CA, Inc. 2015 Definitive Proxy Statement
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

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Definitive Proxy Statement
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Soliciting Material Pursuant to Section 240.14a-12.

CA, Inc.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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June 15, 2015
To Our Stockholders:
On behalf of the Board of Directors and management of CA, Inc., we are pleased to invite you to our 2015 annual meeting of stockholders. The meeting will be held at our company’s offices located at One CA Plaza, Islandia, New York 11749 on August 5, 2015 at 10:00 a.m. Eastern Daylight Time.
Additional details about the meeting, including the formal agenda, are contained in the accompanying Notice of Annual Meeting and Proxy Statement. At the meeting, there also will be remarks from management and a period during which you will be able to ask questions.
Whether or not you plan to attend the meeting in person, please vote your shares by following the instructions in the accompanying materials.
Thank you for your consideration and continued support.
Sincerely,
Arthur F. Weinbach
Michael P. Gregoire
Chairman of the Board
Chief Executive Officer


SAVE RESOURCES: PLEASE SIGN UP FOR EMAIL DELIVERY

If you received this Proxy Statement and our Annual Report by mail, we encourage you to conserve natural resources, as well as significantly reduce our printing and mailing costs, by signing up to receive your stockholder communications via email. With electronic delivery, you will be notified via email as soon as the Proxy Statement and Annual Report are available on the Internet, and you can submit your stockholder votes online. Electronic delivery can also help reduce the number of documents in your personal files.

If you would like to view future Proxy Statements and Annual Reports over the Internet instead of receiving paper copies, you can elect to do so by voting at www.proxyvote.com and providing your email address through that website after you vote. Your election to view these documents over the Internet will remain in effect until you elect otherwise. If you choose to view future Proxy Statements and Annual Reports over the Internet, next year you will receive an email with instructions on how to view those materials and vote.





NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of CA, Inc.:
The 2015 annual meeting of stockholders of CA, Inc. will be held on Wednesday, August 5, 2015, at 10:00 a.m. Eastern Daylight Time at the company’s offices located at One CA Plaza, Islandia, New York 11749, for the following purposes:
(1)
to elect 12 directors, each to serve until the next annual meeting and until his or her successor is duly elected and qualified;
(2)
to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2016;
(3)
to approve, by non-binding vote, the compensation of our Named Executive Officers; and
(4)
to transact any other business that properly comes before the meeting and any adjournment or postponement of the meeting.
The Board of Directors fixed the close of business on June 8, 2015 as the record date for determining the stockholders who are entitled to notice of and to vote at the meeting and any adjournment or postponement.
A list of stockholders entitled to vote at the meeting will be available for inspection upon the request of any stockholder for any purpose germane to the meeting at our principal executive offices, 520 Madison Avenue, New York, New York 10022, during the 10 days before the meeting, during ordinary business hours, and will be available at the meeting location during the meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 5, 2015:
The Notice of Annual Meeting, Proxy Statement and Annual Report to Stockholders
are available on the Internet at www.proxyvote.com.
Admission tickets and our meeting admittance procedures are on the outside back cover of the Proxy Statement. Whether or not you expect to attend, please vote your shares by following the instructions contained in the Proxy Statement.
 
 
Michael C. Bisignano
 
Executive Vice President, General Counsel and Corporate Secretary
New York, New York
June 15, 2015




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CA, INC.
520 Madison Avenue
New York, New York 10022
PROXY STATEMENT
GENERAL INFORMATION
Introduction
This Proxy Statement is furnished to the holders of the common stock, par value $0.10 per share (“Common Stock”), of CA, Inc. in connection with the solicitation of proxies by our Board of Directors for use at our 2015 annual meeting of stockholders and any adjournment or postponement of the meeting. The meeting will be held on August 5, 2015 at 10:00 a.m. Eastern Daylight Time at the Company’s offices located at One CA Plaza, Islandia, New York 11749. The matters expected to be acted upon at the meeting are set forth in the preceding Notice of Annual Meeting. At present, the Board of Directors knows of no other business to come before the meeting.
When this Proxy Statement refers to the “Company,” “we,” “us,” or “our,” it is referring to CA, Inc.
Availability of Proxy Materials
If you received a notice regarding the availability of annual meeting proxy materials on the Internet (“Notice of Internet Availability”) for the annual meeting, you will not receive a printed copy of the proxy materials unless you specifically request one. The Notice of Internet Availability provides you with instructions on how to view our proxy materials on the Internet.
If you want to receive a paper or email copy of the proxy materials, you may request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed in the Notice of Internet Availability by July 22, 2015 to facilitate timely delivery.
We plan to mail the Notice of Internet Availability on or about June 19, 2015. We will mail a printed copy of the proxy materials to certain stockholders, as in prior years, and we expect that mailing to begin on or about June 22, 2015.
Record Date; Voting Rights; Quorum
Only stockholders of record at the close of business on June 8, 2015 are entitled to notice of the meeting and to vote at the meeting or any adjournment or postponement. On June 8, 2015, we had outstanding 442,908,034 shares of Common Stock. Each outstanding share of Common Stock is entitled to one vote. A majority of the outstanding shares of Common Stock, present or represented by proxy at the meeting, will constitute a quorum. For additional information, please see “How Proxy Votes Are Tabulated,” below.


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Stockholders of Record; Street Name Stockholders
If your shares of Common Stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and the Notice of Internet Availability (and, if applicable, the mailed or emailed proxy materials) is sent directly to you. If your shares are held in an account at a bank, broker, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice of Internet Availability (and, if applicable, the mailed or emailed proxy materials) is forwarded to you by that firm. The firm holding your account is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that firm on how to vote the shares held in your account. We may reimburse those firms for reasonable fees and out-of-pocket costs incurred in forwarding the Notice of Internet Availability (and, if applicable, the mailed or emailed proxy materials) to you.
Proxy Solicitation
We will bear the cost of our soliciting proxies. In addition to using the Internet, our directors, officers and employees may solicit proxies in person and by mailings, telephone, facsimile, or electronic transmission, for which they will not receive any additional compensation. We will also make arrangements with brokers and other custodians, nominees and fiduciaries to forward solicitation material to the beneficial owners of shares of Common Stock held by those persons, and we may reimburse those custodians, nominees and fiduciaries for reasonable fees and out-of-pocket expenses incurred. We have retained Morrow & Co., LLC to assist us in soliciting proxies for a fee of $7,500, plus expenses.
How to Vote
You may vote in the following ways:
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In person: You may vote in person at the meeting.
•
By Internet: You may vote your shares by Internet at www.proxyvote.com.
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By telephone: If you are located in the United States or Canada, you may vote your shares by calling 1-800-690-6903.
•
By mail: You may vote by mail if you receive a printed copy of the proxy materials, which will include a proxy card.
How Proxy Votes Are Tabulated
Only the shares of Common Stock represented by valid proxies received and not revoked will be voted at the meeting. Votes cast at the meeting by proxy or in person will be tabulated by the Inspector of Election. The Inspector of Election will treat shares of Common Stock represented by a valid proxy as present at the meeting for purposes of determining a quorum, whether or not the proxy is marked as casting a vote or abstaining on any or all matters.
If you are a beneficial owner of shares held in street name and do not provide the firm that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the firm that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. We believe that Proposal 2 — Ratification of appointment of independent registered public accounting firm — is a routine matter on which brokers can vote on behalf of their clients if clients do not furnish voting instructions. All other proposals are non-routine matters.
If the firm that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, it will inform our Inspector of Election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.” “Broker


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non-votes” are treated as present for purposes of determining a quorum, but are not counted as votes “for” or “against” the matter in question or as abstentions, and they are not counted in determining the number of votes present for the particular matter.
If you are a stockholder of record and you:
•
indicate when voting on the Internet or by telephone that you wish to vote as recommended by our Board of Directors; or
•
sign and return a proxy card without giving specific voting instructions,
then the proxy holders (i.e., the persons named in the proxy card provided by our Board of Directors) will vote your shares in the manner recommended by our Board of Directors on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the meeting or any adjournment or postponement of the meeting.
Please note that if you hold your shares through a bank, broker or other nominee and you want to vote in person at the meeting, you must obtain a proxy from your bank, broker or other nominee authorizing you to vote those shares and you must bring that proxy to the meeting. If any other business properly comes before the meeting or any adjournment or postponement, it is the intention of the proxy holders named in the Board of Directors’ accompanying proxy card to vote the shares represented by the proxy card on those matters in accordance with their best judgment.
Vote Required to Approve Proposals
Assuming that a quorum is present at the meeting, the following votes are required under our governing documents and Delaware state law:
Item
Vote Required
Effect of Abstentions and Broker Non-Votes on Vote Required
Proposal 1 – Election of directors
A majority of votes cast with regard to a director (which means that the number of votes cast “for” the director must exceed the number of votes cast “against” a director)
Abstentions and broker non-votes will have no effect on the election of directors since only votes cast “for” and “against” a director will be counted
Proposal 2 – Ratification of appointment of independent registered public accounting firm
Approval of a majority of shares present or represented by proxy and entitled to vote on the proposal
Abstentions will have the effect of a vote “against” the proposal

If your broker holds shares in your name, the broker, in the absence of voting instructions from you, is entitled to vote your shares
Proposal 3 – Approval, by non-binding vote, of the compensation of our Named Executive Officers
Approval of a majority of shares present or represented by proxy and entitled to vote on the proposal
Abstentions will have the effect of a vote “against” the proposal

Any broker non-votes will reduce the absolute number, but not the percentage, of affirmative votes needed for approval
How to Revoke Your Proxy
You may revoke your proxy at any time before it is exercised by delivering a written revocation to the Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022, by duly submitting a proxy bearing a later date (including by telephone or the Internet), or by voting in person at the meeting.


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Householding
If you and other residents with the same last name at your mailing address own shares of Common Stock in street name, your broker or bank may have sent you a notice that your household will receive only one notice of Internet availability or annual report and proxy statement for each company in which you hold stock through that broker or bank. This practice of sending only one copy of proxy materials is known as “householding.” If you received a householding communication, your broker will send one copy of the Notice of Internet Availability or this Proxy Statement and our Annual Report for the fiscal year ended March 31, 2015 to your address unless contrary instructions were given by any stockholder at that address. If you received more than one copy of the Notice of Internet Availability or the proxy materials this year and you wish to reduce the number of copies you receive in the future and save us the cost of printing and mailing these documents, please contact your bank or broker.
You may revoke your consent to householding at any time by sending your name, the name of your bank or broker, and your account number to our Investor Relations Department at the address below. The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if your household received a single set of the Notice of Internet Availability or proxy materials for this year, but you would prefer to receive your own copy, we will send a copy of the Notice of Internet Availability or the Proxy Statement and Annual Report to you if you send a written request to CA, Inc., Investor Relations Department, 520 Madison Avenue, New York, New York 10022, or contact our Investor Relations Department at 1-800-225-5224.
Annual Report to Stockholders
Our Annual Report for the fiscal year ended March 31, 2015 accompanies this Proxy Statement and is also available on the Internet. Please follow the instructions in the Notice of Internet Availability if you want to review our Annual Report online. Our Annual Report contains financial and other information about us. The Annual Report is not a part of this Proxy Statement.


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CORPORATE GOVERNANCE
The Board of Directors is responsible for oversight of the management of the Company. The Board has adopted Corporate Governance Principles, which along with the Company’s charter and By-laws, and the charters of the committees of the Board, provide the framework for the governance of the Company.
Corporate Governance Principles
We periodically consider and review our Corporate Governance Principles. Our current Corporate Governance Principles are attached to this Proxy Statement as Exhibit A and can be found, together with other corporate governance information, on our website at www.ca.com/invest. The Board also evaluates the principal committee charters from time to time, as appropriate.
Code of Conduct
We maintain a Code of Conduct that qualifies as a “code of ethics” under applicable Securities and Exchange Commission (“SEC”) regulations. Our Code of Conduct is applicable to all employees and directors, and is available on our website at www.ca.com/invest. Any waiver of a provision of our Code of Conduct that applies to our directors or executive officers will be contained in a report filed with the SEC on Form 8-K or will be otherwise disclosed as permitted by law or regulation.
Each of our Corporate Governance Principles and our Code of Conduct is available free of charge in print to any stockholder who requests a copy by writing to our Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022.
Board Leadership Structure
The Board is currently led by our non-executive Chairman of the Board, Arthur F. Weinbach, who is an independent director. Our Corporate Governance Principles do not specify a policy with respect to the separation of the positions of Chairman and Chief Executive Officer or with respect to whether the Chairman should be a member of management or a non-management director. The Board recognizes that there is no single, generally accepted approach to providing Board leadership, and given the dynamic and competitive environment in which we operate, the Board’s leadership structure may vary as circumstances warrant. The Board has determined that the leadership of the Board is currently best conducted by an independent Chairman.
The Chairman provides overall leadership to the Board in its oversight function, while the Chief Executive Officer, Michael P. Gregoire, provides leadership with respect to the day-to-day management and operation of our business. We believe the separation of the offices allows Mr. Weinbach to focus on managing Board matters and allows Mr. Gregoire to focus on managing our business. In addition, we believe the separation of the offices enhances the objectivity of the Board in its management oversight role. To further enhance the objectivity of the Board, all members of our Board are independent except our Chief Executive Officer.
Board Role in Risk Oversight
Our management is responsible for managing risks affecting the Company, including identifying, assessing and appropriately mitigating risk. The responsibilities of the Board include oversight of the Company’s risk management processes, including working with management to establish and monitor the Company’s risk appetite.
The Board exercises its risk oversight responsibilities primarily through its Compliance and Risk Committee, which regularly reviews and discusses with management the Company’s risk appetite and the significant risks that may affect our enterprise. Our Executive Vice President and Chief Financial Officer (whose department includes our enterprise risk management function) reports to the Compliance and Risk Committee with respect to the Company’s enterprise risk management function (including


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operational, financial, strategic, legal and regulatory risks). Our Executive Vice President and General Counsel (whose department includes our chief compliance officer) reports to the Compliance and Risk Committee with respect to the Company’s business practices and compliance functions.
The other committees of the Board also provide risk oversight associated with their respective areas of responsibility. For example, the Audit Committee oversees risks related to our financial statements, our financial reporting processes, our internal control processes and accounting matters. In addition, the Compensation and Human Resources Committee provides oversight with respect to risks related to our compensation practices. The Corporate Governance Committee oversees risks related to our corporate governance structure and processes. In fulfilling their oversight responsibilities, all committees receive regular reports on their respective areas of responsibility from members of management. The Chair of each committee, in turn, reports regularly to the full Board on matters including risk oversight.
The Board believes that the Company’s current Board and Committee leadership structure helps to promote more effective risk oversight by the Board.
Director Independence
The Board has determined that 11 of the nominees for election at the annual meeting (all of the nominees other than Mr. Gregoire) are independent under The NASDAQ Stock Market LLC (“NASDAQ”) listing requirements and our Corporate Governance Principles. Mr. Gregoire is deemed not to be independent because he is our Chief Executive Officer.
In the course of the Board’s determination regarding the independence of each non-employee director, the Board considers transactions, relationships and arrangements as required by the independence guidelines contained in our Corporate Governance Principles. There were no transactions, relationships or arrangements outside of the independence guidelines that required review by the Board for purposes of determining whether the directors were independent.
All members of the Audit, Compensation and Human Resources, and Corporate Governance Committees are independent directors as defined by NASDAQ listing requirements and our Corporate Governance Principles. Members of the Audit Committee also satisfy the separate independence requirements of the SEC.
Board Committees and Meetings
The Board of Directors has established four principal committees — the Audit Committee, the Compensation and Human Resources Committee, the Corporate Governance Committee and the Compliance and Risk Committee — to carry out certain responsibilities and to assist the Board in meeting its fiduciary obligations. These committees operate under written charters, which have been adopted by the respective committees and by the Board. The charters of the current committees can be reviewed on our website at www.ca.com/invest and are also available free of charge in print to any stockholder who requests them by writing to our Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022.
During fiscal year 2015, the Board of Directors met seven times. The independent directors meet at all regular Board meetings in executive session without any non-independent director or member of management present. Mr. Weinbach, who is an independent director, presided at these executive sessions. During fiscal year 2015, each incumbent director attended, in the aggregate, more than 75% of the Board meetings and meetings of the Board committees on which the director served.


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The current members of the Board’s four principal committees are as follows:
Independent Directors
Audit
Compensation and Human Resources
Corporate Governance
Compliance and Risk
Jens Alder
X
 
 
X
Raymond J. Bromark
X (Chair)
 
 
X
Gary J. Fernandes
 
X (Chair)
 
X
Rohit Kapoor
X
 
X
 
Jeffrey G. Katz
X
 
 
X
Kay Koplovitz
 
X
X
 
Christopher B. Lofgren
X
 
X (Chair)
 
Richard Sulpizio
 
X
X
 
Laura S. Unger
 
X
 
X (Chair)
Renato (Ron) Zambonini
X
 
X
 
Number of Meetings in Fiscal Year 2015
7
7
7
3
Information about the principal responsibilities of these committees appears below.
Audit Committee
The general purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities with respect to:
•
the audits of our financial statements and the integrity of our financial statements and internal controls;
•
the qualifications and independence of our independent registered public accounting firm (including the Committee’s direct responsibility for the engagement of the independent registered public accounting firm);
•
the performance of our internal audit function and independent registered public accounting firm; and
•
our accounting and financial reporting processes.
The Board has determined that Mr. Bromark qualifies as an “audit committee financial expert” and that all members of the Audit Committee are independent under applicable SEC and NASDAQ rules. Additional information about the responsibilities of the Audit Committee is set forth in the Audit Committee charter.
Compensation and Human Resources Committee
The general purpose of the Compensation and Human Resources Committee is to assist the Board in fulfilling its responsibilities with respect to executive compensation and human resources matters, including to:
•
develop an executive compensation philosophy and objectives and establish principles to guide the design and select the components of executive compensation;
•
approve the amount and the form of compensation, as well as the other terms of employment, of the Company’s executive officers (as defined in the applicable SEC regulations), including the Chief Executive Officer and the other Named Executive Officers (who are identified in the Fiscal Year 2015 Summary Compensation Table, below);


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•
evaluate, in coordination with the Corporate Governance Committee and the other independent members of the Board, the performance of the Chief Executive Officer; and
•
recommend to the Board approval of all executive compensation plans and programs.
Additional information about the Compensation and Human Resources Committee’s responsibilities is set forth in the Compensation and Human Resources Committee charter.
Corporate Governance Committee
The general purpose of the Corporate Governance Committee is to assist the Board in fulfilling its responsibilities with respect to our governance, including making recommendations to the Board concerning:
•
the size and composition of the Board, the qualifications and independence of the directors and the recruitment and selection of individuals to stand for election as directors;
•
the organization and operation of the Board, including the nature, size and composition of committees of the Board, the designation of committee chairs, the designation of a Lead Independent Director, Chairman of the Board or similar position, and the distribution of information to the Board and its committees; and
•
the compensation of non-employee directors.
In addition, the Corporate Governance Committee evaluates, in coordination with the Compensation and Human Resources Committee, the performance of the Chief Executive Officer.
Additional information about the Corporate Governance Committee’s responsibilities is set forth in the Corporate Governance Committee charter.
Compliance and Risk Committee
The general purpose of the Compliance and Risk Committee is to:
•
provide general oversight of our enterprise risk management and compliance functions;
•
provide input to our management in the identification, assessment, mitigation and monitoring of enterprise-wide risks faced by the Company; and
•
provide recommendations to the Board with respect to its review of our business practices and compliance activities and enterprise risk management.
Additional information about the responsibilities of the Compliance and Risk Committee is set forth in the Compliance and Risk Committee charter.
Other Committees
From time to time, the Board also establishes special committees or ad hoc committees to assist the Board in carrying out its responsibilities.
During fiscal year 2010, the Board established a special M&A Committee to review and approve certain acquisitions and divestitures. The M&A Committee also receives reports from management on the performance of acquisitions. The M&A Committee held five meetings during fiscal year 2015. The current members of the M&A Committee are Messrs. Sulpizio (Chair), Alder, Bromark, Fernandes, Lofgren and Zambonini.


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Board Self-Assessment and Director Evaluation
In accordance with our Corporate Governance Principles, the Board of Directors conducts an annual self-assessment of its performance to determine whether the Board and its committees are functioning effectively. As part of this process, each director completes a written questionnaire regarding the effectiveness of the Board and each committee on which the director serves. Additionally, the Chairman of the Board and the Chair of the Corporate Governance Committee coordinate an annual evaluation of the performance of each director. This evaluation includes an interview by the Chairman of the Board with each director to solicit comments regarding the performance of individual directors, as well as an interview by the Chair of the Corporate Governance Committee with each director to solicit comments regarding the performance of individual directors and the Chairman of the Board. Feedback received in response to the written questionnaires and during the interviews is discussed at Board and committee meetings to address any significant issues raised.
Director Nominating Procedures
The Corporate Governance Committee will consider director candidates recommended by stockholders. In considering candidates submitted by stockholders, the Committee will take into consideration the factors specified in our Corporate Governance Principles, as well as the current needs of the Board and the qualifications of the candidate. The Committee may also take into consideration the number of shares held by the recommending stockholder and the length of time that those shares have been held. To recommend a candidate for consideration by the Committee, a stockholder must submit the recommendation in writing, including the following information:
•
the name of the stockholder and evidence of the stockholder’s ownership of Common Stock, including the number of shares owned and the length of time the shares have been owned; and
•
the name of the candidate, the candidate’s résumé or a list of the candidate’s qualifications to be a director of the Company, and the candidate’s consent to be named as a director nominee if recommended by the Committee and nominated by the Board.
Recommendations and the information described above should be sent to the Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022.
Once a person has been identified by the Corporate Governance Committee as a potential candidate, the Committee may: collect and review publicly available information regarding the person to assess whether the person should be considered further; request additional information from the candidate and the proposing stockholder; contact references or other persons to assess the candidate; and conduct one or more interviews with the candidate. The Committee may consider that information in light of information regarding any other candidates that the Committee may be evaluating at that time, as well as any relevant director search criteria. The evaluation process generally does not vary based on whether or not a candidate is recommended by a stockholder; however, as stated above, the Committee may take into consideration the number of shares held by the recommending stockholder and the length of time that those shares have been held.
In addition to recommending director candidates to the Corporate Governance Committee, stockholders may also nominate candidates for election to the Board at the annual meeting of stockholders. See “Advance Notice Procedures for Our 2016 Annual Meeting,” below, for more information.
In addition to stockholder recommendations, the Corporate Governance Committee may receive suggestions as to nominees from our directors, officers or other sources, which may be either unsolicited or in response to requests from the Committee for these suggestions. In addition, the Committee may engage search firms to assist it in identifying director candidates.


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Communications with Directors
The Board of Directors is interested in receiving communications from stockholders and other interested parties, which would include, among others, customers, suppliers and employees. These parties may contact any member (or members) of the Board or any committee, the non-employee directors as a group, or the Chair of any committee, by mail or electronically. In addition, the Audit Committee is interested in receiving communications from employees and other interested parties, which would include stockholders, customers, suppliers and employees, on issues regarding accounting, internal controls or auditing matters. Any such correspondence should be addressed to the appropriate person or persons, either by name or title, and sent by postal mail to the office of the Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022, or by email to directors@ca.com.
The Corporate Secretary will forward to the applicable directors each communication received as described above in the preceding paragraph other than: spam and similar junk mail and mass mailings; product complaints, product inquiries and new product suggestions; résumés and other job inquiries; surveys; business solicitations or advertisements; and any communication that is deemed unduly hostile, threatening, illegal or similarly unsuitable.
Related Person Transactions
The Board has adopted a Related Person Transactions Policy, which is a written policy governing the review and approval or ratification of Related Person Transactions, as defined in SEC rules.
Under the Related Person Transactions Policy, each of our directors, nominees for director and executive officers must notify the General Counsel and/or the Office of Corporate Secretary of any potential Related Person Transaction involving that person or an immediate family member of that person. The General Counsel and/or the Office of Corporate Secretary will review each potential Related Person Transaction to determine if it is subject to the Related Person Transactions Policy. If so, the transaction will be referred for approval or ratification to the Corporate Governance Committee, which will approve or ratify the transaction only if it determines that the transaction is in, or is not inconsistent with, our best interests and the best interests of our stockholders. In determining whether to approve or ratify a Related Person Transaction, the Corporate Governance Committee may consider, among other things:
•
the fairness to us of the Related Person Transaction;
•
whether the terms of the Related Person Transaction would be on the same basis if the transaction, arrangement or relationship did not involve a related person;
•
the business reasons for us to participate in the Related Person Transaction;
•
the nature and extent of our participation in the Related Person Transaction;
•
whether any Related Person Transaction involving a director, nominee for director or an immediate family member of a director or nominee for director would be immaterial under the categorical standards adopted by the Board with respect to director independence contained in our Corporate Governance Principles;
•
whether the Related Person Transaction presents an actual or apparent conflict of interest for any director, nominee for director or executive officer, the nature and degree of such conflict and whether any mitigation of such conflict is feasible;
•
the availability of other sources for comparable products or services;
•
the direct or indirect nature and extent of the related person’s interest in the Related Person Transaction;


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•
the ongoing nature of the Related Person Transaction;
•
the relationship of the related person to the Related Person Transaction and with us and others;
•
the importance of the Related Person Transaction to the related person; and
•
the amount involved in the Related Person Transaction.
The Corporate Governance Committee administers the Related Person Transactions Policy and may review, and recommend amendments to, the Related Person Transactions Policy from time to time.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2015, there were no compensation committee interlocks and no insider participation in Compensation and Human Resources Committee decisions that were required to be reported under the rules and regulations of the Securities Exchange Act of 1934, as amended.
Anti-Hedging Policy
As part of our policy against insider trading, our directors, officers and other employees are prohibited from purchasing or selling (1) short-term or speculative securities that are based on Company securities and (2) financial instruments designed to hedge or offset any change in the market value of Company securities. Prohibited instruments include prepaid variable forward contracts, puts or calls and other exchange-traded options, swaps, collars, exchange funds and other derivative securities. “Short-sales” of Company securities are also prohibited.


