EXHIBIT 99.01
CERIDIAN CORPORATION
STOCK AWARD AGREEMENT
This Agreement is entered into by you, Xxxxxx X. Xxxxx, and
Ceridian Corporation (the "Company") as of April 15, 1998 (the
"Date of Grant") to evidence the making of a stock award by the
Company to you.
1. Award. Effective as of the Date of Grant, the Company
has granted to you 3,000 shares of the Company's common stock
(the "Awarded Shares"), subject to the terms and conditions set
forth in this Agreement.
2. Restrictions on Transferability. A stock certificate
evidencing 1,000 of the Awarded Shares will be issued in your
name and delivered to you as soon as administratively practicable
after a registration statement on Form S-8 under the Securities
Act of 1933, as amended, has been filed with the Securities and
Exchange Commission and has become effective. The 2,000 share
balance of the Awarded Shares (the "Restricted Shares") may not
be sold, transferred, assigned, pledged or otherwise used as
collateral by you unless and until, and then only to the extent
that, restrictions on transferability shall have lapsed in
accordance with this Agreement. In this Agreement, the lapsing
of such transferability restrictions is referred to as "vesting,"
and Restricted Shares that are no longer subject to such
transferability restrictions are referred to as "vested."
3. Book-Entry Registration. Ownership of Restricted Shares
which are not yet vested shall not be evidenced by a stock
certificate, but rather shall be evidenced by an entry in a
certificateless book-entry stock account maintained by the
Company's transfer agent for its common stock (the "Transfer
Agent"). To facilitate the transfer to the Company of any
Awarded Shares that you might subsequently forfeit in accordance
with the terms of this Agreement, you agree to sign and promptly
return to the Company with a signed copy of this Agreement such
stock power(s) as the Company may request. Upon written
notification by the Company to the Transfer Agent of the vesting
of all or a portion of the Restricted Shares, a stock certificate
evidencing such unrestricted shares shall be issued in your name
and delivered to the you.
4. Vesting of Restricted Shares. Subject to Sections 5, 6
and 9 of this Agreement, one-half of the Restricted Shares will
vest on April 15, 1999 and the remaining one-half of the
Restricted Shares will vest on April 15, 2000.
5. Termination of Employment. Except as provided in
Section 6 of this Agreement, if your employment with the Company
and all of its majority-owned subsidiaries terminates for any
reason, you will immediately forfeit any Restricted Shares that
have not yet vested as of the employment termination date.
This document constitutes part of a prospectus covering
securities that have been registered under the Securities Act
of 1933.
1
6. Change of Control. Subject to the definitions and
limitations contained in the following paragraphs of this
Section 6, and subject to Section 9 of this Agreement, in the
event of a Change of Control Termination with respect to you,
all of your Restricted Shares will immediately become fully
vested.
For purposes of this Section 6, the following
definitions will be applied:
(a) "Benefit Plan" means any formal or informal plan,
program or other arrangement heretofore or hereafter adopted by
the Company or any of its majority owned subsidairies for the
direct or indirect provision of compensation to you, whether or
not such compensation is deferred, is in the form of cash or
other property or rights, or is in the form of a benefit to or
for you.
(b) "Change of Control" means any of the following
events:
(i) a merger or consolidation to which the Company is
a party if the individuals and entities who were stockholders of
the Company immediately prior to the effective date of such
merger or consolidation have beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of less
than 50% of the total combined voting power for election of
directors of the surviving corporation immediately following the
effective date of such merger or consolidation;
(ii) the direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934)
in the aggregate of securities of the Company representing 25%
or more of the total combined voting power of the Company's then
issued and outstanding securities by any person or entity, or
group of associated person or entities acting in concert;
(iii) the sale of the properties and assets of the
Company, substantially as an entirety, to any person or entity
which is not a wholly-owned subsidiary of the Company;
(iv) the stockholders of the Company approve any plan
or proposal for the liquidation of the Company; or
(v) a change in the composition of the Company's
Board of Directors at any time during any consecutive 24 month
period such that the "Continuity Directors" cease for any reason
to constitute at least a 70% majority of the Board. For
purposes of this clause, "Continuity Directors" means those
members of the Board who either (1) were directors at the
beginning of such consecutive 24 month period, or (2) were
elected by, or on the nomination or recommendation of, at least
a two-thirds majority of the then-existing Board of Directors.
