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EXHIBIT 10.3
AMENDMENT NO. 1
TO THE PERSONNEL AGREEMENT
BETWEEN
ARBITRON INC.
AND
CERIDIAN CORPORATION
THIS AMENDMENT NO. 1 TO THE PERSONNEL AGREEMENT by and between Arbitron Inc., a
Delaware Corporation formerly known as Ceridian Corporation ("Arbitron"), and
Ceridian Corporation, a Delaware corporation formerly known as New Ceridian
Corporation ("Ceridian"), is entered into as of April 3, 2001.
WHEREAS, Arbitron and Ceridian entered into a Personnel Agreement dated as of
February 14, 2001 (the "Personnel Agreement");
WHEREAS, the Personnel Agreement provided for the conversion of stock options
and restricted stock based on the relationship between the trading prices of
Arbitron prior to the Distribution Date and Arbitron and Ceridian after the
Distribution Date, so that the intrinsic value of the stock options before the
Distribution Date will be equivalent to the intrinsic value of the stock options
after the Distribution Date;
WHEREAS, on the Distribution Date, Arbitron was removed from the S&P 500 and
Ceridian was added to the S&P 400, this substantially increased the trading
volume and impacted the price of Ceridian before and after the Distribution
Date;
WHEREAS, Arbitron and Ceridian wish to amend the Personnel Agreement to (1)
adjust the stock option conversion formulas for Ceridian employees and retirees,
decedents and certain other former Arbitron employees to remove the external
impact of the large volume of trading in Ceridian's stock as a result of the
changes in the S&P 500 and S&P 400, (2) adjust the restricted stock conversion
formulas to remove the external impact of the large volume of trading in
Ceridian's stock as a result of the changes in the S&P 500 and S&P 400, and (3)
to adjust the Arbitron stock option formulas to reflect the fact that Arbitron
traded on a post reverse spin and post reverse stock split basis after the
Distribution Date;
NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Section 5.4. The text of Section 5.4 shall be deleted in its entirety
and be replaced with the following:
"5.4 Corporation Stock Option Plans. The Corporation shall continue in
effect each stock option plan under which any person holds an
outstanding option to purchase shares of the Corporation's common stock
after the Effective Time. Except as otherwise provided in Section 5.5,
each Ceridian Option held by a person other than a New Ceridian
Optionee, whether or not exercisable as of the Effective Time, shall be
adjusted in accordance with the following rules.
(a) The price to be paid for each share of Arbitron common stock
under the option shall be equal to the product of the per share
exercise price of the Ceridian
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Option and the Arbitron Price Ratio, such product to be rounded
to the nearest whole cent; and.
(b) The number of shares of Arbitron common stock to be issued in
the exchange shall be equal to the quotient obtained by dividing
the number of shares covered by the existing Ceridian Option by
the Arbitron Price Ratio; such quotient to be rounded to the
nearest full share."
2. Section 5.5. The text of Section 5.5 shall be deleted in its entirety
and be replaced with the following:
"5.5 Retiree, Decedent and Other Options. Any Arbitron Option held by
(i) a Former Arbitron Employee or Former New Ceridian Employee who was
entitled to continue benefits as a retired employee of the Corporation
following his or her termination of employment, (ii) a retired
non-employee director of the Corporation, (iii) the successors of an
individual who is deceased, or (iv) a former director of ABR Information
Services, Inc. shall, notwithstanding the preceding provisions of this
article, be converted to separate options to purchase common stock of
Arbitron (an "Arbitron Retiree Option") and New Ceridian (a "New
Ceridian Retiree Option") as follows:
(a) The number of shares subject to each New Ceridian Retiree
Option shall be equal to the product of (i) the number of shares
subject to the related Ceridian Option and (ii) a fraction, the
numerator of which is the exercise price per share of the related
Ceridian Option and the denominator of which is the sum of (x)
the exercise price per share of the New Ceridian retiree Option
plus (y) a fraction, the numerator of which is the exercise price
per share of the Arbitron Retiree Option and the denominator of
which is five, which product shall be rounded to the nearest
whole share.