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COMPENSATION OF DIRECTORS
Only our non-employee directors receive compensation for their services as directors. Fees are paid to non-employee directors under our 2012 Compensation Plan for Non-Employee Directors (the “2012 Plan”). The 2012 Plan also allows the Board of Directors to authorize the payment of additional fees to any eligible director who chairs a committee of the Board or to an eligible director serving as the lead independent director or Chairman of the Board. Currently, all of our non-employee directors receive compensation pursuant to the 2012 Plan.
From time to time, the Board evaluates and establishes the fees payable to non-employee directors. The Board established the current fees in May 2014. The customary process involved a review of non-employee director compensation by the Corporate Governance Committee and the Committee’s recommendation of a proposal to the Board. In conducting its review, the Committee engaged Towers Watson, compensation consultant to the Compensation and Human Resources Committee, to provide advice regarding design, competitive market data and trends, and other pertinent matters.
All non-employee director fees are paid in the form of deferred stock units, but each non-employee director may elect to receive a portion of his or her director fees in cash. The following table shows the annual fees for our non-employee directors and the maximum permissible cash election with respect to those fees.
Annual Fee Description
Fee
Maximum Cash Election
Non-Employee Director

$325,000

$100,000
Chairman of the Board

$100,000

50%
Audit Committee Chair

$25,000

50%
Compensation and Human Resources Committee Chair

$15,000

50%
Corporate Governance Committee Chair

$10,000

50%
Compliance and Risk Committee Chair

$10,000

50%
In settlement of the deferred stock units following termination of service, a director receives shares of Common Stock in an amount equal to the number of deferred stock units in the director’s deferred compensation account. The deferred stock units are settled, at the election of the director, by delivery of shares of Common Stock either in a lump sum or in up to 10 annual installments beginning on the first business day of the calendar year after termination of service.
To further our commitment to support charities, directors are able to participate in our Matching Gifts Program. Under this program, we match contributions by directors up to an aggregate amount of $25,000 per fiscal year by a director to charities approved by us. Upon the mandatory retirement of a director in accordance with our director retirement policy, we also make a one-time donation of $10,000 to a charity specified by the retiring director.
We also provide directors with, and pay premiums for, director and officer liability insurance and we reimburse directors for reasonable expenses incurred in connection with Company business.


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The following table includes information about compensation paid to our non-employee directors for the fiscal year ended March 31, 2015.
Fiscal Year 2015 Director Compensation Table
Director
Fees Earned or Paid in Cash(1)
($)
Stock Awards(1)(2)
($)
Option Awards
($)
All Other Compensation (3)(4)(5)
($)
Total
($)
J. Alder
100,000

225,000

—

25,000

350,000

R.J. Bromark
112,500

237,500

—

—

350,000

G.J. Fernandes
—

340,000

—

25,000

365,000

M.P. Gregoire(6)
—

—

—

—

—

R. Kapoor
100,000

225,000

—

12,500

337,500

J.G. Katz(7)
5,556

12,500

—

—

18,056

K. Koplovitz
100,000

225,000

—

23,000

348,000

C.B. Lofgren
101,250

233,750

—

17,000

352,000

R. Sulpizio
100,000

225,000

—

25,000

350,000

L.S. Unger
105,000

230,000

—

7,300

342,300

A.F. Weinbach
—

425,000

—

25,000

450,000

R. Zambonini
100,000

225,000

—

—

325,000

__________
(1)
As noted above, all director fees are paid in deferred stock units, except that directors may elect in advance to have a specified portion of those fees paid in cash. The maximum cash election with respect to the annual non-employee director fee is $100,000. The maximum cash election for the chairman and committee chair fees is 50% of those fees. The amounts in the “Fees Earned or Paid in Cash” column represent the amounts paid to directors who elected to receive a portion of their director fees in cash.
 
 
(2)
As required by SEC rules, this column represents the aggregate grant date fair value of awards computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” for deferred stock units. The aggregate grant date fair value for deferred stock units is calculated by multiplying the number of deferred stock units by the closing market price of the Common Stock on the date the deferred stock units are credited to a director’s account.


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As of March 31, 2015, the following deferred stock units had been credited to each director’s account:
Director
Aggregate Number of Deferred Stock Units
J. Alder
24,577
R.J. Bromark
50,712
G.J. Fernandes
108,238
M.P. Gregoire(6)
–
R. Kapoor
39,029
J.G. Katz(7)
383
K. Koplovitz
40,793
C.B. Lofgren
69,306
R. Sulpizio
36,393
L.S. Unger
56,812
A.F. Weinbach
92,129
R. Zambonini
53,701
(3)
The amounts in this column include contributions we made under our Matching Gifts Program in fiscal year 2015. Under our current Matching Gifts Program, we match up to $25,000 of director charitable contributions made in each fiscal year by each director. The contributions we paid or accrued under our Matching Gifts Program in fiscal year 2015 were as follows: Mr. Alder, $25,000; Mr. Fernandes, $25,000; Mr. Kapoor, $12,500; Ms. Koplovitz, $23,000; Mr. Lofgren, $17,000; Mr. Sulpizio, $25,000; Ms. Unger, $7,300; and Mr. Weinbach, $25,000.
 
 
(4)
We provide directors with, and pay premiums for, director and officer liability insurance and reimburse directors for reasonable travel and accommodation expenses incurred in connection with Company business, the values of which are not included in this table.
 
 
(5)
Directors receive dividend equivalents on deferred stock units held in their deferred compensation accounts. This amount is not included in the “All Other Compensation” column because the deferred stock units are granted at fair market value, which reflects the expected dividend equivalents to be received.
 
 
(6)
As Chief Executive Officer, Mr. Gregoire is compensated as an employee of the Company and, as such, he received no compensation in his capacity as a director in fiscal year 2015. For a description of Mr. Gregoire’s fiscal year 2015 compensation, please see “Compensation and Other Information Concerning Executive Officers,” below.
 
 
(7)
Mr. Katz was elected to the Board of Directors in March 2015, during fiscal year 2015.


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PROPOSAL 1 — ELECTION OF DIRECTORS
On the recommendation of the Corporate Governance Committee, the Board of Directors has nominated the persons listed below for election as directors at the annual meeting, each to serve until the next annual meeting and until his or her successor is duly elected and qualified. Each of the nominees is an incumbent director.
Each of the nominees has confirmed to us that he or she expects to be able to continue to serve as a director until the end of his or her term. If, however, at the time of the annual meeting, any of the nominees named below is not available to serve as a director (an event that the Board does not anticipate), all the proxies granted to vote in favor of that director’s election will be voted for the election of any other person or persons that the Board may nominate.
Our policy is that all directors and nominees should attend our annual meetings of stockholders. 10 of our 11 directors then in office attended the 2014 annual meeting of stockholders.
Majority Voting
Under our majority voting standard for uncontested elections of directors, a director nominee will be elected only if the number of votes cast “for” exceeds the number of votes “against” the director’s election. In contested elections, the plurality voting standard will apply, under which the nominees receiving the most votes will be elected regardless of whether those votes constitute a majority of the shares voted at the meeting. Under our Corporate Governance Principles, if a director does not receive more votes “for” than votes “against” at an annual meeting of stockholders, generally the Board of Directors will have 90 days from the certification of the vote to accept or reject the individual’s irrevocable resignation that all incumbent directors are required to submit before the mailing of the Proxy Statement for the annual meeting.
Board Composition
The Board of Directors and the Corporate Governance Committee each strive to ensure that the Board is composed of engaged, independent directors with diverse backgrounds, who are committed to representing the long-term interests of our stockholders. Our directors are expected to possess the highest personal and professional ethics, integrity and values. They must have an inquisitive and objective perspective, practical wisdom and mature judgment, and be willing and able to devote sufficient time to fulfill their responsibilities to the Company and our stockholders.
Diversity
The Board does not have a formal policy with respect to diversity. However, the Board and the Corporate Governance Committee each believe that it is essential that the Board members represent diverse viewpoints, with a broad array of experiences, professions, skills, geographic representation and backgrounds that, when considered as a group, provide a sufficient mix of perspectives to allow the Board to best fulfill its responsibilities to the long-term interests of the Company’s stockholders.
Board Renewal
The Board and the Corporate Governance Committee each believe it is important to have experienced directors with a deep understanding of the Company’s business as well as other directors who bring fresh perspectives to the Board. In their efforts to identify potential director candidates, the Board and the Corporate Governance Committee consider:
•
the input from the Board’s self-assessment process to identify the backgrounds and expertise that are desired; and


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•
the future needs of the Board in light of anticipated director retirements under our director tenure policies.
As a means to ensure orderly Board succession, our director tenure policies (contained in our Corporate Governance Principles) require that:
•
a director may serve only until the annual meeting after the director’s 75th birthday; and
•
the Corporate Governance Committee shall determine whether to recommend to the Board that any action be taken as a result of a director’s retirement from his or her principal occupation or a material change in his or her principal occupation or business association.
The Board’s ongoing assessment of its collective skills, experience and expertise has resulted in the recruitment of three new independent directors since 2011.
Biographical Information and Qualifications of Director Nominees
Set forth below are each nominee’s name, age, principal occupation for at least the last five years and other biographical information, including the year in which each was first elected a director of the Company. In addition, the biographies discuss the particular experience, qualifications, attributes and skills of the director that, in light of the Company’s business and structure, led the Board to conclude that the individual should serve on the Board of the Company.
JENS ALDER
Director since 2011
Age 57
Business Experience
Mr. Alder served as Chief Executive Officer of TDC A/S, Denmark’s largest telecommunications provider, from 2006 to 2008. Prior to that, Mr. Alder served as Chief Executive Officer of Swisscom Ltd., Switzerland’s largest telecommunications provider, from 1999 to 2006 after serving as its Executive Vice President of Network Services and Wholesale from 1998 to 1999.
Current Directorships
Mr. Alder has served as Chairman of the Board of Sanitas Krankenversicherung, a privately held health insurance company based in Switzerland, since 2009, a director of BG Consulting Engineers, a privately held civil engineering group with operations in Switzerland, France and Algeria, since 2011, Chairman of the Board of Goldbach Group AG, a publicly held electronic media company based in Switzerland, since 2013 and Chairman of the Board of Alpiq Holding AG, a publicly held energy services provider based in Switzerland, since 2015.
Previous Directorships
Mr. Alder served as Chairman of the Board of RTX Telecom A/S, a publicly held telecommunications component and handset producer based in Denmark, from 2010 to 2014, Chairman of the Board of Industrielle Werke Basel, the state-owned public utility of Basel, Switzerland, from 2010 to 2015, a director of Sunrise Communications AG, a privately held telecommunications company based in Switzerland, from 2008 to 2010, a director of TA Management A/S, a privately held company supporting Danish banks restructuring distressed companies, from 2009 to 2010, a director of Copenhagen International School, an international school in Denmark, from 2008 to 2010 and a director of Neue Zürcher Zeitung AG, a publicly held Swiss newspaper, from 2010 to 2013.


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Qualifications
Mr. Alder’s qualifications include: international experience; extensive experience in the technology industry; leadership experience at large, complex companies; and governance experience as a member or chair of boards of numerous companies.
RAYMOND J. BROMARK
Director since 2007
Age 69
Business Experience
Mr. Bromark is a retired Partner of PricewaterhouseCoopers, LLP (“PwC”), an international accounting and consulting firm. He joined PwC in 1967 and became a Partner in 1980. He was Partner and Head of the Professional, Technical, Risk and Quality Group of PwC from 2000 to 2006, a Global Audit Partner from 1994 to 2000 and Deputy Vice Chairman, Auditing and Business Advisory Services from 1990 to 1994. In addition, he served as a consultant to PwC from 2006 to 2007.
Current Directorships
Mr. Bromark has been a director of YRC Worldwide, Inc., a transportation service provider, since July 2011 and a director of Tesoro Logistics GP, LLC, the general partner of Tesoro Logistics LP, an operator, developer and acquirer of crude oil, refined products and natural gas logistics assets, since March 2011. He chairs the audit/ethics committee of YRC Worldwide, Inc. and also chairs the audit committee of Tesoro Logistics GP, LLC.
Previous Directorships
Mr. Bromark was a director of World Color Press, Inc., a provider of printing services, and chaired its audit committee, from 2009 to 2010 when the company merged into another company.
Other Experience
Mr. Bromark is a member of the American Institute of Certified Public Accountants (the “AICPA”) and in previous years has participated as a member of the University of Delaware’s Weinberg Center for Corporate Governance’s Advisory Board. Mr. Bromark was PwC’s representative on the AICPA’s Center for Public Company Audit Firms’ Executive Committee. He has also been a member of the Financial Accounting Standards Board Advisory Council, the Public Company Accounting Oversight Board’s Standing Advisory Group, the AICPA’s Special Committee on Financial Reporting, the AICPA’s SEC Practice Section Executive Committee and the AICPA’s Ethics Executive Committee.
Qualifications
Mr. Bromark’s qualifications include: extensive experience in accounting, auditing, financial reporting, and compliance and regulatory matters; deep understanding of financial controls and familiarity with large public company audit clients; extensive experience in leadership positions at PwC; and public company governance experience as a member or chair of boards and board committees of public companies.
GARY J. FERNANDES
Director since 2003
Age 71
Business Experience
Mr. Fernandes has been Chairman and President of FLF Investments, a family business involved with the acquisition and management of commercial real estate properties and other assets, since 1999. Mr. Fernandes retired as Vice Chairman of Electronic Data Systems Corporation (“EDS”), a global technology services company, in 1998, after serving as Senior Vice President of EDS from 1984 to 1996, and as


17



Chairman of A.T. Kearney, a management consulting firm and a subsidiary of EDS, from 1995 to 1998. He served on the board of directors of EDS from 1981 to 1998. After retiring from EDS, Mr. Fernandes founded Convergent Partners, a venture capital fund focusing on buyouts of technology-related companies, and was a partner from 1999 to 2000.
Current Directorships
Mr. Fernandes has served as a director of North Texas Public Broadcasting, Inc. (KERA), a non-profit media corporation, since 2014. Mr. Fernandes also serves as an advisory director of MHT Partners, an investment banking firm serving mid-market companies.
Previous Directorships
Mr. Fernandes was a director of BancTec, Inc., a privately held systems integration, manufacturing and services company, from 2003 to 2014, Blockbuster Inc., a provider of home entertainment services, from 2004 to 2011, a director of webMethods, Inc., a business integration and optimization software company, from 2002 to 2005, a director of 7-Eleven, Inc., an operator, franchisor, and licensor of convenience stores worldwide, from 1991 to 2005 and, as stated above, a director of EDS from 1981 until 1998. In addition, he served as a director of E-Telecare Global Solutions, a provider of customer care outsourcing services, from 2007 to 2008, where he also served as Non-Executive Chairman of the Board.
Other Experience
Mr. Fernandes serves on the Board of Governors of Boys & Girls Clubs of America. He also serves as a trustee of the O’Hara Trust, a charitable trust that benefits the Boys & Girls Clubs of Dallas County, and the Hall-Voyer Foundation, a charity supporting educational and health programs in Honey Grove, Texas. In addition, Mr. Fernandes serves on the Board of Trustees of The Greenhill School, a private K-12 school located in Dallas, Texas, and the NPR Foundation, an organization responsible for the management of endowed funds for National Public Radio (“NPR”) and for continuing fundraising for NPR. Mr. Fernandes has chaired the audit, compensation and finance committees of a number of public companies.
Qualifications
Mr. Fernandes’s qualifications include: extensive leadership experience at a large, complex, global public company; extensive experience in the technology industry; global business experience through 15 years of responsibility for EDS’s international business; government and regulatory experience through oversight of EDS’s U.S. government business; financial and investment experience; entrepreneurial experience; and public company governance experience as a member or chair of boards and board committees of public companies.
MICHAEL P. GREGOIRE
Director since 2013
Age 49
Business Experience
Mr. Gregoire has been Chief Executive Officer of the Company since January 2013. Previously, he served as President and Chief Executive Officer of Taleo Corporation (“Taleo”), a provider of on-demand talent management software solutions, from March 2005 until Taleo’s acquisition by Oracle Corporation in April 2012. Mr. Gregoire served as a director of Taleo from April 2005 to April 2012 and served as Taleo’s Chairman of the Board from May 2008 to April 2012. Mr. Gregoire served as Executive Vice President, Global Services and held various other senior management positions at PeopleSoft, Inc., an enterprise software company, from May 2000 to January 2005. Mr. Gregoire served as Managing Director for global financial markets at Electronic Data Systems, Inc., a global technology services company, from 1996 to April 2000, and in various other roles from 1988 to 1996.


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Current Directorships
Mr. Gregoire has been a director of Automatic Data Processing, Inc., a provider of human capital management solutions to employers and integrated computing solutions to vehicle dealers, since January 2014. Mr. Gregoire has been a director of NPower, a non-profit information technology services network, since September 2013.
Previous Directorships
As stated above, Mr. Gregoire served as a director of Taleo from April 2005 to April 2012 and served as Taleo’s Chairman of the Board from May 2008 to April 2012. Mr. Gregoire served as a director of ShoreTel, Inc., a provider of business communication solutions, from November 2008 to January 2014. He chaired the compensation committee of ShoreTel, Inc. from July 2010 to January 2014.
Other Experience
Mr. Gregoire has served on the Executive Council of TechNet, a national, bipartisan network of technology CEOs and senior executives that promotes the growth of the innovation economy, since November 2014.
Qualifications
Mr. Gregoire’s qualifications include: extensive executive leadership experience with public companies in the software and services sectors, including as Chief Executive Officer of the Company; extensive experience in the technology industry; and public company governance experience as a member of boards and a member and chair of board committees of public companies.
ROHIT KAPOOR
Director since 2011
Age 50
Business Experience
Mr. Kapoor has been Vice Chairman and Chief Executive Officer of ExlService Holdings, Inc. (“EXL Holdings”), a provider of outsourcing and transformation services, since April 2012 and has been a director of EXL Holdings since 2002. Mr. Kapoor co-founded ExlService.com, Inc. (“EXL Inc.”), a wholly-owned subsidiary of EXL Holdings, in April 1999. Mr. Kapoor served as EXL Holdings’ President and Chief Executive Officer from May 2008 to April 2012, its Chief Financial Officer from November 2002 to June 2005 and from August 2006 to March 2007, as its Chief Operating Officer from June 2007 to April 2008 and as President and Chief Financial Officer of EXL Inc. since August 2000. Prior to founding EXL Inc., Mr. Kapoor served as a business head of Deutsche Bank from July 1999 to July 2000. From 1991 to 2000, Mr. Kapoor served in various capacities at Bank of America in the United States and Asia, including India.
Current Directorships
As stated above, Mr. Kapoor has been a director of EXL Holdings since 2002. Mr. Kapoor has been a director of the Tri-State chapter of Pratham USA, an education non-profit organization, since March 2014.
Qualifications
Mr. Kapoor’s qualifications include: extensive leadership experience at a public company; extensive accounting experience; international experience; entrepreneurial experience; governance experience as a member of the board of a public company; and a deep understanding of operational efficiencies.


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JEFFREY G. KATZ
Director since 2015
Age 59
Business Experience
Jeffrey G. Katz served as Chief Executive Officer of Wize Commerce, Inc., a provider of online monetization and traffic acquisition technology solutions, from 2010 to 2014. Prior to joining Wize Commerce, Mr. Katz served as President and Chief Executive Officer of LeapFrog Enterprises, Inc., a provider of digital educational entertainment solutions for children, from 2006 to 2010. In addition, he served as the Executive Chairman of LeapFrog Enterprises from 2010 to 2011. Previously, Mr. Katz served as the Founding Chairman, President and Chief Executive Officer of Orbitz Worldwide, Inc., a global online travel company from 2000 to 2004. Mr. Katz also served as Chief Executive Officer of Swissair, formerly Switzerland’s national airline, and held various leadership positions at American Airlines Group, Inc. (formerly AMR Corporation) and Lawrence Livermore National Laboratory, a federal science research facility.
Current Directorships
Mr. Katz has served as a director of R.R. Donnelley & Sons Company, a digital and print communications business, since 2013.
Previous Directorships
Mr. Katz served as a director of Digital River, Inc., a provider of online commerce, payments and marketing solutions, from 2014 to 2015, LeapFrog Enterprises from 2005 to 2011, Northwest Airlines Corporation from 2005 to 2008 and Orbitz from 2000 to 2004.
Qualifications
Mr. Katz’s qualifications include: extensive executive leadership experience at large, complex companies; extensive experience in the technology industry; international experience; and governance experience as a member or chair of boards and board committees of public companies.
KAY KOPLOVITZ
Director since 2008
Age 70
Business Experience
Ms. Koplovitz has been Chairman and Chief Executive Officer of Koplovitz & Co., LLC, a media and investment firm, since 1998. She is a founder of USA Network, an international cable television programming company, and served as its Chairman and Chief Executive Officer from 1977 to 1998. Ms. Koplovitz launched the Sci-Fi Channel (currently Syfy) in 1992. In 2001, Ms. Koplovitz co-founded Boldcap Ventures, a venture capital fund focused on investing in early to mid-stage companies, primarily in the healthcare and technology sectors, of which she is a governing board member. From 2000 to 2001, Ms. Koplovitz served as Chief Executive Officer of Working Women Network, a multi-platform media company.
Current Directorships
Ms. Koplovitz serves on the boards of Time Inc., a media and publishing company, Ion Media Networks, Inc., a privately held television and media company, The Paley Center for Media (formerly the Museum of Television and Radio), Springboard Enterprises, a non-profit organization that supports emerging growth ventures led by women, and the International Tennis Hall of Fame.


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Previous Directorships
Ms. Koplovitz was a director of General Reinsurance Corporation, a property/casualty and life/health reinsurance company, from 1990 to 1998, was a director of Nabisco, a manufacturer of cookies and snacks, from 1992 to 2000, served as a director and member of the governance committee of Oracle Corporation, a database software and middleware company, from 1998 to 2001, was a director of Instinet Group, Inc., an electronic brokerage services provider, from 2001 to 2007, served as Chairman of Joy Berry Enterprises, Inc., a privately held publisher of children’s books, from 2008 to 2013, was a director of Kate Spade & Company (formerly Fifth & Pacific Companies, Inc. and Liz Claiborne, Inc.), a designer and marketer of fashion apparel and accessories, from 1992 to 2015, where she also served as non-executive Chairman of the Board from 2007 to 2013, and, as stated above, served as Chairman of USA Network from 1977 to 1998.
Other Experience
Ms. Koplovitz is a member of the Board of Visitors, College of Letters and Science at the University of Wisconsin-Madison.
Qualifications
Ms. Koplovitz’s qualifications include: extensive executive leadership experience at a large, complex company; entrepreneurial experience; extensive marketing and sales experience; technology experience; venture capital investment experience; and public company governance experience as a member or chair of boards and board committees of public companies.
CHRISTOPHER B. LOFGREN
Director since 2005
Age 56
Business Experience
Mr. Lofgren has been President, Chief Executive Officer and a director of Schneider National, Inc. (“Schneider National”), a provider of transportation and logistics services, since 2002. He served as Chief Operating Officer of Schneider National from 2001 to 2002, Chief Executive Officer of Schneider Logistics, a subsidiary of Schneider National, from 2000 to 2001, Chief Information Officer of Schneider National from 1996 to 2000, and Vice President, Engineering and Systems Development of Schneider National from 1994 to 1996. Prior to joining Schneider National, Mr. Lofgren held several positions at Symantec Corp., a security, storage and systems management solutions company, including Interim General Manager, Director of Engineering and Senior Engineer Manager. Prior to Symantec, Mr. Lofgren was a Senior Staff Engineer with Motorola, Inc., a telecommunications company.
Current Directorships
As stated above, Mr. Lofgren serves as a director of Schneider National. In addition, Mr. Lofgren currently serves on the board of directors of the U.S. Chamber of Commerce and the American Transportation Research Institute, a research trust affiliated with the American Trucking Associations.
Previous Directorships
Mr. Lofgren served as a director of the American Trucking Associations from 2005 to 2013.
Other Experience
Mr. Lofgren currently serves on the Advisory Board of the Georgia Institute of Technology and served on the Advisory Board of the Georgia Tech College of Engineering from 2010 to 2013. Mr. Lofgren currently serves on the Advisory Board of Junior Achievement of Wisconsin in Brown County. He was inducted into the National Academy of Engineering in 2009.


