EXHIBIT 10.05
CERIDIAN CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
PARTIES
Ceridian Corporation (a Delaware Corporation)
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
and
Xxxxxx Xxxxx ("Executive")
Date: January 1, 1996
RECITALS
A. Ceridian wishes to obtain the services of Executive for at
least the duration of this Agreement, and the Executive
wishes to provide his or her services for such period.
B. Ceridian desires reasonable protection of Ceridian's
Confidential Information (as defined below).
C. Ceridian desires assurance that Executive will not compete
with Ceridian or engage in recruitment of Ceridian's
employees for a reasonable period of time after termination
of employment, and Executive is willing to refrain from
competition and recruitment.
D. Executive desires to be assured of a minimum Base Salary (as
defined below) from Ceridian for Executive's services for
the term of this Agreement (unless terminated earlier
pursuant to the terms of this Agreement).
E. It is expressly recognized by the parties that Executive's
acceptance of, and continuance in, Executive's position with
Ceridian and agreement to be bound by the terms of this
Agreement represents a substantial commitment to Ceridian in
terms of Executive's personal and professional career and a
foregoing of present and future career options by Executive,
for all of which Ceridian receives substantial value.
F. The parties recognize that a Change of Control (as defined
below) may result in material alteration or diminishment of
Executive's position and responsibilities and substantially
frustrate the purpose of Executive's commitment to Ceridian
and forebearance of options.
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G. The parties recognize that in light of the above-described
commitment and forebearance of options, it is essential
that, for the benefit of Ceridian and its stockholders,
provision be made for a Change of Control Termination (as
defined below) in order to enable Executive to accept and
effectively continue in Executive's position in the face of
inherently disruptive circumstances arising from the
possibility of a Change of Control of the Parent Corporation
(as defined below), although no such change is now
contemplated or foreseen.
H. The parties wish to replace any and all prior agreements and
undertakings with respect to the Executive's employment and
Change of Control occurrences and compensation.
NOW, THEREFORE, in consideration of Executive's acceptance of and
continuance in Executive's employment for the term of this
Agreement and the parties' agreement to be bound by the terms
contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Base Salary" shall mean regular cash compensation paid on a
periodic basis exclusive of benefits, bonuses or incentive
payments.
1.02 "Board" shall mean the Board of Directors of Ceridian
Corporation (the "Parent Corporation").
1.03 "Ceridian" shall mean Ceridian Corporation and, except as
otherwise provided in Article VIII and Section 9.02 of
Article IX,
(a) any Subsidiary (as that term is defined in Section
1.07); and
(b) any successor in interest by way of consolidation,
operation of law, merger or otherwise.
1.04 "Confidential Information" shall mean information or
material which is not generally available to or used by
others, or the utility or value of which is not generally
known or recognized as standard practice, whether or not the
underlying details are in the public domain, including:
(a) information or material relating to Ceridian and its
business as conducted or anticipated to be conducted;
business plans; operations; past, current or
anticipated software, products or services; customers
or prospective customers; or research, engineering,
development, manufacturing, purchasing, accounting, or
marketing activities;
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(b) information or material relating to Ceridian's
inventions, improvements, discoveries, "know-how,"
technological developments, or unpublished writings or
other works of authorship, or to the materials,
apparatus, processes, formulae, plans or methods used
in the development, manufacture or marketing of
Ceridian's software, products or services;
(c) information which when received is marked as
"proprietary," "private," or "confidential;"
(d) trade secrets;
(e) software in various stages of development, including
computer programs in source code and binary code form,
software designs, specifications, programming aids
(including "library subroutines" and productivity
tools), programming languages, interfaces, visual
displays, technical documentation, user manuals, data
files and databases; and
(f) any similar information of the type described above
which Ceridian obtained from another party and which
Ceridian treats as or designates as being proprietary,
private or confidential, whether or not owned or
developed by Ceridian.
Notwithstanding the foregoing, "Confidential Information"
does not include any information which is properly published
or in the public domain; provided, however, that information
which is published by or with the aid of Executive outside
the scope of employment or contrary to the requirements of
this Agreement will not be considered to have been properly
published, and therefore will not be in the public domain
for purposes of this Agreement.
