall make, at least 10 days before each meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order with the address of and the number of shares held by each, which list, for a period of 10 days prior to such meeting, shall be kept on file at the place where the meeting is to be held or at a place specified in the notice of the meeting in the city where the meeting is to be held. Such list shall be subject to inspection by any stockholder at any time during usual

2

business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine such list or to vote at any meeting of stockholders.

     Section 7. Quorum. A majority of the outstanding shares of the corporation entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, the chairman of the meeting may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally called. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. Unless otherwise provided by law, the certificate of incorporation or these bylaws, in all matters other than the election of directors, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders.

     Section 8. Proxies. At all meetings of stockholders, a stockholder may vote by proxy (i) executed in writing by the stockholder or by his duly authorized attorney in fact; or (ii) by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or an agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder; or (iii) as otherwise permitted pursuant to Section 212 of the Delaware General Corporation Law. Such proxy shall be filed with the Secretary of the corporation before or at the time of the meeting. No proxy shall be valid after three years from the date of its execution, unless otherwise provided in the proxy.

     Section 9. Voting of Shares. Unless otherwise provided in the certificate of incorporation of the Corporation, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of stockholders, as set forth in the Certificate of Incorporation. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Shares of its own capital stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of any corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

     Section 10. Consent of Stockholders in Lieu of Meeting.

          (a) Any action required to be taken at a meeting of the stockholders, or any other action which may be taken at a meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing setting forth

3

the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. The Corporation shall give prompt notice of the taking of corporate action without a meeting by less than unanimous written consent to stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law.

          (b) Inspectors of Election; Procedures for Counting Consents. Within three (3) business days after receipt of the earliest dated consent delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law or the determination by the Board of Directors of the Corporation that the Corporation should seek corporate action by written consent, as the case may be, the Secretary shall engage nationally recognized independent inspectors of elections for the purpose of performing a ministerial review of the validity of the consents and revocations. The cost of retaining inspectors of election shall he borne by the Corporation. No action by written consent without a meeting shall be effective until such date as the inspectors certify to the Corporation that the consents delivered to the Corporation in accordance with this section represent at least the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and votes.

          Consents and revocations shall be delivered to the inspectors upon receipt by the Corporation, the soliciting stockholders or their proxy solicitors or other designated agents. As soon as consents and revocations are received, the inspectors shall review the consents and revocations and shall maintain a count of the number of valid and unrevoked consents. The inspectors shall keep such count confidential and shall not reveal the count to the Corporation, the soliciting stockholder or their representatives or any other entity. As soon as practicable after the earlier if (i) sixty (60) days after the date of the earliest dated consent delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation law or (ii) a written request therefor by the Corporation or the soliciting stockholders (whichever is soliciting consents), notice of which request shall be given to the party opposing the solicitation of consents, if any, which request shall state that the Corporation or soliciting stockholders, as the case may be, have a good faith belief that the requisite number of valid and unrevoked consents to authorize or take the action specified in the consents has been received in accordance with these By-laws, the inspectors shall issue a preliminary report to the Corporation and the soliciting stockholders stating: (i) the number of valid consents: (ii) the number of valid revocations; (iii) the number of valid and unrevoked consents: (iv) the number of invalid consents; (v) the number of invalid revocations; (vi) whether, based on their preliminary count, the requisite number of valid and unrevoked consents has been obtained to authorize or take the action specified in the consents.

          Unless the Corporation and the soliciting stockholders shall agree to a shorter or longer period, the Corporation and the soliciting stockholders shall have 48 hours to review the consents and revocations and to advise the inspectors and the opposing party in writing as to whether they intend to challenge the preliminary report of the inspectors. If no written notice of in intention to challenge the preliminary report is received within 48 hours after the inspectors’ issuance of the preliminary report, the inspectors shall issue to the Corporation and the soliciting stockholders their final report containing the information from the inspectors’

4

determination with respect to whether the requisite number of valid and unrevoked consents was obtained to authorize and take the action specified in the consents. If the Corporation or the soliciting stockholders issue written notice of an intention to challenge the inspectors’ preliminary report within 48 hours after the issuance of that report, a challenge session shall be scheduled by the inspectors as promptly as practicable. Following completion of the challenge session, the inspectors shall as promptly as practicable issue their final report to the soliciting stockholders and the Corporation, which report shall contain the information included in the preliminary report, plus all changes in the vote totals as a result of the challenge and a certification of whether the requisite number of valid and unrevoked consents was obtained to authorize or take the action specified in the consents. A copy of the final report of the inspectors shall be included in the book in which the proceedings of meetings of stockholders are recorded.

     Section 11. Nominations of Directors.

          (a) Only persons who are nominated in accordance with the procedures set forth in these by-laws shall be eligible to serve as Directors. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who is a stockholder of record at the time of giving of notice provided for in this by-law, who shall be entitled to vote for the election of Directors at the meeting and who complies with the notice procedures set forth in this by-law.

          (b) Nominations by stockholders shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the corporation (i) in the case of an annual meeting, not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure was made, and (ii) in the case of a special meeting at which Directors are to be elected, not later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure was made. Such stockholder’s notice shall set forth (1) as to each person whom the stockholder proposes to nominate for election or reelection as a Director all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (II) as to the stockholder giving the notice (A) the name and address, as they appear on the corporation’s books, of such stockholder and (B) the class and number of shares of the corporation which are beneficially owned by such stockholder and also which are owned of record by such stockholder; and (III) as to the beneficial owner, if any, on whose behalf the nomination is made, (A) the name and address of such person and (B) the class and number of shares of the corporation which are beneficially owned by such person. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish the Secretary of the corporation that information required to be set forth in the stockholder’s notice of nomination which pertains to the nominee.

5

          (c) No person shall be eligible to serve as a Director of the corporation unless nominated in accordance with the procedures set forth in this by-law. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these by-laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this by-law, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this by-law.

6

     Section 12. Notice of Stockholder Business.

          (a) At an annual or special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) pursuant to the corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by a stockholder of the corporation who is a stockholder of record at the time of giving of the notice provided for in this by-law, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this by-law.

          (b) For business to be properly brought before a meeting by a stockholder pursuant to clause (iii) of paragraph (a) of this by-law, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder’s notice with respect to an annual meeting must be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the meeting is changed by more than 30 days from such anniversary date, notice by the stockholder to be timely must be received no later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure was made. To be timely, a stockholder’s notice with respect to a special meeting must be received no later than the close of business on the 10th day following the earlier of the day on which notice of the meeting was mailed or public disclosure was made. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (A) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (B) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder of record and by the beneficial owner, if any, on whose behalf the proposal is made and (D) any material interest of such stockholder of record and the beneficial owner, if any, on whose behalf the proposal is made in such business.

          (c) Notwithstanding anything in these by-laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this by-law. The Chairman of the meeting shall, if the fact warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the procedures prescribed by these by-laws, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this by-law, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this by-law.

ARTICLE III. BOARD OF DIRECTORS

     Section 1. General Powers. The business and affairs of the corporation shall be managed by its Board of Directors.

     Section 2. Number and Tenure. The Board of Directors shall consist of three or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Directors need not be stockholders. Each Director shall hold office until the next

7

     annual meeting of stockholders and until his successor shall have been elected and shall have qualified.

     Section 3. Annual and Regular Meetings. An annual meeting of the Board of Directors shall be held, without other notice than this by-law, immediately after, and at the same place as, the annual meeting of stockholders. The Board of Directors may also provide, by resolution, the time and place, either within or without the State of Delaware, for the holding of other regular meetings without other notice than such resolution.

     Section 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President, Secretary or any two Directors. The persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Delaware, as the place for holding any special meeting of the Board of Directors called by them.

     Section 5. Notice. Notice of any special meeting of the Board of Directors shall be given at least forty-eight (48) hours prior thereto by written notice delivered personally or mailed to each Director at his business address or by telegram or facsimile transmission. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. If notice be given by facsimile, such notice shall be deemed to be delivered upon receipt of a facsimile delivery confirmation from the addressee’s last known facsimile number. Any Director may waive notice of any meeting. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

     Section 6. Quorum. A majority of the Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice.

     Section 7. Manner of Acting. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, provided, that any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all the members of the Board of Directors or such committee, as the case may be, consent thereto in writing or writings filed with the minutes of proceedings of the Board of Directors or such committee.

     Section 8. Vacancies. Any vacancy occurring in the Board of Directors, including a vacancy resulting from enlargement of the Board, may be filled by the Directors by vote of a majority of the Directors then in office though less than a quorum of the Board of Directors, or by the plurality of the votes cast at a meeting of stockholders. A Director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, or in the case of an enlargement of the board, until the next annual meeting of stockholders and until his successor shall have been elected and shall have qualified.

8

     Section 9. Compensation. Directors who are not employees of the Corporation may be paid such fees or other compensation for service on the Board of Directors or any Committee of the Board of Directors as may be approved by the Board of Directors. Such directors may also be reimbursed for the expenses they incur in attending or participating in meetings of the Board of Directors or any Committee of the Board.

     Section 10. Telephonic Meetings. Members of the Board of Directors, or any Committee thereof, may participate in a meeting of the Board or Committee by means of conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section shall constitute presence in person at the meeting.

     Section 11. Committees.

          (a) Powers and Authority. The Corporation shall be governed by the provisions of 8 Del.C. §141(c)(2), as that statute may be amended from time to time, in respect to the powers and authority of any committee of the Board of Directors.

          (b) Formation. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.

          (c) Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III of these by-laws.

ARTICLE IV. OFFICERS

     Section 1. Number. The officers of the corporation shall be a Chairman of the Board, President, one or more Vice-Presidents (the number thereof to be determined by the Board of Directors), a Secretary, and a Treasurer, each of whom shall be elected by the Board of Directors. One or more Assistant Secretaries and Assistant Treasurers and such other officers and assistant officers as may be deemed necessary may also be appointed from time to time by the Board of Directors. Any two or more offices may be held by the same person, except the offices of President and Secretary.