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Qualifications
Mr. Lofgren’s qualifications include: extensive executive leadership experience at a large, complex company; extensive technology experience; understanding of regulatory compliance through Schneider National’s highly regulated industry; and international business management experience.
RICHARD SULPIZIO
Director since 2009
Age 65
Business Experience
Mr. Sulpizio served as President and Chief Executive Officer of Qualcomm Enterprise Services, a division of Qualcomm Incorporated (“Qualcomm”) responsible for mobile communications and services to the transportation industry, from December 2009 to February 2013. He served as Senior Advisor of Qualcomm Enterprise Services from February 2013 to November 2013. Mr. Sulpizio served as President and Chief Operating Officer of Qualcomm, a developer of wireless technologies, products and services, from 1998 to 2001 and served in various other executive positions between 1991 and 1998. He served as a director of Qualcomm from 2000 to 2007. Mr. Sulpizio served as President and Chief Executive Officer of MediaFLO, USA, Inc., a Qualcomm subsidiary involved in bringing multimedia services to the wireless industry, from 2005 to 2006. Mr. Sulpizio served as President of Qualcomm Europe in 2004 and President of Qualcomm China from 2002 to 2003. Before joining Qualcomm, Mr. Sulpizio worked for eight years at Unisys Corporation, a worldwide information technology company, and 10 years at Fluor Corporation, an engineering and construction company.
Current Directorships
Mr. Sulpizio has served as a director of ResMed Inc., a global developer, manufacturer and marketer of medical products, since 2005, where he has served on its governance committee and compensation committee.
Previous Directorships
As stated above, Mr. Sulpizio served as a director of Qualcomm from 2000 to 2007.
Other Experience
Mr. Sulpizio serves on the advisory board of the University of California San Diego’s Sulpizio Family Cardiovascular Center.
Qualifications
Mr. Sulpizio’s qualifications include: extensive executive leadership experience at a large, complex, global public company; extensive technology experience; international management experience; and public company governance experience as a member or chair of boards and board committees of public companies.
LAURA S. UNGER
Director since 2004
Age 54
Business Experience
Ms. Unger served as a special advisor to Promontory Financial Group, a global consulting firm for financial services companies, from 2010 to 2014. She served as the Independent Consultant to JPMorgan Chase & Co., a global securities, investment banking and retail banking firm for the global analyst conflict settlement from 2003 to 2010. From 2002 to 2003, Ms. Unger was employed by CNBC, a satellite and cable television business news channel, as a Regulatory Expert. Ms. Unger was a


22



Commissioner of the SEC from 1997 to 2002, and served as Acting Chairperson of the SEC from February to August 2001. Ms. Unger served as Counsel to the U.S. Senate Committee on Banking, Housing and Urban Affairs from 1990 to 1997. Prior to working on Capitol Hill, Ms. Unger was an attorney with the Enforcement Division of the SEC.
Current Directorships
Ms. Unger has served as a director of CIT Group, Inc., a provider of financing to small businesses and middle market companies, since 2010, where she has served as chairman of its nominating and governance committee and member of its audit committee. She has served as a director and member of the audit committee and nominations and governance committee of Navient Corporation, which operates the loan management, servicing and asset recovery business that was previously operated by Sallie Mae, since 2014. Ms. Unger has served as a director of Nomura Securities International, Inc. and Nomura Global Financial Products, Inc., privately held U.S. subsidiaries of Nomura Holdings, Inc., a Japanese financial services provider, since 2015. She also serves as a director of Children's National Medical Center and Children’s National Medical Center Foundation.
Previous Directorships
Ms. Unger was a director and member of the governance, compensation and audit committees of Ambac Financial Group, Inc., a holding company whose affiliates provide financial guarantees and financial services, from 2002 to 2013, a director and member of the nominating and governance committee and audit committee of the IQ Funds Complex, a group of closed-end mutual funds, from 2008 to 2010, a director and a member of the audit committee of Borland Software Corporation, a provider of software lifecycle management solutions, from 2002 to 2004 and a director and member of the audit committee of MNBA Corporation, a bank holding company, from 2004 to 2006.
Qualifications
Ms. Unger’s qualifications include: government and public policy experience; legal and regulatory experience; extensive leadership experience at government agencies; and public company governance experience as a member or chair of boards and board committees of public companies.
ARTHUR F. WEINBACH
Director since 2008
Age 72
Business Experience
Mr. Weinbach has been Chairman of the Board of the Company since May 2010. From 2007 to June 2010, Mr. Weinbach was Executive Chairman and from July 2010 to November 2011 non-executive Chairman of Broadridge Financial Solutions, Inc., a provider of products and services for securities processing, clearing and outsourcing which was spun off from Automatic Data Processing, Inc. (“ADP”), a provider of business outsourcing solutions. Prior to the spin-off, Mr. Weinbach was associated with ADP from 1980 to 2007, serving as executive Chairman and Chief Executive Officer from 1996 to 2006 and as non-executive Chairman until November 2007. Prior to joining ADP, Mr. Weinbach held various positions at Touche Ross & Co., an accounting firm and a predecessor of Deloitte Touche Tohmatsu, and was a partner from 1975 to 1979.
Current Directorships
Mr. Weinbach has been a director of The Phoenix Companies, Inc., a provider of life insurance and annuity products, since 2008, chairman of its audit committee since 2009 and a member of its compensation committee since 2008.


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Previous Directorships
In addition to having served as a director of Broadridge and ADP, including as Chairman of both, Mr. Weinbach served as a director of First Data Corporation, a provider of electronic commerce and payment solutions for merchants, financial institutions and card issuers, from 2000 to 2006, and as a member of its audit committee for much of that period. He was also a director of Schering-Plough Corporation, a pharmaceutical manufacturer, from 1999 to 2009, at which he chaired its audit and finance committees during various times.
Other Experience
Mr. Weinbach is currently a Trustee of New Jersey SEEDS, a non-profit organization providing academic enrichment and leadership programs for high-achieving, low-income youth.
Qualifications
Mr. Weinbach’s qualifications include: extensive financial, accounting and auditing experience; international experience; technology experience; and public company governance experience as a member or chair of boards and board committees of public companies.
RENATO (RON) ZAMBONINI
Director since 2005
Age 68
Business Experience
Mr. Zambonini was Chairman of the Board of Cognos Incorporated (“Cognos”), a developer of business intelligence software, from 2004 until 2008, and a director from 1994 until 2008. Mr. Zambonini was Chief Executive Officer of Cognos from 1995 to 2004, President from 1993 to 2002, and Senior Vice President, Research and Development from 1990 to 1993. Prior to joining Cognos, Mr. Zambonini served as Vice President, Research and Development of Cullinet Software, Inc., a software developer, from 1987 to 1989.
Current Directorships
Mr. Zambonini has served as a director of PTC Inc., a company that develops, markets and supports product development software solutions and related services, since May 2011.
Previous Directorships
In addition to having served as a director of Cognos, including as Chairman, Mr. Zambonini served as a director of Reynolds & Reynolds, a software company servicing automotive dealerships, from 2003 to 2006, and a director of Emergis, Inc., an electronic commerce business, from 2004 to 2008. Mr. Zambonini served on the audit committee of Reynolds & Reynolds and the compensation committee of Emergis, Inc.
Qualifications
Mr. Zambonini’s qualifications include: extensive executive leadership experience at a large, complex, public company; extensive technology experience; and public company governance experience as a member or chair of boards and board committees of public companies.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES LISTED ABOVE (PROPOSAL 1).


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PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP has been appointed by the Audit Committee to serve as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2016. KPMG LLP has been the Company’s independent registered public accounting firm since the fiscal year ended March 31, 2000. The Audit Committee believes that the continued retention of KPMG LLP is in the best interests of the Company and our stockholders. As provided in the Audit Committee’s Charter, (1) the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements and its effectiveness of internal control over financial reporting; and (2) the Audit Committee is directly involved in the selection of its independent registered public accounting firm’s lead engagement partner. Our Audit Committee Charter also provides that periodically the Audit Committee “will consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.”
In determining whether to reappoint KPMG LLP as the Company’s independent registered public accounting firm, the Audit Committee took into consideration a number of factors, including the length of time the firm has been engaged, the quality of the Audit Committee’s ongoing discussions with KPMG LLP, an assessment of the professional qualifications and past performance of the lead engagement partner and KPMG LLP and the potential impact of changing independent registered public accounting firms. Through more than 15 years of experience with the Company, KPMG LLP has gained institutional knowledge and expertise regarding the Company’s operations, accounting policies and practices and internal control over financial reporting. The Audit Committee believes that appointing a new independent registered public accounting firm would require a significant time commitment that could interfere with management’s focus on financial reporting and internal controls.
In accordance with SEC rules and KPMG LLP’s policies, engagement partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to the Company. For lead and concurring engagement partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of the Company’s lead engagement partner pursuant to this rotation policy involves a meeting between the Chairman of the Audit Committee and the candidate for the role, discussion by the full Audit Committee and with Company management, as well as discussion between the Chairman of the Audit Committee and KPMG LLP leadership.
Although our By-laws do not require the submission of the selection of our independent registered public accounting firm to our stockholders for approval or ratification, the Audit Committee considers it desirable to obtain the views of our stockholders on that appointment. If our stockholders fail to ratify the appointment of KPMG LLP, the Audit Committee may reconsider its selection of the firm as our independent registered public accounting firm for the fiscal year ending March 31, 2016.
A representative of KPMG LLP will be present at the annual meeting, will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL 2).
Audit and Other Fees Paid to KPMG LLP
The fees billed by KPMG LLP for professional services rendered for the fiscal years ended March 31, 2015 and March 31, 2014 are reflected in the following table:


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Fee Category
Fiscal Year 2015 Fees
Fiscal Year 2014 Fees
Audit Fees

$10,246,065


$10,213,025

Audit-Related Fees
1,601,310

1,745,000

Tax Fees
471,430

680,000

All Other Fees
30,000

—

Total Fees

$12,348,805


$12,638,025

Audit Fees
Audit fees relate to: audit work performed in connection with the audit of our financial statements for the fiscal years ended March 31, 2015 and 2014 included in our Annual Reports on Form 10-K; the audit of the effectiveness of our internal control over financial reporting at March 31, 2015 and 2014; the reviews of the interim financial statements included in our Quarterly Reports on Form 10-Q for the fiscal years ended March 31, 2015 and 2014; as well as work that generally only the independent registered public accounting firm can reasonably be expected to provide, including comfort letters to underwriters and lenders, statutory audits of foreign subsidiaries, consents to reissue its reports, review of SEC filings and comment letters, and discussions surrounding the proper application of financial accounting and reporting standards.
Audit-Related Fees
Audit-related fees are for assurance and related services that are traditionally performed by the independent registered public accounting firm, including employee benefit plan audits and special procedures required to meet certain regulatory requirements. The audit-related fees for fiscal year 2015 and fiscal year 2014 primarily include services in connection with: divestitures; software license compliance; assistance with new revenue standard implementation; greenhouse gas emissions reporting; benefit plan audits; information systems compliance with the Federal Information Security Management Act; and engagements under Statement on Standards for Attestation Engagements No. 16, Reporting on Controls at a Service Organization (formerly Statement on Auditing Standards (“SAS”) No. 70).
Tax Fees
Tax fees reflect all services, except those services specifically related to the audit of the financial statements, performed by the independent registered public accounting firm’s tax personnel. The tax fees for fiscal years 2015 and 2014 primarily include services in connection with international and U.S. tax compliance matters.
All Other Fees
All other fees for fiscal year 2015 represent fees for consulting services related to certain non-financial information systems.
The Audit Committee has concluded that the provision of the non-audit services listed above is compatible with maintaining the independence of KPMG LLP.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted policies and procedures requiring Audit Committee pre-approval of the performance of all audit, audit-related and non-audit services (including tax services) by our independent registered public accounting firm. The Audit Committee may consult with management in determining which services are to be performed, but may not delegate to management the authority to make these determinations. The Audit Committee has also delegated to its Chairman the authority to pre-approve the performance of audit, audit-related and non-audit services by our independent registered public accounting firm (provided that tax services may be pre-approved only up to $100,000), if such


26



approval is necessary or desirable in between meetings, provided that the Chairman must inform the Audit Committee no later than its next scheduled meeting.


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AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements and internal controls for the fiscal year ended March 31, 2015 with management.
The Audit Committee has discussed with KPMG LLP, the Company’s independent registered public accounting firm, the matters required to be discussed under applicable Public Company Accounting Oversight Board standards.
The Audit Committee has received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with KPMG LLP its independence.
Based upon the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2015 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015, for filing with the Securities and Exchange Commission.
 
THE AUDIT COMMITTEE
 

Raymond J. Bromark, Chair
Jens Alder
Rohit Kapoor
Jeffrey G. Katz
Christopher B. Lofgren
Ron Zambonini
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation and Human Resources Committee (the “Compensation Committee”) has reviewed and discussed with management the following Compensation Discussion and Analysis section of this Proxy Statement. Based on its review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
 
THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
 

Gary J. Fernandes, Chair
Kay Koplovitz
Richard Sulpizio
Laura S. Unger


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COMPENSATION DISCUSSION AND ANALYSIS
For fiscal year 2015, our Named Executive Officers (NEOs), as defined by SEC rules, were:
•
Michael P. Gregoire, Chief Executive Officer (CEO);
•
Richard J. Beckert, Executive Vice President and Chief Financial Officer (CFO);
•
Adam Elster, Executive Vice President and Group Executive, Worldwide Sales and Services;
•
Amit Chatterjee, Executive Vice President, Enterprise Solutions and Technology Group; and
•
Lauren P. Flaherty, Executive Vice President and Chief Marketing Officer.
This Compensation Discussion and Analysis is organized in six key sections:
•
Compensation Philosophy
•
Executive Summary
◦
Fiscal Year 2015 Business Performance Highlights
◦
Impact of Business Performance and Plan Design on Fiscal Year 2015 Executive Compensation
◦
Other Fiscal Year 2015 Executive Compensation Highlights
◦
Compensation-Related Corporate Governance Highlights
•
Fiscal Year 2015 Reported vs. Unrealized/Realized Compensation
•
Discussion and Analysis
◦
Elements of Compensation
◦
How Compensation Is Set and Determined
◦
Determining Payouts for Fiscal Year 2015
•
Other Important Compensation Matters
Compensation Philosophy
The Company’s compensation philosophy is pay-for-performance. This compensation philosophy is intended to align executives’ compensation with performance against the Company’s short-term and long-term performance objectives. The compensation philosophy and compensation program design are also intended to provide compensation and incentives needed to attract, motivate and retain key executives who are crucial to the Company’s long-term success. The manner in which our compensation philosophy is implemented may vary from year to year depending on evolving objectives and challenges. Our plan design for fiscal year 2015 is summarized below.
Executive Summary
Fiscal Year 2015 Business Performance Highlights
In fiscal year 2015, we focused our efforts on our go-to-market strategy, introduced new products and strengthened relationships with our customers. As demonstrated by the fourth quarter’s results, however, we still have work to do to drive the kind of growth that our company has the potential to achieve. We are


29



making progress in differentiating and building new products that help our customers succeed in the Application Economy. We have also significantly improved the underlying efficiency of our business.1 
From a financial perspective, we reported for fiscal year 2015:
•
a 2% decline in revenue from fiscal year 2014 in constant currency and 3% as reported to $4.262 billion, primarily due to lower subscription and maintenance revenue and professional service revenue. In addition, there was an unfavorable foreign exchange effect on total revenue of $71 million;
•
GAAP2 diluted earnings per share from continuing operations declined 5% from fiscal year 2014 in constant currency and declined 7% as reported to $1.82, and non-GAAP diluted earnings per share from continuing operations decreased 15% from fiscal year 2014 in constant currency and decreased 16% as reported to $2.53;3 
•
cash flow from continuing operations of $1,030 million for fiscal year 2015 as reported compared with $973 million in fiscal year 2014; and
•
GAAP operating margin of 27%, up three percentage points from fiscal year 2014, and non-GAAP operating margin of 37%, flat from fiscal year 2014.3 
Impact of Business Performance and Plan Design on Fiscal Year 2015 Executive Compensation
The Company’s performance is directly reflected in the compensation decisions and pay outcomes for our NEOs for fiscal year 2015. While there were a number of positive aspects of our business performance in fiscal year 2015, the Company’s performance goals were not met in all respects. The payouts of fiscal year 2015 incentive compensation were affected not only by our business performance, but also by our incentive compensation plan design. For fiscal year 2015, our annual incentive plan design included:
•
performance measures based on revenue growth, “new sales growth” (measuring growth in total new product and mainframe solutions capacity sales) and operating margin performance; and
•
a cap on the payout for operating margin performance such that, if the threshold level for either the revenue growth or new sales growth performance measure was not achieved, the operating margin performance measure would not pay above target level, even if performance on operating margin exceeded the target.
We believe these features are consistent with our strategy to focus on short- and long-term revenue growth and to limit the ability to receive above-target payouts solely by controlling expenses.
For fiscal year 2015, the Company’s performance and incentive plan design had a significant impact on payouts, primarily as a result of the Company’s failure to achieve the projected target level of performance for the new sales growth performance measure. This shortfall resulted in a payout for the new sales growth performance measure that was significantly below the target level, and it triggered the cap on the operating margin performance measure at 100% of target, even though actual performance on that measure exceeded target performance.
____________________
1 
Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for a more detailed description of our fiscal year 2015 financial results.
2 
“GAAP” refers to the generally accepted accounting principles in the United States of America.
3 
A reconciliation of non-GAAP financial measures to comparable GAAP financial measures is included in “Supplemental Financial Information,” below.


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As a result, we paid incentive compensation to our NEOs, based on performance periods ending March 31, 2015, at the following levels:
•
75.5% of target for the fiscal year 2015 annual performance cash incentive; and
•
31.3% of target for the fiscal year 2013-2015 three-year performance share program.
The Company’s performance over the last two fiscal years has had a significant and unfavorable impact on the compensation of our NEOs, including our CEO. The chart below compares Mr. Gregoire’s target total direct compensation over the prior two fiscal years (consisting of base salary, annual performance cash incentive target award and long-term incentive target award) to the amount we calculate that he actually realized over the last two fiscal years. The Total Realized amount is calculated using the methodology described below under “Fiscal Year 2015 Reported vs. Unrealized/Realized Compensation” for each of the years. We note that the fiscal year 2015-2017 three-year performance shares are not reflected in Total Realized Compensation, as any payout would not occur until after fiscal year 2017 and that Mr. Gregoire was not eligible for the fiscal year 2013-2015 performance shares (which paid out shortly after the end of fiscal year 2015) because he was not an employee when those award were granted.
 
Since a substantial majority of the CEO’s pay was performance-based, the Company’s below-target performance in certain areas over the last two fiscal years had a significant impact upon the total amounts realized.

Also, because a substantial portion of the CEO’s compensation is tied to the long-term performance of the Company and/or subject to long-term vesting, he does not realize the value of that portion immediately. Rather, he could realize the value over a longer-term period subject to his continued employment. The ultimate value of this portion is directly tied to long-term Company and stock price performance. Mr. Gregoire was not eligible for payout of any three-year performance shares after fiscal years 2014 and 2015 since he was not with the Company at the time those awards were granted.
Other Fiscal Year 2015 Executive Compensation Highlights
New in Fiscal Year 2015. Consistent with our compensation philosophy, and in order to continue to motivate our executives to pursue long-term strategic priorities and build stockholder value while maintaining consistency in our executive compensation programs, the Compensation Committee determined to maintain the fundamental design of the fiscal year 2014 executive incentive program in fiscal year 2015. The most significant change was the addition of a time-based restricted stock component to our long-term incentive plan (LTIP) for fiscal year 2015. Most of our NEOs’ total direct compensation continues to be tied to objective financial measures over an annual or three-year performance period.
Incentive Compensation Plan Design. The following illustration summarizes each component of the fiscal year 2015 executive incentive compensation program, and highlights how each component aligns


31



with our pay-for-performance philosophy. With the addition of base salary, all of the components below comprise an NEO’s total direct compensation.
Our fiscal year 2015 executive incentive compensation program reflects what we believe are best practices, which include the following:
ü
The program provides an appropriate balance of annual and long-term incentives and includes multiple measures of performance that are tied to our strategies and goals.
ü
The annual performance cash incentive provides greater near-term focus on building total new product and mainframe solutions capacity sales. We capped the payout of the operating margin metric to ensure that the payout under our program would not be driven solely by expense containment.
ü
Most of our compensation is “at-risk” and/or performance-based as reflected in the Compensation Dashboard below.
Predominance of “at-risk” and/or performance-based compensation
89% of the CEO’s (and 82% on average of the other NEOs’) target total direct compensation is “at-risk” and/or performance-based, consistent with our fundamental pay-for-performance philosophy.
These allocations reflect our belief that a significant portion of our NEOs’ compensation should be performance-based or “at-risk” based on Company performance and/or service requirements. Since the value of restricted stock is directly tied to stock price performance and is realized only upon continued employment through the vesting dates, we have included restricted stock as “at-risk” for purposes of this summary.


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Since our annual and long-term incentive opportunities have both upside opportunities and downside risks and our actual performance can deviate from the target goals, the amount of compensation actually earned may differ from the target allocations, as reflected by the actual below-target payouts for fiscal year 2015, as summarized in this Compensation Discussion and Analysis.
ü
100% of “at-risk” and/or performance-based compensation is based on the achievement of core business metrics or is subject to market risk based on stock price performance.
ü
We emphasize close alignment between our long-term incentives and our Common Stock performance and stockholder interests as reflected in the Compensation Dashboard below.
Close alignment with Common Stock performance and stockholder interests
72% of the CEO’s (and 64% on weighted average of the other NEOs’) target total direct compensation is payable in Common Stock and subject to long-term Company performance.
ü
The Compensation Committee uses a combination of business performance metrics and time horizons to promote and reward achievement of key strategic and financial goals, as well as stock price performance, over the short- and long-term.
ü
Payout for each component is capped at 150%-200% of target.
Compensation-Related Corporate Governance Highlights
We believe that strong compensation-related governance practices are critical to successfully implementing our pay-for-performance philosophy. The following are highlights of our strong practices:
•
Say-on-Pay. We seek stockholder feedback through an annual “say-on-pay” vote. We have achieved strong say-on-pay results, with approval by greater than 95% of votes cast for each of the last three fiscal years.
•
Clawback. A “clawback” policy applies to incentive compensation if an NEO engages in misconduct that results in substantial restatement of our financial statements. Additional “clawback” provisions apply to certain equity awards in the event of breach of non-competition and other restrictive covenants.
•
Independent Advisors. The compensation consultants and advisors to the Compensation Committee have been determined to be independent of Company management.


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•
Annual Risk Review. We conduct an annual risk review of incentive compensation to confirm that our incentive compensation programs do not give rise to risks that are reasonably likely to have a material adverse effect on the Company.
•
Stock Ownership Requirements. We have Stock Ownership Requirements ranging from two-to-five times base salary for each NEO. The CEO’s requirement is five times his annual base salary.
•
No Hedging. We do not believe our directors, officers or other employees should speculate or hedge their interests in our stock. We therefore prohibit them from purchasing or selling derivative securities that are directly linked to our stock or from making “short-sales” of our stock.
•
No Option Repricing. We prohibit the repricing of stock options. This includes amending outstanding options to lower their exercise price or canceling outstanding options and replacing them with new options.
Fiscal Year 2015 Reported vs. Unrealized/Realized Compensation
Since the vast majority of compensation reported in the Summary Compensation Table below represents potential pay, we believe it is important to also look at the compensation actually realized each year. The following chart shows the compensation reported in the Fiscal Year 2015 Summary Compensation Table, as well as the compensation that we consider to have been earned or received by our NEOs including the amounts that are not subject to forfeiture (Total Realized Compensation) and the amounts that remain subject to forfeiture (Total Unrealized Compensation).
The following chart is intended to supplement the Summary Compensation Table. The Summary Compensation Table, as required by SEC rules, provides the grant date fair value of all stock options, restricted stock and performance shares granted during the fiscal year. As a result, a significant portion of the total compensation amounts reported in the Summary Compensation Table relate to equity awards that have not fully vested (including performance shares for which the performance period has not been completed) and for which the value is uncertain (and which may deliver no value at all). For example, a portion of the stock awards reflected in the Summary Compensation Table represent fiscal year 2015-2017 three-year performance shares that were granted in fiscal year 2015 but will not be issued until the end of three-year performance period on March 31, 2017, subject to attainment of the applicable performance goals.


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For fiscal year 2015, Total Realized Compensation was less than 1/3 of reported pay in the Summary Compensation Table for the CEO and less than 1/2 of reported pay for the other NEOs on average.

•
Total Summary Compensation Table compensation comprises the Total Compensation amount from the Fiscal Year 2015 Summary Compensation Table, less the amount in the All Other Compensation column of that table.
•
Total Unrealized Compensation comprises fiscal year 2015 stock awards that were unvested as of March 31, 2015 and the intrinsic value of fiscal year 2015 LTIP stock options that were unvested as of March 31, 2015.
•
Total Realized Compensation comprises fiscal year 2015 base salary, actual annual performance cash incentive earned for fiscal year 2015, fiscal year 2015 LTIP stock awards that vested during the fiscal year, the intrinsic value of fiscal year 2015 LTIP stock options that vested during the fiscal year and the payout of the fiscal year 2013-2015 performance shares to the eligible executives.
Total Realized Compensation for Messrs. Beckert and Elster includes the payout of the Fiscal Year 2013-2015 performance shares; the other NEOs were not eligible for those awards because they were not employees when the awards were granted.
Total Realized Compensation for Mr. Chatterjee includes the sign-on bonus he received at the time he was hired during fiscal year 2015.
The fiscal year 2015-2017 three-year performance shares are not reflected, as any payout would not occur until after fiscal year 2017.
The value of the stock awards and stock options was based on a closing price of $32.61 on March 31, 2015, less the applicable exercise price (i.e., the “spread” or intrinsic value) in the case of stock options.
None of the NEOs exercised any stock options or sold any shares in fiscal year 2015.


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The chart above further reinforces that a substantial majority of our NEOs’ compensation is performance-based and that compensation realized for fiscal year 2015 was significantly reduced because the Company did not meet all of its target performance goals. Also, because the stock options and restricted stock are subject to vesting over three years, our NEOs realize the value over a long-term period, which aids in retention and ties these awards to long-term stock price performance.
Discussion and Analysis
This section provides more detailed information about our executive compensation program in the following order:
Elements of Compensation
The elements of regular compensation for the Company’s NEOs for fiscal year 2015 were base salary, annual performance cash incentive compensation, long-term incentive compensation, broad-based employee benefit programs and limited perquisites, supporting a holistic total rewards philosophy, as summarized in the Compensation Dashboard below.
The Company does not have a pre-established policy or target pay mix for allocating between fixed and variable compensation. However, the allocation is influenced by the Compensation Committee’s assessment of the practices of companies in the compensation benchmarking group and the Company’s short-term and long-term strategic objectives. The Compensation Committee believes that executive compensation should incentivize our NEOs to achieve consistent and sustained Company performance at target levels in order to achieve the Company’s strategic, financial and operating objectives. Accordingly, their compensation is heavily weighted towards variable compensation, including annual cash incentives and long-term equity incentives, rather than fixed compensation or base salaries.
The Compensation Dashboard below illustrates that the most significant portion of our NEOs’ compensation is based on Company performance. Immediately below the Compensation Dashboard, additional details are provided for each compensation element as it relates to fiscal year 2015.


