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Software maker Computer Associates International Inc. won a Delaware Chancery Court judge’s approval for a $230 million settlement of shareholder lawsuits alleging company officials wrongly pocketed more than $500 million in stock under a flawed executive compensation plan. Vice Chancellor Myron Steele concluded that Computer Associates executives’ agreement to return 4.5 million shares of stock they received under the plan — worth $230 million — was a “fair and reasonable” settlement of shareholders’ objections to the payout. Steele also agreed to award shareholders’ numerous lawyers a total of 900,000 shares of Computer Associates’ stock to cover legal fees and expenses. The fees are worth about $46 million, based on the company’s stock price the day the settlement was approved at a hearing in Dover, Del. Lisa Sanders and Edward Bickel, who own shares in the Islandia, N.Y.-based company, filed suit in Chancery Court in Wilmington, Del., in 1998, contending Chief Executive Charles Wang, Chief Operating Officer Sanjay Kumar and Executive Vice President Russell Artzt should return 9.5 million of the 20.25 million shares they received as part of an executive compensation plan. The suits alleged the awards, enhanced by stock splits, exceeded the 1995 plan’s limits. Steele later ordered the executives to hand over the 9.5 million shares. But while the case was on appeal to the Delaware Supreme Court, the Computer Associates executives offered to return 4.5 million of the shares to settle the dispute and the plaintiffs agreed, partly to avoid further litigation that could turn out badly for them, according to shareholder lawyers. The settlement “constitutes a return of value to shareholders — they should be pleased with this result,” said Steele in approving the settlement. Computer Associates was represented by Alan J. Stone and Jessica Zeldin of Wilmington’s Morris Nichols Arsht & Tunnell. The company and some of its board also were represented by Moses Silverman and Jonathan J. Freeman of New York’s Paul Weiss Rifkind Wharton & Garrison. Wang, Kumar and Artzt were represented by Wayne N. Elliott and James L. Holzman of Prickett Jones & Elliott. The Computer Associates executives also were represented by David E. Nachman and Caroline S. Press of New York’s Solomon Zauderer Ellerhorn Frischer & Sharp. Shareholders were represented by Norman M. Monhait of Wilmington’s Rosenthal Monhait Gross & Goddess. They also were represented by Martin P. Unger of New York’s Tenzer Greenblatt and George Linck of New York. Other stockholders who sued were represented by Pamela S. Tikellis and Robert J. Kriner of the Wilmington office of Haverford, Pa.’s Chimicles & Tikellis. They also were represented by Scott Fisher of New York’s Garwin Bonzaft Gerstein & Fisher. The lead case was Lisa Sanders, et. al., v. Charles B. Wang., et. al. , CA No. 16640.

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