1.05 "Disability" shall mean the inability of Executive to
perform his or her duties under this Agreement because of
illness or incapacity for a continuous period of five
months.
1.06 "Parent Corporation" shall mean Ceridian Corporation and,
except as otherwise provided in Article VIII and Section
9.02 of Article IX, any successor in interest by way of
consolidation, operation of law, merger or otherwise.
"Parent Corporation" shall not include any Subsidiary.
1.07 "Subsidiary" shall mean: (a) any corporation at least a
majority of whose securities having ordinary voting power
for the election of directors (other than securities having
such power only by reason of the occurrence of a
contingency) is at the time owned by Parent Corporation
and/or one or more Subsidiaries; and (b) any division or
business unit (or portion thereof) of Parent Corporation or
a corporation described in clause (a) of this Section 1.07.
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ARTICLE II
EMPLOYMENT, DUTIES AND TERM
2.01 Employment. Upon the terms and conditions set forth in this
Agreement, Ceridian hereby employs Executive, and Executive
accepts such employment. Except as expressly provided
herein, termination of this Agreement by either party shall
also terminate Executive's employment by Ceridian.
2.02 Duties. Executive shall devote his or her full-time and
best efforts to Ceridian and to fulfilling the duties of his
or her position which shall include such duties as may from
time to time be assigned him or her by Ceridian, provided
that such duties are reasonably consistent with Executive's
education, experience and background. Executive shall
comply with Ceridian's policies and procedures to the extent
they are not inconsistent with this Agreement in which case
the provisions of this Agreement prevail.
2.03 Term. Subject to the provisions of Articles IV, VII, and
VIII, Executive's employment shall continue until the later
of: (a)December 31, 1997; or (b) two years after a Change
of Control which occurs prior to December 31, 1997. In any
event, the Agreement shall automatically terminate without
notice when Executive reaches 65 years of age. If
employment is continued after the age of 65 by mutual
agreement, it shall be terminable at will by either party.
ARTICLE III
COMPENSATION AND EXPENSES
3.01 Base Salary. For all services rendered under this Agreement
during the term of Executive's employment, Ceridian shall
pay Executive a minimum Base Salary at the annual rate
currently being paid or, if Executive is not currently in
Ceridian's employ, at the annual rate specified in the
written offer of employment. If Executive's salary is
increased from time to time during the term of this
Agreement, the increased amount shall be the Base Salary for
the remainder of the term and any extensions.
3.02 Bonus and Incentive. Bonus or incentive compensation shall
be in the sole discretion of Ceridian. Except as otherwise
provided in Article VII, Ceridian shall have the right in
accordance with their terms to alter, amend or eliminate any
bonus or incentive plans, or Executive's participation
therein, without compensation to Executive.
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3.03 Business Expenses. Ceridian shall, in accordance with, and
to the extent of, its policies in effect from time to time,
bear all ordinary and necessary business expenses incurred
by Executive in performing his or her duties as an employee
of Ceridian, provided that Executive accounts promptly for
such expenses to Ceridian in the manner prescribed from time
to time by Ceridian.
ARTICLE IV
EARLY TERMINATION
4.01 Early Termination. Subject to the respective continuing
obligations of the parties pursuant to Articles V, VI, and
IX, this Article sets forth the terms for early termination
of this Agreement; provided, however, that this Article
shall not apply to a Change of Control Termination which is
governed solely by the provisions of Article VII.
4.02 Termination for Cause. Ceridian may terminate this
Agreement immediately for cause. For the purpose hereof
"cause" means (a) fraud, (b) misrepresentation, (c) theft or
embezzlement of Ceridian assets, (d) intentional violations
of law involving moral turpitude, (e) the continued failure
by Executive to satisfactorily perform his or her duties as
reasonably assigned to Executive pursuant to Section 2.02 of
Article II of this Agreement for a period of 60 days after a
written demand for such satisfactory performance which
specifically identifies the manner in which it is alleged
Executive has not satisfactorily performed such duties. In
the event of termination for cause pursuant to this Section
4.02, Executive shall be paid at the usual rate of
Executive's annual Base Salary through the date of
termination specified in any notice of termination.