36



COMPENSATION DASHBOARD
The numbers in the chart reflect the percentage that each compensation element represents of the CEO’s fiscal year 2015 target total direct compensation.
For the other NEOs, on weighted average, the mix is 18% base salary, 18% annual performance cash incentive, 13% stock options, 13% restricted stock and 38% performance shares.
OTHER ELEMENTS OF NEO COMPENSATION
 
 
Benefits and Retirement Programs
(e.g., medical, dental, disability and other welfare programs, retirement benefits, deferred compensation arrangements, severance and change in control benefits, etc.)
Limited Perquisites
(e.g., relocation-alternative housing arrangements, personal use of Company transportation, financial planning, etc.)
NEOs generally participate in the same benefit plans as the broader Company employee population in the U.S.
Perquisites aid in the attraction of executives by providing a limited number of personal benefits that allow executives to have greater focus on business matters and increased productivity.
As for the general employee population, welfare benefits provide some protection against financial hardship that can result from illness, disability or death. We also offer a 401(k) defined contribution plan to U.S. employees. We do not have any defined benefit pension or supplemental pension plans.
Not all NEOs receive or participate in the example perquisites.
Additional details are provided below under “Compensation and Other Information Concerning Executive Officers — Other Compensation Arrangements Provided to Our NEOs.”
Additional details are provided below in the Fiscal Year 2015 Summary Compensation Table.
Base Salaries
The Company compensates its NEOs with an annual base salary for services rendered during the


37



year. Base salaries are essential for the attraction and retention of talented executive officers. The annual base salaries for our NEOs are reviewed annually when the Compensation Committee reviews its compensation benchmark information. Base salary does not automatically or necessarily increase each year.
Fiscal Year 2015 Annual Performance Cash Incentive Awards
The annual performance cash incentive award provides an opportunity for an executive to earn cash after the end of the fiscal year, based on the level of attainment of revenue growth and new sales growth and operating margin goals (each as defined below) approved by the Compensation Committee at the beginning of the fiscal year 2015 performance period.
For the fiscal year 2015 annual performance cash incentive award, the performance measures and weightings were as follows:
•
Revenue Growth (50% weighting): Growth in total revenue, as reported in the Company’s Form 10-K for fiscal year 2015 (the “Form 10-K”), excluding the impact of foreign currency exchange. Maximum payout opportunity: 150% of target.
•
New Sales Growth (25% weighting): Growth in total new product and mainframe solutions capacity sales, as reported in the Form 10-K, excluding the impact of foreign currency exchange. Maximum payout opportunity: 200% of target.
•
Operating Margin (25% weighting): Operating income divided by total revenue for fiscal year 2015. Operating income is defined as income from continuing operations before interest and income taxes, as reported in the Form 10-K, plus non-GAAP operating adjustments, including, purchased software amortization, intangibles amortization, share-based compensation, software capitalization and amortization expense for internally developed software products (internally developed software product expense), expenses associated with the Board-approved rebalancing plan (Fiscal 2014 Plan), and hedging gains/losses, net, as reported in the “Reconciliation of GAAP Results to Non-GAAP Net Income” table of the Company’s fiscal year 2015 fourth quarter financial results press release. Maximum payout opportunity: 150% of target; 100% of target if specified threshold level of either revenue growth or new sales growth is not achieved.
The revenue growth, new sales growth and operating margin metrics exclude any: (1) results from discontinued operations as reported in the Form 10-K (adjusting the payout schedule to remove the effect of the discontinued operations from both target and actual financial results); (2) internally reported results from any acquisition during fiscal year 2015 that has a purchase price of $50 million or greater and that was not contemplated at the time the target performance goals were established; and (3) cumulative effect of changes in accounting rules and methods and tax laws, retained and uninsured losses from natural disaster or catastrophe and business losses resulting from extraordinary political, economic or legal changes.
For fiscal year 2014, we made changes to the annual performance cash incentive program to motivate the participants to continue to drive the Company’s strategic priorities, which include increasing near-term focus on “new sales growth” because of its potential beneficial effect on long-term revenue growth. These changes, which were also included in our fiscal year 2015 annual performance cash incentive plan, included the addition of the new sales growth metric and of a cap on the payout for operating margin results if there is a failure to achieve certain threshold performance levels under the other measures. If the specified threshold level for either the revenue growth or new sales growth performance measure is not achieved, the operating margin performance measure does not pay above target level even if performance on operating margin exceeds target. This cap is intended to limit the ability to receive above-target payouts solely by controlling expenses.


38



For fiscal year 2015, this design had a significant impact on payouts because the Company did not achieve the projected target level of performance for the new sales growth performance goal, which resulted in a payout for this goal that was significantly below the target level. This performance also capped the payout on the operating margin performance measure at 100% of target, even though actual performance on that measure exceeded target performance.
The Compensation Committee annually reviews the metrics and the weightings used in the incentive compensation programs. Our NEOs were assigned these metrics and weightings because they closely aligned our NEOs with the Company’s overall business plan for fiscal year 2015, which is consistent with focusing the team on overall business growth and profitability and holding the executive management team accountable for business decisions. Details of the fiscal year 2015 payout are below under “Determining Payouts for Fiscal Year 2015 — Fiscal Year 2015 Annual Performance Cash Incentive Award Payouts.”
Fiscal Year 2015 Long-Term Incentive Awards
Consistent with the Company’s fundamental pay-for-performance compensation philosophy, the Company allocates a substantial portion of its executive compensation to performance-based equity awards in the form of Common Stock so that our executives’ interests are aligned with our stockholders’ interests. For fiscal year 2015, the total target value of each NEO’s long-term incentives consisted of a combination of stock options, restricted stock and three-year performance shares.
Stock Options
Early in fiscal year 2015, stock options were granted to our NEOs (other than Mr. Chatterjee) as part of their fiscal year 2015 LTIP. Mr. Chatterjee received his fiscal year 2015 stock option grant in June 2014, prorated based on his start date. Ms. Flaherty also received additional stock options as part of her compensation increase in January 2015, as described below. All of the stock options have an exercise price equal to the closing market price of Common Stock on the grant date and vest with respect to 34% of the underlying shares on the first anniversary of the grant date and 33% of the underlying shares on each of the second and third anniversaries of the grant date.
The objective of the stock option grants and their three-year vesting schedule is to align the interests of our executives with the long-term performance of our stock price and the interests of our stockholders and to promote the retention of the executives. The stock options granted in fiscal year 2015 have a term of ten years. Additional details are provided below in the Fiscal Year 2015 Grants of Plan-Based Awards table.
Restricted Stock
For fiscal year 2015, the Compensation Committee added time-based restricted stock to the LTIP in order to more directly promote retention and continuity. Restricted stock awards represent 20% of the LTIP award and were granted to our NEOs near the beginning of fiscal year 2015 (other than Mr. Chatterjee). Mr. Chatterjee received his fiscal year 2015 restricted stock award in June 2014, prorated based on his start date. Ms. Flaherty received additional restricted stock as part of her compensation increase in January 2015.
Because the restricted shares vest in approximately equal installments over a three-year period subject to continued employment, the restricted shares provide the executives with strong incentives to remain employed by the Company, while providing additional rewards for increases in our stock price. In order for the restricted stock awards to begin vesting, the Company must achieve positive net income for the initial fiscal year. We believe this performance measure allows the time-based restricted stock awards to qualify as “performance-based” compensation under Section 162(m) of the U.S. Internal Revenue Code. Additional details are provided below under “Other Important Compensation Matters — Tax


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Deductibility of Performance-Based Compensation” and in the Fiscal Year 2015 Grants of Plan-Based Awards table.
Fiscal Year 2013-2015 Three-Year Performance Share Awards
Fiscal year 2013-2015 performance shares were granted in fiscal year 2013 as part of the fiscal year 2013 LTIP, to be settled by the issuance of unrestricted shares of Common Stock at the conclusion of the three-year performance period ended March 31, 2015, based on the Company’s performance for that three-year performance period. Messrs. Beckert and Elster are the NEOs who received a grant of the fiscal year 2013-2015 three-year performance share awards. The other NEOs were ineligible for this award because they were not executive officers at the beginning of the performance period.
These three-year performance shares were granted to our NEOs because the Compensation Committee believed that these executives are principally responsible for leading the execution of the Company’s long-term strategy.
The following describes the performance metrics for the fiscal year 2013-2015 three-year performance period (and the weightings attributable to each metric), which ended on March 31, 2015 and which the Compensation Committee approved near the beginning of the performance period:
•
Three-Year Revenue Growth (50% weighting): Three-year average growth in total revenue as disclosed in the Form 10-K over the three-year performance period ending March 31, 2015, excluding the impact of foreign currency exchange.
•
Three-Year Operating Margin Growth (30% weighting): Three-year average growth in operating margin calculated as operating income divided by total revenue as reported in the Form 10-K over the three-year performance period ending March 31, 2015. Operating income is defined as income from continuing operations before interest and income taxes as reported in the Form 10-K, plus non-GAAP operating adjustments, including, but not limited to, purchased software amortization, intangibles amortization, share-based compensation, and hedging (gains)/losses, net, as reported in the “Reconciliation of GAAP Results to non-GAAP Net Income” table of the Company’s fiscal year fourth quarter financial results press release.
•
Three-Year Adjusted Cash Flow from Operations (CFFO) Growth (20% weighting): Three-year average growth in net cash provided by continuing operating activities as disclosed in the Form 10-K over the three-year performance period ending March 31, 2015, plus restructuring and other payments for those fiscal years reported in the Company’s Supplemental Financials provided at www.ca.com/invest.
The three-year revenue growth, three-year operating margin growth and three-year adjusted CFFO growth metrics exclude any: (1) results from discontinued operations as reported in the Form 10-K (adjusting the payout schedule to remove the effect of the discontinued operations from both actual and projected financial results); and (2) internally reported results from any acquisition during fiscal years 2013, 2014 and 2015 that was not contemplated at the time the target performance goals were established.
Details of the payout for this award are shown below under Determining Payouts for Fiscal Year 2015 — Payout for Fiscal Year 2013-2015 Three-Year Performance Share Awards.
Incomplete Performance Cycle: Fiscal Year 2015-2017 Three-Year Performance Share Awards
Early in fiscal year 2015, the Compensation Committee awarded fiscal year 2015-2017 performance shares to the NEOs (other than Mr. Chatterjee) as part of their fiscal year 2015 LTIP. Mr. Chatterjee received performance shares for the fiscal year 2015 LTIP in June 2014, prorated based on his start date. Ms. Flaherty received additional performance shares as part of her compensation increase in January 2015.


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The performance metrics are weighted as follows: 50% on average three-year revenue growth, 30% on average three-year operating margin performance and 20% on average three-year adjusted cash flow from operations growth, over the performance period consisting of fiscal years 2015, 2016 and 2017. The fiscal year 2015-2017 three-year performance shares comprise 60% of the targeted total value of each NEO’s LTIP for fiscal year 2015. The three-year performance share awards are to be settled in the form of unrestricted shares of Common Stock, which will be issued only after the Compensation Committee certifies the level of attainment of the applicable performance goals. The objective of the three-year performance share awards is to align the interests of the executives with the long-term performance of the Company’s stock price and the interests of our stockholders, and to promote retention of the NEOs. The fiscal year 2015-2017 three-year performance shares were granted to NEOs because the Compensation Committee believes that these executives are principally responsible for leading the execution of the Company’s long-term strategy.
The number of shares of Common Stock underlying fiscal year 2015-2017 three-year performance shares that our NEOs may earn is reflected in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of the Fiscal Year 2015 Grants of Plan-Based Awards table, below. Because the three-year performance period ends with fiscal year 2017, the results for that performance period are not yet available and payouts are scheduled to occur after fiscal year 2017. The financial objectives for the fiscal year 2015-2017 three-year performance period reflected our internal, confidential business plan at the time the awards were established. At the time the fiscal year 2015-2017 three-year performance objectives were formulated, there was a substantial degree of difficulty with respect to achieving those objectives.
How Compensation Is Set and Determined
Consistent with our pay-for-performance compensation philosophy, the Compensation Committee follows specific fundamental compensation principles in determining compensation for our NEOs. The Compensation Committee determines the appropriate strategy to include these principles in our NEOs’ compensation program, and seeks to achieve the desired outcomes described below.
Principle
Strategy
Support a performance-based culture
Annually assess and appropriately reward executive performance against short-term and long-term financial, operating and strategic goals.
Adopt a total rewards holistic view
Promote the various components of an employment experience including compensation, benefits, perquisites and career development.
Include substantial portion of “at-risk” compensation
Establish alignment of a substantial portion of our executives’ compensation to the Company’s financial, strategic, operational and stock price performance.
Ensure appropriate compensation component mix
Balance the base salary, annual performance cash incentive, and long-term incentive compensation components of an executive’s overall compensation package to the competitive market.
Align to Company strategy
Annually review, assess, and implement change needed to ensure that the executive compensation program aligns with the Company’s short-term and long-term strategy (including with respect to appropriate compensation mix and performance measures).
Align with stockholders’ interests
Establish programs and policies that are transparent and meet governance and fiduciary commitments to our stockholders. Design programs that seek to deliver stockholder return. Deliver a substantial portion of compensation in stock. Maintain executive stock ownership requirements.
Mitigate excessive risk taking
Compensation Committee has discretion to reduce any annual performance cash incentive or performance share award for any reason, including the quality and long-term strategic alignment of the results underlying the achievement of performance goals. Payouts under incentive compensation programs are capped at 150%-200% of target. Mandatory reduction of target performance incentive for failure to complete annual ethics training. “Clawback” of compensation in the case of substantial Company financial restatements as a direct result of intentional misconduct or fraud. Clawback provisions have also been incorporated in equity grant agreements that could be triggered in the event the employee breaches certain restrictive covenants. Annual risk assessment of compensation programs with management.


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Desired Outcomes
Attract and retain talented senior executives whose judgment is vital to the continued success of the Company
Deliver superior stockholder return
Engage and incent executives to achieve short-term and long-term goals
Ensure business is conducted in an ethical manner and that incentive compensation is designed in a way to discourage executives from engaging in excessive or inappropriate risk-taking
The Role of the Compensation Committee
The responsibilities of the Compensation Committee are set forth in the Compensation Committee’s charter, which is available on our website at www.ca.com/invest. The Compensation Committee:
•
develops an executive compensation philosophy and objectives, establishes principles to guide the design and select the components of executive compensation and reviews the philosophy and strategy on an annual basis;
•
approves the amount and the form of compensation, as well as the other terms of employment, of the Company’s executive officers (as defined in the applicable SEC regulations), including the CEO and the other NEOs;
•
reviews NEO stock ownership compliance;
•
reviews and certifies, to the extent applicable, compensation that is intended to be tax-qualified under Section 162(m) of the U.S. Internal Revenue Code, is compliant with these tax rules;
•
recommends to the Board approval of all executive compensation plans and programs; and
•
considers the results of the advisory vote on compensation of our NEOs (“say on pay”) and shareholder proposals concerning executive compensation plans and programs.
The Compensation Committee consists entirely of directors who are “independent” as described in applicable NASDAQ rules and the Company’s Corporate Governance Principles.
The Compensation Committee, together with independent members of the Board, oversees the performance and reviews the compensation of the CEO as well as executive management development and succession planning.
The Compensation Committee meets regularly in executive session, without management present, and reports to the full Board at each regular Board meeting.
Determining Salary and Incentive Compensation Opportunities
The Compensation Committee reviews the compensation opportunities (salary and incentive compensation) for executive officers when they are hired and promoted, and on an annual basis. In determining the compensation opportunities for our NEOs relating to fiscal year 2015, the Compensation Committee used its judgment in considering various factors, including:
•
our NEO’s responsibilities, experience, strategic importance, performance and potential;
•
competitive market or survey data and related competitive pay mix between base salary, annual incentives and long-term and/or equity incentives;
•
advice from the Compensation Committee’s independent compensation consultant;


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•
recommendations from the CEO and the Chief Human Resources Officer regarding each other NEO;
•
feedback from the independent members of the Board regarding the CEO;
•
the Company’s performance; and
•
the Company’s compensation philosophy.
The Compensation Committee may consider other factors as it deems appropriate, such as internal pay fairness and retention risk. The Compensation Committee may also consider our past compensation history (including the compensation of an executive’s predecessor) and the executive’s compensation with the previous employer, including amounts forfeited in connection with a termination of their employment. Further, the Compensation Committee considers the results of recent “say-on-pay” votes.
Ultimately, it is the Compensation Committee’s evaluation of these factors that forms the basis for determining our NEOs’ salary and incentive compensation. The Compensation Committee does not set specific targets or benchmarks for overall compensation or for allocations between fixed and performance-based compensation, cash and non-cash compensation or short-term and long-term compensation, although for all NEOs the largest portion of pay is always performance-based and focused on long-term performance as shown in the Compensation Dashboard above.
Mr. Gregoire. Mr. Gregoire’s compensation opportunities were first determined by the Compensation Committee in connection with the negotiation of his December 2012 employment arrangement. As part of the annual executive compensation review process in early fiscal year 2015, the Compensation Committee approved an increase of approximately 18% to Mr. Gregoire’s target fiscal year 2015-2017 long-term incentive opportunity without any change to his base salary or target annual performance cash incentive opportunity. This was the first change to Mr. Gregoire’s total direct compensation since his hire date. In determining Mr. Gregoire’s compensation opportunities, including his most recent increase, the Compensation Committee considered the factors listed above, including his performance since joining the Company as CEO.
Mr. Beckert. Mr. Beckert received an increase of approximately 8% in both salary and target annual performance cash incentive opportunity for fiscal year 2015 as part of the Compensation Committee’s annual executive compensation review process early in fiscal year 2015. Mr. Beckert’s target fiscal year 2015-2017 long-term incentive opportunity did not change from his target fiscal year 2014-2016 long-term incentive opportunity. The Compensation Committee considered the factors listed above, including his performance since being promoted to CFO, in making its determinations. Mr. Beckert’s target fiscal year 2013-2015 long-term incentive opportunity was determined early in fiscal year 2013, based on the factors listed above.
Mr. Elster. Mr. Elster’s fiscal year 2015 salary and target annual performance cash incentive and target fiscal year 2015-2017 long-term incentive opportunities were determined early in fiscal year 2015 as part of the Compensation Committee’s annual executive compensation review process and were the same as those approved in fiscal year 2014 for Mr. Elster in connection with his promotion to lead Worldwide Sales and Services in that year. Mr. Elster’s target fiscal year 2013-2015 long-term incentive opportunity was determined in early fiscal year 2013, when Mr. Elster served as Executive Vice President and Group Executive, Mainframe and Customer Success Group. In approving Mr. Elster’s compensation opportunities, the Compensation Committee considered the factors listed above.
Mr. Chatterjee. Mr. Chatterjee’s fiscal year 2015 salary and target annual performance cash incentive opportunity and his target 2015-2017 long-term incentive opportunity were determined in connection with the negotiation of his April 2014 employment arrangement. In determining Mr. Chatterjee’s compensation opportunities at the time the Company entered into the employment arrangement with Mr. Chatterjee, the Compensation Committee considered the factors listed above.


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Ms. Flaherty. Ms. Flaherty’s fiscal year 2015 salary and target annual performance cash incentive opportunity and her long-term incentive opportunity were first determined by the Compensation Committee in connection with the negotiation of her June 2013 employment arrangement. The Compensation Committee’s determinations at the time the employment arrangement was negotiated were based on the factors listed above, as well her prior compensation, including the compensation she forfeited as a result of her termination of employment with her previous employer. In January 2015, the Compensation Committee considered the factors listed above, including Ms. Flaherty’s performance and contribution since she became our Chief Marketing Officer, and approved a compensation increase for Ms. Flaherty. This was the first change to Ms. Flaherty’s total direct compensation since she joined the Company. Ms. Flaherty received an increase of approximately 4% in both her base salary and target annual performance cash incentive opportunity and her target fiscal year 2015-2017 long-term incentive opportunity was increased by approximately 22%.
The target compensation opportunities vary by individual, although for all NEOs the largest portion of pay is variable and performance-based. Although the Compensation Committee sets the targets for the incentive compensation programs, each NEO’s actual or realized compensation varies above or below this level based on the degree to which specific performance goals are attained under the incentive compensation plans and changes in stock value over time, consistent with the pay-for-performance nature of the incentive programs. The realized pay for our NEOs for fiscal year 2015 is shown in the chart above under Fiscal Year 2015 Reported vs. Unrealized/Realized Compensation.
The Role of the Compensation Consultant
During fiscal year 2015, the Compensation Committee continued its engagement with Towers Watson as its independent executive compensation consultant. Towers Watson provided the Compensation Committee with the following services:
•
advised with respect to the design, form, components and amounts of compensation for executive officers;
•
advised and provided analysis on the appropriate composition and mix of the Company’s compensation benchmarking group;
•
reviewed the Company’s current compensation programs and opined on whether those programs were competitive and well-balanced;
•
reviewed and advised with respect to market trends, governance issues and developments and their potential effect on executive compensation programs; and
•
consulted with the Compensation Committee on appropriate performance metrics for the annual performance cash incentive and long-term incentive awards.
The scope of the services provided by Towers Watson is described in an engagement agreement. Consistent with SEC rules and NASDAQ listing standards, the Compensation Committee reviewed the independence of Towers Watson prior to the engagement and concluded that Towers Watson was independent under the applicable rules. The Compensation Committee will evaluate the independence standards of its consultants on an annual basis. The Compensation Committee engaged Towers Watson based on its experience, expertise and familiarity with the Company and the technology industry. A representative of Towers Watson usually attends sessions of the Compensation Committee that deal with executive compensation matters. In addition, management also works with Towers Watson at the direction of the Compensation Committee to prepare materials with respect to market data and best practices for the Compensation Committee’s consideration when making compensation decisions.


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The Role of Executive Management
The Compensation Committee considers the views and insights of the CEO and the Chief Human Resources Officer in making compensation decisions for the other NEOs and other executives. The Compensation Committee believes that the input of these officers with respect to the business environment, the Company’s competitive status in various business areas, and the attributes and performance of individual executives is an essential component of the Compensation Committee’s process. No NEO provides any recommendation regarding the determination of his or her own compensation. Any recommendation by our CEO or Chief Human Resources Officer is based on available competitive market or survey data and their assessment of an executive’s individual contribution and performance, scope of responsibility, experience, potential, retention risk and strategic importance to the Company.
The CFO also has a role in the Compensation Committee’s process by providing insight into the Company’s key financial drivers and goals in the short- and long-term and by certifying the level of attainment of the pre-established financial performance goals for the annual and long-term incentive components of the executive compensation programs. The Compensation Committee considered the results as certified by the CFO in approving the level of attainment of the performance goals for the performance periods ending March 31, 2015 and the payouts based on that level of attainment.
Use of Compensation Benchmarking Data
The Compensation Committee, with the assistance of Towers Watson, annually reviews a variety of data to assist in the design and determination of the amount, components and mix of compensation payable to the Company’s executive officers, including our NEOs. The Compensation Committee reviews data prepared by Towers Watson, including competitive market data for the most comparable positions at a sample of other companies that the Company considers as its “peer group.” Using a methodology recommended by Towers Watson and with its assistance, the Compensation Committee selected a benchmarking group that included the following attributes:
•
companies in the industry in which the Company’s business competes (i.e., Systems and Software);
•
companies in other similar technology industries (e.g., applications software, IT services, computer storage and peripherals, etc.) in which the Company competes for executive talent and for which information about their compensation programs is available;
•
a sample of companies of these types that has median revenues that approximate the Company’s revenue, since revenue size is considered by compensation consultants to typically have a high correlation with the scale and complexity of a business, and often similarly correlates to compensation levels; and
•
a company sample size that is sufficiently robust to offer a reasonable measure of statistical integrity and provide continuity with peer groups used in prior years.
The Compensation Committee annually evaluates the compensation benchmarking group to confirm that it remains appropriate. The compensation benchmarking group for fiscal year 2015 selected by the Compensation Committee was substantially the same as the group for fiscal year 2014, except that Qualcomm Incorporated (which the Compensation Committee determined no longer shared as many of the attributes summarized above for purposes of including it in its peer group) and BMC Software, Inc. (which ceased to be a public company after the 2014 benchmarking group was approved) were removed. The benchmarking group for fiscal year 2015 is as follows:


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Fiscal Year 2015 Compensation Benchmarking Group
Adobe Systems Incorporated
Compuware Corporation
salesforce.com, inc.
Autodesk, Inc.
EMC Corporation
Seagate Technology plc
Automatic Data Processing, Inc.
Intuit Inc.
Symantec Corporation
Cadence Design Systems, Inc.
Juniper Networks, Inc.
Unisys Corporation
Citrix Systems, Inc.
Microsoft Corporation
VMware, Inc.
Computer Sciences Corporation
Oracle Corporation
 
In general, the Compensation Committee does not, on a formulaic basis, set target direct compensation opportunity at a particular market percentile based on the peer group data. Instead, the Compensation Committee used peer group information as a reference point and guide to make what is ultimately a decision based on informed judgment that balances the factors described above. This approach provides the Compensation Committee the flexibility needed to make compensation decisions based upon all of the facts and circumstances described above. The Compensation Committee will also consider survey data for a particular role that covers issuers beyond the peer group, as it deems appropriate.
When business performance results do not meet all of our expectations, our NEOs receive compensation that is below our target levels, as shown in the Fiscal Year 2015 Reported vs. Unrealized/Realized Compensation chart above, and such amounts may be below market compared with our compensation benchmarking group. Similarly, when superior business performance results are achieved, our NEOs have an opportunity to receive compensation that is above our target levels and/or above market in comparison with our compensation benchmarking group.
Determining Payouts for Fiscal Year 2015
Determining Annual Performance Cash Incentive Award Payouts
After the end of fiscal year 2015, the Compensation Committee reviewed the Company’s actual performance against the financial goals. The Compensation Committee discussed these results with the CEO and CFO, including the level of difficulty in achieving the targeted performance goals for fiscal year 2015. The Compensation Committee determined that the annual performance cash incentive awards would be paid out at the actual core plan formulaic attainment level. See “Other Important Compensation Matters — Tax Deductibility of Performance-Based Compensation” below for additional details.
Since the performance for the new sales growth measure was below the anticipated target level, the payout with regard to that measure was 25% of the target amount. Further, since the performance for the new sales growth measure was below the threshold level for purposes of the cap on the operating margin measure, payout for the operating margin measure was capped at the target level. At the time the fiscal year 2015 performance objectives were formulated, there was a substantial degree of difficulty with respect to achieving the new sales growth goal and the threshold payout level would require performance at or above the level of our results for fiscal year 2014.
The table below shows the relationship of Company performance against the performance goals to the level of attainment of the applicable performance goal, which is the formulaic basis for the payout of the annual performance cash incentive awards.