     Section 2. Election and Term of Office. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the stockholders. If the election of

9

officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided.

     Section 3. Removal. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

     Section 4. Vacancies. A vacancy of any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term.

     Section 5. Chairman of the Board and Vice-Chairman of the Board. The Board of Directors may appoint a Chairman of the Board and may designate the Chairman of the Board as Chief Executive Officer. If the Board of Directors appoints a Chairman of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. The Chairman of the Board shall preside at all meetings of the Board of Directors and the stockholders at which he is present. If the Board of Directors appoints a Vice-Chairman of the Board, he shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be vested in him by the Board of Directors.

     Section 6. President. The President shall, subject to the direction of the Board of Directors, have general charge and supervision of the business of the corporation, unless otherwise provided by the Board of Directors. The President shall, when present and in the absence of the Chairman of the Board and the Vice-Chairman of the Board, if one shall be appointed, preside at all meetings of the stockholders and of the Board of Directors. He may sign, with the Secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates for shares of the corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these by-laws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.

     Section 7. The Vice-President. In the absence of the President or in the event of his death, inability or refusal to act, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all powers of and be subject to all the restrictions upon the President. Any Vice-President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors.

     Section 8. The Secretary. The Secretary shall: (a) keep the minutes of the stockholders’ and of the Board of Directors’ meetings in one or more books provided for that purpose; (b) see

10

that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the post office address of each stockholder; (e) sign with the President, or a Vice-President, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; and (f) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors.

     Section 9. The Treasurer. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article V of these by-laws; (b) have general charge of the stock transfer books of the corporation unless a transfer agent shall have been appointed; (c) sign with the President, or a Vice-President, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; and (d) in general perform all the duties incident to the office of Treasurer and such other duties as may from time to time be assigned to him by the President or by the Board of Directors.

     Section 10. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries, when authorized by the Board of Directors, may sign with the President or a Vice-President certificates for shares of the corporation the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such surety or sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.

     Section 11. Salaries. The salaries of the officers shall be fixed-from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a Director of the corporation.

ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS

     Section 1. Contract. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

     Section 2. Loans. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

11

     Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

     Section 4. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select.

ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

     Section 1. Certificates. Shares of the Corporation shall be evidenced by certificates in such form as the appropriate officers of the Corporation may from time to time prescribe; provided, that the Board of Directors may provide by resolution that some or all of any or all classes or series of stock of the Corporation shall be uncertificated shares. Notwithstanding the foregoing, each holder of uncertificated shares shall be entitled, upon request, to a certificate representing such shares. Shares represented by certificates shall be numbered and registered in a share register as they are issued. Share certificates shall exhibit the name of the registered holder and the number and class of shares and the series, if any, represented thereby and the par value of each share or a statement that such shares are without par value, as the case may be. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificated shares of the same class and series shall be identical.

     Section 2. Signatures on Certificates. Every share certificate shall be signed by the Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the President or a Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall be sealed with the Corporation’s seal, which may be facsimile, engraved or printed.

     Section 3. Transfer Agents and Registrars; Facsimile Signatures. The Board of Directors may appoint one or more transfer agents and one or more registrars and may require all certificates for shares to bear the signature or signatures of any of them. Where a certificate is signed (a) by a transfer agent or an assistant or co-transfer agent, or (b) by a registrar or co-registrar, the signature of any officer thereon may be facsimile. Where a certificate is signed by a registrar or co-registrar, the certificate of any transfer agent or co-transfer agent thereon may be by facsimile signature of the authorized signatory of such transfer agent or co-transfer agent. In case any officer or officers of the Corporation who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers, whether because of death, resignation or otherwise, before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may, nevertheless, be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation.

     Section 4. Lost Certificates. In case of the loss or destruction of any certificate of stock or other security of the Corporation, another may be issued in its place upon satisfactory proof of such loss or destruction and upon the giving of a satisfactory bond of indemnity to the Corporation and to the transfer agents and registrars, if any, of such stock or other security, in

12

such sum as the Board of Directors may prescribe. The Board of Directors may delegate to any officer or officers of the Corporation the authorization of the issuance of such new certificate or certificates and the approval of the form and amount of such indemnity bond and the surety thereon.

     Section 5. Transfer of Shares. Upon surrender to the Corporation, or a transfer agent of the Corporation, of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation may issue a new certificate, or, upon request, evidence of the equivalent uncertificated shares, to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the holder of uncertificated shares, the Corporation shall cancel such uncertificated shares and issue new equivalent uncertificated shares, or, upon such holder’s request, certificated shares, to the person entitled thereto, and record the transaction upon its books.

     Section 6. Registered Shareholders. The Corporation and its transfer agents shall be entitled to treat the holder of record of any share or shares as the holder in fact thereof and shall not be bound to recognize any equitable or other claims to, or interest in, such shares on the part of any other person and shall not be liable for any registration or transfer of shares which are registered, or to be registered, in the name of a fiduciary or the nominee of a fiduciary unless made with actual knowledge that a fiduciary, or nominee of a fiduciary, is committing a breach of trust in requesting such registration or transfer, or with knowledge of such facts that its participation therein amounts to bad faith.

ARTICLE VII. FISCAL YEAR

     The fiscal year of the corporation shall begin on the first day of April and end on the last day of March in each year.

     ARTICLE VIII. SEAL

     The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and the words, “Corporate Seal”.

ARTICLE IX. AMENDMENTS

     Unless otherwise provided by the Certificate of Incorporation or these By-Laws, these By-Laws may be amended or repealed, or new By-Laws may be adopted, (1) at any annual or special meeting of the stockholders, by the affirmative vote of 51% of the stockholders, present or in person or represented by proxy and entitled to vote on such action; provided, however, that the notice of such meeting shall have been given as provided in these By-Laws, which notice shall mention that amendment or repeal of these By-Laws, or the adoption of new By-Laws, is one of the purposes of such meeting; (2) by written consent of the stockholders pursuant to Section 10 of Article II; or (3) by action of the Board of Directors.

ARTICLE X. INDEMNIFICATION

     To the fullest extent permitted by Section 145 of the Delaware General Corporation Law, the Corporation shall indemnify any director or officer of the Corporation who was or is a party

13

or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether brought by a third party or by or in the right of the Corporation, by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer against expenses (including attorneys’ fees), liability, loss, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding.

     Expenses (including attorneys’ fees) actually and reasonably incurred by a director or officer in defending any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative, and whether brought by a third party or by or in the right of the Corporation, and in which the director or officer is made or threatened to be made a party by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer, shall be paid on behalf of the director or officer by the Corporation in advance of the final disposition of such action, suit, or proceeding and within 30 days of receipt by the secretary of the Corporation of (i) an application from such director or officer setting forth the basis for such indemnification, and (ii) if required by law at the time such application is made, an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that the director or officer is not entitled to be indemnified by the Corporation as authorized in this Article. The financial ability of any director or officer to make a repayment contemplated by this provision shall not be a prerequisite to the making of an advance. Expenses incurred by other representatives or employees of the Corporation who are not directors or officers of the Corporation may be paid upon terms and conditions, if any, as the Board of Directors deems appropriate.

     Such indemnity and right to advancement of expenses shall inure to the benefit of the heirs, executors and administrators of any director or officer so indemnified pursuant to this Article. The right to indemnification and to advancement of expenses under this Article shall be a contract right. Such indemnification and advancement of expenses shall be in addition to any other rights to which those directors and officers seeking indemnification and advancement of expenses may be entitled under any law, agreement, vote of stockholders, or otherwise.

     Any repeal or amendment of this Article by the directors or stockholders of the Corporation or by changes in applicable law shall, to the extent permitted by applicable law, be prospective only, and shall not adversely affect any right to indemnification or advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or amendment. In addition to the foregoing, the right to indemnification and advancement of expenses shall be to the fullest extent permitted by the General Corporation Law of the State of Delaware or any other applicable law and all amendments to such laws as hereafter enacted from time to time.

14

EX-10.1

Exhibit 10.1

November 22, 2004

John A. Swainson
     32 Main Street,
          Ridgefield, CT 06877

          Re: Employment Agreement

Dear John:

     This is your Employment Agreement (the “Agreement”) with Computer Associates International, Inc., a Delaware corporation (the “Company”). It sets forth the terms of your employment with the Company and its affiliates from time to time (together, the “Group”).

1. Your Position, Performance and Other Activities

     (a) Position. You will be employed in the position of President of the Company. It is anticipated that you will be employed in the position of Chief Executive Officer of the Company within six (6) months of your Start Date (as defined in Section 2). You will be appointed to the Company’s Board of Directors (the “Board”) as of your Start Date (as defined in Section 2) and the Company will use all reasonable efforts to cause you to be nominated for re-election each time your term expires during your employment. You agree to serve as a member of the Board, as well as a member of any Board committee to which you may be elected or appointed. You also agree that you will be deemed to have resigned from the Board and each Board committee voluntarily, without any further action by you, as of the end of your employment.

     (b) Authority, Responsibilities and Reporting. You will have the authority, responsibilities and reporting relationships that correspond to your position, including any particular authority, responsibilities and reporting relationships consistent with your position that the Board may assign to you from time to time and compliance with such policies of the Company as may be adopted from time to time.

     (c) Performance. During your employment, you will devote substantially all of your business time and attention to the Group and will use good faith efforts to discharge your responsibilities under this Agreement to the best of your ability. During your employment, your place of performance will be Islandia, New York or such other place as the Board determines.