4.03 Termination Without Cause. Either Executive or Ceridian may
terminate this Agreement and Executive's employment without
cause on at least 75 days' written notice or payment in lieu
of notice under (b) below. In the event of termination of
this Agreement and of Executive's employment pursuant to
this Section 4.03, compensation shall be paid as follows:
(a) if the notice of termination is given by Executive at
any time Executive shall be paid at the usual rate of
his or her annual Base Salary through the date of
termination specified in such notice (but not to exceed
75 days);
(b) if the notice of termination is given by Ceridian and
effective prior to Executive's 65th birthday,
(1) Executive shall be paid at the usual rate of his or
her annual Base Salary through the date of termination
specified in the notice provided, however, that
Ceridian shall have the option of making termination of
the Agreement and Executive's employment effective
immediately upon notice in which case Executive shall
be paid a lump sum representing the value of 75 days
worth of salary; and (2) Executive shall receive,
within 15 days following termination, a lump sum
payment equivalent to two years' Base Salary.
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(c) If the notice of termination is given by Ceridian to be
effective on or after Executive's 65th birthday
Executive shall be paid at the usual rate of his or her
annual Base Salary through the date of termination
specified in any notice.
(d) In the event that termination occurs pursuant to
Sections 4.03(b) or 4.03(c), then, in addition to the
payments specified in said Sections, Ceridian shall pay
to Executive any amount equal to (1) the bonus, if any,
to which Executive would otherwise have become entitled
under all Ceridian bonus plans in effect at the time of
termination of this Agreement had Executive remained
continuously employed for the full fiscal year in which
termination occurred and continued to perform his or
her duties in the same manner as they were performed
immediately prior to termination, multiplied by (2) a
fraction, the numerator of which shall be the number of
whole months Executive was employed in the year in
which termination occurred and the denominator of which
is 12. The amount payable pursuant to this Section
4.03(d) shall be paid within 15 days after the date
such bonus would have been paid had Executive remained
employed for the full fiscal year.
4.04 Termination In The Event of Death or Disability. This
Agreement shall terminate in the event of death or
disability of Executive.
(a) In the event of Executive's death, Ceridian shall pay
an amount equal to 12 months of Base Salary at the rate
in effect at the time of Executive's death plus the
amount Executive would have received in annual
incentive plan bonus for the year in which termination
occurs had "target" goals been achieved. Such amount
shall be paid (1) to the beneficiary or beneficiaries
designated in writing to Ceridian by Executive, (2) in
the absence of such designation to the surviving
spouse, or (3) if there is no surviving spouse, or such
surviving spouse disclaims all or any part, then the
full amount, or such disclaimed portion, shall be paid
to the executor, administrator or other personal
representative of Executive's estate. The amount shall
be paid as a lump sum as soon as practicable following
Ceridian's receipt of notice of Executive's death. All
such payments shall be in addition to any payments due
pursuant to Section 4.04(c) below.
(b) In the event of disability, Base Salary shall be
terminated as of the end of the month in which the last
day of the five-month period of Executive's inability
to perform his or her duties occurs.
(c) In the event of termination by reason of Executive's
death or disability, Ceridian shall pay to Executive
any amount equal to (1) the amount Executive would have
received in annual incentive plan bonus for the year in
which termination occurs had "target" goals been
achieved, multiplied by (2) a fraction, the numerator
of which shall be the number of whole months Executive
was employed in the year in which the death or
disability occurred and the denominator of which is 12.
The amount payable pursuant to this Section 4.04(c)
shall be paid within 15 days after the date such bonus
would have been paid had Executive remained employed
for the full fiscal year.
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4.05 Entire Termination Payment. The compensation provided for
in this Article IV for early termination of this Agreement
and termination pursuant to this Article IV shall constitute
Executive's sole remedy for such termination. Executive
shall not be entitled to any other termination or severance
payment which may be payable to Executive under any other
agreement between Executive and Ceridian.