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Fiscal Year 2015 Annual Performance Cash Incentive Performance Metrics (Core Plan)*
Relationship of Performance to Payout
Target Award Earned
Threshold
Target
Maximum
Actual Performance
Payout Percentage Credited
Corporate
Perf. Goal
Payout %
Perf. Goal
Payout %
Perf. Goal
Payout %
Revenue Growth
-3.5%
25%
-0.6%
100%
1.0%
150%
-1.8%
88%
Operating Margin**
35.5%
25%
37.0%
100%
38.5%
150%
37.5%
100%
Total Payout Factor
 
 
 
 
 
 
 
75.5%
__________
*A reconciliation of non-GAAP financial measures in the above table to comparable GAAP financial measures is included in “Supplemental Financial Information,” below.
**Operating Margin is capped at 100% of target since threshold new sales growth measure was not achieved.
Determining Payout of Fiscal Year 2013-2015 Three-Year Performance Share Awards
At the end of fiscal year 2015, the Compensation Committee reviewed the Company’s actual performance against the performance measures established at the beginning of fiscal year 2013 for the fiscal year 2013-2015 three-year performance share awards based on the Company’s expectations at that time. The Compensation Committee determined that the three-year performance share awards would be paid out at actual core plan formulaic attainment of the performance goals, as shown in the table below, and that it would not exercise its discretion to reduce the awards below that level. See “Other Important Compensation Matters — Tax Deductibility of Performance-Based Compensation” below for additional details.
Fiscal Year 2013-2015 Three-Year Performance Shares Performance Metrics*
Relationship of Performance to Payout
Target Award Earned
Threshold
Target
Maximum
Actual Performance
Payout Percentage Credited
Perf. Goal
Payout %
Perf. Goal
Payout %
Perf. Goal
Payout %
3-Year Revenue Growth
1.0%
25%
4.0%
100%
7.0%
200%
-1.8%
0%
3-Year Operating Margin Growth
1.4%
25%
2.8%
100%
4.7%
200%
3.1%
104.4%
3-Year Adjusted CFFO Growth
3.2%
25%
6.5%
100%
9.8%
200%
-10.0%
0%
Total Payout Factor
 
 
 
 
 
 
 
31.3%
__________
*A reconciliation of non-GAAP financial measures in the above table to comparable GAAP financial measures is included in “Supplemental Financial Information,” below.
Other Important Compensation Matters
Compensation Committee Discretion to Reduce Performance-Based Award Payouts
The Compensation Committee retains discretion to reduce the amount of any incentive compensation payout (including annual performance cash incentive and performance share awards) for any reason, including the results of the Compensation Committee’s review of the basis on which the performance goals were achieved. This review includes an examination of, among other things, the quality and long-term strategic alignment of the performance underlying the attainment of the performance goals, as well as the long-term risks associated with the manner in which the performance goals were attained. In addition, given the investments made by the Company in acquisitions, the Compensation Committee also evaluates and considers the performance of any acquisition during the fiscal year relative to the targets provided at the time such acquisition was approved.
Executive compensation payouts are also tied to the ethical standards of the Company. A failure to complete annual ethics training results in a mandatory 10% reduction of an executive’s target


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performance incentive. Moreover, in determining whether to exercise additional discretion to reduce payouts on the basis of issues relating to ethical standards, the Compensation Committee considers each executive’s contribution to the establishment and maintenance of high ethical and compliance standards throughout his or her organization and, in general, throughout the Company. Management also notifies the Compensation Committee of any incidents or reports of unethical behavior or other misconduct. No reductions were made to any NEO’s annual performance cash incentive for ethical or other reasons with respect to payouts made for fiscal year 2015.
Policy on Adjustments or Recovery of Compensation
The Compensation Committee maintains a compensation recovery (“clawback”) policy that is applicable in the event of a substantial restatement of our financial statements that is a direct result of the intentional misconduct or fraud of an executive officer or other senior executive. Under this policy, the Compensation Committee can, in its discretion, direct that we recover all or a portion of any award (which includes any cash or equity-based award or incentive compensation award) made to any executive officer or other senior executive who engaged in that intentional misconduct and/or fraud for any fiscal year that is negatively affected by the restatement. The amount the Compensation Committee can seek to recover is the amount by which the affected award exceeds the amounts that would have been payable to that executive had the financial statements been initially filed as restated, or any greater or lesser amount (but not greater than the entire affected awards in the given period). The Compensation Committee will determine how we may recover this compensation, including by seeking repayment, reduction of any potential future payments and/or an adjustment of what otherwise might have been a future increase in compensation or a compensatory grant.
In addition, the Company has included clawback provisions in certain agreements evidencing grants of restricted stock awards, restricted stock units and stock option awards entered into in fiscal year 2015, including for those awards made to our NEOs under the fiscal year 2015 LTIP. These provisions generally permit the Company to recover shares or gains from restricted stock and stock options granted to an employee who violates the Company’s non-competition and non-solicitation provisions. The Compensation Committee believes that these provisions are important to the Company and its stockholders because they provide a means by which to recover compensation that was paid to an employee who subsequently breached restrictive covenant provisions intended to protect the Company and its assets.
Tax Deductibility of Performance-Based Compensation
Section 162(m) of the U.S. Internal Revenue Code limits the annual deductibility of compensation in excess of $1 million paid to the CEO and to the other three highest-paid executive officers (other than the CFO) unless this compensation qualifies as “performance-based.” For purposes of Section 162(m), compensation derived from the exercise of stock options generally qualifies as performance-based. In addition, we generally structure and intend that incentive compensation paid in cash or in the form of restricted stock, restricted stock units or performance shares to our NEOs should qualify as performance-based. In order for the fiscal year 2015 restricted stock awards granted to our NEOs to begin vesting, the Company must achieve positive net income for the initial fiscal year. We believe this performance measure allows these time-based awards to qualify as “performance-based” compensation under Section 162(m). We believe that, for fiscal year 2015, incentive compensation paid to our NEOs in cash and equity under the LTIP qualified as performance-based. However, the Compensation Committee retains discretion to approve annual, long-term or other compensation arrangements in a manner that does not permit the compensation to qualify for tax deductibility under Section 162(m). In addition, it is possible that performance-based compensation that is intended to be exempt from the deduction limit under Section 162(m) may not meet the requirements to qualify for such exemption.
Since fiscal year 2011, the Company’s annual performance cash incentive and three-year performance share awards under the long-term incentive plans have been designed to give additional flexibility in the payout of awards while also satisfying the requirements of Section 162(m) of the Internal


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Revenue Code regarding the deductibility of performance-based compensation. We followed the same approach for fiscal year 2015 compensation. Under this design, when the performance period begins, the Compensation Committee:
•
establishes the performance metrics and objective performance goals relating to each award;
•
establishes a “162(m) plan” funding level that reflects the maximum amounts of cash or stock that may be payable upon achievement of those performance goals;
•
retains discretion to pay out the awards at a level below the 162(m) plan funding level; and
•
establishes a “core plan” funding level that reflects the expected payout of the awards upon achievement of those performance goals, which payout is lower than the 162(m) plan funding level.
After the performance period ends and we receive certification of the extent to which the performance goals were achieved, the awards are determined under the 162(m) plan funding level based on the certified extent of achievement. The Compensation Committee then considers other factors relating to the manner in which the performance goals were attained, including the effect of events that were unforeseeable when the performance goals were established. The Compensation Committee may exercise its discretion to pay out the awards at a lower level than the 162(m) plan. After the Compensation Committee’s evaluation of these matters for the performance relating to the fiscal year 2015 annual performance cash incentive and the fiscal year 2013-2015 performance shares, the Compensation Committee exercised its discretion to pay out the awards at the core plan funding level.
Executive Stock Ownership Requirements
The objective of our Executive Stock Ownership Requirements is to align senior executives’ interests with those of stockholders and encourage growth in stockholder value. Our Executive Stock Ownership Requirements apply to a group of executives that includes our NEOs.
Under our Executive Stock Ownership Requirements, the amount of Common Stock each executive is required to own, which is stated as a multiple of the executive’s base salary, reflects each executive’s role and level of responsibility at the Company.
The multiples that apply to our NEOs are as follows: (i) CEO - five times, (ii) CFO - three times and (iii) other NEOs - two times. A NEO who is in compliance with the applicable stock ownership requirement may dispose of shares of Common Stock only so long as his or her remaining ownership of Common Stock equals or exceeds the applicable stock ownership requirement. If a NEO is not in compliance with the applicable stock ownership requirement, he or she must maintain a minimum retention ratio of 75% of the after tax value of any Common Stock that he or she receives upon vesting of any Company incentive award. Additionally, the Compensation Committee may, among other things, elect to reduce future equity awards or require cash incentives to be paid in shares of Common Stock for executives who do not meet the minimum stock ownership requirement.
Anti-Hedging Policy
As part of our policy against insider trading, our officers and other employees are prohibited from purchasing or selling (1) short-term or speculative securities that are based on Company securities and (2) financial instruments designed to hedge or offset any change in the market value of Company securities. Prohibited instruments include prepaid variable forward contracts, puts or calls and other exchange-traded options, swaps, collars, exchange funds and other derivative securities. “Short-sales” of Company securities are also prohibited. Pledging of any Company stock by the NEOs is not permitted without the approval of the CEO and the Compensation Committee. These provisions also apply to our non-employee directors.


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Equity Grant Timing Policy
The Compensation Committee and executive management monitor the Company’s stock option and equity grant policies to ensure that those policies comply with applicable regulations and are consistent with good corporate practice. Grants to executive officers are customarily approved by the Compensation Committee at a regularly scheduled meeting. The Compensation Committee may approve grants to executive officers at a special meeting or by unanimous written consent under special circumstances, such as those involving new hires, promotions or retention issues. Generally, the Compensation Committee will approve stock option or other equity awards granted to executive officers as part of the long-term incentive plan at the beginning of each fiscal year on or after the trading blackout period ends following the public announcement of the Company’s financial results for the fiscal year just ended. The Compensation Committee has delegated authority to the CEO to make limited equity grants to non-executive officers at any time of the year, including for new hires, promotions or retention grants. Equity awards that are approved by the CEO are granted on pre-established grant dates each month. The grants approved by the CEO are reviewed with the Compensation Committee on a quarterly basis.
Effect of Termination of Employment on Performance-Based Compensation
If an executive’s employment terminates before the end of the applicable performance period, the executive generally ceases to be eligible for any portion of the executive’s performance-based award, except as described below. Certain executive arrangements, including the Executive Severance Policy, may provide for the executive whose employment terminates by the Company without “cause” or by the executive for “good reason” prior to payout to be paid a prorated portion of his or her annual performance cash incentive bonus and three-year performance shares after the end of the performance period, based on the actual attainment of applicable performance goals. In addition, consistent with the terms of our long-term incentive awards, unless otherwise provided in an executive’s employment contract, an executive forfeits any unvested stock options and restricted stock awards upon termination of employment. Upon a “retirement,” as defined in our equity incentive plan, vested stock options can be exercised for up to one year following a termination of employment. If employment is terminated due to disability, an executive may be eligible for a prorated portion of the three-year performance shares after the three-year performance period based on the Company’s actual performance. In the event of the executive’s death, the executive’s estate would receive a prorated portion of the target award only with respect to three-year performance share awards (based on the portion of the period completed through the date of death). All termination terms are also subject to the Compensation Committee’s discretion. For further information please see “Compensation and Other Information Concerning Executive Officers — Other Compensation Arrangements Provided to Our NEOs,” below.
Employment and Separation Arrangements
Detailed descriptions of any employment or separation arrangements with our NEOs are provided below under “Compensation and Other Information Concerning Executive Officers — Other Compensation Arrangements Provided to Our NEOs — Employment and Separation Arrangements.” In each of the cases where there is an employment arrangement, the use of such an arrangement was deemed to be necessary to recruit or retain the executive.
The Company entered into an employment arrangement in connection with hiring Mr. Chatterjee in fiscal year 2015. The Compensation Committee determined that it would be advisable to enter into an employment arrangement in order to recruit Mr. Chatterjee and to help assure that he remains focused on maximizing Company performance and stockholder value.
The Compensation Committee intends to enter into employment agreements or arrangements with executive officers only where it deems it necessary to recruit or retain the executive or where customary or required under local rules. We currently do not have any employment agreements with our NEOs that provide for a fixed term of employment. The employment of each of our NEOs remains at-will and can be terminated at any time in accordance with the terms of the applicable employment arrangement.


50



In early fiscal year 2015, the Compensation Committee adopted a standardized executive severance policy for the CEO and for the senior executives who report to the CEO. The policy provides for severance in the event of a termination without cause or a resignation for good reason. Additional details about this policy are provided below.
Deferred Compensation Arrangements
The Company maintains a non-qualified Executive Deferred Compensation Plan, under which our executive officers, including our NEOs, may defer a portion of their annual performance cash incentive award. The Company does not provide any defined benefit pension or supplemental pension plan for NEOs.
Change in Control Severance Policy
As described below under “Compensation and Other Information Concerning Executive Officers — Other Compensation Arrangements Provided to Our NEOs — Change in Control Severance Policy,” the Change in Control Severance Policy is intended to maintain continuity of executive management in the event of a change in control of the Company. The Compensation Committee has broad latitude to amend this policy and to add or remove executives as participants under the policy, as it deems appropriate. The policy generally provides for certain payments and benefits upon a “double trigger” event (i.e., termination without “cause” or for “good reason” following a change in control). In fiscal year 2011, the Compensation Committee determined that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-up provisions with respect to payments contingent upon a change in control.



51



COMPENSATION AND OTHER INFORMATION CONCERNING EXECUTIVE OFFICERS

Fiscal Year 2015 Summary Compensation Table
The following table includes information concerning compensation paid to or earned by our NEOs for the fiscal year ended March 31, 2015.
Name and Principal Position
Fiscal Year
Salary
($)
Bonus
($)
Stock Awards(1)
($)
Option Awards(2)
($)
Non-Equity Incentive Plan Compensation(3)
($)
All Other Compensation(4)
($)
Total
($)
Michael P. Gregoire
Chief Executive Officer
2015
1,000,000

—

4,797,581

1,249,621

1,131,750

264,121

8,443,073

2014
1,000,000

—

3,228,921

1,865,899

1,108,500

1,140,902

8,344,222

2013
234,849

500,000

1,826,459

2,900,588

—

342,151

5,804,047

Richard J. Beckert(5)
EVP & Chief Financial Officer
2015
637,500

—

1,771,398

461,395

490,425

100,297

3,461,015

2014
587,500

—

1,408,981

814,209

443,400

99,226

3,353,316

2013
537,500

—

1,222,341

590,629

374,000

99,078

2,823,548

Adam Elster
EVP & Group Executive, Worldwide Sales & Services
2015
700,000

—

1,919,021

499,846

528,150

51,676

3,698,693

2014
659,896

—

1,245,136

723,804

487,436

46,981

3,163,253

 
2013
637,500

—

1,164,131

562,503

442,000

26,078

2,832,212

Amit Chatterjee(6)
EVP, Enterprise Solutions & Technology Group
2015
534,091

250,000

1,310,370

341,307

401,849

—

2,837,617

 
 
 
 
 
 
 
 
Lauren P. Flaherty(7)
EVP & Chief Marketing Officer
2015
605,208

—

1,392,376

358,853

456,679

32,673

2,845,789

2014
400,000

250,000

2,319,459

2,644,077

295,195

105,180

6,013,911

__________
(1)
This column shows the aggregate grant date fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation,” for all restricted stock, restricted stock units and performance shares granted in fiscal years 2015, 2014 and 2013. These award fair values have been determined based on the assumptions set forth in the “Stock Plans” footnote in the Notes to the Consolidated Financial Statements in our fiscal year 2015, 2014 and 2013 Annual Reports on Form 10-K (“Form 10-K”). Additional information about the awards reflected in this column is set forth in the notes to the Fiscal Year 2015 Grants of Plan-Based Awards table and the Outstanding Equity Awards at 2015 Fiscal Year-End table, below.
 
 
(2)
This column shows the aggregate grant date fair value in accordance with FASB ASC Topic 718 for all stock option awards granted in fiscal years 2015, 2014 and 2013. These award fair values have been determined based on the assumptions set forth in the “Stock Plans” footnote in the Notes to the Consolidated Financial Statements in our fiscal year 2015, 2014, and 2013 Form 10-Ks.
 
 
(3)
The amounts in this column for fiscal year 2015 represent the annual performance cash incentives described under “Compensation Discussion and Analysis — Discussion and Analysis — Determining Payouts for Fiscal Year 2015 — Determining Annual Performance Cash Incentive Award Payouts,” above. These amounts were paid early in fiscal years 2016, 2015 and 2014 for performance in fiscal years 2015, 2014 and 2013, respectively. These amounts had been accrued for financial reporting purposes in fiscal years 2015, 2014 and 2013, respectively.
 
 
(4)
The “All Other Compensation” column includes for fiscal year 2015 the perquisites and other personal benefits detailed below, as well as contributions we made under our tax-qualified 401(k) plan and related nonqualified supplemental retirement plans, as required to be disclosed under the applicable SEC rules. We also purchase tickets to certain sports and entertainment events. The tickets are used for business development and partnership building. If, however, the tickets are not used for business and may otherwise go unused, Company employees, including NEOs, may have access to the tickets. Because these tickets have already been purchased by the Company, we believe that there is no incremental cost associated with the use of the tickets.


52



 
Gregoire
($)
Beckert
($)
Elster
($)
Flaherty
($)
Company automobile use(a)
65,500

—

—

—

Company aircraft use(b)
135,494

—

—

—

Relocation-alternative Company accommodations or transportation(c)
—

54,000

5,940

—

Financial planning(d)
17,312

17,116

18,055

18,133

Employer contributions to tax-qualified and nonqualified retirement plans(e)
23,315

24,181

24,181

14,540

Matching charitable contributions(f)
22,500

5,000

3,500

—

__________
 
(a)
In order to help maintain the confidentiality of business matters and to increase productivity when traveling, Mr. Gregoire was provided personal automobile transportation. The amount reported is the incremental cost to the Company for Mr. Gregoire’s commutation and other non-business use of that transportation.
 
 
 
 
(b)
The Company’s Aircraft Use Policy permits the NEOs to use the corporate aircraft for personal travel. Reasonable personal use of corporate aircraft is permitted to reduce these executives’ travel time and to allow them to devote more time to work duties and to help maintain the confidentiality of business matters. During fiscal year 2015, Mr. Gregoire traveled with guests while using the corporate aircraft on certain business and personal trips.  Mr. Gregoire’s personal use of the corporate aircraft resulted in imputed taxable income to Mr. Gregoire. There are no tax gross-up payments provided in connection with any NEO’s personal use of the corporate aircraft. For fiscal year 2015, we determined, based on the incremental cost to us, that the total value of personal use for Mr. Gregoire and his guests was $135,494. The incremental cost is based on the “direct operating cost” calculated based on a number of variables, including fuel, fuel additives, maintenance, labor, parts and landing, ramp and parking fees, as well as certain minimal incidental costs incurred during Mr. Gregoire’s personal trips. This incremental cost valuation of aircraft use is different from the standard industry fare level valuation used to impute income to the executives for tax purposes.
 
 
 
 
(c)
The table shows the amount we paid to Mr. Beckert pursuant to a corporate housing policy that provides certain executives with a corporate housing allowance in lieu of relocation of the executive. The amounts shown for Mr. Elster are Company-paid parking fees.
 
 
 
 
(d)
The table shows the amounts we pay for the cost of financial planning services provided by a third party to certain of our executives to assist them in managing complex investment, tax, legal and estate planning matters so that the executives remain focused on our business priorities rather than personal financial concerns.
 
 
 
 
(e)
The amounts include our matching contributions under our tax-qualified 401(k) plan and related nonqualified supplemental retirement plans. The amounts also include our annual discretionary contribution under the tax-qualified 401(k) plan, which was made in fiscal year 2016, but relates to fiscal year 2015. We offer a tax-qualified 401(k) plan and related non-qualified supplemental retirement plans for our executives that provide a competitive long-term retirement savings opportunity on a tax-efficient basis.
 
 
 
 
(f)
Under our charitable gift matching program, we offer to match up to $5,000 per fiscal year of charitable contributions for any full-time U.S. employee and $25,000 per fiscal year for any director. The table shows the amounts of the Company’s matching contributions made or accrued for in fiscal year 2015 with respect to charitable contributions made by the NEOs for fiscal year 2015.
 
 
 
(5)
Mr. Beckert’s annual base salary increased, effective July 2014, from $600,000 to $650,000. The amount in the Summary Compensation Table reflects the amount actually paid to Mr. Beckert for the fiscal year.


53



(6)
Information for Mr. Chatterjee is shown only for the portion of fiscal year 2015 after he joined the Company in May 2014. On May 6, 2015, Mr. Chatterjee ceased to be Executive Vice President, Enterprise Solutions and Technology Group.
 
 
(7)
Information for Ms. Flaherty is shown only for fiscal years 2015 and 2014 because she was not an NEO prior to fiscal year 2013. Ms. Flaherty’s annual base salary increased in January 2015 from $600,000 to $625,000. The amount in the Summary Compensation Table reflects the amount actually paid to Ms. Flaherty for the fiscal year.


54



Fiscal Year 2015 Grants of Plan-Based Awards
The following table provides additional information about stock and option awards, equity incentive plan awards and non-equity incentive plan awards granted to the NEOs during the fiscal year ended March 31, 2015. The compensation plans under which the grants in the following table were made are described in the “Compensation Discussion and Analysis” section above.
 
 
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Estimated Future Payouts Under Equity Incentive Plan Awards(1)
All Other Stock Awards: Number of Shares of Stock or Units
All Other Option Awards: Number of Securities Underlying Options
Exercise or Base Price of Option Awards
Grant Date Fair Value of Stock and Option Awards
Name
Grant Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
(#)
(#)
($/Sh)
($)
M.P. Gregoire
6/2/2014(2)
 
 
 
33,984

135,935

271,870

 
 
 
3,497,608

6/2/2014(3)
 
 
 
 
 
 
45,311

 
 
1,299,973

6/2/2014(4)
 
 
 
 
 
 
 
212,966

28.69

1,249,621

5/13/2014(5)
375,000

1,500,000

2,437,500

 
 
 
 
 
 
 
R.J. Beckert
6/2/2014(2)
 
 
 
12,548

50,191

100,382

 
 
 
1,291,414

6/2/2014(3)
 
 
 
 
 
 
16,730

 
 
479,984

6/2/2014(4)
 
 
 
 
 
 
 
78,633

28.69

461,395

5/13/2014(5)
162,500

650,000

1,056,250

 
 
 
 
 
 
 
A. Elster
6/2/2014(2)
 
 
 
13,594

54,374

108,748

 
 
 
1,399,043

6/2/2014(3)
 
 
 
 
 
 
18,124

 
 
519,978

6/2/2014(4)
 
 
 
 
 
 
 
85,186

28.69

499,846

5/13/2014(5)
175,000

700,000

1,137,500

 
 
 
 
 
 
 
A. Chatterjee
6/2/2014(2)
 
 
 
9,282

37,128

74,256

 
 
 
955,303

6/2/2014(3)
 
 
 
 
 
 
12,376

 
 
355,067

6/2/2014(4)
 
 
 
 
 
 
 
58,167

28.69

341,307

5/13/2014(5)
133,151

532,603

865,480

 
 
 
 
 
 
 
L.P. Flaherty
6/2/2014(2)
 
 
 
9,411

37,643

75,286

 
 
 
968,554

1/14/2015(6)
 
 
 
408

1,630

3,260

 
 
 
46,983

6/2/2014(3)
 
 
 
 
 
 
12,547

 
 
359,973

1/14/2015(6)
 
 
 
 
 
 
543

 
 
16,866

6/2/2014(4)
 
 
 
 
 
 
 
58,975

28.69

346,048

1/14/2015(6)
 
 
 
 
 
 
 
2,553

31.06

12,805

5/13/2014(5)
151,318

605,274

983,570

 
 
 
 
 
 
 
__________
(1)
The amounts shown represent shares of our Common Stock in respect of three-year performance share awards granted in fiscal year 2015. The threshold level is set at 25% and the maximum level is set at 200%.
 
 
(2)
The amounts in this row represent the fiscal year 2015-2017 three-year performance share award threshold, target and maximum payouts approved under the fiscal year 2015 long-term incentive plan by the Compensation Committee on June 2, 2014, as described above in “Compensation Discussion and Analysis,” and the amounts reported in the last column represent the fair value as of the date the targets were set, computed in accordance with FASB ASC Topic 718 based on probable outcome, assuming target. See “Stock Plans,” in the Notes to the Consolidated Financial Statements in our Fiscal Year 2015 Form 10-K for an explanation of the methodology and assumptions used in the FASB ASC Topic 718 valuations.


55



(3)
The amounts in this row represent the number and grant date fair value of restricted stock awards granted on June 2, 2014, which vest 34%, 33% and 33% on June 2, 2015, 2016 and 2017, respectively.
 
 
(4)
The amounts in this row represent the number, exercise price and grant date fair value of stock options awarded on June 2, 2014, which vest 34%, 33% and 33% on June 2, 2015, 2016 and 2017, respectively.
 
 
(5)
The amounts in this row represent the threshold, target and maximum payouts under the annual performance cash incentive for fiscal year 2015. Payout of the annual performance cash incentive was made early in fiscal year 2016 and is reflected in the “Non-Equity Incentive Plan Compensation” column of the Fiscal Year 2015 Summary Compensation Table above, and is discussed in “Compensation Discussion and Analysis,” above.
 
 
(6)
The amounts in this row represent the number, exercise price (in the case of options) and grant date fair value of the awards granted to Ms. Flaherty in connection with her compensation increase in January 2015. Ms. Flaherty was granted an additional 543 restricted stock awards and options to purchase 2,553 shares of Common Stock and her fiscal year 2015-2017 three-year performance share target increased by 1,630 shares in connection with the increase in her fiscal year 2015 LTIP. The restricted stock awards and stock options each vest 34%, 33% and 33% on January 14, 2016, 2017 and 2018, respectively.


56



Outstanding Equity Awards at 2015 Fiscal Year-End
The following table sets forth certain information with respect to outstanding equity awards at March 31, 2015 with respect to the NEOs.
 