     (d) Other Activities. During your employment, you will not render any business, commercial or professional services to any non-member of the Group. However, you may (1) serve on corporate, civic or charitable boards, (2) manage personal investments, or (3) deliver lectures, or fulfill speaking engagements or teach at educational institutions, so long as (A) these activities do not interfere with your performance of your responsibilities under this Agreement and (B) any service on a corporate, civic or charitable board is approved by the Board.

2. Term of Your Employment

Subject to your satisfactory completion of pre- and post-employment background, reference and other checks, your employment under this Agreement will (a) begin on November 22, 2004 (the “Start Date” of this Agreement) and (b) end at the close of business on the earlier of (1) the end of the Compensation Period or (2) the effective date of early termination of your employment. Your “Compensation Period” begins on your Start Date and is initially scheduled to end on the fifth anniversary of your Start Date. Beginning on the fifth anniversary of your Start Date and on each following anniversary, your Compensation Period will automatically extend for one year unless either you or the Company gives at least 90 days’ prior notice of non-extension. In no event, however, will your Compensation Period extend beyond the end of the Company’s fiscal year in which your 65^th birthday occurs. References in this Agreement to “your employment” are to your employment under this Agreement.

3. Your Compensation

     (a) Salary. During your employment, you will receive an annual base salary (as increased from time to time, your “Salary”). The starting amount of your Salary is $1,000,000. The Company will review your Salary at least annually and may increase it at any time for any reason. However, your Salary may not be decreased at any time (including after any increase) without your written consent and any increase in your Salary will not reduce or limit any other obligation to you under this Agreement. Your Salary will be paid in accordance with the Group’s normal practices for senior executives.

     (b) Bonus. You will be eligible to receive an annual cash bonus (your “Bonus”) for each fiscal year of the Company ending during your employment. The target level for your Bonus in each full fiscal year of your employment will be at least 100% of your Salary (the “Target Annual Bonus”) and the maximum level for your Bonus will be 200% of your Salary. You will be entitled to a minimum Bonus of $333,334 for the Company’s fiscal year ending March 31, 2005. Your Bonus will be paid at the same time as such bonuses are paid to other senior executives of the Company.

2

     (c) Long-Term Incentive Awards. You will be eligible to receive long-term incentive awards (“Long-Term Incentive Awards”) as determined by the Company in accordance with the Company’s Long-Term Incentive Plan (and any successor plan) in which you will begin to participate for the performance period starting April 1, 2005. The target award level under the Company’s Long-Term Incentive Plan initially will be 2.5 times your Salary. The maximum award level under the Company’s Long-Term Incentive Plan initially will be 3.75 times your Salary.

     (d) Initial Incentive Awards. (1) In addition to your Salary and Bonus, on your Start Date you will be awarded (A) stock options to purchase 350,000 shares of the Company’s common stock (your “Sign-On Options”) and (B) 100,000 restricted shares of the Company’s common stock (your “Sign-On Stock”).

     (2) Your Sign-On Options will be granted under the Company’s 2002 Incentive Plan and will have an exercise price equal to the Start Date Closing Price. Your Sign-On Options will vest 34%, 33% and 33% on the first, second and third anniversaries of the Start Date.

     (3) Your Sign-On Stock will be granted under the Company’s 2002 Incentive Plan. Initially, your Sign-On Stock may not be transferred or assigned and will be forfeited to the Company for zero (0) consideration if your employment with the Company is terminated for any reason prior to vesting. Your Sign-On Stock will vest in equal installments on each of the first three one-year anniversaries of your Start Date (such restricted stock is “vested” when it is no longer subject to such transfer restrictions and forfeiture provisions).

     (4) Except as provided in this Agreement, your Sign-On Options and Sign-On Stock will be subject to the terms of the Company’s 2002 Incentive Plan and to the terms of your award agreement under it (which will contain the Group’s normal provisions for senior executives).

     (e) Relocation Benefit. In accordance with the Company’s Relocation Policy, you will be eligible to be reimbursed for your reasonable costs incurred in connection with your relocation to the Company’s headquarters in Islandia, New York. In addition, you shall receive up to 12 months of temporary corporate housing in accordance with Company policy.

     (f) Restricted Stock Units. In addition to your Sign-On Stock, on your Start Date you will be awarded restricted stock units with respect to 100,000 shares of the Company’s common stock (your “RSUs”). Your RSUs will be granted under the Company’s 2002 Incentive Plan. Your RSUs may not be transferred or assigned until six (6) months after the date on which your employment with the Group terminates for any reason. Six (6) months after your date of termination, your RSUs will fully vest, be transferable and be paid to you. You will also receive dividend equivalent rights entitling you to be paid, at the same time as other shareholders of the Company, any dividends declared and paid in respect of the 100,000 shares of the Company’s common stock underlying your RSUs.

     (g) Signing Bonus. Within 30 days of your Start Date, you will receive a signing bonus equal to $2.5 million in cash. Additionally, you will receive the

3

present value of $2.8 million, the form and manner of such payment to be agreed by you and the Company; provided, however, if you and the Company fail to agree on a form and manner of this payment within 60 days of the Start Date, the Company has the right to make the $2.8 million payment in cash.

4. Other Employee Benefits

     (a) Vacation. You will be entitled to paid annual vacation during your employment (totaling at least four (4) weeks a year) on a basis that is at least as favorable as that provided to other senior executives of the Group.

     (b) Business Expenses. You will be reimbursed for all business and entertainment expenses incurred by you in performing your responsibilities under this Agreement. However, your reimbursement will be subject to the Group’s normal practices for senior executives.

     (c) Facilities. During your employment, you will be provided with office space, facilities, secretarial support and other business services consistent with your position on a basis that is at least as favorable as that provided to other senior executives of the Group.

     (d) Indemnification. To the extent permitted by law, the Company will indemnify you against any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, arising by reason of your status as a director, officer, employee and/or agent of the Group during your employment. In addition, to the extent permitted by law, the Company will pay or reimburse any expenses, including reasonable attorney’s fees, you incur in investigating and defending any actual or threatened action, suit or proceeding for which you may be entitled to indemnification under this Section 4(d). However, you agree to repay any expenses paid or reimbursed by the Company if it is ultimately determined that you are not legally entitled to be indemnified by the Company. If the Company’s ability to make any payment contemplated by this Section 4(d) depends on an investigation or determination by the board of directors of any member of the Group, at your request the Company will use its best efforts to cause the investigation to be made (at the Company’s expense) and to have the relevant board reach a determination as soon as reasonably possible. This indemnification will be at least as favorable as that provided to other senior executives and directors of the Group.

     (e) Employee Benefit Plans. During your employment, you will be eligible to participate in the Group’s employee benefit and welfare plans, including plans providing retirement benefits, medical, dental, hospitalization, life or disability insurance, on a basis that is at least as favorable as that provided to other senior executives of the Group.

5. Early Termination of Your Employment

     (a) No Reason Required. You or the Company may terminate your employment early at any time for any reason, or for no reason, subject to compliance with Section 5(e).

4

     (b) Termination by the Company for Cause.

     (1) “Cause” means any of the following:

     (A) Your continued failure, either due to willful action or as a result of gross neglect, to substantially perform your duties and responsibilities to the Group under this Agreement (other than any such failure resulting from your incapacity due to physical or mental illness) that, if capable of being cured, has not been cured within thirty (30) days after written notice is delivered to you by the Board, which notice specifies in reasonable detail the manner in which the Company believes you have not substantially performed your duties and responsibilities.

     (B) Your engagement in conduct which is demonstrably and materially injurious to the Group, or that materially harms the reputation or financial position of the Group, unless the conduct in question was undertaken in good faith on an informed basis with due care and with a rational business purpose and based upon the honest belief that such conduct was in the best interest of the Group.

     (C) Your indictment or conviction of, or plea of guilty or nolo contendere to, a felony or any other crime involving dishonesty, fraud or moral turpitude.

     (D) Your being found liable in any SEC or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not you admit or deny liability).

     (E) Your breach of your fiduciary duties to the Group which may reasonably be expected to have a material adverse effect on the Group. However, to the extent the breach is curable, the Company must give you notice and a reasonable opportunity to cure.

     (F) Your (i) obstructing or impeding, (ii) endeavoring to influence, obstruct or impede or (iii) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “Investigation”). However, your failure to waive attorney-client privilege relating to communications with your own attorney in connection with an Investigation shall not constitute “Cause”.

     (G) Your removing, concealing, destroying, purposely withholding, altering or by any other means falsifying any material which is requested in connection with an Investigation.

     (H) Your disqualification or bar by any governmental or self-regulatory authority from serving in the capacity contemplated by this Agreement or your loss of any governmental or self-regulatory license that is reasonably necessary for you to perform your responsibilities to the Group under this Agreement, if (i) the

5

disqualification, bar or loss continues for more than 30 days and (ii) during that period the Group uses its good faith efforts to cause the disqualification or bar to be lifted or the license replaced. While any disqualification, bar or loss continues during your employment, you will serve in the capacity contemplated by this Agreement to whatever extent legally permissible and, if your employment is not permissible, you will be placed on leave (which will be paid to the extent legally permissible).

     (I) Your unauthorized use or disclosure of confidential or proprietary information, or related materials, or the violation of any of the terms of the Company’s standard confidentiality policies and procedures, in the case of any item identified in this clause (I) which may reasonably be expected to have a material adverse effect on the Group and that, if capable of being cured, has not been cured within thirty (30) days after written notice is delivered to you by the Company, which notice specifies in reasonable detail the alleged unauthorized use or disclosure or violation.

     (J) Your violation of the Group’s (i) Workplace Violence Policy or (ii) policies on discrimination, unlawful harassment or substance abuse.

For this definition, no act or omission by you will be “willful” unless it is made by you in bad faith or without a reasonable belief that your act or omission was in the best interests of the Group.