ARTICLE V
CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT
5.01 Confidentiality. Executive will not, during the term or
after the termination or expiration of this Agreement,
publish, disclose, or utilize in any manner any Confidential
Information obtained while employed by Ceridian. If
Executive leaves the employ of Ceridian, Executive will not,
without Ceridian's prior written consent, retain or take
away any drawing, writing or other record in any form
containing any Confidential Information.
5.02 Business Conduct and Ethics. During the term of
employment with Ceridian, Executive will engage in no
activity or employment which may conflict with the interest
of Ceridian, and will comply with Ceridian's policies and
guidelines pertaining to business conduct and ethics.
5.03 Disclosure. Executive will disclose promptly in
writing to Ceridian all inventions, discoveries, software,
writings and other works of authorship which are conceived,
made, discovered, or written jointly or singly on Ceridian
time or on Executive's own time, providing the invention,
improvement, discovery, software, writing or other work of
authorship is capable of being used by Ceridian in the
normal course of business, and all such inventions,
improvements, discoveries, software, writings and other
works of authorship shall belong solely to Ceridian.
5.04 Instruments of Assignment. Executive will sign and
execute all instruments of assignment and other papers to
evidence vestiture of Executive's entire right, title and
interest in such inventions, improvements, discoveries,
software, writings or other works of authorship in Ceridian,
at the request and the expense of Ceridian, and Executive
will do all acts and sign all instruments of assignment and
other papers Ceridian may reasonably request relating to
applications for patents, patents, copyrights, and the
enforcement and protection thereof. If Executive is needed,
at any time, to give testimony, evidence, or opinions in any
litigation or proceeding involving any patents or copyrights
or applications for patents or copyrights, both domestic and
foreign, relating to inventions, improvements, discoveries,
software, writings or other works of authorship conceived,
developed or reduced to practice by Executive, Executive
agrees to do so, and if Executive leaves the employ of
Ceridian, Ceridian shall pay Executive at a rate mutually
agreeable to Executive and Ceridian, plus reasonable
traveling or other expenses.
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5.05 Inventions Developed on Executive's Own Time. The two
immediately preceding sections entitled "Disclosure" and
"Instruments of Assignment" do not apply to inventions in
which a Ceridian claim of any rights will create a violation
of Chapter 47 Minnesota Revised Statutes, Section 1-181.78,
reproduced below and constituting the written notification
of its Subdivision 3.
181.78 Agreements relating to inventions
Subdivision 1.
Any provision in an employment agreement which provides that
an Executive shall assign or offer to assign any of his
rights in an invention to his employer shall not apply to an
invention for which no equipment, supplies, facility or
trade secret information of the employer was used and which
was developed entirely on the employee's own time, and
(1) which does not relate (a) directly to the business of
the employer or (b) to the employer's actual or demonstrably
anticipated research or development, or (2) which does not
result from any work performed by the employee for the
employer. Any provision which purports to apply to such an
invention is to that extent against the public policy of
this state and is to that extent void and unenforceable.
Subdivision 2.
No employer shall require a provision made void and
unenforceable by subdivision 1 as a condition of employment
or continuing employment.
Subdivision 3.
IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1,
1977, CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN
OR OFFER TO ASSIGN ANY OF HIS RIGHTS IN ANY INVENTION TO HIS
EMPLOYER, THE EMPLOYER MUST ALSO, AT THE TIME THE AGREEMENT
IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE EMPLOYEE THAT
THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO
EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF
THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON
THE EMPLOYEE'S OWN TIME, AND (1) WHICH DOES NOT RELATE (a)
DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (b) TO THE
EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR
DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK
PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER.
5.06 Executive's Declaration. Executive has no inventions,
improvements, discoveries, software, writings or other works
of authorship useful to Ceridian in the normal course of
business, which were conceived, made or written prior to the
date of this Agreement and which are excluded from this
Agreement.
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5.07 Survival. The obligations of this Article V shall
survive the expiration or termination of this Agreement.