 
Option Awards
Stock Awards
Name
Grant Date/Service Inception Date
Number of Securities Underlying Unexercised Options Exercisable
(#)
Number of Securities Underlying Unexercised Options Unexercisable
(#)
Option Exercise Price
($)
Option Expiration Date
Number of Shares or Units of Stock That Have Not Vested(1)
(#)
Market Value of Shares or Units of Stock That Have Not Vested(4)
($)
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested(5)
($)
M.P. Gregoire
1/7/2013
264,241(1)

130,148(1)

22.82
1/7/2023
 
 
 
 
 
2/21/2013
195,076(2)

96,081(2)

24.41
1/7/2023
 
 
 
 
 
5/13/2013
129,611(1)

251,597(1)

26.98
5/13/2023
 
 
 
 
 
6/2/2014
—

212,966(1)

28.69
6/2/2024
 
 
 
 
 
1/7/2013
 
 
 
 
28,921

943,114

 
 
 
6/2/2014
 
 
 
 
45,311

1,477,592

 
 
 
5/13/2013
 
 
 
 
 
 
97,894(6)

3,192,323

 
6/2/2014
 
 
 
 
 
 
122,708(7)

4,001,508

Total
 
 
 
 
 
74,232

2,420,706

220,602

7,193,831

R.J. Beckert
9/21/2006
4,864(1)

—

23.27
9/21/2016
 
 
 
 
 
6/14/2011
24,561(1)

—

21.78
6/14/2018
 
 
 
 
 
5/22/2012
56,859(1)

28,005(1)

25.24
5/22/2019
 
 
 
 
 
2/21/2013
35,552(3)

17,510(3)

24.41
5/22/2019
 
 
 
 
 
5/13/2013
56,558(1)

109,787(1)

26.98
5/13/2023
 
 
 
 
 
6/2/2014
—

78,633(1)

28.69
6/2/2024
 
 
 
 
 
6/2/2014
 
 
 
 
16,730

545,565

 
 
 
5/13/2013
 
 
 
 
 
 
42,717(6)

1,393,001

 
6/2/2014
 
 
 
 
 
 
45,307(7)

1,477,461

Total
 
 
 
 
 
16,730

545,565

88,024

2,870,462

A. Elster
8/17/2011
1,738(1)

—

19.93
8/17/2018
 
 
 
 
 
5/22/2012
26,672(1)

26,671(1)

25.24
5/22/2019
 
 
 
 
 
2/21/2013
16,677(3)

16,676(3)

24.41
5/22/2019
 
 
 
 
 
5/13/2013
47,132(1)

91,489(1)

26.98
5/13/2023
 
 
 
 
 
1/21/2014
2,136(1)

4,144(1)

34.26
1/21/2024
 
 
 
 
 
6/2/2014
—

85,186(1)

28.69
6/2/2024
 
 
 
 
 
6/2/2014
 
 
 
 
18,124

591,024

 
 
 
5/13/2013
 
 
 
 
 
 
35,597(6)

1,160,818

 
1/21/2014
 
 
 
 
 
 
1,612(6)

52,567

 
6/2/2014
 
 
 
 
 
 
49,083(7)

1,600,597

Total
 
 
 
 
 
18,124

591,024

86,292

2,813,982

A. Chatterjee
6/2/2014
—

58,167(1)

28.69
6/2/2024
 
 
 
 
 
6/2/2014
 
 
 
 
12,376

403,581

 
 
 
6/2/2014
 
 
 
 
 
 
33,515(7)

1,092,924

Total
 
 
 
 
 
12,376

403,581

33,515

1,092,924

L.P. Flaherty
8/1/2013
25,296(1)

49,103(1)

30.12
8/1/2023
 
 
 
 
 
8/1/2013
125,319(1)

243,265(1)

30.12
8/1/2023
 
 
 
 
 
6/2/2014
—

58,975(1)

28.69
6/2/2024
 
 
 
 
 
1/14/2015
—

2,553(1)

31.06
1/14/2025
 
 
 
 
 
8/1/2013
 
 
 
 
37,513

1,223,299

 
 
 
6/2/2014
 
 
 
 
12,547

409,158

 
 
 
1/14/2015
 
 
 
 
543

17,707

 
 
 
8/1/2013
 
 
 
 
 
 
19,105(6)

623,014

 
6/2/2014
 
 
 
 
 
 
33,980(7)

1,108,088

 
1/14/2015
 
 
 
 
 
 
1,471(7)

47,969

Total
 
 
 
 
 
50,603

1,650,164

54,556

1,779,071



57



____________
(1)
Award vests 34%, 33% and 33% on each anniversary of the grant date.
 
 
(2)
Award granted on February 21, 2013 will vest 34%, 33%, and 33% on January 7, 2014, 2015, and 2016, respectively.
 
 
(3)
Award granted on February 21, 2013 will vest 34%, 33%, and 33% on May 22, 2013, 2014, and 2015, respectively.
 
 
(4)
Represents the market value, based on the closing price of the Common Stock on March 31, 2015 ($32.61), for shares held as of March 31, 2015.
 
 
(5)
Represents the market value, based on the closing price of the Common Stock on March 31, 2015 ($32.61), for shares projected to be issuable, in settlement of performance shares for those performance cycles that have not concluded as of March 31, 2015.
 
 
(6)
Represents the number of shares that may be issued under the fiscal year 2014-2016 three-year performance share component of the fiscal year 2014 long-term incentive plan if performance shares are earned at the projected earnings level as of the fiscal year end 2015 of 73%. No shares have been issued under this award to date and the number of shares earned, if any, will depend on performance and the Compensation Committee’s discretion. Any shares earned will immediately vest on issuance early in fiscal year 2017.
 
 
(7)
Represents the number of shares that may be issued under the fiscal year 2015-2017 three-year performance share component of the fiscal year 2015 long-term incentive plan if performance shares are earned at the projected earnings level as of the fiscal year end 2015 of 90%. No shares have been issued under this award to date and the number of shares earned, if any, will depend on performance and the Compensation Committee’s discretion. Any shares earned will immediately vest on issuance early in fiscal year 2018.


58



Fiscal Year 2015 Option Exercises and Stock Vested
The following table presents information about each stock option exercise and vesting of stock during the fiscal year ended March 31, 2015 for each of the NEOs on an aggregated basis.
 
Option Awards
Stock Awards
Name
Number of Shares Acquired on Exercise
(#)
Value Realized on Exercise
($)
Number of Shares Acquired on Vesting
(#)
Value Realized on Vesting(3)
($)
M.P. Gregoire
—

—

28,922(1)

885,592

R.J. Beckert
—

—

17,198(2)

560,827

A. Elster
—

—

16,379(2)

534,119

A. Chatterjee
—

—

—

—

L.P. Flaherty
—

—

19,325(1)

550,183

__________
(1)
These amounts represent restricted stock awards that vested in fiscal year 2015.
 
 
(2)
These shares relate to performance cycles that concluded in fiscal year 2015. These shares actually vested early in fiscal year 2016, when the compensation committee certified the attainment of the performance goals for these performance cycles.
 
 
(3)
In fiscal year 2015, the value realized on vesting for the performance share awards described in footnote (2) above was calculated using $32.61, the closing stock price of the common stock on March 31, 2015.



59



Fiscal Year 2015 Non-Qualified Deferred Compensation
The following table summarizes the NEOs’ compensation under our Executive Deferred Compensation Plan, including our 401(k) Supplemental Plans and the executive deferred compensation arrangements. See “Other Compensation Arrangements Provided to Our NEOs — Deferred Compensation Arrangements” and “— 401(k) Supplemental Plans,” below.
Name
Executive Contributions in Last Fiscal Year
($)
Registrant Contributions in Last Fiscal Year(1)
($)
Aggregate Earnings / Losses in Last Fiscal Year(2)
($)
Aggregate Withdrawals / Distributions
($)
Aggregate Balance at Last Fiscal Year-End(3)
($)
M.P. Gregoire
 
 
 
 
 
Executive Deferred Compensation Plan
—

—

—

—

—

CA, Inc. Restoration Plan
—

7,250

—

—

—

CA, Inc. Excess Benefit Plan
—

10,346

—

—

—

R.J. Beckert
 
 
 
 
 
Executive Deferred Compensation Plan
—

—

—

—

—

CA, Inc. Restoration Plan
—

7,250

24

—

39,887

CA, Inc. Excess Benefit Plan
—

11,213

35

—

56,648

A. Elster
 
 
 
 
 
Executive Deferred Compensation Plan
—

—

—

—

—

CA, Inc. Restoration Plan
—

7,250

28

—

45,666

CA, Inc. Excess Benefit Plan
—

—

—

—

—

A. Chatterjee
—

—

—

—

—

L.P. Flaherty
 
 
 
 
 
Executive Deferred Compensation Plan
—

—

—

—

—

CA, Inc. Restoration Plan
—

7,250

—

—

—

CA, Inc. Excess Benefit Plan
—

—

—

—

—

__________
(1)
As reflected and described above in footnote (4) to the Fiscal Year 2015 Summary Compensation Table, we made a discretionary contribution in fiscal year 2016 to our 401(k) Supplemental Plans in respect of fiscal year 2015 performance and, therefore, that contribution is reflected in the table above. For additional information, please see “Other Compensation Arrangements Provided to Our NEOs — 401(k) Supplemental Plans,” below.
 
 
(2)
Represents earnings during fiscal year 2015 under the Executive Deferred Compensation Plan and the 401(k) Supplemental Plans. For additional information, please see “Other Compensation Arrangements Provided to Our NEOs — Deferred Compensation Arrangements” and “— 401(k) Supplemental Plans,” below.
 
 
(3)
This column does not include amounts that are represented in footnote (1) concerning the Company’s discretionary contribution made in respect of fiscal year 2015, as the timing of the fiscal year 2015 discretionary contribution was made after the Company’s fiscal year-end and, therefore, it was not included in the NEOs’ aggregate balances as of March 31, 2015.


60



Other Compensation Arrangements Provided to Our Named Executive Officers
Deferred Compensation Arrangements
The Company offers senior executives, including the NEOs, an unfunded Executive Deferred Compensation Plan, under which they may defer up to 90% of their annual performance cash incentive payouts. Compensation that is deferred is credited to a participant’s account, which is indexed to one or more investment options chosen by the participant. The amount credited is adjusted for, among other things, hypothetical investment earnings, expenses and gains or losses to the investment options. The investment options generally track those options available to our U.S. employees under the tax-qualified 401(k) plan.
Under the Executive Deferred Compensation Plan, a participant receives a lump sum distribution of the value of the participant’s deferral account after the earliest of death, disability, six months after “separation from service,” a termination in connection with a “change in control” (as each term is defined in the plan document) or a date specified by the participant (generally 5, 10 or 15 years following the deferral).
401(k) Supplemental Plans
The CA, Inc. Restoration Plan and the CA, Inc. Excess Benefit Plan (the “401(k) Supplemental Plans”) are unfunded plans that were created for the purpose of benefiting participants in the CA Savings Harvest Plan, our tax-qualified 401(k) plan, who are unable to receive a full allocation of employer contributions due to limitations imposed under the applicable tax rules. Pursuant to each of these plans, we set up a notional account that is credited with an amount, if any, that would have been credited to the participant’s 401(k) plan account absent those tax limitations. In addition, we credited these accounts with an interest-equivalent amount equal to the interest that would have been earned if the accounts had been invested in the money market fund investment alternative under our tax-qualified 401(k) plan. The amounts credited to the accounts under the 401(k) Supplemental Plans vest in accordance with the same schedule that employer contributions vest under the tax-qualified 401(k) plan, except that upon termination of the plan or a change in control of the Company, the accounts become fully vested. Within six months following a “separation from service,” the vested portion of the accounts is distributed in the form of a lump sum.
Employment and Separation Arrangements
Below are summaries of the employment and separation arrangements for the NEOs. The Company also adopted an Executive Severance Policy in fiscal year 2015 that provides for payments to be made upon certain termination events, a description of which immediately follows these summaries.
Michael P. Gregoire (Chief Executive Officer)
Mr. Gregoire’s employment arrangement, dated December 10, 2012, provides that he will be paid an initial base salary at the annual rate of $1,000,000. In each fiscal year, Mr. Gregoire is eligible to receive a target annual performance cash incentive of 150% of his annual base salary and a target long-term incentive performance award of at least $5,500,000, subject to the terms and conditions of the Company’s annual performance cash incentive and long-term incentive performance programs, respectively, and subject to reduction only in connection with a proportionate reduction affecting target levels for the Company’s other executive officers. As described in the Compensation Discussion and Analysis section above, Mr. Gregoire’s target long-term incentive performance award was increased to $6,500,000 for fiscal year 2015. Mr. Gregoire is eligible to participate in all retirement, welfare and benefit plans and perquisites on a basis that is no less favorable than those provided to other senior executives of the Company generally.


61



In connection with his commencement of employment, Mr. Gregoire was awarded sign-on equity grants under the Company’s 2011 Incentive Plan of $3,000,000 in stock options and $2,000,000 in restricted stock units, of which 34% vested on January 7, 2014, 33% vested on January 7, 2015 and 33% will vest on January 7, 2016. Mr. Gregoire was also paid a cash sign-on bonus of $500,000 in lieu of an annual bonus for fiscal year 2013 and to help offset his expenses associated with his relocation to the New York, NY metropolitan area and negotiation of his employment arrangement.
Mr. Gregoire’s employment is at-will and may be terminated at any time in accordance with the terms of his employment arrangement. If Mr. Gregoire’s employment is terminated by the Company without “cause” or by Mr. Gregoire for “good reason,” each as defined in his employment arrangement, on or before January 7, 2018, he will be eligible to receive, subject to his execution of a release of claims in favor of the Company: (i) accelerated vesting of any then-unvested portion of his sign-on equity grants (but sign-on stock options may not be exercised and sign-on restricted stock units will not be settled prior to their original vesting dates, and sign-on stock options will expire no later than one year thereafter); (ii) a prorated annual bonus for the year in which the termination date occurs, in an amount determined based on the Company’s actual performance and paid at the time his annual bonus would otherwise have been paid; (iii) a cash severance payment equal to 150% of his annual base salary if the termination date occurs on or prior to January 7, 2016, 75% of his annual base salary if the termination date occurs during the period from January 8, 2016 through January 7, 2017, and 37.5% of his annual base salary if the termination date occurs during the period from January 8, 2017 through January 7, 2018; and (iv) payment of Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premiums for up to 18 months following termination for himself and his eligible dependents.
If Mr. Gregoire’s employment is terminated by the Company without “cause” or by Mr. Gregoire for “good reason” after January 7, 2018, his employment arrangement provides that he will not be entitled to receive any cash severance, but he will be eligible to receive, subject to his execution of a release of claims in favor of the Company: (i) a full annual bonus for the year in which the termination date occurs, in an amount determined based on the Company’s actual performance and paid at the time his annual bonus would otherwise have been paid, provided that the targets and terms of the annual bonus for that year have been approved by the Compensation Committee prior to his termination date; and (ii) COBRA premium payments as described above.
Under Mr. Gregoire’s employment arrangement, the Company must also indemnify and hold Mr. Gregoire harmless for acts and omissions in connection with his employment to the maximum extent permitted under applicable law and the Company’s certificate of incorporation and bylaws, and must provide him coverage under the Company’s directors and officers liability insurance policy. Mr. Gregoire is subject to standard non-compete and non-solicitation covenants during, and for the 18-month period following, his employment with the Company, as well as perpetual confidentiality and mutual non-disparagement covenants.
Amit Chatterjee (Executive Vice President, Enterprise Solutions and Technology Group)
Mr. Chatterjee’s start date with the Company was May 12, 2014. His employment arrangement, dated April 25, 2014, provides an initial base salary at the annual rate of $600,000. For fiscal year 2015, Mr. Chatterjee’s target annual performance cash incentive was $600,000 and his target long-term incentive performance award was $2,000,000, prorated based on the number of days employed during the fiscal year. Mr. Chatterjee’s annual base salary is subject to reduction only in connection with a proportionate reduction affecting salaries for the Company’s other executive officers. The target levels for his annual and long-term performance incentive awards remain subject to the review and approval of the Compensation Committee. Mr. Chatterjee is eligible to participate in all retirement, welfare and benefit plans and perquisites on a basis that is no less favorable than those provided to other senior executives of the Company generally.
The Company also paid Mr. Chatterjee, 30 days after Mr. Chatterjee’s start date, a cash sign-on bonus of $250,000 as an inducement to accept the Company’s offer of employment and to provide an


62



additional retention incentive through the first anniversary of his employment. The cash sign-on bonus is subject to recoupment if Mr. Chatterjee’s employment is terminated before the first anniversary of his start date by the Company with “cause” or by Mr. Chatterjee other than for “good reason,” each as defined in his employment arrangement.
Mr. Chatterjee’s employment is at-will and may be terminated at any time in accordance with the terms of his employment arrangement. If Mr. Chatterjee’s employment is terminated by the Company without “cause” or by Mr. Chatterjee for “good reason,” each as defined in his employment arrangement, on or before December 31, 2017, his employment arrangement provides that he will be eligible to receive, subject to his execution of a release of claims in favor of the Company: (i) a prorated annual bonus for the year in which the termination date occurs, in an amount determined based on the Company’s actual performance and paid at the time his annual bonus would otherwise have been paid; and (ii) a cash severance payment equal to his annual base salary.
Mr. Chatterjee is subject to standard non-compete and non-solicitation covenants during, and for the one-year period following, his employment with the Company, as well as perpetual confidentiality and non-disparagement covenants.
On May 6, 2015, Mr. Chatterjee ceased to be Executive Vice President, Enterprise Solutions and Technology Group, but he is expected to remain employed in a non-executive officer capacity until June 15, 2015.
Lauren P. Flaherty (Executive Vice President and Chief Marketing Officer)
Ms. Flaherty’s start date with the Company was August 1, 2013. Her employment arrangement, dated June 14, 2013, provides an initial base salary at the annual rate of $600,000. In early fiscal year 2015, Ms. Flaherty’s target annual performance cash incentive was $600,000 and her target long-term incentive performance award was $1,800,000. As described in the Compensation Discussion and Analysis section above, in January 2015, her base salary and target annual performance cash incentive were each increased to $625,000 and her target long-term incentive performance award was increased to $2,200,000. Ms. Flaherty’s annual base salary is subject to reduction only in connection with a proportionate reduction affecting salaries for the Company’s other executive officers. The target levels for her annual and long-term performance incentive awards remain subject to the review and approval of the Compensation Committee. Ms. Flaherty is eligible to participate in all retirement, welfare and benefit plans and perquisites on a basis that is no less favorable than those provided to other senior executives of the Company generally.
In connection with her hire, Ms. Flaherty was awarded sign-on equity grants under the Company’s 2011 Incentive Plan of $2,200,000 in stock options and $1,600,000 in restricted stock units, all of which will vest in approximately equal installments on each of the first three anniversaries of the grant date. The Company also agreed to pay Ms. Flaherty a cash sign-on bonus of $500,000 intended to compensate her for amounts forfeited with her prior employer, of which $250,000 was paid 30 days after her start date and the remaining $250,000 will be paid on or around the second anniversary of her start date. The cash sign-on bonus is subject to recoupment if Ms. Flaherty’s employment is terminated before the second anniversary of her start date by the Company with “cause” or by Ms. Flaherty other than for “good reason,” each as defined in her employment arrangement
Ms. Flaherty’s employment is at-will and may be terminated at any time in accordance with the terms of her employment arrangement. If Ms. Flaherty’s employment is terminated by the Company without “cause” or by Ms. Flaherty for “good reason” on or before December 31, 2016, her employment arrangement provides that she will be eligible to receive, subject to her execution of a release of claims in favor of the Company: (i) accelerated vesting of any then-unvested portion of her sign-on equity grants (but sign-on stock options may not be exercised and sign-on restricted stock units will not be settled prior to their original vesting dates, and sign-on stock options will expire no later than one year thereafter); (ii) a prorated annual bonus for the year in which the termination date occurs, in an amount determined based


63



on the Company’s actual performance and paid at the time her annual bonus would otherwise have been paid; and (iii) a cash severance payment equal to her annual base salary.
Ms. Flaherty is subject to standard non-compete and non-solicitation covenants during, and for the one-year period following, her employment with the Company pursuant to our standard employment and confidentiality agreement, as well as perpetual confidentiality and non-disparagement covenants.
Richard Beckert (Executive Vice President and Chief Financial Officer) and Adam Elster (Executive Vice President and Group Executive, Worldwide Sales and Services)
At the time Mr. Beckert was promoted to CFO in May 2011, we agreed that, in the event his employment is terminated by the Company without “cause” or he resigns for “good reason” on or before April 1, 2015, he would be eligible to receive a severance payment equal to his base salary and payment of a prorated amount of any outstanding annual performance cash incentive award based on the Company’s actual performance and paid at the time the bonus would have otherwise been paid.
At the time Mr. Elster was promoted to Executive Vice President and Group Executive, Worldwide Sales and Services in January 2014, we agreed that, in the event his employment is terminated by the Company without “cause” or he resigns for “good reason” on or before January 21, 2017, he would be eligible to receive a severance payment equal to his annual base salary (or 75% of his annual base salary if such termination occurs after January 21, 2017 but before January 21, 2018) and payment of a prorated amount of any outstanding annual performance cash incentive award based on the Company’s actual performance and paid at the time the bonus would have otherwise been paid.
The employment arrangements with the NEOs summarized above generally contain similar definitions for “good reason” and “cause.” “Good reason” is generally defined as: (i) any material and adverse change in the NEO’s authorities and responsibilities; (ii) any material reduction by the Company of the NEO’s base salary or target incentive compensation; or (iii) any material breach by the Company of the NEO’s employment arrangement. “Cause” is generally defined as: (i) willful failure to perform duties; (ii) conduct that materially harms the reputation or financial position of the Company; (iii) conviction of, or plea of guilty or nolo contendere to, a felony; or (iv) the commission of any other crime involving dishonesty, breach of fiduciary duties, or failure to cooperate with the Company in any investigation, or impeding any investigation.
Further, as described immediately below, the NEOs are eligible for separation payments in accordance with the Company’s Executive Severance Policy. If an NEO is covered by and receives termination of employment benefits under an individual employment arrangement (as described above), such payments and benefits will reduce (but not below zero) the corresponding payments or benefits provided under the Executive Severance Policy. In that case, the NEO would receive the greater of the two separation payments but not both of them.
Executive Severance Policy
As of May 13, 2014, the Compensation Committee approved a severance policy for senior executives, intended to provide a uniform policy for the payment of severance benefits to the CEO and the CEO’s direct reports in the event of certain terminations of employment. The policy generally provides for the following in the event of a termination without “cause” or resignation for “good reason”: (i) cash severance payment equal to 100% of each executive’s respective base salary (or 150% of base salary in the case of the CEO), (ii) a prorated annual performance cash incentive for the year in which the termination occurs, based on actual performance and paid at the time the bonus would otherwise have been paid, (iii) a prorated portion of outstanding performance shares (based on the portion of the performance cycle completed prior to the termination date), based on actual performance and paid at the time the shares would otherwise have been paid and (iv) 18 months’ of COBRA premium-equivalent payments. All payments would be conditioned on the executive executing a valid release of claims against the Company.


64



Change in Control Severance Policy
We maintain a Change in Control Severance Policy, which was initially approved by the Board of Directors in October 2004. This policy covers such senior executives as the Board of Directors may designate from time to time, including the NEOs discussed below.
Our Change in Control Severance Policy is intended to provide post-change in control severance benefits consistent with current competitive practice. These benefits are intended to: (i) provide additional incentive to those key executives most closely connected to a potential change in control to remain focused on the Company’s business priorities and to act more objectively and, therefore, in the best interests of stockholders, despite the fact that such a transaction could result in the executives’ termination; (ii) encourage key executives to remain with us prior to completion of a change in control and to work toward a successful transition; and (iii) provide potential additional non-competition and employee non-solicitation protection. In addition, pursuant to the equity incentive plans under which equity-based awards are granted - such as options, restricted stock, restricted stock units and performance shares - those equity-based awards generally vest upon a change in control if granted under the 2002 or 2007 Incentive Plans. Stock options and restricted stock awards granted under the 2011 Incentive Plan generally vest upon a termination without “cause” or for “good reason” (each as defined in the 2011 Incentive Plan) within a two-year period following a change in control or will immediately vest upon a change in control if the Company’s stock ceases to be publicly traded following the change in control or these equity awards are not honored or assumed in connection with the change in control. As a condition to receiving a payment under the Change in Control Severance Policy, an executive must sign a separation and release agreement that, among other things, requires the executive to acknowledge that his or her existing confidentiality agreement with us, including with respect to non-competition and non-solicitation provisions, continues to be in full force and effect.
The policy provides for certain payments and benefits in the event that, following a change in control or potential change in control of the Company, a covered executive’s employment is terminated either without “cause” by us or for “good reason” by the executive. The amount of the severance payment would range from 1.00 to 2.99 times an executive’s annual base salary and bonus (“bonus” is generally defined under the policy as the higher of the target annual performance cash incentive for the fiscal year in which the termination occurs or the average annual performance cash incentives earned during the last three completed fiscal years of the Company immediately preceding the date of termination) as determined from time to time by the Compensation Committee. As of March 31, 2015, Messrs. Gregoire, Beckert, Elster and Chatterjee would have been entitled to cash severance payments equal to 2.99 times their respective annual base salaries and bonuses and Ms. Flaherty would be entitled to a cash severance payment equal to 2.00 times her annual base salary and bonus, to be paid no later than 60 days following a termination of employment.
The policy also provides the following additional benefits: (i) prorated target bonus payments for the year of termination; (ii) a payment equal to the cost of 18 months’ of COBRA premium payments; (iii) one year of outplacement services; (iv) if applicable, certain relocation expenses; and (v) payments to make the executive whole with respect to excise taxes under Section 280G of the Internal Revenue Code. To the extent payment under the policy would give rise to an excess parachute excise tax, the policy provides that the payment will be reduced to an amount that would not give rise to an excise tax under Section 280G, provided that the reduction will not be more than 10%. If a reduction of greater than 10% would be required such that the payment would not give rise to an excise tax, no reduction will be required and we will gross up the executive to keep the executive whole. However, effective July 2010, the Compensation Committee in connection with a review of its executive compensation practices, determined that it will not enter into any new or materially amended agreements with executive officers providing for excise tax gross-up provisions with respect to payments contingent upon a change in control. None of the NEOs are entitled to any excise tax gross up benefits.
Under the policy, a “change in control” would include, among other things, each of the following events: (i) the acquisition of 35% or more of our voting power; (ii) a change in a majority of the incumbent


65



members of our Board of Directors; (iii) the sale of all or substantially all our assets; (iv) the consummation of certain mergers or other business combinations; and (v) stockholder approval of a plan of liquidation or dissolution.
Estimated Payments in the Event of Termination of Employment or Following a Change in Control
Upon certain types of terminations of employment not related to a change in control of the Company, the Company may pay severance benefits to the NEOs. As described above, the NEOs are eligible for separation payments under the Company’s Executive Severance Policy and, in certain situations, separation payments are also provided under an individual employment arrangement entered into with an NEO. For additional information, please see “Other Compensation Arrangements Provided to Our NEOs — Employment and Separation Arrangements” and “Other Compensation Arrangements Provided to Our NEOs — Executive Severance Policy,” above.
The following table shows the potential payments to our NEOs under existing policies, agreements, plans or arrangements, under various scenarios involving a change in control or termination of employment, assuming a March 31, 2015 termination date and using the closing price of the Common Stock on March 31, 2015 of $32.61.
As Mr. Chatterjee ceased to serve in his executive officer capacity, he is no longer eligible for benefits under our Change in Control Severance Policy. Since the SEC rules require the reporting of change in control and termination-related payments as of March 31, 2015, Mr. Chatterjee is included in the following table.