     (2) To terminate your employment “for Cause”, the Board must determine in good faith that Cause has occurred, the Company must comply with Section 5(e) and the Company must deliver to you a copy of a resolution duly adopted by a majority of the entire Board (excluding you) at a meeting of the Board called and held for such purpose (after reasonable notice to you and a reasonable opportunity for you and your counsel to be heard) that finds that in the good faith opinion of the Board, Cause has occurred and states the basis for that belief.

     (c) Termination by You for Good Reason.

     (1) “Good Reason” means any of the following:

     (A) Any material and adverse change in your position with the Group (including by reason of the Company’s failure to cause you to be nominated to the Board).

     (B) Any failure by the Company to provide you with authority, responsibilities and reporting relationships as provided in Section 1(b) or any material and adverse reduction in your authority, responsibility or reporting relationships or the assignment of any duties inconsistent in any material respect with your position, authority, duties or responsibilities, in each case other than any isolated, insubstantial and inadvertent failure by the Company that is

6

not in bad faith and is cured promptly on your giving the Company notice.

     (C) Any reduction by the Company in your Salary or Target Annual Bonus, other than any such reduction agreed to by you in writing or any insubstantial or inadvertent reduction by the Company that is cured promptly on your giving the Company notice.

     (D) Any failure by the Company to comply with Section 3, other than any isolated, insubstantial and inadvertent failure by the Company that is not in bad faith and is cured promptly on your giving the Company notice.

     (E) Any purported termination by the Company of your employment that is in breach of this Agreement.

     (F) Any failure by the Company to comply with Section 11(c).

     (2) The Company’s placing you on paid leave for up to 90 consecutive days while it is determining whether there is a basis to terminate your employment for Cause will not constitute Good Reason.

     (3) To terminate your employment “for Good Reason”, Good Reason must have occurred and you must comply with Section 5(e). However, (A) if you do not give a Termination Notice within 90 days after you have knowledge that an event constituting Good Reason has occurred, the event will no longer constitute Good Reason and (B) you must give the Company notice and a 30-day period to cure the event constituting Good Reason under Section 5(c)(1).

     (d) Termination on Disability or Death.

     (1) The term “Disability” means your absence from your responsibilities with the Company on a full-time basis for 180 business days in any consecutive 12 months as a result of incapacity due to mental or physical illness or injury. If a doctor mutually acceptable to you and the Company determines in good faith that your Disability has occurred, the Company may give you Termination Notice. If within 30 days of the Termination Notice you do not return to full-time performance of your responsibilities, your employment will terminate. If you do return to full-time performance in that 30-day period, the Termination Notice will be cancelled for all purposes of this Agreement. Except as provided in this Section 5(d), your incapacity due to mental or physical illness or injury will not affect the Company’s obligations under this Agreement.

     (2) Your employment will terminate automatically on your death. If you die before your employment starts, all the provisions of this Agreement will also terminate and there will be no liability of any kind under this Agreement.

7

     (e) Advance Notice Generally Required.

     (1) To terminate your employment before the end of your Compensation Period, either you or the Company must provide a Termination Notice to the other. A “Termination Notice” is a written notice that states the specific provision of this Agreement on which termination is based, including, if applicable, the specific clause of the definition of Cause or Good Reason and a reasonably detailed description of the facts that permit termination under that clause. (The failure to include any fact in a Termination Notice that contributes to a showing of Cause or Good Reason does not preclude either party from asserting that fact in enforcing its rights under this Agreement.)

     (2) You and the Company agree to provide 90 days’ advance Termination Notice of any early termination, unless your employment is terminated by the Company for Cause or because of your Disability or death. Accordingly, the effective date of early termination of your employment will be 90 days after Termination Notice is given except that (A) the effective date will be the date of the Company’s Termination Notice if your employment is terminated by the Company for Cause, although the Company may provide a later effective date in the Termination Notice, (B) the effective date will be 30 days after Termination Notice is given if your employment is terminated because of your Disability, and (C) the effective date will be the time of your death if your employment is terminated because of your death. The Company may elect to place you on paid leave for all or part of the advance notice period.

6. The Company’s Obligations in Connection With Your Termination

     (a) General Effect. On termination in accordance with Sections 2 and 5, your employment will end and the Group will have no further obligations to you except as provided in this Section 6.

     (b) With Good Reason or Without Cause. If, during your Compensation Period, the Company terminates your employment without Cause or you terminate your employment for Good Reason:

     (1) The Company will pay you the following as of the end of your employment: (A) your unpaid Salary through the date of termination, (B) your Salary for any accrued but unused vacation, (C) any accrued expense reimbursements and other cash entitlements, (D) any unpaid but awarded Bonus and (E) any unpaid compensation deferred by you (together with any interest and/or earnings through the end of your employment) other than pursuant to a tax-qualified plan (together, your “Accrued Compensation”). In addition, the Company will timely pay you any amounts and provide to you any benefits that are required, or to which you are entitled, under any plan, contract or arrangement of the Group (together, the “Other Benefits”).

     (2) The Company will pay you your Accrued Bonus. Your “Accrued Bonus” means, to the extent not previously awarded or paid, your Target

8

Annual Bonus for the fiscal year in which the Termination Notice is given multiplied by the number of days of your employment since the fiscal year ending before Termination Notice is given divided by 365.

     (3) The Company will pay you ratably over 24 months an amount equal to two (2) times the sum of your (A) then current Salary and (B) average Bonus earned over the three (3) most recently completed fiscal years (or, if you have worked less than three (3) fiscal years, the number of fiscal years worked) prior to the date of termination, but in no event will this bonus amount be greater than your Target Annual Bonus for the fiscal year in which the Termination Notice is given. For purposes of calculating your Bonus for the Company’s 2005 fiscal year, your Bonus will be annualized.

     (4) The unvested stock options issued by the Group to you, that, absent the end of your employment, would have vested in the 24-month period following your termination, will immediately vest and become exercisable. The restricted stock and other equity-based compensation (excluding any Long-Term Incentive Awards not yet granted for any then outstanding performance cycles) awarded by the Group to you, that, absent the end of your employment, would have vested in the 24-month period following your termination, will vest and become immediately payable.

     (5) The Company will pay you a lump-sum payment equal to your continuation coverage cost under COBRA for 18 months. The payments in this Section 6(b)(5) are referred to as your “Welfare Benefits”.

     (c) Company Non-Renewal of Compensation Period. If the Company elects not to renew your Compensation Period in accordance with Section 2:

     (1) The Company will pay you your Accrued Compensation, Accrued Bonus and your Other Benefits.

     (2) The unvested stock options issued by the Group to you, that, absent the end of your employment, would have vested in the 12-month period following your termination will immediately vest and become exercisable. The restricted stock and other equity-based compensation (excluding any Long-Term Incentive Awards not yet granted for any then outstanding performance cycles) awarded by the Group to you, that, absent the end of your employment, would have vested in the 12-month period following your termination will vest and become immediately payable. The benefits in this Section 6(c)(2) are referred to as your “Accelerated Equity Vesting.”

     (3) The Company will pay you ratably over 12 months an amount equal to one (1) times your then current Salary.

     (4) The Company will pay you a lump-sum payment equal to your continuation coverage cost under COBRA for 12 months.

9

     (d) For Cause or without Good Reason. If the Company terminates your employment for Cause or you terminate your employment without Good Reason, the Company will pay your Accrued Compensation and provide your Other Benefits.

     (e) For Your Disability or Death. If, during the Compensation Period, your employment terminates as a result of your death or Disability, the Company will pay your Accrued Compensation and Accrued Bonus and will provide Accelerated Equity Vesting and your Other Benefits and Welfare Benefits.

     (f) Change in Control. If there is a “Change in Control”, as defined in the Company’s Change in Control Severance Policy (the “CIC Severance Policy”), and you are entitled to the payments and benefits provided in the CIC Severance Policy they will reduce (but not below zero) the corresponding payment or benefit provided under this Agreement. It is the intent of this provision to pay or to provide to you the greater of the two payments or benefits but not to duplicate them. The equity awards granted in this Agreement shall have the benefit of the potential accelerated vesting contained in the Company’s 2002 Incentive Plan as in effect on the Start Date. Under the terms of the CIC Severance Policy you will be considered a Schedule A participant. If the CIC Severance Policy were to be changed during your Compensation Period, the Company will establish change in control terms applicable to you on a basis no less favorable to you than as are set forth in the CIC Severance Policy on the Start Date.

     (g) Condition. The Company will not be required to make the payments and provide the benefits stated in this Section 6 unless you execute and deliver to the Company an agreement releasing from all liability (other than the payments and benefits contemplated by this Agreement) each member of the Group and any of their respective past or present officers, directors, employees or agents. This agreement will be in the form normally used by the Group senior executives at the time.

     (h) Timing. The benefits provided in this Section 6 will begin at the end of your employment, and unless otherwise specified, any cash payments owed you under this Section 6 will be paid in a lump sum within 30 days following your date of termination.

7. Proprietary Information

     (a) Definition. “Proprietary Information” means confidential or proprietary information, knowledge or data concerning (1) the Group’s businesses, strategies, operations, financial affairs, organizational matters, personnel matters, budgets, business plans, marketing plans, studies, policies, procedures, products, ideas, processes, software systems, trade secrets and technical know-how, (2) any other matter relating to the Group and (3) any matter relating to clients of the Group or other third parties having relationships with the Group. Proprietary Information includes (1) information regarding any aspect of your tenure as an employee of the Group or the termination of your employment, (2) the names, addresses, and phone numbers and other information concerning clients and prospective clients of the Group, (3) investment techniques and trading strategies used in, and the performance records of, client accounts or other investment products, and (4) information and materials concerning the personal affairs of employees of the

10

Group. In addition, Proprietary Information may include information furnished to you orally or in writing (whatever the form or storage medium) or gathered by inspection, in each case before or after the date of this Agreement. However, Proprietary Information does not include information (1) that was or becomes generally available to the public, other than as a result of a disclosure by you, directly or indirectly, or as a result of the violation by a third party of the Group’s confidentiality rights, or (2) that you can establish was independently developed by you without reference to any Proprietary Information.