ARTICLE VI
NON-COMPETITION, NON-RECRUITMENT
6.01 General. The parties hereto recognize and agree that (a)
Executive is a senior executive of Ceridian and is a key
Executive of Ceridian, (b) Executive has received, and will
in the future receive, substantial amounts of Confidential
Information, (c) Ceridian's business is conducted on a
worldwide basis, and (d) provision for non-competition and
non-recruitment obligations by Executive is critical to
Ceridian's continued economic well-being and protection of
Ceridian's Confidential Information. In light of these
considerations, this Article VI sets forth the terms and
conditions of Executive's obligations of non-competition and
non-recruitment subsequent to the termination of this
Agreement and/or Executive's employment for any reason.
6.02 Non-Competition.
(a) Unless the obligation is waived or limited by Ceridian
in accordance with subsection (b) of this Section 6.02,
Executive agrees that for a period of two years
following termination of employment for any reason,
Executive will not directly or indirectly, alone or as
a partner, officer, director, shareholder or employee
of any other firm or entity, engage in any commercial
activity in competition with any part of Ceridian's
business as conducted as of the date of such
termination of employment or with any part of
Ceridian's contemplated business with respect to which
Executive has Confidential Information as governed by
Article V of this Agreement. For purposes of this
subsection (a), "shareholder" shall not include
beneficial ownership of less than five percent (5%) of
the combined voting power of all issued and outstanding
voting securities of a publicly held corporation whose
stock is traded on a major stock exchange. Also for
purposes of this subsection (a), "Ceridian's business"
shall include business conducted by Ceridian or its
affiliates and any partnership or joint venture in
which Ceridian or its affiliates is a partner or joint
venturer; provided that, "affiliate" as used in this
sentence shall not include any corporation in which
Ceridian has ownership of less than fifteen percent
(15%) of the voting stock.
(b) At its sole option Ceridian may, by written notice to
Executive within 30 days after the effective date of
termination of Executive's employment, waive or limit
the time and/or geographic area in which Executive
cannot engage in competitive activity.
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(c) During the term of the non-competition obligation,
prior to accepting employment with, or agreeing to
provide consulting services to, any firm which offers
products or services in the fields of electronics or
information processing, Executive shall give 30 days
prior written notice to Ceridian. Such written notice
shall describe the proposed employment or consulting
services and the firm to which they will be rendered.
Ceridian's failure to respond or object to such notice
shall not in any way constitute acquiescence or waiver
of Ceridian's rights under this Article VI.
(d) During any period of non-competition pursuant to this
Article VI Ceridian shall pay Executive an amount equal
to the usual rate of Executive's Base Salary in effect
at the time of termination. There shall be credited
against Ceridian's obligation to make such payments any
other payments made by Ceridian to Executive pursuant
to Article IV of this Agreement. In the event that
Ceridian elects, pursuant to subsection (b) of this
Section 6.02, to waive all or any portion of the non-
competition obligation, no payment shall be required by
Ceridian with respect to the portion of the non-
competition period which has been waived.
6.03 Non-Recruitment. For a period of two years following
termination of employment for any reason, Executive will not
initiate or actively participate in any other employer's
recruitment or hiring of Ceridian employees. This provision
shall not preclude Executive from responding to a request
(other than by Executive's employer) for a reference with
respect to an individual's employment qualifications.
6.04 Survival. The obligations of this Article VI shall survive
the expiration or termination of this Agreement.
ARTICLE VII
CHANGE OF CONTROL
7.01 Definitions. For purposes of this Article VII, the
following definitions shall be applied:
(a) "Change of Control" shall mean any of the following
events:
(1) a merger or consolidation to which Parent
Corporation is a party if the individuals and
entities who were stockholders of Parent
Corporation 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 fifty percent (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; or
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(2) 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 Parent Corporation representing
twenty-five percent (25%) or more of the total
combined voting power of Parent Corporation's then
issued and outstanding securities by any person or
entity, or group of associated persons or entities
acting in concert; or
(3) the sale of the properties and assets of Parent
Corporation, substantially as an entirety, to any
person or entity which is not a wholly-owned
subsidiary of Parent Corporation.