(c) "Change of Control Compensation" means any payment
or benefit (including any transfer of property) in the nature of
compensation, to or for the benefit of you under this Agreement
or any Other Agreement or Benefit Plan, which is considered to
be contingent on a Change of Control for purposes of
Section 280G of the Internal Revenue Code (the "Code").
2
(d) "Change of Control Termination" means any of the
following events occurring within two years after a Change of
Control:
(i) Termination of your employment with the Company
and all of its majority-owned subsidiaries for any reason other
than (A) fraud, (B) theft or embezzlement of Company or
subsidiary assets, (C) intentional violations of law involving
moral turpitude, or (D) your substantial and continuing failure
to satisfactorily perform your duties as reasonably assigned to
you for a period of 60 days after a written demand for such
satisfactory performance which specifically identifies the manner
in which it is alleged you have not satisfactorily performed such
duties; or
(ii) Termination of employment with the Company and
all of its majority-owned subsidiaries by you for Good Reason.
A Change of Control Termination shall not include a termination
of employment by reason of death or disability.
(e) "Good Reason" means a good faith determination by
you that any one or more of the following events has occurred at
the instigation by the Company or one of its majority-owned
subsidiaries, without your express written consent, after a
Change of Control:
(i) A change in your reporting responsibilities,
titles or offices as in effect immediately prior to the Change
of Control, or your removal from any of such positions, which
has the effect of diminishing your responsibility or authority;
or
(ii) A reduction in your base salary as in effect
immediately prior to the Change of Control or as the same may be
increased from time to time thereafter; or
(iii) Your being required to be based anywhere other
than within twenty-five miles of your job location at the time of
the Change of Control; or
(iv) Without replacement by plans, programs, or
arrangements which, taken as a whole, provide benefits to you at
least reasonably comparable to those discontinued or adversely
affected, (A) the failure to continue in effect, within its
maximum stated term, any pension, bonus, incentive, stock
ownership, purchase, option, life insurance, health, accident,
disability, or any other employee compensation or benefit plan,
program or arrangement, in which you are participating immediately
prior to a Change of Control; or (B) the taking of any action that
would materially adversely affect your participation or materially
reduce your benefits under any of such plans, programs or
arrangements; or
(v) The failure to provide you with office space,
furniture, and secretarial support at least comparable to that
provided to you immediately prior to the Change of Control, or the
taking of any similar action that would materially adversely
affect the working conditions in or under which you perform your
employment duties; or
3
(vi) If your primary employment duties are with a
majority-owned subsidiary of the Company, the sale, merger,
contribution, transfer or any other transaction as a result of
which the Company no longer directly or indirectly controls or has
a significant equity interest in such subsidiary; or
(vii) Any material breach by the Company or one of its
majority-owned subsidiaries of any employment agreement between
you and the Company or such subsidiary.
(f) "Excise Tax" means any applicable federal excise tax
imposed by Section 4999 of the Code.
(g) "Other Agreements" means any agreement, contract or
understanding heretofore or hereafter entered into between you
and the Company or any of its majority-owned subsidiaries for
the direct or indirect provision of compensation to you.
(h) "Reduced Amount" means the largest amount that could
be received by you as Change of Control Compensation such that
no portion of such Change of Control Compensation would be
subject to the Excise Tax.
If any Change of Control Compensation would be considered a
"parachute payment" within the meaning of Section 280G(b)(2) of
the Code and if, after reduction for any Excise Tax and federal
income tax imposed by the Code, your net proceeds of such Change
of Control Compensation would be less than the amount of your
net proceeds resulting from the payment of the Reduced Amount
after reduction for federal income taxes, then the Change of
Control Compensation payable to you shall be limited to the
Reduced Amount. The determinations required by the preceding
sentence shall be made by the firm of independent certified
public accountants serving as the outside auditor of the Company
as of the date of the applicable Change of Control, and such
determinations shall be binding upon the Company and you. If
Change of Control Compensation to you is limited to the Reduced
Amount, then you will have the right to designate those payments
or benefits under this Agreement, any Other Agreements and/or
any Benefit Plans that should be reduced or eliminated so as to
avoid having your Change of Control Compensation be subject to
the Excise Tax. If you fail to make such designation within 30
days of having received notification that such designation is
required, the Company shall make such designations and shall
promptly inform you of its actions in such regard.