     (b) Use and Disclosure. You will obtain or create Proprietary Information in the course of your involvement in the Group’s activities and may already have Proprietary Information. You agree that the Proprietary Information is the exclusive property of the Group, and that, during your employment, you will use and disclose Proprietary Information only for the Group’s benefit and in accordance with any restrictions placed on its use or disclosure by the Group. After your employment, you will not use or disclose any Proprietary Information. In addition, nothing in this Agreement will operate to weaken or waive any rights that the Group may have under statutory or common law, or any other agreement, to the protection of trade secrets, confidential business information and other confidential information.

     (c) Limitations. Nothing in this Agreement prohibits you from providing truthful testimony or information concerning the Group to governmental, regulatory or self-regulatory authorities. Also, the parties (and their respective employees, representatives and agents) may disclose to any and all persons, without any limitation of any kind, the tax treatment and tax structure of this Agreement and all materials of any kind (including opinions and other tax analysis) that are provided to either party related to such tax treatment and structure.

8. Ongoing Restrictions on Your Activities

     (a) General Effect. This Section 8 applies during your employment and for the 12-month period after your employment ends. This Section uses the following defined terms:

     “Competitive Enterprise” means any business enterprise that either (1) engages in any material activity that competes anywhere with any material activity in which the Group is then engaged or (2) holds a 5% or greater equity, voting or profit participation interest in any enterprise that engages in such a competitive activity.

     “Client” means any client or prospective client of the Group to whom you provided services, or for whom you transacted business, or whose identity became known to you in connection with your relationship with or employment by the Group.

     “Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action. A general employment advertisement by an entity of which you are a part is excluded from the definition of Solicit.

11

     (b) Your Importance to the Group and the Effect of this Section 8. You acknowledge that:

     (1) In the course of your involvement in the Group’s activities, you will have access to Proprietary Information and the Group’s client base and will profit from the goodwill associated with the Group. On the other hand, in view of your access to Proprietary Information and your importance to the Group, if you compete with the Group for some time after your employment, the Group will likely suffer significant harm. In return for the benefits you will receive from the Group and to induce the Group to enter into this Agreement, and in light of the potential harm you could cause the Group, you agree to the provisions of this Section 8. The Company would not have entered into this Agreement if you did not agree to this Section 8.

     (2) In light of Section 8(b)(1), if you breach any provision of this Section 8, the loss to the Company would be material but the amount of loss would be uncertain and not readily ascertainable.

     (3) This Section 8 limits your ability to earn a livelihood in a Competitive Enterprise and your relationships with Clients. You acknowledge, however, that complying with this Section 8 will not result in severe economic hardship for you or your family.

(c) Your Payment Obligations. If you fail to comply with this Section 8 during the Compensation Period and for a 12-month period thereafter, other than any isolated, insubstantial and inadvertent failure that is not in bad faith, you will forfeit all (i) remaining payments owed to you under Section 6 and (ii) restricted stock and other equity-based compensation (without features similar to exercise) that have been awarded by the Group and not vested at the time of determination.

     (d) Non-Competition. During your Compensation Period and for a 12-month period after termination of your employment, you will not directly or indirectly:

     (1) hold a 10% or greater equity, voting or profit participation interest in a Competitive Enterprise; or

     (2) associate (including as a director, officer, employee, partner, consultant, agent or advisor) with a Competitive Enterprise and in connection with your association engage, or directly or indirectly manage or supervise personnel engaged, in any activity:

     (A) that is substantially related to any activity that you were engaged in,

     (B) that is substantially related to any activity for which you had direct or indirect managerial or supervisory responsibility, or

12

     (C) that calls for the application of specialized knowledge or skills substantially related to those used by you in your activities;

in each case, for the Group at any time during the year before the end of your employment (or, if earlier, the year before the date of determination).

     (e) Non-Solicitation of Clients. During your Compensation Period and for a 12-month period after termination of your employment, you will not attempt to:

     (1) Solicit any Client to transact business with a Competitive Enterprise or to reduce or refrain from doing any business with the Group (excluding any business that is not a material activity of the Group),

     (2) transact business with any Client that would cause you to be a Competitive Enterprise or that would cause any Client to reduce or refrain from doing any business with the Group, or

     (3) interfere with or damage any relationship between the Group and a Client.

     (f) Non-Solicitation of Group Employees. During your Compensation Period and for a 12-month period after termination of your employment, you will not attempt to Solicit anyone who is then an employee of the Group (or who was an employee of the group within the prior three (3) months) to resign from the Group or to apply for or accept employment with any Competitive Enterprise, except that you may Solicit your administrative assistant.

     (g) Notice to New Employers. Before you either apply for or accept employment with any other person or entity while any of Section 8(d), (e) or (f) is in effect, you will provide the prospective employer with written notice of the provisions of this Section 8 and will deliver a copy of the notice to the Group.

9. No Public Statements or Disparagement

You agree that you will not make any public statement that would libel, slander or disparage any member of the Group or any of their respective past or present officers, directors, employees or agents. This Section 9 is subject to Section 7(c).

10. Effect on Other Agreements; Entire Agreement

This Agreement is the entire agreement between you and the Company with respect to the relationship contemplated by this Agreement and supersedes any earlier agreement, written or oral, with respect to the subject matter of this Agreement. In entering into this Agreement, no party has relied on or made any representation, warranty, inducement, promise or understanding that is not in this Agreement. You hereby acknowledge that you are not subject to any obligation which would in any way restrict the performance of your duties hereunder.

13

11. Successors

     (a) Payments on Your Death. If you die and any amounts become payable under this Agreement, we will pay those amounts to your estate.

     (b) Assignment by You. You may not assign this Agreement without the Company’s consent. Also, except as required by law, your right to receive payments or benefits under this Agreement may not be subject to execution, attachment, levy or similar process. Any attempt to effect any of the preceding in violation of this Section 11(b), whether voluntary or involuntary, will be void.

     (c) Assumption by any Surviving Company. Before the effectiveness of any merger, consolidation, statutory share exchange or similar transaction (including an exchange offer combined with a merger or consolidation) involving the Company (a “Reorganization”) or any sale, lease or other disposition (including by way of a series of transactions or by way of merger, consolidation, stock sale or similar transaction involving one or more subsidiaries) of all or substantially all of the Company’s consolidated assets (a “Sale”), the Company will cause (1) the Surviving Company to unconditionally assume this Agreement in writing and (2) a copy of the assumption to be provided to you. After the Reorganization or Sale, the Surviving Company will be treated for all purposes as the Company under this Agreement. The “Surviving Company” means (i) in a Reorganization, the entity resulting from the Reorganization or (ii) in a Sale, the entity that has acquired all or substantially all of the assets of the Company.

12. Disputes

     (a) Employment Matter. This Section 12 applies to any controversy or claim between you and the Group arising out of or relating to or concerning this Agreement or any aspect of your employment with the Group or the Seller or the termination of that employment (together, an “Employment Matter”).

     (b) Mandatory Arbitration. Subject to the provisions of this Section 12, any Employment Matter will be finally settled by arbitration in the County of New York administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect. However, the rules will be modified in the following ways: (1) the decision must not be a compromise but must be the adoption of the submission by one of the parties, (2) each arbitrator will agree to treat as confidential evidence and other information presented to the same extent as the information is required to be kept confidential under Section 7, (3) there will be no authority to amend or modify the terms of this Agreement except as provided in Section 13(c) (and you and the Group agree not to request any such amendment or modification), (4) a decision must be rendered within 10 business days of the parties’ closing statements or submission of post-hearing briefs and (5) the arbitration will be conducted before a panel of three arbitrators, one selected by you within 10 days of the commencement of arbitration, one selected by the Company in the same period and the third selected jointly by these arbitrators (or, if they are unable to agree on an arbitrator within 30 days of the commencement of arbitration, the third arbitrator will be appointed by the American Arbitration Association; provided that the arbitrator shall be a partner or former partner at a nationally recognized law firm).

14

     (c) Limitation on Damages. You and the Group agree that there will be no punitive damages payable as a result of any Employment Matter and agree not to request punitive damages.

     (d) Injunctions and Enforcement of Arbitration Awards. You or the Group may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in the County of New York to enforce any arbitration award under Section 12(b). Also, the Group may bring such an action or proceeding, in addition to its rights under Section 12(b) and whether or not an arbitration proceeding has been or is ever initiated, to temporarily, preliminarily or permanently enforce any part of Sections 7 and 8. You agree that (1) your violating any part of Sections 7 and 8 would cause damage to the Group that cannot be measured or repaired, (2) the Group therefore is entitled to an injunction, restraining order or other equitable relief restraining any actual or threatened violation of those Sections, (3) no bond will need to be posted for the Group to receive such an injunction, order or other relief, (4) no proof will be required that monetary damages for violations of those Sections would be difficult to calculate and that remedies at law would be inadequate and (5) the General Counsel of the Company is irrevocably appointed as your agent for service of process in connection with any such action or proceeding (the General Counsel will promptly advise you of any such service of process).

     (e) Jurisdiction and Choice of Forum. You and the Group irrevocably submit to the exclusive jurisdiction of any state or federal court located in the County of New York over any Employment Matter that is not otherwise arbitrated or resolved according to Section 12(b). This includes any action or proceeding to compel arbitration or to enforce an arbitration award. Both you and the Group (1) acknowledge that the forum stated in this Section 12(e) has a reasonable relation to this Agreement and to the relationship between you and the Group and that the submission to the forum will apply even if the forum chooses to apply non-forum law, (2) waive, to the extent permitted by law, any objection to personal jurisdiction or to the laying of venue of any action or proceeding covered by this Section 12(e) in the forum stated in this Section, (3) agree not to commence any such action or proceeding in any forum other than the forum stated in this Section 12(e) and (4) agree that, to the extent permitted by law, a final and non-appealable judgment in any such action or proceeding in any such court will be conclusive and binding on you and the Group. However, nothing in this Agreement precludes you or the Group from bringing any action or proceeding in any court for the purpose of enforcing the provisions of Sections 12(b) and this 12(e).

