EXHIBIT 10.01 PAGE 1
AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment, dated as of August ___, 1998, amends certain provisions of
the Executive Employment Agreement ("Agreement"), dated as of ___________, 1997,
between Ceridian Corporation and you, _______________. Unless otherwise defined
herein, capitalized terms used in this Amendment have the meanings given to them
in the Agreement. In consideration of you continuing in your employment with
Ceridian for the remaining term of the Agreement, and the mutual promises and
obligations contained in the Agreement as modified by this Amendment, you and
Ceridian agree to amend the Agreement as follows:
1. Section 7.03 of the Agreement is hereby amended in its entirety to read as
follows:
"7.03 CHANGE OF CONTROL TERMINATION PAYMENT. In the event of a Change
of Control Termination, then, and without further action by the
Board, Compensation Committee or otherwise, Ceridian shall,
within five days of such termination, make a lump sum payment to
Executive in an amount equal to one dollar ($1.00) less than
three times the average annualized compensation, as defined by
Section 280G of the Code, received by Executive from Ceridian and
includible in Executive's gross income for federal income tax
purposes for the five most recent taxable years of the Executive
ending before the date upon which the Change in Control occurred
(or such portion of such period during which Executive was an
employee of Ceridian). Neither this payment nor any other
compensation to be provided to Executive by Ceridian pursuant to
this Agreement or any other agreement or Benefit Plan which may
be considered Change of Control Compensation shall be subject to
any limitation on Change of Control Compensation which may
otherwise be expressed in any such agreement or Benefit Plan."
2. Section 7.04 of the Agreement is hereby amended in its entirety to read as
follows:
"7.04 TAX REIMBURSEMENT.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payments or
distributions by Ceridian to or for the benefit of the
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any payments
required under this Section 7.04) (collectively, the
"Payments") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount such that, after payment by the Executive of all
taxes (and any interest or penalties imposed with respect to
such taxes), including any income taxes and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
EXHIBIT 10.01 PAGE 2
(b) Subject to the provisions of Section 7.04(d), all
determinations required to be made under this Section 7.04,
including whether and when a Gross-Up Payment is required
and the amount such Gross-Up Payment and the assumptions to
be utilized in arriving at such determination, shall be made
by KPMG Peat Marwick LLP (the "Accounting Firm"), which
shall provide detailed supporting calculations both to
Ceridian and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by Ceridian.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm
shall then be referred to as the "Accounting Firm"
hereunder). All fees and expenses of the Accounting Firm
shall be borne solely by Ceridian. Any Gross-Up Payment, as
determined pursuant to this Section 7.04, shall be paid by
Ceridian to the Executive within five days of the receipt of
the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon Ceridian and the
Executive.
(c) As a result of uncertainty in the application of Section
4999 of the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments which should have been made by Ceridian will not
have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that Ceridian exhausts its remedies pursuant to Section
7.04(d) and the Executive thereafter is required to make a
payment of any additional Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by
Ceridian to or for the benefit of the Executive.
(d) The Executive shall notify Ceridian in writing of any claim
by the Internal Revenue Service that, if successful, would
require the payment by Ceridian of any Gross-Up Payment.
Such notification shall be given as soon as practicable but
no later than ten business days after the Executive knows of
such claim and shall apprise Ceridian of the nature of such
claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the
expiration of the thirty-day period following the date on
which it gives such notice to Ceridian (or such shorter
period ending on the date that any payment of taxes with
respect to such claim is due). If Ceridian notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give Ceridian any information reasonably requested by
Ceridian relating to such claim;
(ii) take such action in connection with contesting such
claim as Ceridian shall reasonably request in writing
from time to time, including accepting legal
representation with respect to such claim by an
attorney reasonably selected by Ceridian;
EXHIBIT 10.01 PAGE 3
(iii) cooperate with Ceridian in good faith in order to
effectively contest such claim; and
(iv) permit Ceridian to participate in any proceedings
relating to such claim;
provided, however, that Ceridian shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 7.04(d), Ceridian shall
control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax
claimed and xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as Ceridian shall determine; provided further, however,
that if Ceridian directs the Executive to pay such claim and xxx
for a refund, Ceridian shall advance the amount of such payment
to the Executive on an interest-free basis and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
provided further that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, Ceridian's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle
or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(e) If, after the receipt by the Executive of an amount advanced by
Ceridian pursuant to Section 7.04(d), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to Ceridian's complying with the
requirements of Section 7.04(d)) promptly pay to Ceridian the
amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by Ceridian
pursuant to Section 7.04(d), a determination is made that the
Executive shall not be entitled to any refund with respect to
such claim and Ceridian does not notify the Executive in writing
of its intent to contest such denial of refund prior to the
expiration of thirty days after such determination, then such
advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid."
EXHIBIT 10.01 PAGE 4
Ceridian and you have caused this Amendment to be duly executed and
delivered, and this Amendment shall be effective, as of the date first
written above. Following the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement," "hereunder," "herein,"
"hereof," or words of like import shall mean and be a reference to the
Agreement as amended by this Amendment.
EXECUTIVE CERIDIAN CORPORATION
____________________________ By:___________________________
[Name] Title:__________________________
Address:
____________________________
____________________________