(b) The exercise price per share of each New Ceridian Retiree
Option shall be equal to the product of (i) New Ceridian
Post-Distribution Price and (ii) a fraction, the numerator of
which is equal to the exercise price per share of the related
Ceridian Option and the denominator of which is the closing price
of Ceridian Common Stock on the last trading day immediately
before the Distribution Date, which product shall be rounded to
the nearest whole cent.
(c) The number of shares subject to each Arbitron Retiree Option
shall be an amount equal to the quotient of the number of shares
subject to each New Ceridian Retiree Option (as determined under
paragraph (a) above) divided by five, which quotient shall be
rounded to the nearest whole share.
(d) The exercise price per share of each Arbitron Retiree Option
shall be equal to the product of (i) the Arbitron
Post-Distribution Stock Price by (ii) a fraction, the numerator
of which is the exercise price per share of the related Ceridian
Option and the denominator of which is the closing price of
Ceridian Common Stock on the last trading day immediately before
the Distribution Date, which product shall be rounded to the
nearest whole cent."
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3. Section 5.7. The text of Section 5.7 shall be deleted in its entirety
and be replaced with the following:
"5.7 Option Definitions. For purposes of this Article,
(a) "Arbitron Post-Distribution Price" shall be the quotient
obtained by dividing the volume-weighted average price of the
common stock of Arbitron during the three consecutive trading
days immediately following the Distribution Date.
(b) "Arbitron Price Ratio" shall be the quotient obtained by
dividing the Arbitron Post-Distribution Price by the Ceridian
Pre-Distribution Price.
(c) "Ceridian Pre-Distribution Price" shall be the
volume-weighted average price of the common stock of the
Corporation during the three consecutive trading days immediately
prior to the Distribution Date.
(d) "New Ceridian Post-Distribution Price" shall be equal to the
opening price of common stock of New Ceridian on the first
trading day immediately following the Distribution Date.
(e) "New Ceridian Price Ratio" shall be the quotient obtained by
dividing the New Ceridian Post-Distribution Price by the closing
price of Ceridian Common Stock on the last trading day
immediately before the Distribution Date."
4. Section 5.9. The text of Section 5.9 shall be deleted in its entirety
and be replaced with the following:
"5.9 Restricted Stock. Before the Effective Time, New Ceridian shall
establish (and the Corporation as sole stockholder of New
Ceridian shall approve) a restricted stock plan that will benefit
the New Ceridian Employees and the members of the board of
directors of New Ceridian who, as of the Effective Time, hold
restricted stock under one or more restricted stock plans of the
Corporation. The shares of New Ceridian common stock issued as a
distribution in respect of such shares of restricted stock shall
remain subject to the same restrictions to which such restricted
shares were subject. In addition, New Ceridian shall, to the
extent that the cessation of employment or of a directorship with
the Corporation at the Effective Time causes the forfeiture of
any such restricted stock, provide for the distribution of shares
of New Ceridian common stock to the affected persons, subject to
the same restrictions to which the forfeited stock was subject,
under the new restricted stock plan. The number of shares of New
Ceridian common stock subject to such replacement award shall be
equal to the product of (i) the number of such forfeited shares
of restricted stock and/or deferred stock (adjusted for the
one-for-five reverse stock split) by (ii) a fraction, the
numerator of which is the Arbitron Post-Distribution Price and
the denominator of which is the New Ceridian Post-Distribution
Price, such product to be rounded to the nearest whole share."
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5. Full Force. Except as amended pursuant to this Agreement, the Personnel
Agreement shall remain in full force and effect in accordance with its
original terms.
6. Definitions. To the extent a term is not defined herein, such term shall
have the meaning provided for in the Personnel Agreement.
7. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts
have been signed by each of the parties and delivered to the other
party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
ARBITRON INC. CERIDIAN CORPORATION
By: /s/ Xxxxxxx X. Xxxx By: Xxxx X. Xxxxxx
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Its: Executive Vice President, Legal and Its: Vice President, General
Business Affairs, Chief Legal Officer Counsel and Secretary
and Secretary
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