EXHIBIT 10.06
AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment to Executive Employment Agreement, dated as
of May , 1996 (the "Amendment"), is between Ceridian
Corporation and ("Executive"). Ceridian
Corporation and Executive are parties to an Executive Employment
Agreement dated , 199 (the "Agreement"), and desire
to amend that Agreement in the manner provided in this Amendment.
Unless otherwise defined herein, capitalized terms used in this
Amendment have the meanings given to them in the Agreement.
1. In consideration of Executive's continuance in
Executive's employment for the remaining term of the Agreement
and the mutual promises and obligations contained in the
Agreement as modified by this Amendment, the parties hereby agree
to amend Sections 7.01 through 7.05 of the Agreement in their
entirety to read as follows:
"7.01Definitions. For purposes of this Article VII,
the following definitions shall be applied:
(a)"Benefit Plan" means any formal or informal plan,
program or other arrangement heretofore or hereafter
adopted by Ceridian for the direct or indirect
provision of compensation to the Executive (including
groups or classes of participants or beneficiaries of
which the Executive is a member), 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 the Executive.
(b)"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
(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; or
(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.
(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
a Participant 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 Code.
(d)"Change of Control Termination" means, with
respect to Executive, either 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; or
(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 or
Disability.
(e)"Code" means the Internal Revenue Code of 1986,
as amended. Any reference to a section of the Code
shall include the corresponding section of such Code
as from time to time amended.
(f)"Excise Tax" means any applicable federal
excise tax imposed by Section 4999 of the Code.
(g)"Good Reason" means a good faith determination by
Executive, in Executive's sole and absolute 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
(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 thereafter;
(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;
(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.
(g)"Other Agreements" means any agreement,
contract or understanding heretofore or hereafter
entered into between Executive and Ceridian for the
direct or indirect provision of compensation to
Executive.
(h)"Reduced Amount" means the largest amount that
could be received by a Participant as Change of
Control Compensation such that no portion of such
Change of Control Compensation would be subject to
the Excise Tax.
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
3
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 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 or Benefit Plan, 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, Executive's net proceeds of
such Change of Control Compensation would be less than the
amount of Executive's net proceeds resulting from the
payment of the Reduced Amount after reduction for federal
income taxes, then the Change of Control Compensation
payable to Executive 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 Ceridian as of
the date of the applicable Change of Control, and such
determinations shall be binding upon Ceridian and Executive.
If Change of Control Compensation to Executive is limited to
the Reduced Amount, then Executive shall have the right, in
his or her sole discretion, 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 Executive's Change of Control Compensation
be subject to the Excise Tax. If Executive fails to make
make such designation within 30 days of having received
notification that such designation is required, Ceridian
shall make such designations and shall promptly inform
Executive of its actions in such regard.
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) the prime rate of interest (or such
comparable index as may be adopted) established from time to
time by the First Bank National Association, Minneapolis,
Minnesota; or (b) the maximum rate permitted under Section
280G(d)(4) of the Internal Revenue Code."
2. This Amendment shall become 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.
4
In Witness Whereof, the parties have caused this Amendment
to be duly executed and delivered as of the date first written
above.
EXECUTIVE CERIDIAN CORPORATION
By:
[Typed Name]
Title:
Address:
5