     (f) Waiver of Jury Trial. To the extent permitted by law, you and the Group waive any and all rights to a jury trial with respect to any Employment Matter.

     (g) Governing Law. This Agreement will be governed by and construed in accordance with the law of the State of New York applicable to contracts made and to be performed entirely within that State.

     (h) Costs. To the extent permitted by law, the Company will reimburse any reasonable expenses, including reasonable attorney’s fees, you incur as a result of any Employment Matter, provided that you prevail on a material issue in such

15

dispute. Additionally, the Company will reimburse your reasonable attorney’s fees, not to exceed $40,000, incurred to negotiate this Employment Agreement.

13. General Provisions

     (a) Construction.

     (1) References (A) to Sections are to sections of this Agreement unless otherwise stated; (B) to any contract (including this Agreement) are to the contract as amended, modified, supplemented or replaced from time to time; (C) to any statute, rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under the statute) and to any section of any statute, rule or regulation include any successor to the section; (D) to any governmental authority include any successor to the governmental authority; (E) to any plan include any programs, practices and policies; (F) to any entity include any corporation, limited liability company, partnership, association, business trust and similar organization and include any governmental authority; and (G) to any affiliate of any entity are to any person or other entity directly or indirectly controlling, controlled by or under common control with the first entity.

     (2) The various headings in this Agreement are for convenience of reference only and in no way define, limit or describe the scope or intent of any provisions or Sections of this Agreement.

     (3) Unless the context requires otherwise, (A) words describing the singular number include the plural and vice versa, (B) words denoting any gender include all genders and (C) the words “include”, “includes” and “including” will be deemed to be followed by the words “without limitation.”

     (4) It is your and the Group’s intention that this Agreement not be construed more strictly with regard to you or the Group.

     (b) Withholding. You and the Group will treat all payments to you under this Agreement as compensation for services. Accordingly, the Group may withhold from any payment any taxes that are required to be withheld under any law, rule or regulation.

     (c) Severability. If any provision of this Agreement is found by any court of competent jurisdiction (or legally empowered agency) to be illegal, invalid or unenforceable for any reason, then (1) the provision will be amended automatically to the minimum extent necessary to cure the illegality or invalidity and permit enforcement and (2) the remainder of this Agreement will not be affected. In particular, if any provision of Section 8 is so found to violate law or be unenforceable because it applies for longer than a maximum permitted period or to greater than a maximum permitted area, it will be automatically amended to apply for the maximum permitted period and maximum permitted area.

16

     (d) No Set-off or Mitigation. Except as provided in Section 8(c) or if your employment is terminated by the Company for Cause, your and the Company’s respective obligations under this Agreement will not be affected by any set-off, counterclaim, recoupment or other right you or any member of the Group may have against each other or anyone else. You do not need to seek other employment or take any other action to mitigate any amounts owed to you under this Agreement.

     (e) Notices. All notices, requests, demands and other communications under this Agreement must be in writing and will be deemed given (1) on the business day sent, when delivered by hand or facsimile transmission (with confirmation) during normal business hours, (2) on the business day after the business day sent, if delivered by a nationally recognized overnight courier or (3) on the third business day after the business day sent if delivered by registered or certified mail, return receipt requested, in each case to the following address or number (or to such other addresses or numbers as may be specified by notice that conforms to this Section 13(e)):

     If to you, to your address then on file with the Company’s payroll department.

     If to the Company or any other member of the Group, to:

Computer Associates International, Inc.

World Headquarters

One Computer Associates Plaza

Islandia, New York 11749

Attention: General Counsel

Facsimile: (631) 342-4865

     (f) Consideration. This Agreement is in consideration of the mutual covenants contained in it. You and the Group acknowledge the receipt and sufficiency of the consideration to this Agreement and intend this Agreement to be legally binding.

     (g) Amendments and Waivers. Any provision of this Agreement may be amended or waived but only if the amendment or waiver is in writing and signed, in the case of an amendment, by you and the Company or, in the case of a waiver, by the party that would have benefited from the provision waived. Except as this Agreement otherwise provides, no failure or delay by you or the Group to exercise any right or remedy under this Agreement will operate as a waiver, and no partial exercise of any right or remedy will preclude any further exercise.

     (h) Third-Party Beneficiaries. Subject to Section 11, this Agreement will be binding on, inure to the benefit of and be enforceable by the parties and their respective heirs, personal representatives, successors and assigns. This Agreement does not confer any rights, remedies, obligations or liabilities to any entity or person other than you and the Company and your and the Company’s permitted successors and assigns, although (1) this Agreement will inure to the benefit of the Group and (2) Section 11(a) will inure to the benefit of the most recent persons named in a notice under that Section.

17

     (i) Counterparts. This Agreement may be executed in counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement. However, this Agreement will not be effective until the date both parties have executed this Agreement.

	Very truly yours,
Accepted and agreed to:
/s/ John A. Swanson	/s/ Lewis S. Ranieri
John A. Swainson	Lewis S. Ranieri
	Chairman Computer Associates International, Inc.
November 22, 2004

18

EX-10.2

Exhibit 10.2

Execution Copy

EMPLOYMENT AGREEMENT

          This Agreement is entered into by and between Computer Associates International, Inc. (the “Company”) and Jeff Clarke (“Executive”) as of November 22, 2004. On April 23, 2004, Executive was appointed to the position of Chief Operating Officer (the “COO Position”) of the Company. Executive continues to serve as the Chief Financial Officer of the Company (the “CFO Position”). In consideration of the Company offering, and Executive accepting, the COO Position, Executive and the Company agree as follows:

     1. Work Standards. Executive will continue to (a) serve the Company (and such of its subsidiary companies as the Company may designate) faithfully, diligently and to the best of Executive’s ability under the direction of the Chief Executive Officer (including any interim Chief Executive Officer) of the Company, (b) devote his best efforts, attention and energy to the performance of his duties to the Company and (c) not do anything inconsistent with his duties to the Company. Executive’s employment pursuant to the terms of this Agreement shall be effective as of April 23, 2004 and shall end on March 31, 2006, unless earlier terminated in accordance with paragraph 8 of this Agreement or extended by mutual written agreement between the Company and Executive.

     2. Laws; Other Agreements. Executive represents that his employment hereunder will not violate any law or duty by which he is bound, and will not conflict with or violate any agreement or instrument to which Executive is a party or by which he is bound.

     3. Compensation.

          (a) In consideration of services that Executive has rendered and will render to the Company in the future, the Company agrees to pay Executive the sum of $650,000 per annum (less applicable withholdings) commencing on April 23, 2004, payable semi-monthly concurrent with the Company’s normal payroll cycle. The Company will pay this amount until Executive’s employment hereunder terminates.

          (b) (i) In addition, with respect to the fiscal year ending March 31, 2005, Executive shall be eligible to receive:

               (A) a 2005 Annual Performance Bonus (payable in cash) pursuant to Section 4.4 of the Company’s 2002 Incentive Plan, as amended (as so amended, the “2002 Plan”), with an Annual Performance Bonus target of $800,000.00, which Annual Performance Bonus shall otherwise be subject to the terms and conditions of the Company’s 2005 Annual Performance Bonus program set forth in the resolutions approving the Performance Bonuses described in paragraphs 3(b)(i) and (ii) that were adopted (the “Resolutions”) by the Compensation and Human Resource Committee (the “Compensation Committee”) of the Board of Directors; and

               (B) a targeted Long-Term Performance Bonus of $3,050,000.00 for the period from April 1, 2004 through March 31, 2005, which Long-Term Performance Bonus shall otherwise be subject to the terms and conditions applicable to the fiscal year ending March 31, 2005 under the Company’s 2005-2007 Long-Term Performance Bonus program set forth in the Resolutions. Subject to paragraph 3(c), such Long-Term Performance Bonus shall vest and the portion of the Performance Bonus payable in options shall become exercisable in accordance with the terms set forth in the Resolutions.

               (ii) In addition, with respect to the fiscal year ending March 31, 2006:

               (A) Executive shall be eligible to receive a 2006 Annual Performance Bonus for the period from April 1, 2005 through March 31, 2006, with a target amount and such other terms and conditions as determined by the Compensation Committee; and

               (B) Executive shall be eligible to receive a targeted Long-Term Performance Bonus of $3,050,000.00 for the period from April 1, 2004 through March 31, 2006, which Long-Term Performance Bonus shall otherwise be subject to the terms and conditions applicable to the performance period ending March 31, 2006 under the Company’s 2005-2007 Long-Term Performance Bonus program

set forth in the Resolutions. Subject to paragraph 3(c), such Long-Term Performance Bonus shall vest and the portion of the Performance Bonus payable in options shall become exercisable in accordance with the terms set forth in the Resolutions.

               (c) (i) In the event that Executive (A) voluntarily resigns his COO Position with the Company other than “for good reason” (as defined in paragraph 5(b) of this Agreement) or (B) is terminated “for cause” (as defined in paragraph 5(a) of this Agreement), in any such case prior to March 31, 2006, Executive shall (x) forfeit any and all rights he may have to receive any of the benefits provided for in this paragraph 3 (other than any amounts or awards for which all required services have been rendered and any applicable Performance Cycle has ended but which have not yet been paid) and (y) be obligated to repay the Company for any moving and/or relocation expenses in accordance with the terms of the Moving & Relocation Expense Reimbursement Agreement entered into between Executive and the Company (the “Relocation Agreement”). All stock options and restricted stock held by Executive in the event of the termination of Executive’s employment as described in this paragraph 3(c)(i) shall be subject to the terms and conditions of the 2002 Plan (and any successor plan) and any applicable resolutions.