(4) the stockholders of Parent Corporation approve any
plan or proposal for the liquidation of Parent
Corporation; or
(5) a change in the composition of the Board at any
time during any consecutive 24 month period such
that the "Continuity Directors" cease for any
reason to constitute at least a seventy percent
(70%) majority of the Board. For purposes of this
clause, "Continuity Directors" means those members
of the Board who either:
(A) were directors at the beginning of such
consecutive 24 month period; or
(B) were elected by, or on the nomination or
recommendation of, at least a two-thirds
(2/3) majority of the then-existing Board.
(b) "Change of Control Actions" shall mean any payment
(including any benefit or transfer of property) in the
nature of compensation, to or for the benefit of
Executive under any arrangement, which is considered
contingent on a Change of Control for purposes of
Section 280G of the Internal Revenue Code. As used in
this definition, the term "arrangement" includes,
without limitation, any agreement between Executive and
Ceridian and any and all of Ceridian's salary, bonus,
incentive, restricted stock, stock option, compensation
or benefit plans, programs or arrangements, and shall
include this Agreement.
(c) "Change of Control Termination" shall mean, with
respect to Executive, any of the following events
occurring within two years after a Change of Control:
(1) Termination of Executive's employment by Ceridian
for any reason other than (A) fraud, (B) theft or
embezzlement of Ceridian assets, (C) intentional
violations of law involving moral turpitude, or
(D) the substantial and continuing failure by
Executive to satisfactorily perform his or her
duties as reasonably assigned to Executive
pursuant to Section 2.02 of Article II of this
Agreement for a period of 60 days after a written
demand for such satisfactory performance which
specifically identifies the manner in which it is
alleged Executive has not satisfactorily performed
such duties.
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(2) Termination of employment with Ceridian by
Executive pursuant to Section 7.02 of this Article
VII. A Change of Control Termination by Executive
shall not, however, include termination by reason
of death.
(d) "Good Reason" shall mean a good faith determination by
Executive, in Executive's reasonable judgment, that any
one or more of the following events has occurred,
without Executive's express written consent, after a
Change of Control:
(1) A change in Executive's reporting
responsibilities, titles or offices as in effect
immediately prior to the Change of Control, or any
removal of Executive from, or any failure to re-
elect Executive to, any of such positions, which
has the effect of materially diminishing
Executive's responsibility or authority;
(2) A reduction by Ceridian in Executive's Base Salary
as in effect immediately prior to the Change of
Control or as the same may be increased from time
to time;
(3) Ceridian requiring Executive to be based anywhere
other than within 25 miles of Executive's job
location at the time of the Change of Control;
(4) Without replacement by plans, programs, or
arrangements which, taken as a whole, provide
benefits to Executive at least reasonably
comparable to those discontinued or adversely
affected, (A) the failure by Ceridian 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 Executive is participating
immediately prior to a Change of Control; or (B)
the taking of any action by Ceridian that would
materially adversely affect Executive's
participation or materially reduce Executive's
benefits under any of such plans, programs or
arrangements;
(5) The failure by Ceridian to provide office space,
furniture, and secretarial support at least
comparable to that provided Executive immediately
prior to the Change of Control or the taking of
any similar action by Ceridian that would
materially adversely affect the working conditions
in or under which Executive performs his or her
employment duties;
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(6) If Executive's primary employment duties are with
a Subsidiary, the sale, merger, contribution,
transfer or any other transaction in conjunction
with which Parent Corporation's ownership interest
in such Subsidiary decreases below the level
specified in Section 1.07 of Article I unless (A)
this Agreement is assigned to the
purchaser/transferee with the provisions of
Article VII in full force and effect and operative
as if a Change of Control has occurred with
respect to the purchaser/transferee as Parent
Corporation immediately after the
purchase/transfer becomes effective, and (B) such
purchaser/transferee has a creditworthiness
reasonably equivalent to Parent Corporation's; or
(7) Any material breach of this Agreement by Ceridian.