Prior to a Change of Control, the Compensation Committee of
the Board of Directors of the Company will have the power and
right, within its sole discretion, to rescind, modify or amend
this Section 6 without your consent. In all other cases, neither
such Committee nor any other party will, following a Change of
Control, have the power to exercise such authority or otherwise
take any action that is inconsistent with the provisions of this
Section 6.
7. Dividends and Distributions. Any dividends or
distributions (including regular, periodic cash dividends) paid
with respect to Restricted Shares that have not yet vested will
be subject to the same restrictions on transferability and the
possibility of forfeiture to the Company as the Restricted Shares
to which the dividends or distributions relate. To facilitate
4
the enforcement of this provision, any such dividends or
distributions paid with respect to unvested Restricted Shares
shall be held by the Company or its agent designated for the
purpose until such time as the Restricted Shares to which the
dividends or distributions relate vest or are forfeited. If such
Shares vest, the dividends or distributions with respect thereto
shall be paid or transferred to you at the time the certificate
representing such Shares is provided to you. If such Shares are
forfeited, all of your right, title and interest in and to such
dividends and distributions shall automatically be transferred to
the Company, and you agree to execute any documents evidencing
such transfer as may be requested by the Company, either at the
time of such transfer or in anticipation of such transfer
becoming necessary.
8. Continued Employment. Nothing in this Agreement shall
confer upon you any right with respect to continuance of
employment by the Company or any of its subsidiaries, nor
interfere in any way with the right of the Company or any of its
subsidiaries to terminate your employment at any time.
9. Prohibited Activities. If, at any time prior to the
vesting of all Restricted Shares, or at any time prior to one
year after the termination of your employment with the Company
and all of its subsidiaries, whichever is later, you (i) engage
in any commercial activity in competition with any part of the
business of the Company or its subsidiaries, (ii) divert or
attempt to divert from the Company or its subsidiaries any
business of any kind, including, without limitation, interference
with any business relationships with suppliers, customers,
licensees, licensors, clients or contractors, (iii) make, or
cause or attempt to cause any other person to make, any
statement, either written or oral, or convey any information
about the Company which is disparaging or which in any way
reflects negatively upon the Company, or (iv) engage in any other
activity that is inimical, contrary or harmful to the interests
of the Company or its subsidiaries, including influencing or
advising any person who is employed by or in the service of the
Company or its subsidiaries to leave such employment or service
to compete with the Company or its subsidiaries or to enter into
the employment or service of any actual or prospective competitor
of the Company or its subsidiaries, or influencing or advising
any competitor of the Company or its subsidiaries to employ or to
otherwise engage the services of any person who is employed by or
in the service of the Company or its subsidiaries, or improperly
disclosing or otherwise misusing any confidential information
regarding the Company or its subsidiaries, then (1) you will
forfeit any Restricted Shares that are not yet vested effective
the date on which you enter into such activity, and (2) any
taxable income realized by you from the grant or vesting of
Awarded Shares during a period beginning six months prior to the
date on which you enter into such activity shall be paid by you
to the Company..
10. Payment of Amounts Owed. By accepting this Agreement,
you consent to a reduction from any amounts the Company owes you
from time to time (including wages or other compensation) of any
amount you owe the Company under Section 9 of this Agreement. If
the Company does not recover by means of set-off the full amount
you owe it, you agree to immediately repay the unpaid balance to
the Company.
11. Tax Withholding. The Company is entitled to withhold
and deduct from your future wages (or from other amounts which
may be due and owing to you), or make other arrangements
5
for the collection of, all legally required amounts necessary to
satisfy any and all federal, state and local withholding and
employment-related tax requirements attributable to the Awarded
Shares, and you agree to cooperate with the Company to effect
such compliance.
12. Governing Law. The validity, construction,
interpretation, administration and effect of this Agreement
will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota, without regard to
its conflicts of law principles.
13. Successors and Assigns. This Agreement will be
binding upon and inure to the benefit of the successors and
permitted assigns of you and the Company.
In Witness Whereof, you and Ceridian Corporation have
executed this Agreement as of the Date of Grant.
CERIDIAN CORPORATION
By_____________________________ ____________________________
Secretary Xxxxxx X. Xxxxx
Participant's Mailing Address
_________________________
_________________________
6