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Termination Due to Death(1)
($)
Termination Due To Disability(1)
($)
Without Cause / Resignation for Good Reason (per Employment Arrangement)(2)
($)
Certain Terminations Following a Change in Control(3)
($)
M.P. Gregoire
 
 
 
 
Cash Severance
—

–

1,500,000

7,475,000

Interrupted Performance Cycles(4)
4,402,415

4,367,367

4,367,367

4,402,415

Acceleration of Unvested Equity(5)
6,734,036

6,734,036

3,005,127

6,734,036

Other Benefits
—

—

21,994

31,994

Total Payments
11,136,451

11,101,403

8,894,488

18,643,445

R.J. Beckert
 
 
 
 
Cash Severance
—

—

650,000

3,887,000

Interrupted Performance Cycles(4)
1,822,834

1,808,010

1,808,010

1,822,834

Acceleration of Unvested Equity(5)
1,821,886

1,821,886

—

1,821,886

Other Benefits
—

—

23,663

33,663

Total Payments
3,644,720

3,629,896

2,481,673

7,565,383

A. Elster
 
 
 
 
Cash Severance
—

—

700,000

4,186,000

Interrupted Performance Cycles(4)
1,702,470

1,689,009

1,689,009

1,702,470

Acceleration of Unvested Equity(5)
1,773,344

1,773,344

—

1,773,344

Other Benefits
—

—

23,663

33,663

Total Payments
3,475,814

3,462,353

2,412,672

7,695,477

A. Chatterjee
 
 
 
 
Cash Severance
—

—

600,000

3,588,000

Interrupted Performance Cycles(4)
399,538

397,627

397,627

399,538

Acceleration of Unvested Equity(5)
631,596

631,596

—

631,596

Other Benefits
—

—

21,711

31,711

Total Payments
1,031,134

1,029,223

1,019,338

4,650,845

L.P. Flaherty
 
 
 
 
Cash Severance
—

—

625,000

2,500,000

Interrupted Performance Cycles(4)
996,301

988,805

988,805

996,301

Acceleration of Unvested Equity(5)
2,613,299

2,613,299

1,829,029

2,613,299

Other Benefits
—

—

21,711

31,711

Total Payments
3,609,600

3,602,104

3,464,545

6,141,311



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__________
(1)
Upon termination due to an executive’s death or disability, stock options become immediately exercisable and can be exercised within one year of such death or disability, but not later than the normal expiration date of the option. Restricted stock awards that have not vested immediately vest upon death or disability. This column includes the intrinsic value (i.e., the value based upon our stock price, and in the case of options, less the exercise price) of equity awards that would become exercisable or vested if the NEO had died or become disabled as of March 31, 2015. With regard to the three-year performance shares, promptly after death, the executive’s estate would receive a prorated portion of the target share award based on the portion of the performance cycle that lapsed prior to the death. In the event of a disability, the executive would be eligible to receive a prorated number of shares based on the actual results after the end of the performance cycle, based on the portion of the performance cycle that lapsed prior to the disability. For purposes of this calculation, we determined the value of the prorated amount of the outstanding performance share awards under the fiscal year 2014-2016 and 2015-2017 long-term incentive plans using the closing market price of the Company’s Common Stock ($32.61) on March 31, 2015 based on the achievement of “target” performance under those awards, with the value of such awards discounted to reflect the present value of the target awards in the case of disability since those awards would not be paid until after the end of the applicable performance cycle.
 
 
(2)
If Mr. Gregoire’s employment had been terminated by the Company without “cause” or by Mr. Gregoire for “good reason” on March 31, 2015, he would have received: (i) accelerated vesting of any then-unvested portion of his sign-on equity grants (but sign-on stock options may not be exercised and sign-on restricted stock units will not be settled prior to their original vesting dates, and sign-on stock options will expire no later than one year thereafter); and (ii) a cash severance payment equal to 150% of his annual base salary. Assuming a March 31, 2015 termination date, Messrs. Beckert, Chatterjee and Elster and Ms. Flaherty would have been entitled to their respective annual base salary amount, payable in a lump sum, upon termination without “cause” or resignation for “good reason.” Ms. Flaherty would also be entitled to accelerated vesting of her sign-on restricted stock units and stock options (but sign-on stock options may not be exercised and sign-on restricted stock units will not be settled prior to their original vesting dates, and sign-on stock options will expire no later than one year thereafter). Under the terms of the Executive Severance Policy, each NEO would also receive (i) a lump-sum payment of an amount equal to 18 months of COBRA premium payments, provided he or she has not commenced employment with or accepted an offer of employment with a subsequent employer offering health benefits and (ii) with regard to the fiscal year 2014-2016 and fiscal year 2015-2017 three-year performance shares, a prorated portion of any award the executive would have received had the executive remained employed through the payment date, based upon the attainment of the performance goals and pro-rated for the period during the performance period through the NEO’s termination date.
 
 
(3)
Represents cash payments and the value of benefits payable upon a termination of employment without “cause” or resignation for “good reason” within the two-year period following a change in control, under our Change in Control Severance Policy (described above). As of March 31, 2015, Messrs. Gregoire, Beckert, Elster and Chatterjee would each have been entitled to 2.99 times their annual base salaries and annual performance cash incentive targets and Ms. Flaherty would have been entitled to 2.00 times her annual base salary and annual performance cash incentive target. In addition, this calculation includes: (i) the value of the accelerated vesting of each executive’s equity awards and prorated payout with regard to outstanding three-year performance shares, calculated as described in footnote (1) above in the event of death; (ii) the value of one year of outplacement services; and (iii) the lump-sum payment of an amount equal to 18 months of COBRA premium payments. With regard to outstanding options and restricted stock: (i) the 2002 Incentive Plan and 2007 Incentive Plan each provide for the immediate acceleration of awards upon a change in control and (ii) the 2011 Incentive Plan generally provides for the immediate acceleration of awards upon a termination without “cause” or for “good reason” (each as defined in the 2011 Incentive Plan) within a two-year period following a change in control or for immediate acceleration upon a change in control if the Company’s stock ceases to be publicly traded following the change in control or these equity awards are not honored or assumed in connection with the change in control.


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(4)
With regard to the fiscal year 2014-2016 and fiscal year 2015-2017 three-year performance shares, the Compensation Committee reserves discretion, in the event of a disability, to pay a prorated portion of any award the executive would have received had the executive remained employed through the payment date. Eligibility and amount would be determined at the conclusion of the applicable performance cycle. See also the description of the long-term incentive awards and the three-year performance share component in “Compensation Discussion and Analysis,” above.
 
 
(5)
For Mr. Gregoire and Ms. Flaherty, the amounts in this row reflect the accelerated vesting of the unvested portions of their respective sign-on restricted stock awards/units and stock option awards as of March 31, 2015 pursuant to their employment arrangements.
In addition to the payments summarized above, upon any termination of employment (including the scenarios described above, or a termination for cause or resignation without good reason), whether or not in connection with a change in control, the NEOs would be entitled to the balance of their vested accounts under our tax-qualified 401(k) plan, the 401(k) Supplemental Plans and the deferred compensation arrangements and vested equity, each in accordance with their terms. Without regard to vesting, the balances of these accounts for the NEOs as of March 31, 2015 (except for the 401(k) plan) are disclosed in the last column of the Fiscal Year 2015 Non-Qualified Deferred Compensation table, above.
Risk Considerations Relating to Compensation
The Company’s management presented the Compensation Committee with an assessment of the risks involved in the design and implementation of all of the Company’s incentive compensation programs, including all of the executive compensation plans that cover our NEOs. The Compensation Committee concurred with management’s assessment that our incentive compensation programs do not give rise to risks that are reasonably likely to have a material adverse effect on the Company. Some factors considered in this analysis were the following:
•
The long-term equity awards granted to our executives are subject to long-term performance goals that are linked to the Company’s long-term strategy and have long-term performance cycles or vesting schedules, which links the compensation to long-term stock price performance and to the long-term interests of the Company’s stockholders.
•
The Company’s clawback policy gives the Compensation Committee the ability under certain circumstances to recover executive compensation awards when an executive engages in intentional misconduct or fraud that results in a substantial restatement of the Company’s financial statements.
•
The Compensation Committee has discretion to decrease the amount of any incentive compensation payouts (negative discretion) when determining final payouts of awards, which gives the Compensation Committee the ability to avoid rewarding executives for excessive or inappropriate risk-taking.


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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes share and exercise price information about our equity compensation plans as of March 31, 2015. All of our equity compensation plans pursuant to which grants are being made have been approved by our stockholders. Our 2011 Incentive Plan was approved by stockholders in August 2011 and all equity awards to employees after the date of stockholder approval will be granted under the 2011 Incentive Plan; however, awards already granted under the 2007 and 2002 Incentive Plans, including awards for which performance targets have been established under those plans, will remain outstanding and be satisfied under those plans. Non-employee directors receive fees under the CA, Inc. 2012 Compensation Plan for Non-Employee Directors.
Equity Compensation Plan Information
Plan Category
Number of Securities Issuable Upon Exercise of Outstanding Options, Warrants and Rights
(#)
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(1)
($)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
(#)
Equity compensation plans approved by security holders
7,258,040(2)

27.02

61,777,979(3)

Equity compensation plans not approved by security holders
—

—

—

Total
7,258,040

27.02

61,777,979

__________
(1)
The calculation of the weighted average exercise price includes only stock options and does not include the outstanding deferred stock units, restricted stock units, performance-based awards/targets and stock units reflected in the first column.
 
 
(2)
Includes all stock options outstanding under the 2002, 2007 and 2011 Incentive Plans; all restricted stock units outstanding under the 2007 and 2011 Incentive Plans; and all deferred stock units outstanding under the 2002, 2003 and 2012 Compensation Plans for Non-Employee Directors. Although certain shares were not awarded as of March 31, 2015 for the performance-based targets set under the fiscal year 2013, 2014 and 2015 long-term incentive plans, we have assumed the following for purposes of this table: with regard to (i) the three-year performance share components of the fiscal year 2014-2016 and 2015-2017 long-term incentive plans (for which the performance cycles will end after fiscal years 2016 and 2017, respectively), we have assumed a payout at the maximum level and note that payouts under these arrangements could range from 0-200% of target at the end of the applicable performance cycle, depending on performance; and (ii) the one-year performance share component of the fiscal year 2015 long-term incentive plan and the three-year performance share component of the fiscal year 2013-2015 long-term incentive plan, the actual grants occurred in fiscal year 2016 (as indicated in the Outstanding Equity Awards at 2015 Fiscal Year-End table, above) and we have reflected the actual number of shares awarded with respect to this component in this column. This also includes 1,098 options with a weighted average exercise price of $26.91 assumed by us in connection with acquisitions. No additional options or rights will be granted under these assumed equity plans.
 
 
(3)
As of March 31, 2015, there were 32,125,253 shares available under the 2011 Incentive Plan, 274,206 shares available under the 2012 Compensation Plan for Non-Employee Directors, and 29,378,520 shares available under the 2012 Employee Stock Purchase Plan.


70



PROPOSAL 3 — APPROVAL, BY NON-BINDING VOTE, OF THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS
Stockholders are entitled to vote to approve, on an advisory or non-binding basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with SEC rules. This proposal is commonly known as a “say-on-pay” proposal.
The Board of Directors and the Compensation Committee believe that the compensation program described under “Compensation Discussion and Analysis” is an effective incentive for the achievement of positive results, appropriately aligning pay and performance and enabling the Company to attract and retain talented executives.
We are asking for stockholder approval of the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with SEC rules under “Compensation Discussion and Analysis” and “Compensation and Other Information Concerning Executive Officers.” This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the policies and practices described in this Proxy Statement.
This vote is advisory and, therefore, not binding on the Company, the Board of Directors or the Compensation Committee. However, the Board and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding compensation of our Named Executive Officers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC (PROPOSAL 3).


71



INFORMATION REGARDING BENEFICIAL OWNERSHIP
OF PRINCIPAL STOCKHOLDERS, THE BOARD AND MANAGEMENT
The following table sets forth information, based on data provided to us, with respect to beneficial ownership of shares of Common Stock as of June 8, 2015 for (1) each person known by us to beneficially own more than five percent of the outstanding shares of Common Stock, (2) each of our directors and nominees for election as directors, (3) the Named Executive Officers set forth in the Fiscal Year 2015 Summary Compensation Table, above (including Mr. Gregoire, who is listed under the “Directors and Nominees” heading) and (4) all of our directors, nominees and executive officers as a group. The table also sets forth separately the number of shares of Common Stock underlying deferred stock units and restricted stock units held by each of our directors and officers as of June 8, 2015. Percentage of beneficial ownership is based on 442,908,034 shares of Common Stock outstanding as of June 8, 2015. Unless otherwise indicated, the address for the following stockholders is c/o CA, Inc., 520 Madison Avenue, New York, New York 10022.


Beneficial Owner
Number of Shares Beneficially Owned(1)(2)
Percent of Class
Shares Underlying Deferred Stock Units or Restricted Stock Units(3)
Holders of More Than 5%:
 
 
 
Careal Holding AG
125,813,380(4)

28.41%
—

Martin Haefner
 
 
 
Eva Maria Bucher-Haefner
 
 
 
Utoquai 49
8022 Zürich, Switzerland
 
 
 
Directors and Nominees:
 
 
 
Jens Alder
—

*
24,577

Raymond J. Bromark
1,000

*
50,712

Gary J. Fernandes
1,125

*
108,238

Michael P. Gregoire(5)
915,356

*
28,921

Rohit Kapoor
20,000

*
39,029

Jeffrey G. Katz
—

*
383

Kay Koplovitz
—

*
40,793

Christopher B. Lofgren
—

*
69,306

Richard Sulpizio
—

*
36,393

Laura S. Unger
—

*
56,812

Arthur F. Weinbach
25,000

*
92,129

Renato (Ron) Zambonini
25,000

*
53,701

Named Executive Officers (Non-Directors):
 
 
 
Richard J. Beckert
404,223

*
—

Adam Elster
302,266

*
—

Amit Chatterjee(6)
32,153

*
—

Lauren P. Flaherty(7)
372,863

*
18,756

All Directors, Nominees and Executive Officers as a Group (18 persons)
2,257,974

*
654,912



72



__________
*
Represents less than 1% of the Common Stock outstanding.
 
 
(1)
Except as indicated below, all persons have represented to us that they exercise sole voting power and sole investment power with respect to their shares.
 
 
(2)
The amounts shown in this column include the following shares of Common Stock issuable upon exercise of stock options that either are currently exercisable or will become exercisable within 60 days after June 8, 2015: Mr. Beckert, 305,539; Mr. Chatterjee, 19,777; Mr. Elster, 212,411; Ms. Flaherty, 316,852; Mr. Gregoire, 787,136; and all directors, nominees and executive officers as a group, 1,720,950. The amounts shown in this column include the following shares of restricted stock that are currently unvested and subject to tax withholding and over which the respective beneficial owner holds sole voting power but no investment power: Mr. Beckert, 28,118; Mr. Chatterjee, 8,168; Mr. Elster, 29,038; Ms. Flaherty, 23,273; Mr. Gregoire, 84,092; and all directors, nominees and executive officers as a group, 208,064. The amounts shown in this column include the following restricted stock units that will vest within 60 days after June 8, 2015, subject to tax withholding: Ms. Flaherty, 18,757; and all directors, nominees and executive officers as a group, 18,757. The amounts shown in this column include the following shares of Common Stock that are owned jointly with a spouse and over which the respective beneficial owner holds shared voting power and shared investment power: Mr. Zambonini, 25,000; and all directors, nominees and executive officers as a group, 25,000.
 
 
(3)
Under our prior and current compensation plans for non-employee directors, directors have received a portion of their fees in the form of deferred stock units. In January immediately following termination of service, a director receives shares of Common Stock in an amount equal to the number of deferred stock units accrued in the director’s deferred compensation account. Although the deferred stock units are derivative equity securities owned by the directors, the deferred stock units are not included in the column headed “Number of Shares Beneficially Owned” because the directors do not currently have the right to dispose of or to vote the underlying shares of Common Stock. See “Compensation of Directors” for more information.
 
 
(4)
Information based solely on a Schedule 13D/A filed with the SEC jointly by Careal Holding AG (“Careal”), Martin Haefner and Eva Maria Bucher-Haefner on July 10, 2012. Careal is a holding company of which 50% of the shares are owned by Mr. Haefner and 50% of the shares are owned by Ms. Bucher-Haefner. The Schedule 13D/A reported that Mr. Haefner and Ms. Bucher-Haefner share voting power and dispositive power over 125,813,380 shares held by Careal.
 
 
(5)
As of June 8, 2015, Mr. Gregoire holds 28,921 restricted stock units that are not included in the column headed “Number of Shares Beneficially Owned” because Mr. Gregoire does not currently, and will not within 60 days after June 8, 2015, have the right to dispose of or vote the underlying shares of Common Stock.
 
 
(6)
Mr. Chatterjee ceased to be an executive officer as of May 6, 2015. The most recent information available to the Company from public filings and Company records is shown for Mr. Chatterjee.
 
 
(7)
As of June 8, 2015, Ms. Flaherty holds 18,756 restricted stock units that are not included in the column headed “Number of Shares Beneficially Owned” because Ms. Flaherty does not currently, and will not within 60 days after June 8, 2015, have the right to dispose of or vote the underlying shares of Common Stock.


73



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors, executive officers, principal accounting officer and persons who beneficially own more than 10% of our Common Stock to file with the SEC initial reports of ownership and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company. We assist our directors and officers by monitoring transactions and completing and filing Section 16 reports on their behalf. Based solely on a review of the copies of Section 16 reports in our possession and on written representations from reporting persons, we believe that during fiscal year 2015 all required reports for our directors, executive officers, principal accounting officer and persons who beneficially own more than 10% of our Common Stock were filed on a timely basis.
STOCKHOLDER PROPOSALS FOR OUR 2016 ANNUAL MEETING
The submission deadline for stockholder proposals to be included in our proxy materials for the 2016 annual meeting pursuant to rule 14a-8 of the Exchange Act is February 16, 2016, except as may otherwise be provided in rule 14a-8. All such proposals must be received by the Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022 by the required deadline in order to be considered for inclusion in the Company’s 2016 proxy materials.
ADVANCE NOTICE PROCEDURES FOR OUR 2016 ANNUAL MEETING
Under our By-laws, director nominations and other business may be brought at the annual meeting only by or at the direction of the Board of Directors or by a stockholder entitled to vote who has delivered notice to us containing certain information specified in the By-laws (1) not less than 90 days nor more than 120 days prior to the anniversary date of the preceding year’s annual meeting, or (2) if the meeting date is changed by more than 30 days from such anniversary date, not later than the close of business on the tenth day following the date notice of such meeting is mailed or made public, whichever is earlier. Accordingly, the notice for nominating directors at, or bringing other business before, the 2016 annual meeting must be submitted no earlier than April 7, 2016 and no later than May 7, 2016 (unless the date of the meeting is changed by more than 30 days). A copy of the full text of the By-law provisions discussed above may be obtained by writing to the Corporate Secretary at CA, Inc., 520 Madison Avenue, New York, New York 10022. If the stockholder does not also comply with the requirements of rule 14a-4 of the Exchange Act, we may exercise discretionary voting authority under proxies we solicit to vote in accordance with our best judgment on any such nomination or other business submitted by a stockholder.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the meeting. However, if any other business properly comes before the meeting or any adjournment or postponement, it is the intention of the persons named in the Company’s proxy to vote the shares represented thereby on those matters in accordance with their best judgment.
FORM 10-K
A COPY OF OUR ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT CHARGE TO ANY STOCKHOLDER WHO REQUESTS IN WRITING, ADDRESSED TO:
CA, INC.
ATTN.: INVESTOR RELATIONS DEPARTMENT
520 MADISON AVENUE, NEW YORK, NEW YORK 10022
OUR ANNUAL REPORT ON FORM 10-K MAY ALSO BE OBTAINED VIA THE INTERNET AT WWW.CA.COM/INVEST.


74



INCORPORATION BY REFERENCE
To the extent that this Proxy Statement is incorporated by reference into any other filing by us under the Securities Act of 1933, as amended, or the Exchange Act, the sections of this Proxy Statement entitled “Audit Committee Report” and “Compensation and Human Resources Committee Report on Executive Compensation” (to the extent permitted by the rules of the SEC), as well as the exhibits to this Proxy Statement, will not be deemed incorporated, unless specifically provided otherwise in such filing.
Dated: June 15, 2015
New York, New York


75



SUPPLEMENTAL FINANCIAL INFORMATION
Non-GAAP Financial Measures
This Proxy Statement includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP metrics for operating expenses, operating income and operating margin exclude the following items: share-based compensation expense, non-cash amortization of purchased software and other intangible assets, charges relating to rebalancing initiatives that are large enough to require approval from the Company’s Board of Directors, fiscal 2007 restructuring costs and certain other gains and losses. The Company began expensing costs for internally developed software where development efforts commenced in the first quarter of fiscal 2014. Due to this change, the Company also adds back capitalized internal software costs and excludes the amortization of internally developed software costs previously capitalized from these non-GAAP metrics. Adjusted cash flow from operations excludes restructuring and other payments. In addition, the non-GAAP metrics reported in this Proxy Statement exclude internally reported results from any acquisition that had a purchase price of $50 million or greater during the performance period and that was not contemplated at the time the respective target performance goals were established. The Company presents constant currency information to provide a framework for assessing how the Company’s underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than U.S. dollars are converted into U.S. dollars at the exchange rate in effect on the last day of the Company’s prior fiscal year (i.e., March 31, 2014, March 31, 2013 and March 31, 2012, respectively). Constant currency excludes the impacts from the Company’s hedging program. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, non-GAAP financial measures facilitate management’s internal comparisons to the Company’s historical operating results and cash flows, to competitors’ operating results and cash flows, and to estimates made by securities analysts. Management uses these non-GAAP financial measures internally to evaluate its performance and they are key variables in determining management incentive compensation. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, the Company has historically reported similar non-GAAP financial measures to its investors and believes that the inclusion of comparative numbers provides consistency in its financial reporting.
Stockholders are encouraged to review the reconciliation of the non-GAAP financial measures included in the “Compensation Discussion and Analysis” section of this Proxy Statement to their most directly comparable GAAP financial measures, which are included in the following tables.


76



CA, Inc.
Reconciliation of GAAP Results to Fiscal Year 2015 Non-GAAP Revenue Growth
(unaudited)
(dollars in millions)
 
 
Fiscal Year Ended
 
 
March 31,
 
 
2015
 
2014
Revenue
 
$
4,262

 
$
4,412

Impact of foreign currency exchange
 
71

 
 
Revenue in constant currency(1)
 
$
4,333

 
 
y/y (decline) growth in constant currency(1)
 
(1.8
)%
 
 
__________
(1)
Constant currency information is presented to provide a framework for assessing how the Company’s underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than U.S. dollars are converted into U.S. dollars at the exchange rate in effect on March 31, 2014, which was the last day of the prior fiscal year. Constant currency excludes the impacts from the Company’s hedging program.
Refer to “Compensation Discussion and Analysis — Discussion and Analysis — Elements of Compensation — Fiscal Year 2015 Annual Performance Cash Incentive Awards” for a definition of the fiscal year 2015 non-GAAP revenue growth calculation.
Certain non-material differences may arise versus actual from impact of rounding.


77



CA, Inc.
Reconciliation of GAAP Results to Fiscal Year 2015 Non-GAAP Operating Margin
(Income from Continuing Operations Before Interest and Income Taxes)
(unaudited)
(dollars in millions)
 
 
Fiscal Year Ended
 
 
March 31, 2015
GAAP income from continuing operations
 
$
810

GAAP income tax expense
 
305

Interest expense, net
 
47

GAAP income from continuing operations before interest and income taxes
 
$
1,162

GAAP operating margin (% of revenue)(1)
 
27.3
%
Non-GAAP adjustments to expenses:
 
 
Costs of licensing and maintenance(2)
 
$
5

Cost of professional services(2)
 
4

Amortization of capitalized software costs(3)
 
273

Selling and marketing(2)
 
30

General and administrative(2)
 
29

Product development and enhancements(2)
 
19

Depreciation and amortization of other intangible assets(4)
 
58

Other expenses, net(5)
 
17

Total Non-GAAP adjustment to operating expenses
 
$
435

Non-GAAP operating income (income from continuing operations before interest and income taxes)
 
$
1,597

Non-GAAP operating margin (% of revenue)(6)
 
37.5
%
__________
(1)
GAAP operating margin is calculated by dividing GAAP income from continuing operations before interest and income taxes by total revenue (refer to previous table for total revenue).
 
 
(2)
Non-GAAP adjustment consists of share-based compensation.
 
 
(3)
Non-GAAP adjustment consists of $124 million of purchased software amortization and $149 million of internally developed software products amortization.
 
 
(4)
Non-GAAP adjustment consists of other intangibles amortization.
 
 
(5)
Non-GAAP adjustment consists of charges relating to the FY2014 Board approved rebalancing initiative (the Fiscal 2014 Plan) and certain other gains and losses.
 
 
(6)
Non-GAAP operating margin is calculated by dividing non-GAAP operating income by total revenue (refer to previous table for total revenue).
Refer to “Compensation Discussion and Analysis — Discussion and Analysis — Elements of Compensation — Fiscal Year 2015 Annual Performance Cash Incentive Awards” for a definition of the fiscal year 2015 non-GAAP operating margin calculation.
Certain non-material differences may arise versus actual from impact of rounding.


78



CA, Inc.
Reconciliation of GAAP Results to Three-Year Non-GAAP Revenue Growth
(unaudited)
(dollars in millions)
 
 
Fiscal Year Ended
 
 
March 31,
 
 
2015
 
2014
 
2013
 
2012
Revenue
 
$
4,262

 
$
4,412

 
$
4,504

 
$
4,658

Adjustment for acquisitions
 
(45
)
 
(26
)
 
—

 
—

Revenue adjusted for acquisitions
 
$
4,217

 
$
4,386

 
$
4,504

 
$
4,658

Impact of foreign currency exchange
 
71

 
32

 
95

 
 
Revenue in constant currency adjusted for acquisitions(1)
 
$
4,288

 
$
4,418

 
$
4,599

 
 
y/y (decline) growth in constant currency(1)
 
(2.2
)%
 
(1.9
)%
 
(1.3
)%
 
 
Three-year average (decline) growth in constant currency(1)
 
(1.8
)%
 
 
 
 
 
 
__________
(1)
Constant currency information is presented to provide a framework for assessing how the Company’s underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than U.S. dollars are converted into U.S. dollars at the exchange rate in effect on the last day of the prior fiscal year (i.e., March 31, 2014, March 31, 2013 and March 31, 2012, respectively). Constant currency excludes the impact from the Company’s hedging program.
Refer to “Compensation Discussion and Analysis — Discussion and Analysis — Elements of Compensation — Fiscal Year 2015 Long-Term Incentive Awards — Fiscal Year 2013-2015 Three-Year Performance Share Awards” for a definition of the three-year non-GAAP revenue growth calculation.
Certain non-material differences may arise versus actual from impact of rounding.