               (ii) In the event that Executive (x) voluntarily resigns his COO Position with the Company “for good reason” (as defined in paragraph 5(b) of this Agreement), (y) is terminated from the COO Position other than “for cause” (as defined in paragraph 5(a) of this Agreement), or (z) terminates his employment on account of death or Disability (as defined in the 2002 Plan), in any such case prior to March 31, 2006, then:

               (A) Executive shall be entitled to receive a lump sum payment (less applicable withholding taxes) in an amount equal to $4,500,000 (which represents the sum of (1) $650,000 plus (2) his 2005 Annual Performance Bonus target as set forth in paragraph 3(b)(i)(A) (i.e. $800,000) and (3) his Long-Term Performance Bonus target (i.e., $3,050,000) for the Performance Cycle ending with the close of the fiscal year during which his termination occurs), provided that if Executive resigns his COO Position “for good reason” (as defined in paragraph 5(b) of this Agreement) based on a reduction of any of Executive’s bonuses that meets the requirements of clause (iii) of the definition of “good reason”, the $4,500,000 payment described in this clause (A) shall be reduced by the sum of any bonuses actually paid to Executive in respect of the period as to which such reduction took place, payable in cash within 30 days after the end of the six month period following Executive’s termination of employment with the Company, or earlier if the Company determines that making such payment after termination but before the expiration of such six month period is permitted by law;

               (B) management shall recommend that (1) the 235,000 options granted pursuant to Executive’s March 18, 2004 offer letter and any unvested Restricted Stock, Fair Market Value Options and Premium-Priced Options granted to Executive pursuant to the Long-Term Performance Bonuses described in paragraphs 3(b)(i) and (ii) shall vest in full immediately upon the termination of Executive’s employment hereunder, (2) the 235,000 options and any Fair Market Value Options and Premium-Priced Options granted to Executive pursuant to the Long-Term Performance Bonuses described in paragraphs 3(b)(i) and (ii) shall remain exercisable for one year following such termination of employment, and (3) all Restricted Stock issued, and all stock received on exercise of options granted, to Executive pursuant to the Long-Term Performance Bonuses described in paragraphs 3(b)(i) and (ii) shall no longer be subject to any holding period (except as may be required by any state or federal securities laws); and

               (C) Executive shall be relieved of all obligations to repay any moving and/or relocation expenses under the Relocation Agreement.

               (iii) For clarification purposes only, in the event that Executive resigns or is terminated from his CFO Position for any reason or no reason at any time, but remains in his COO Position, no benefits shall be payable under this paragraph 3 on account of such resignation or termination but the terms and conditions of paragraph 3 shall continue to remain in full force and effect.

               (iv) In the event that Executive continues to be employed through March 31, 2006, Executive shall be entitled to any Annual Performance Bonus and Long-Term Performance Bonus payable under the terms of the 2002 Plan and the Resolutions for the fiscal year ending March 31, 2006 in accordance with paragraph 3(b)(ii), without regard to whether Executive’s employment with the Company is subsequently terminated before any such Performance Bonuses are paid.

2

               (v) Notwithstanding anything to the contrary herein, Executive shall be entitled to the payments under this paragraph 3(c) only to the extent not already provided under another plan or policy of the Company.

          (d) Capitalized terms used in paragraphs 3(b) and (c) and not defined are used as defined in the 2002 Plan.

     4. Benefits and Perquisites. During the term of Executive’s employment, Executive shall be eligible to participate in all pension, welfare and benefit plans and perquisites generally made available to other senior executives of the Company.

     5. Termination by Company for Cause or Executive for Good Reason.

          (a) For purposes of this Agreement, termination “for cause” shall mean that the Company terminates Executive’s employment for any of the following reasons:

               (i) Executive’s continued failure, either due to willful action or as a result of gross neglect, to substantially perform his duties with the Company (other than any such failure resulting from his incapacity due to physical or mental illness) that, if capable of being cured, has not been cured within 30 days after written notice is delivered to Executive by or on behalf of the Compensation Committee, which notice specifies in reasonable detail the manner in which the Compensation Committee believes that Executive has not substantially performed his duties,

               (ii) the engaging by Executive in conduct which is demonstrably and materially injurious to the Company or its affiliates, monetarily or otherwise, unless the conduct in question was undertaken in good faith, and with a rational business purpose and based upon the reasonable belief that such conduct was in the best interest of the Company or its affiliates, as the case may be,

               (iii) Executive’s indictment or conviction (or plea of guilty or nolo contedere) for any felony or any other crime (other than a petty misdemeanor) involving dishonesty, fraud or moral turpitude,

               (iv) Executive’s breach of fiduciary duty to the Company or its affiliates which may in the good faith determination of the Compensation Committee reasonably be expected to have a material adverse effect on the Company or its affiliates,

               (v) violation of the Company’s policies relating to compliance with applicable laws which may in the good faith determination of the Compensation Committee reasonably be expected to have a material adverse effect on the Company or its affiliates,

               (vi) violation of the Company’s policies on discrimination, unlawful harassment or substance abuse,

               (vii) violation of the Company’s Workplace Violence Policy, or

               (viii) unauthorized use or disclosure of confidential or proprietary information or related materials, or the violation of any of the terms of the Company’s standard confidentiality policies and procedures, which, in either case, (A) may reasonably be expected to have a material adverse effect on the Company or its affiliates and (B) if capable of being cured, has not been cured within 30 days after written notice is delivered to Executive by or on behalf of the Compensation Committee, which notice specifies in reasonable detail the alleged unauthorized use or disclosure or violation.

For purposes of clause (i) of this definition, no act, or failure to act, on Executive’s part shall be deemed “willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that his act, or failure to act, was in the best interest of the Company or its affiliates, as the case may be.

          (b) For purposes of this Agreement, termination “for good reason” shall mean any action or series of actions by the Company which, taken together if a series of actions, directly or indirectly results in (i) any material and adverse change in Executive’s position, title or equivalent title with the Company (other than removal of Executive from the position of Chief Financial Officer), (ii) any material and

3

adverse reduction in Executive’s supervisory or other authority or responsibility other than any isolated, insubstantial and inadvertent failure by the Company that is not in bad faith and is cured promptly on Executive’s giving the Company notice, (iii) any reduction by the Compensation Committee in the amount of Executive’s 2005 or 2006 Annual Performance Bonus or Executive’s Long-Term Performance Bonus for the period ending March 31, 2005 or the period ending March 31, 2006, as applicable, that results in the amount of any such Performance Bonus being less than 75% of the amount determined pursuant to the formulae specified in the Resolutions, as applicable, other than (1) any such reduction that is consistent with reductions for all executive vice presidents and above level officers eligible for awards under the 2005 or 2006 Annual Performance Bonus programs or the 2005-2007 Long-Term Performance Bonus programs, as applicable, (2) any such reduction agreed to by Executive in writing or (3) any insubstantial or inadvertent reduction by the Compensation Committee that is not in bad faith and is cured promptly on Executive’s giving the Company notice, (iv) the Company’s material breach of this Agreement, provided that no alleged action, change, reduction or breach set forth in preceding clauses (i), (ii) or (iii) or in this clause (iv), respectively, shall be deemed to constitute “good reason” unless such action, reduction or breach remains uncured, as the case may be, after the expiration of thirty (30) days following delivery to Company from Executive of a written notice, setting forth such course of conduct deemed by Executive to constitute “good reason”, or (v) the failure of the Company to require any purchaser of or successor to substantially all of the assets of the Company or any enterprise with which or into which the Company may be merged to assume the Company’s obligations under this Agreement.

     6. Indemnification. For so long as Executive is employed by the Company pursuant to this Agreement and at all time thereafter, the Company shall indemnify and hold Executive harmless for acts and omissions in Executive’s capacity as Chief Operating Officer and Chief Financial Officer, as applicable, to the maximum extent permitted under applicable law.

     7. Authorization to Modify Restrictions. Executive acknowledges that the restrictions contained in this Agreement are reasonable, but agrees that if a court having proper jurisdiction holds a particular restriction unreasonable, that restriction shall be modified to the extent necessary in the opinion of such court to make it reasonable, and that the remaining provisions of this Agreement shall nonetheless remain in full force and effect.

     8. No Duration of Employment. Notwithstanding anything else contained in this Agreement to the contrary, the Company and Executive each acknowledge and agree that Executive’s employment with the Company may be terminated by either the Company (subject only to the provisions of paragraph 3(c) of this Agreement) or Executive (subject only to the provisions of paragraph 3(c) of this Agreement) at any time and for any reason, with or without cause, upon 10 days’ written notice to the other party, provided that this Agreement may be terminated “for cause” immediately upon written notice from the Company to Executive. In addition, this Agreement shall automatically terminate upon Executive’s death or Disability. Upon termination of Executive’s employment for any reason whatsoever, the Company shall have no further obligations to Executive other than those set forth in paragraphs 3 and 6 of this Agreement.

     9. General.

          (a) Any notice required or permitted to be given under this Agreement shall be made either:

               (i) by personal delivery to Executive or, in the case of the Company, to the Company’s principal office (“Principal Office”) located at One Computer Associates Plaza, Islandia, New York 11749, Attention: Senior Vice President - Human Resources, or

               (ii) in writing and sent by registered mail, postage prepaid, to Executive’s residence, or, in the case of the Company, to the Company’s Principal Office.

Any provision of this Agreement calling for notice to be delivered by or on behalf of the Compensation Committee shall be satisfied by any notice that is executed on behalf of the Compensation Committee by any director or officer of the Company acting pursuant to the authorization of the Compensation Committee and otherwise delivered in accordance with this paragraph 9(a).