(e) "Internal Revenue Code" -- Any reference to a section
of the Internal Revenue Code shall mean that section of
the Internal Revenue Code of 1986, or to the
corresponding section of such Code as from time to time
amended.
7.02 Change of Control Termination Right. For a period of two
years following a Change of Control, Executive shall have
the right, at any time and within Executive's sole
discretion, to terminate employment with Ceridian for Good
Reason. Such termination shall be accomplished by, and
effective upon, Executive giving written notice to Ceridian
of Executive's decision to terminate. Except as otherwise
expressly provided in this Agreement, upon the exercise of
said right, all obligations and duties of Executive under
this Agreement shall be of no further force and effect.
7.03 Change of Control Termination Payment. In the event of a
Change of Control Termination, and subject to the
"Limitation on Change of Control Compensation" contained in
Section 7.04, then, and without further action by the Board,
Compensation Committee or otherwise, Parent Corporation
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 Internal
Revenue 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).
7.04 Limitation on Change of Control Compensation.
Notwithstanding any other provisions of this Agreement or of
any other agreement, contract or understanding heretofore or
hereafter entered into between Ceridian and Executive,
Executive shall not be entitled to receive any Change of
Control Action which would, with respect to Executive,
constitute a "parachute payment" for purposes of Section
280G of the Internal Revenue Code. In the event any Change
of Control Action would, with respect to Executive,
constitute a "parachute payment", Executive shall have the
right to designate those Change of Control Action(s) which
would be reduced or eliminated so that Executive will not
receive a "parachute payment".
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7.05 Interest. In the event Parent Corporation does not make
timely payment in full of the Change of Control Termination
payment described in Section 7.03, Executive shall be
entitled to receive interest on any unpaid amount at the
lower of: (a) prime rate of interest (or such comparable
index as may be adopted) established from time to time by
the Norwest Bank Minneapolis, N.A., Minneapolis, Minnesota;
or (b) the maximum rate permitted under Section 280G(d)(4)
of the Internal Revenue Code.
7.06 Attorneys' Fees. In the event Executive incurs any legal
expense to enforce or defend his or her rights under this
Article VII of this Agreement, or to recover damages for
breach thereof, Executive shall be entitled to recover from
Ceridian any expenses for attorneys' fees and disbursements
incurred.
7.07 Benefits Continuation. In the event of a Change of Control
Termination, Executive (and anyone entitled to claim under
or through Executive) shall, until age 65, be entitled to
receive from Ceridian the same or equivalent health, dental,
accidental death and dismemberment, short and long-term
disability, life insurance coverages, and all other
insurance policies and health and welfare benefits programs,
policies or arrangements, at the same levels and coverages
as Executive was receiving on the day immediately prior to
the Change of Control. To the extent that election of
continuation of any of such coverages, programs, policies,
or arrangements is made available to employees terminating
at age 55 with 15 or more years of service, Executive shall
be required to pay no more for continuation than is required
of such employees on the day immediately prior to the Change
of Control. If no such continuation program is available,
Executive shall be required to pay no more than he/she paid
as an active employee, or if provided by Ceridian at no cost
to employees on the day immediately prior to the Change of
Control, they shall continue to be made available to
Executive on this basis.
ARTICLE VIII
CHANGE OF SUBSIDIARY STATUS
In the event that, prior to a Change of Control: (a) a Subsidiary
is sold, merged, contributed, or in any other manner transferred,
or if for any reason Parent Corporation's ownership interest in
any such Subsidiary falls below the level specified in Section
1.07, (b) Executive's primary employment duties are with the
Subsidiary at the time of the occurrence of such event, and (c)
Executive does not, in conjunction therewith, transfer employment
directly to Parent Corporation or another Subsidiary, then:
(1) If Executive gives his or her written consent to the
assignment of this Agreement to such Subsidiary, or to
the purchaser or new majority interest holder of such
Subsidiary, (and such assignment is accepted) this
Agreement shall remain in full force and effect between
Executive and the assignee, except that the provisions
of Article VII of this Agreement shall become null and
void;
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(2) If such assignment is not accepted by the Subsidiary or
purchaser, then this Agreement shall be deemed to have
been terminated by Ceridian without cause pursuant to
Section 4.03 of Article IV; and
(3) In all other cases, this Agreement shall be deemed
terminated for cause pursuant to Section 4.02 of
Article IV.