79



CA, Inc.
Reconciliation of GAAP Results to Three-Year Non-GAAP Operating Margin Growth
(Income from Continuing Operations Before Interest and Income Taxes)
(unaudited)
(dollars in millions)
 
 
Fiscal Year Ended
 
 
March 31,
 
 
2015
 
2014
 
2013
 
2012
Revenue
 
$
4,262

 
$
4,412

 
$
4,504

 
$
4,658

Adjustment for acquisitions
 
(45
)
 
(26
)
 
—

 
—

Revenue adjusted for acquisitions
 
$
4,217

 
$
4,386

 
$
4,504

 
$
4,658

GAAP net income
 
$
846

 
$
914

 
$
955

 
$
951

GAAP income from discontinued operations, net of income taxes
 
(36
)
 
(27
)
 
(34
)
 
(50
)
GAAP income from continuing operations
 
$
810

 
$
887

 
$
921

 
$
901

GAAP income tax expense
 
305

 
129

 
339

 
390

Interest expense, net
 
47

 
54

 
44

 
35

GAAP income from continuing operations before interest and income taxes
 
$
1,162

 
$
1,070

 
$
1,304

 
$
1,326

Non-GAAP adjustments to expenses:
 
 
 
 
 
 
 
 
Costs of licensing and maintenance(1)
 
$
5

 
$
4

 
$
3

 
$
3

Cost of professional services(1)
 
4

 
4

 
4

 
4

Amortization of capitalized software costs(2)
 
273

 
271

 
162

 
102

Selling and marketing(1)
 
30

 
28

 
30

 
35

General and administrative(1)
 
29

 
26

 
23

 
27

Product development and enhancements(3)
 
19

 
(14
)
 
17

 
19

Depreciation and amortization of other intangible assets(4)
 
58

 
60

 
54

 
65

Total Non-GAAP adjustment to operating expenses
 
$
418

 
$
379

 
$
293

 
$
255

Non-GAAP operating income (income from continuing operations before interest and income taxes)
 
$
1,580

 
$
1,449

 
$
1,597

 
$
1,581

Adjustment for acquisitions, net
 
(19
)
 
7

 
—

 
—

Non-GAAP operating income (income from continuing operations before interest and income taxes), adjusted for acquisitions
 
$
1,561

 
$
1,456

 
$
1,597

 
$
1,581

Non-GAAP operating margin (% of revenue)(5)
 
37.0
%
 
33.2
 %
 
35.5
%
 
34.0
%
y/y growth (decline)
 
11.4
%
 
(6.5
)%
 
4.4
%
 
 
Three-year average growth
 
3.1
%
 
 
 
 
 
 
__________
(1)
Non-GAAP adjustment consists of share-based compensation.
 
 
(2)
For the twelve month periods ending March 31, 2015 and 2014, non-GAAP adjustment consists of $124 million and $116 million of purchased software amortization and $149 million and $155 million of internally developed software products amortization, respectively. Non-GAAP adjustment consists of purchased software amortization, which includes an impairment of $55 million relating to purchased software products for the fiscal year ended March 31, 2013.
 
 
(3)
For the twelve month periods ending March 31, 2014, non-GAAP adjustment consists of $19 million of share-based compensation and ($33) million of software development costs capitalized.
 
 
(4)
Non-GAAP adjustment consists of other intangibles amortization.
 
 
(5)
Non-GAAP operating margin is calculated by dividing non-GAAP operating income adjusted for acquisitions by revenue adjusted for acquisitions.
Refer to “Compensation Discussion and Analysis — Discussion and Analysis — Elements of Compensation — Fiscal Year 2015 Long-Term Incentive Awards — Fiscal Year 2013-2015 Three-Year Performance Share Awards” for a definition of the three-year non-GAAP operating margin growth calculation.
Certain non-material differences may arise versus actual from impact of rounding.


80



CA, Inc.
Reconciliation of GAAP Results to Three-Year Non-GAAP Adjusted Cash Flow From Operations Growth
(unaudited)
(dollars in millions)
 
 
Fiscal Year Ended
 
 
March 31,
 
 
2015
 
2014
 
2013
 
2012
Net cash provided by operating activities
 
$
1,030

 
$
973

 
$
1,359

 
$
1,456

Restructuring and other payments
 
3

 
8

 
15

 
16

Adjusted cash flow from operations
 
$
1,033

 
$
981

 
$
1,374

 
$
1,472

y/y (decline) growth
 
5.3
 %
 
(28.6
)%
 
(6.7
)%
 
 
Three-year average growth
 
(10.0
)%
 
 
 
 
 
 
Refer to “Compensation Discussion and Analysis — Discussion and Analysis — Elements of Compensation — Fiscal Year 2015 Long-Term Incentive Awards — Fiscal Year 2013-2015 Three-Year Performance Share Awards” for a definition of the three-year non-GAAP adjusted cash flow from operations growth calculation.
Certain non-material differences may arise versus actual from impact of rounding.


81



EXHIBIT A
CA, INC.
CORPORATE GOVERNANCE PRINCIPLES
General
These Corporate Governance Principles (these “Principles”) have been approved by the Board of Directors of CA, Inc. (the “Company”) and provide the basic outline of the Company’s corporate governance.
Role and Functions of the Board
The Board is elected by the stockholders to oversee the business and affairs of the Company, to oversee management, to build long-term value for the stockholders, and to sustain the Company’s vitality for its stockholders and other constituencies, including its employees.
In addition to these general roles, the Board performs a number of more specific functions, including:
•
selecting and overseeing the evaluation of the Chief Executive Officer (the “CEO”);
•
overseeing CEO and senior management succession planning;
•
providing counsel and oversight on the selection, evaluation and development of senior management;
•
reviewing and approving corporate strategy on an annual basis;
•
advising and counseling the CEO and senior management on relevant topics;
•
reviewing, monitoring and, where appropriate, approving fundamental financial and business strategies and major corporate actions;
•
assessing major risks facing the Company and considering strategies for their management and mitigation; and
•
overseeing and evaluating processes designed to maintain the integrity of the Company, including the integrity of its financial statements, its compliance with law and ethics, and its relationships with its employees, customers, suppliers and other stakeholders.
Director Qualifications
Directors should possess the highest personal and professional ethics, integrity and values, and must be committed to representing the long-term interests of the Company and its stockholders. They must have an inquisitive and objective perspective, practical wisdom and mature judgment, as well as an understanding of the Company’s business and the willingness to question what they do not understand.
Each director should be free of any conflict of interest which would interfere with the proper performance of the responsibilities of a director.
Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively. To ensure that a director has sufficient time to devote, no director may serve on more than three boards of directors of public companies in addition to the Company’s Board.
To enable the Corporate Governance Committee to monitor compliance with the criteria for service as a director, as well as for service on a particular Board Committee, a director shall notify the Chair of the


A-1



Corporate Governance Committee promptly of: (1) the director’s retirement from his or her principal occupation or a material change in his or her principal occupation or business association; (2) the proposed election of the director to the board of directors (or similar body) or any board committee of another entity (other than not-for-profit entities); (3) the director’s removal or other cessation of service as a member of any such board or committee; or (4) any other development that could affect the director’s ability to serve on the Board or any Board Committee. The Corporate Governance Committee shall determine whether to recommend to the Board that any action be taken as a result of any such event.
Director Independence
A majority of the directors must be independent directors, as determined by the Board on the recommendation of the Corporate Governance Committee, based on the guidelines set forth below. The Board believes that the CEO should serve on the Board. At no time shall more than two employees of the Company (including the CEO) serve on the Board; provided, that if the total number of directors exceeds twelve, no more than 25% of the total number of directors may be employees of the Company.
For a director to be considered independent, the Board must determine that the director does not have any relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has established guidelines to assist it in determining director independence in conformity with The NASDAQ Stock Market LLC (“NASDAQ”) listing requirements. In addition, the Board will consider all relevant facts and circumstances in making an independence determination, not only from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation.
A director will not be independent if:
•
the director is, or at any time during the past three years was, employed by the Company (provided that employment by a director as an executive officer on an interim basis for a period no longer than one year will not disqualify that director from being considered independent following such employment);
•
a family member of the director is, or at any time during the past three years was, employed by the Company as an executive officer;
•
the director or a family member of the director accepted any compensation from the Company in excess of $120,000 during any period of 12 consecutive months within the past three years (provided that compensation received by the director for former service as an executive officer on an interim basis for a period no longer than one year will not be considered in determining independence following such service), other than (i) compensation for Board or Board committee service, (ii) compensation paid to a family member of the director who is an employee (other than an executive officer) of the Company or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation;
•
the director or a family member of the director is a partner in, or a controlling shareholder or an executive officer of, any organization to which the Company made, or from which the Company received payments for property or services in the current or any of the past three fiscal years that exceed 2% of the recipient’s consolidated gross revenues for that year or $200,000, whichever is more, other than (i) payments arising solely from investments in the Company’s securities or (ii) payments under non-discretionary charitable contribution matching programs;
•
the director or a family member of the director is an executive officer of another entity where at any time during the past three years any of the executive officers of the Company served on the compensation committee of such other entity; or


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•
the director or a family member of the director is a current partner or employee of the Company’s outside auditor, or was a partner or an employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.
Any one or more of the following relationships, whether individually or in any combination, will be considered immaterial and will not, in and of themselves, impair the director’s independence:
Payments To/From the Company
1.
the director or a family member of the director is a partner in or an executive officer of another company or entity to which the Company made or from which the Company received payments for property or services in an amount that does not exceed, in the current or any of the past three fiscal years 2% of the recipient’s consolidated gross revenues for that year or $200,000, whichever is more, other than (i) payments arising solely from investments in the Company’s securities or (ii) payments under non-discretionary charitable contribution matching programs;
2.
the director and family members of the director directly or indirectly own, in the aggregate, a 10% or greater equity interest in another company or entity to which the Company made or from which the Company received payments for property or services in an amount that does not exceed, in the current or any of the past three fiscal years 2% of the recipient’s consolidated gross revenues for that year or $200,000, whichever is more, other than (i) payments arising solely from investments in the Company’s securities or (ii) payments under non-discretionary charitable contribution matching programs;
Indebtedness
1.
the director or a family member of the director is a partner in or an executive officer of another company or entity that is indebted to the Company, or to which the Company is indebted, and the total amount of either company’s (or entity’s) indebtedness to the other at the end of the last completed fiscal year is less than 2% of the other company’s or entity’s total consolidated assets;
2.
the director and family members of the director directly or indirectly own, in the aggregate, a 10% or greater equity interest in another company or entity that is indebted to the Company, or to which the Company is indebted, and the total amount of either company’s (or entity’s) indebtedness to the other at the end of the last completed fiscal year is less than 2% of the other company’s or entity’s total consolidated assets;
Charitable Contributions
1.
the director or a family member of the director is an executive officer, of a charitable organization, and the Company’s discretionary charitable contributions to the organization (i.e., other than contributions made under the Company’s matching grant program) do not exceed, in the current or any of the past three fiscal years, 2% of the charitable organization’s consolidated gross revenues for that year or $200,000 whichever is more;
Directorships
1.
the director or a family member of the director is a director, advisory director or trustee (or serves in a similar position) of another company, entity or charitable organization that engages in any transactions (including indebtedness transactions), or has any other relationships, with the Company (including any contributions by the Company to any such charitable organization);


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Less Than 10% Equity Interest
1.
the director and the family members of the director directly or indirectly own, in the aggregate, less than a 10% equity interest in another company or entity that engages in any transactions (including indebtedness transactions), or has any other relationships, with the Company;
Other
1.
the director or a family member of the director is an employee (but not an executive officer) of another company, entity or charitable organization that engages in any transactions (including indebtedness transactions), or has any other relationships, with the Company (including any contributions by the Company to any such charitable organization);
2.
a member of the director’s family (other than a family member) serves in any capacity with the Company; or
3.
a member of the director’s family (other than a family member) serves in any capacity with, or owns any equity interest in, another company, entity or charitable organization that engages in any transactions (including indebtedness transactions), or has any other relationships, with the Company (including any contributions by the Company to any such charitable organization).
Notwithstanding the foregoing, the Board (on the recommendation of the Corporate Governance Committee) may determine that a director who has a relationship that exceeds the limits described in the immediately preceding paragraph (but only to the extent that the Board determines that the director does not have any direct or indirect material relationship with the Company and any such relationship does not constitute a bar to independence under NASDAQ listing requirements) is nonetheless independent.
For purposes of these Principles, the term “family member” means a person’s spouse, parents, children, and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home.
The ownership of stock in the Company by directors is encouraged and the ownership of a substantial amount of stock in the Company shall not in itself be a basis for a determination that a director is not independent.
The Board will undertake an annual review of the independence of all non-employee directors, based on the recommendation of the Corporate Governance Committee.
Size of Board
The Corporate Governance Committee considers and makes recommendations to the Board concerning the appropriate size and needs of the Board, taking into account the Board’s ability to function effectively and with appropriate diversity and expertise.
The Corporate Governance Committee shall be responsible for selecting and recommending to the Board candidates to fill vacancies on the Board that occur as a result of expansion of the size of the Board, by resignation, by retirement or for any other reason.
Period of Board Service
A director may serve only until the annual meeting after the director’s 75th birthday.
Director Selection Process
All directors shall stand for election by the stockholders each year at the Company’s Annual Meeting of Stockholders. The Board, on the recommendation of the Corporate Governance Committee, shall propose a slate of nominees for election at each such meeting. In addition, between such meetings, the


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Board, on the recommendation of the Corporate Governance Committee, may elect directors to serve until the next such meeting.
Stockholders may propose nominees for consideration by the Corporate Governance Committee in accordance with procedures developed by that Committee and disclosed in the Company’s Proxy Statement each year. Each director shall submit his or her Irrevocable Resignation (as defined below) in writing to the Chairman of the Corporate Governance Committee. The Board shall nominate for re-election as a director only an incumbent candidate who has tendered, prior to the mailing of the proxy statement for the annual meeting at which he or she is to be re-elected as a director, an irrevocable resignation authorized by Section 141(b) of the Delaware General Corporation Law that will be effective upon (i) the failure to receive the required vote at any annual meeting at which such candidate is nominated for re-election and (ii) Board acceptance of such resignation (an “Irrevocable Resignation”). In addition, the Board shall fill director vacancies and new directorships only with candidates who tender, at or prior to the time of their appointment to the Board, the same form of Irrevocable Resignation tendered by other directors in accordance herewith.
The Corporate Governance Committee (or such other committee comprised of independent directors as the Board may appoint) shall consider the Irrevocable Resignation submitted by any director not receiving the requisite number of votes to be elected pursuant to Section 7 of Article II of the Company’s By-laws and shall recommend to the Board the action to be taken with respect to such tendered resignation. If no independent directors received the required majority vote, the Board shall act on the resignation offers. Any director whose Irrevocable Resignation is under consideration pursuant to this provision shall not participate in the committee recommendation regarding whether to accept the resignation offer. The Board shall take action within 90 days following certification of the vote, unless such action would cause the Company to fail to comply with any requirement of NASDAQ or any rule or regulation promulgated under the Securities Exchange Act of 1934, in which event the Company shall take action as promptly as is practicable while continuing to meet such requirements. The Board will promptly disclose its decision and the reasons therefore in a Form 8-K furnished to the Securities and Exchange Commission. After accepting a director’s resignation, the Board may fill any resulting vacancy or may decrease the size of the Board.
Former CEOs and Other Employee’s Board Membership
The Board believes that the Board membership of the CEO and other employees of the Company following their resignation or retirement from the Company is a matter to be decided in each individual instance. When the CEO no longer holds that position or an employee director resigns or retires as an employee of the Company, resignation from the Board should be offered at the same time.
Meetings
The Board should have at least five scheduled meetings each year. There shall be an agenda for each meeting, focusing on relevant issues for the Board’s consideration. Directors are expected to attend all scheduled meetings of the Board and the Committees on which they serve, as well as meetings of the Company’s stockholders.
The independent directors will have regularly scheduled meetings at least twice a year at which only independent directors are present. The Chairman of the Board (if he or she is an independent director) or the Lead Independent Director (described below), if any, shall preside at those meetings.
Agendas and other meeting materials should be distributed in advance of Board and Committee meetings so as to provide the directors sufficient time to review such materials; the directors are expected to review such materials. Directors are encouraged to make suggestions as to agenda items and to ask that additional information be provided to the Board or any Committee to facilitate its performance.


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On an annual basis, the Secretary of the Company shall prepare and distribute to the directors a detailed calendar of the meetings scheduled to be held by the Board and each of its Committees during the ensuing year. The calendar shall also specify the matters to be considered and acted upon at each such meeting, to the extent known at such time.
Board Leadership
The Board has no policy with respect to separation of the positions of Chairman and CEO or with respect to whether the Chairman should be a member of management or a non-management director, and believes that these are matters that should be discussed and determined by the Board from time to time. When the Chairman of the Board is a member of management or is otherwise not independent, the non-employee directors shall elect annually, on the recommendation of the Corporate Governance Committee, a Lead Independent Director. The duties of the Lead Independent Director (or the Chairman, if he or she is independent) shall include presiding at executive sessions of the non-employee and independent directors.
Board Self-Assessment and Director Evaluation
The Board will conduct an annual self-assessment of its performance to determine whether the Board and its Committees are functioning effectively. The Chair of the Corporate Governance Committee and the Chairman of the Board will coordinate an annual evaluation of the performance of each director.
Board Compensation
Directors who are employees shall not receive any compensation, directly or indirectly, for their services as directors. The Corporate Governance Committee shall be responsible for recommending to the Board the compensation and any benefits for non-employee directors, which shall be subject to the full discussion and approval by the Board. In discharging this duty, the Corporate Governance Committee shall be guided by three goals: (1) compensation should fairly pay directors for the work they perform; (2) compensation should include a significant equity component to align directors’ interests with the long-term interests of stockholders; and (3) the structure of the compensation should be simple, transparent and easy for stockholders to understand.
Stock Ownership Guideline for Non-Employee Directors
Consistent with our director compensation programs, each non-employee director receives at least 50% of his or her director compensation in the form of equity in the Company, which may not be transferred until after the director’s retirement.
Counsel and Other Advisors; Company Funding Obligations
The Board shall have the authority, to the extent deemed necessary or appropriate, to retain and terminate independent legal counsel or other advisors to assist the Board in carrying out its responsibilities. The Company shall provide for appropriate funding, as determined by the Board, to pay any such counsel or other advisors retained by the Board.
Access to Management and Outside Counsel and Auditors
Non-employee directors may contact senior managers of the Company and the Company’s outside counsel and auditors without the permission of senior corporate management, and without such management being present. To facilitate such contact, non-employee directors are encouraged to periodically visit Company locations without senior corporate management being present.


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Director Orientation and Education
Under the guidance of the Corporate Governance Committee, the Company provides an orientation program for new directors and a continuing education program for all directors that includes information about the Company’s business, operations and industry, information about corporate governance, compliance and ethics and information about other matters relevant to the discharge of the directors’ duties. The orientation and continuing education programs may include written materials and oral presentations by Management and outside experts, as well as Company site visits. In addition, directors are highly encouraged to attend appropriate outside continuing education programs on topics relevant to the Company’s business and governance. The Company will reimburse directors for the reasonable expenses of attending these programs.
Board Committees
The Board has established the following committees to assist the Board in discharging its responsibilities: the Audit Committee; the Compensation and Human Resources Committee; the Corporate Governance Committee; and the Compliance and Risk Committee. The Board may from time to time modify any of these Committees or establish new Committees.
The composition, responsibilities and other attributes of each Committee shall be specified in a Charter that shall be adopted by such Committee and approved by the Board. The Charters provide that each Committee will annually evaluate its performance.
Upon the recommendation of the Corporate Governance Committee, the Board of Directors shall appoint the Chairs and members of the Committees, each of whom shall serve at the discretion of the Board. In designating members of the Committees, the Board shall consider the extent to which Committee assignments should be rotated from time to time. While rotating Committee members should be considered periodically, the Board does not believe rotation should be mandated as a policy since there are significant benefits attributable to continuity, experience gained in service on particular committees and utilizing most effectively the individual talents of the directors.
The frequency, length and agenda of meetings of each Committee are determined by the Chair of the Committee, who may consult with members of the Committee and appropriate officers of the Company. Board members who are not members of a particular Committee are welcome to attend meetings of that Committee.
Each Committee’s duties may be described briefly as follows:
•
Audit Committee. The Audit Committee’s general purpose is to assist the Board in fulfilling its oversight responsibilities with respect to (1) the audits of Company’s financial statements and the integrity of the Company’s financial statements and internal controls; (2) the qualifications and independence of the Company’s independent auditor (including the Committee’s direct responsibility for the engagement of the independent auditor); (3) the performance of the Company’s internal audit function and independent auditor; and (4) the Company’s accounting and financial reporting processes.
•
Compensation and Human Resources Committee. The Compensation and Human Resources Committee’s general purpose is to assist the Board in fulfilling its responsibilities with respect to executive compensation and human resources matters, including (1) reviewing and approving corporate goals and objectives relevant to the compensation of the CEO; in coordination with the Corporate Governance Committee, evaluating his or her performance in light of those goals and objectives; and determining and approving his or her compensation based upon such evaluation; and (2) determining the compensation of senior executives other than the CEO, including determinations regarding equity-based and other incentive compensation awards.


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•
Corporate Governance Committee. The Corporate Governance Committee’s general purpose is to assist the Board in fulfilling its responsibilities with respect to the governance of the Company, and includes making recommendations to the Board concerning (1) the size and composition of the Board, the qualifications and independence of the directors, and the recruitment and selection of individuals to stand for election as directors; (2) the organization and operation of the Board, including the nature, size and composition of Committees, the designation of Committee Chairs, the designation of a Lead Independent Director, Chairman of the Board or similar position, and the process for distribution of information to the Board and its Committees; and (3) the compensation of non-employee directors.
•
Compliance and Risk Committee. The Compliance and Risk Committee’s general purposes are (i) to provide general oversight to the Company’s Risk and Compliance functions; (ii) to provide input to management in the identification, assessment and mitigation of enterprise-wide risks faced by the Company both internally and externally; and (iii) to provide recommendations to the Board with respect to its review of the Company’s business practices and compliance activities and enterprise risk management.
It is the policy of the Board that all of the members of the Audit Committee, the Compensation and Human Resources Committee and the Corporate Governance Committee will be independent directors.
Communications with Stockholders and Other Interested Parties
The Board is interested in receiving communications from stockholders and other interested parties, which would include customers, suppliers and employees. Such parties may contact any member (or members) of the Board or any Committee, the non-employee directors as a group, or the Chair of any committee, by mail or electronically. In addition, the Audit Committee is interested in receiving communications from employees and other interested parties, which would include stockholders, customers and suppliers, on issues regarding accounting, internal accounting controls or auditing matters. Any such correspondence should be addressed to the appropriate person or persons, either by name or title, and sent by regular mail to the office of the Corporate Secretary at 520 Madison Avenue, New York, New York 10022, or by email to directors@ca.com.
The Board has determined that the following types of communications are not related to the duties and responsibilities of the Board and its committees and are, therefore, not appropriate: spam and similar junk mail and mass mailings; product complaints, product inquiries and new product suggestions; résumés and other job inquiries; surveys; business solicitations or advertisements; and any communication that is unduly hostile, threatening, illegal or similarly unsuitable. Each communication received as described above will be forwarded to the directors, unless the Corporate Secretary determines said communication is not appropriate. Regardless, certain of these communications will be forwarded to others in the Company for review and action, when appropriate, or to the directors upon request.
Management Development and Succession Planning
The Board, with recommendations from the Corporate Governance Committee and the Compensation and Human Resources Committee, shall approve and maintain a succession plan for the CEO. On an annual basis, the Corporate Governance Committee and the Compensation and Human Resources Committee shall present to the Board a report on succession planning for senior management and a report on management development.
Stock Ownership Requirements for Executives
Stock ownership requirements have been adopted under which members of senior management must achieve ownership thresholds based on a multiple of their base salary.


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These Principles
These Principles shall be subject to review, at least annually, by the Board or the Corporate Governance Committee, and any changes deemed appropriate shall be adopted by the Board, on the recommendation of the Corporate Governance Committee.


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Meeting Admittance Procedures
Only stockholders of the Company as of the June 8, 2015 record date will be permitted to enter the meeting. To enter the meeting, you will have to present an admission ticket or other proof that you were a stockholder of the Company on the record date. Admission tickets are provided below. If you hold your shares of Common Stock through a bank, broker or other nominee, you will have to bring either a copy of the voting instruction card provided by your broker or nominee, or a copy of a brokerage statement showing your ownership of Common Stock as of June 8, 2015. You may also be required to present official identification containing your photograph (such as a driver’s license or passport). We may inspect your packages and bags and we may require you to check them, and in some cases, we may not permit you to enter the meeting with them. Please note that, at our discretion, we may exclude cameras, mobile phones, recording equipment and other electronic devices. Please do not bring non-essential packages, bags or other items to the meeting. We may take other security measures in connection with the meeting. Please allow sufficient time and otherwise plan accordingly.
Notice: If you plan to attend the 2015 annual meeting of stockholders,
please cut out and use the admission ticket(s) below.
Annual Meeting of Stockholders
August 5, 2015, 10:00 a.m. (Eastern Daylight Time)
CA, Inc.
One CA Plaza
Islandia, New York 11749
(800-225-5224)
PLEASE VOTE YOUR SHARES VIA THE TELEPHONE OR INTERNET, OR
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

ADMISSION TICKET
ADMISSION TICKET
Annual Meeting of Stockholders
Annual Meeting of Stockholders
 
 
CA, Inc.
CA, Inc.
One CA Plaza
One CA Plaza
Islandia, New York 11749
Islandia, New York 11749
(800-225-5224)
(800-225-5224)
August 5, 2015
August 5, 2015
10:00 a.m. EDT
10:00 a.m. EDT
 
 
Admit ONE
Admit ONE