          (b) This Agreement shall be binding upon Executive and his heirs, executors, assigns, and administrators and shall inure to the benefit of the Company, its successors and assigns and any subsidiary or parent of the Company.

4

          (c) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles. Any action relating to this Agreement shall be brought exclusively in the state or federal courts of the State of New York, County of Suffolk.

          (d) This Agreement, the Relocation Agreement and the other documents referred to herein represent the entire agreement between Executive and the Company related to Executive’s employment and supersede any and all previous oral or written communications, representations or agreements related thereto. This Agreement may only be modified, in writing, jointly by Executive and a duly authorized representative of the Company.

          (e) Without limiting the scope of paragraph 7 of this Agreement, the provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be any way impaired and shall remain enforceable to the fullest extent permitted by law.

CAUTION TO EXECUTIVE: This Agreement affects important rights. DO NOT sign it unless you have read it carefully and are satisfied that you understand it completely.

	COMPUTER ASSOCIATES
	INTERNATIONAL, INC.
/s/ Jeff Clarke	By:	/s/ Kenneth D. Cron
Jeff Clarke	Name: Kenneth D. Cron
	Title: Chief Executive Officer

5

EX-10.5

Exhibit 10.5

Computer Associates International, Inc.
Restricted Stock Unit Certificate

John A. Swainson
Name of Participant	EmplID

Grant Number
Total Number of Restricted Stock Unit Awards Granted	100,000
Grant Date	November 22, 2004

This Certificate confirms the grant under the Computer Associates International, Inc. 2002 Incentive Plan, as amended and restated effective as of March 31, 2004 (the “Plan”), to the above-named participant of the amount of Restricted Stock Units set forth above. This Certificate does not constitute ownership of any shares of Common Stock of Computer Associates International, Inc. (the “Company”) or confer any rights associated with the ownership of shares, except as expressly set forth herein. This grant is subject in all respects to the applicable terms of the Plan, which are incorporated by reference in this Certificate. A copy of the Plan may be obtained at no cost by contacting the Corporate Treasurer.

This grant will vest in full six (6) months after the date the participant’s employment terminates for any reason, at which time the Company shall deliver to the participant 100,000 shares of Common Stock, free from all restrictions (other than such restrictions as may be applicable under the federal securities laws).

The Company may satisfy any federal income tax withholding obligations that arise in connection with the vesting of the Restricted Stock Units by withholding shares of Common Stock that are issued pursuant to this award having a Fair Market Value, as defined in the Plan, on the date the shares first become taxable equal to the minimum statutory withholding obligation with respect to such taxable shares.

By /s/ Jeff Clarke
Jeff Clarke
Chief Operating Officer

EX-10.6

Exhibit 10.6

Moving & Relocation Expense Reimbursement Agreement

Moving From Office:                                       To:                                       

I acknowledge receipt of Computer Associates International, Inc.’s (CA) Moving & Relocation Expense Reimbursement Agreement and agree as follows:

1. I understand and agree that if my employment is terminated for cause or if I voluntarily leave CA within two (2) years from the date of the actual move, I will be required to repay the moving and/or relocation expenses that CA pays to me or on my behalf in connection with my relocation. The repayment that I will be required to make will be in accordance with the following schedule:

     If I voluntarily terminate my employment or am discharged for cause at any time from the signing of this Agreement through 12 full months following the date of the actual move, I must repay 100% of the moving expenses/costs paid by CA on my behalf;

     If I voluntarily terminate my employment or am discharged for cause at any time from 13 months after the date of the actual move through 24 months after date of the actual move, I must repay 50% of the moving expenses/costs paid by CA on my behalf;

     For purposes of this Agreement, termination “for cause” is defined as employment termination for any of the following reasons: (1) dishonesty, including theft; (2) insubordination; (3) job abandonment; (4) willful refusal to perform the employee’s job; (5) violation of the terms of the Company’s Employment and Confidentiality Agreement; (6) violation of the Company’s policies on discrimination, unlawful harassment or substance abuse; (7) violation of the Company’s Work Rules; (8) violation of the Company’s Workplace Violence Policy; and, (9) excessive absenteeism.

2. I understand and agree that if CA does not terminate my employment for cause and I do not voluntarily terminate my employment within two (2) years after the date of the actual move, I will not be required to repay any portion of the moving expenses/costs paid by CA on my behalf.

3. By signing this Agreement, and to the extent permitted by law, I hereby authorize CA to deduct any repayment I may owe under this Agreement from any monies due to me, whether during my employment or after the date of my employment termination.

I understand and agree that I will pay CA any amounts owing under this Agreement within 90 days following my employment termination by sending a check or money order for the amount owed to CA’s Senior Vice President of Human Resources. I further understand and agree that this Relocation Agreement will be construed in accordance with the laws of the state of New York without regard to New York’s conflict of laws principles.

Agreed and Accepted this

day of                     20
	Employee Name (Print)

Computer Associates International, Inc.

By
	SVP Worldwide Human Resources	Employee Signature

EX-99.1

Exhibit 99.1

CA NAMES JOHN SWAINSON PRESIDENT AND CEO-ELECT

• 26-Year Industry Veteran Also Named to Board of Directors

• Kenneth Cron to Remain Interim CEO into Spring 2005

• Jeff Clarke Continues as Chief Operating Officer

ISLANDIA, N.Y., November 23, 2004 — Computer Associates International, Inc. (NYSE: CA), the leading provider of enterprise management software, today announced that John Swainson, a 26-year industry and IBM veteran, has been named as President and CEO-elect and elected to CA’s Board of Directors, expanding it to 10 members.

The Company will hold a webcast to discuss this announcement at 9:30 a.m. EST today. The webcast can be accessed at http://ca.com/invest.

“I am very pleased that a person of John Swainson’s stature has agreed to lead CA; he is an excellent complement to our very strong CA management team,” CA Chairman Lewis Ranieri said. “He knows what it takes to run a software business and build brands, having spent the last nine years in the senior management of IBM’s Software Group. He has a passion for the customer that is unsurpassed, and an understanding of how to execute on a technology vision that drives revenue growth.”

Most recently, Swainson was vice president for IBM’s worldwide software sales force where he was responsible for selling IBM’s diverse line of software products through multiple channels. Prior to that, he was general manager of the Application Integration and Middleware division of IBM’s Software Group, a division he started in 1997. As head of IBM’s largest software group, he and his team developed and marketed the highly successful WebSphere family of middleware products.

“John turned a relatively unknown software solution, middleware, into a $1 billion business. He possesses a unique set of skills, including development, sales and marketing that combined make him a tremendous manager and the right person to lead CA as it continues to move forward,” Ranieri continued.

In making the announcement, Ranieri said Kenneth Cron, who has led CA since being named interim CEO in April 2004, will continue to lead the Company during a four-to-six month transition period. Swainson joined CA on Monday and will report to Cron during the transition. Jeff Clarke, who joined CA in April 2004, will continue as the Company’s chief operating officer and chief financial officer and will continue to report to Cron.

Ranieri said the transition period ensures that CA will continue to build on the momentum it has built over the past six months.

“Ken and Jeff have done an outstanding job stabilizing CA during an unquestionably tumultuous period and have put the Company back on track,” said Ranieri. “They have defined a company vision, developed a strategic growth plan and initiated a cost restructuring plan. Ken took on a challenging role, and I have truly been impressed by his management style and his ability to make employees, customers and investors believe in the future of CA. I thank Ken for agreeing to stay on for an additional four to six months to help ensure John’s success.”

As president, Swainson, 50, initially will have responsibility for charting CA’s software strategy and the corresponding development of the products to fulfill the vision. Swainson’s appointment as president, CEO-elect and Board member was unanimously approved by CA’s Board of Directors.

“I am excited to be joining CA and becoming part of the Company’s excellent management team,” Swainson said. “I have observed CA as a competitor for many years and have been impressed by the depth of its management software portfolio and its position in the marketplace. I look forward to helping the Company move forward and achieve its goal of being the management software company CIOs turn to to get the most return out of their IT systems.”

Swainson joined IBM in 1978 and served in a variety of sales, marketing and product development positions. He was a member of the IBM Worldwide Management Council, IBM’s Strategy Team, Senior Management Team and on the Board of Governors for the IBM Academy of Technology. He holds a degree in engineering from the University of British Columbia.

Besides being CA’s interim CEO, Cron, 48, also serves as a member of the Company’s Board of Directors. He will continue to serve on CA’s board after he leaves the CEO post. Prior to CA, he was Chief Executive Officer of Vivendi Universal Games, a global leader in the publishing of online, PC and console-based interactive entertainment and a division of Vivendi Universal, S.A. Cron also served as Chief Operating Officer of Vivendi Universal Entertainment.

Clarke, 43, has responsibility for CA’s direct and indirect sales, alliances and partnerships, marketing, business development, and finance. He joined the Company in March, 2004 as chief financial officer, a position he retains, and was promoted to chief operating officer in April.

Clarke has 20 years of strategic, operational and financial experience with leading high-technology firms. He was senior vice president, finance and administration, and chief financial officer at Compaq Computer Corporation from 2001 until the completion of its merger with Hewlett-Packard Company (HP) in 2002. Most recently, he was executive vice president, global operations at HP, where he was responsible for the largest global supply chain and procurement operations in the technology industry.

About CA

Computer Associates International, Inc. (NYSE:CA), the world’s largest management software company, delivers software and services across operations, security, storage, life cycle and service management to optimize the performance, reliability and efficiency of enterprise IT environments. Founded in 1976, CA is headquartered in Islandia, N.Y., and serves customers in more than 140 countries. For more information, please visit http://ca.com.

###

© 2004 Computer Associates International, Inc. One Computer Associates Plaza, Islandia, N.Y. 11749. All trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.