ARTICLE IX
GENERAL PROVISIONS
9.01 No Adequate Remedy. The parties declare that it is
impossible to measure in money the damages which will accrue
to either party by reason of a failure to perform any of the
obligations under this Agreement. Therefore, if either
party shall institute any action or proceeding to enforce
the provisions hereof, such party against whom such action
or proceeding is brought hereby waives the claim or defense
that such party has an adequate remedy at law, and such
party shall not urge in any such action or proceeding the
claim or defense that such party has an adequate remedy at
law.
9.02 Successors and Assigns. Except as otherwise provided in
Article VIII, this Agreement shall be binding upon and inure
to the benefit of the successors and assigns of Parent
Corporation and each Subsidiary, whether by way of merger,
consolidation, operation of law, assignment, purchase or
other acquisition of substantially all of the assets or
business of Ceridian, and any such successor or assign shall
absolutely and unconditionally assume all of Ceridian's
obligations hereunder.
9.03 Notices. All notices, requests and demands given to or made
pursuant hereto shall, except as otherwise specified herein,
be in writing and be delivered or mailed to any such party
at its address:
(a) Ceridian Corporation
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Office of General Counsel
(b) In the case of Executive shall be:
At the address listed on the last page of this
Agreement.
Either party may, by notice hereunder, designate a
changed address. Any notice, if mailed properly
addressed, postage prepaid, registered or certified
mail, shall be deemed dispatched on the registered date
or that stamped on the certified mail receipt, and
shall be deemed received within the second business day
thereafter or when it is actually received, whichever
is sooner.
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9.04 Captions. The various headings or captions in this
Agreement are for convenience only and shall not affect the
meaning or interpretation of this Agreement.
9.05 Governing Law. The validity, construction and performance
of this Agreement shall be governed by the laws of the State
of Minnesota and any and every legal proceeding arising out
of or in connection with this Agreement shall be brought in
the appropriate courts of the State of Minnesota, each of
the parties hereby consenting to the exclusive jurisdiction
of said courts for this purpose. The parties hereto
expressly recognize and agree that the implementation of
this Governing Law provision is essential in light of the
fact that Parent Corporation's corporate headquarters and
its principal executive offices are located within the State
of Minnesota, and there is a critical need for uniformity in
the interpretation and enforcement of the employment
agreements between Ceridian and its senior executives.
9.06 Construction. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
9.07 Waivers. No failure on the part of either party to
exercise, and no delay in exercising, any right or remedy
hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder
preclude any other or further exercise thereof or the
exercise of any other right or remedy granted hereby or by
any related document or by law.
9.08 Modification. This Agreement may not be and shall not be
modified or amended except by written instrument signed by
the parties hereto.
9.09 Arbitration. Because the parties recognize that resolving
any future differences in the courts can require a long time
and great expense, Company and Executive agree that their
only remedy for disputes either may have with the other and
that arise out of Executive's employment, or any aspect of
this Agreement, shall be to submit all disputes to final and
binding arbitration in accordance with the Employment
Dispute Resolution Rules of the American Arbitration
Association. The aggrieved party must send a written notice
of claim to the other party by certified mail, return
receipt requested to the address listed in Section 7.03 of
this Agreement. The arbitrator shall apply the law in
accordance with this Agreement, or federal law, or both, as
applicable to the claim(s) asserted.
9.10 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto in
reference to all the matters herein agreed upon. This
Agreement replaces in full all prior employment agreements
or understandings of the parties hereto, and any and all
such prior agreements or understandings are hereby rescinded
by mutual agreement.
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IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first
above written.
EXECUTIVE CERIDIAN CORPORATION
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
Title:Vice President, Organization
Resources
Address:
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