CERIDIAN CORPORATION
STOCK OPTION AWARD AGREEMENT
1993 LONG-TERM INCENTIVE PLAN
This Agreement between you, ______________, and Ceridian Corporation (the
"Company") is dated as of OCTOBER 21, 1998 (the "Date of Grant") and evidences
the grant of a Non-Statutory Stock Option (the "Stock Option") to you pursuant
to the 1993 Long-Term Incentive Plan of the Company (the "Plan"). Any
capitalized term used in this Agreement which is defined in the Plan shall have
the same meaning as set forth in the Plan.
1. Effective as of the Date of Grant, and subject to the terms and
conditions of the Plan and this Agreement, the Company has granted to you the
option to purchase from the Company, and the Company has agreed to sell to you,
_________ shares of Common Stock at a price of $54.81 per share (the "Option
Shares"). This Stock Option is comprised of two components: ______ of the
Option Shares will become exercisable as provided in paragraph 3 of this
Agreement and are referred to as "Time-Based Option Shares," and ________ of the
Option Shares will become exercisable as provided in paragraph 4 of this
Agreement and are referred to as "Performance-Based Option Shares."
2. This Stock Option will become void and expire at 5:00 p.m. (Minneapolis
time) on the tenth anniversary of the Date of Grant and may not be exercised
after that time.
3. Except as otherwise expressly provided in paragraphs 5 through 9 of
this Agreement, and provided you have been continuously employed by the Company
or a Subsidiary since the Date of Grant, upon October 21, 1999, this Option
shall become exercisable with respect to one-third of the Time-Based Option
Shares, and upon each succeeding October 21st, the Option shall become
exercisable with respect to an additional one-third of the Time-Based Option
Shares.
4. Except as otherwise expressly provided in paragraphs 5 through 9 of
this Agreement, this Stock Option will become exercisable with respect to the
Performance-Based Option Shares at the time specified in this paragraph 4, but
only if, at the time specified, you have been continuously employed by the
Company or a Subsidiary since the Date of Grant.
(a) This Stock Option will become exercisable with respect to all of
the Performance-Based Option Shares as of February 15, 2001 if the average
closing price of a share of the Company's Common Stock on the New York Stock
Exchange for any 20 consecutive trading days during the period beginning on
October 21, 1998 and ending on January 31, 2001 is greater than $70.00 per
share.
(b) If the condition specified in paragraph 4(a) is not satisfied,
this Stock Option will, nevertheless, become exercisable with regard to all of
the Performance-Based Option Shares as of February 15, 2001 if the Company's
rank for Total Return to Shareholders among S&P 500 Companies during the
Performance Period exceeds the 60th percentile.
(c) If neither of the conditions specified in paragraphs 4(a) and (b)
is satisfied, this Stock Option shall nevertheless become exercisable with
respect to all of the Performance-Based Option Shares on October 21, 2004.
(d) When used in this paragraph 4, the following terms shall have the
meanings indicated:
(1) "TOTAL RETURN TO SHAREHOLDERS" means, with respect to the
Company or any other S&P 500 Company, the total return to a holder of the common
stock of such company as a result of his or her ownership of such common stock
during the Performance Period, such total return (i) to be expressed as a
percentage of an assumed initial investment in such common stock as of October
21, 1998 and (ii) to include both the appreciation in the per share price of
such common stock during the Performance Period and the per share fair market
value of all dividends and distributions paid or distributed by such company
with respect to such common stock during the Performance Period, assuming that
all such dividends and distributions are reinvested in shares of such common
stock at their Fair Market Value on the last trading day of the month in which
the dividend or distribution is paid or distributed. For purposes of
calculating Total Return to Shareholders for the Company or any other S&P 500
Company, the assumed initial investment in such company's common stock as of
October 21, 1998 shall be at the applicable Starting Price, and the value of a
share of such company's common stock at the end of the Performance Period shall
be the applicable Ending Price.
(2) "ENDING PRICE" means, with respect to any S&P 500 Company
(including the Company), the average daily last reported sales price of a share
of such company's common stock as reported in the WALL STREET JOURNAL during the
period January 1, 2001 through January 31, 2001.
(3) "FAIR MARKET VALUE" (i) with respect to the Company has the
same meaning as specified in Section 2.10 of the Plan, and (ii) with respect to
any other S&P 500 Company means the last reported sales price of a share of such
company's common stock on the date in question as reported in the WALL STREET
JOURNAL.
(4) "PERFORMANCE PERIOD" means the period October 21, 1998
through January 31, 2001.
(5) "S&P 500 COMPANIES" means the companies that comprise the
Standard & Poors' 500 Stock Index as it existed on October 21, 1998, and which
are still publicly traded on January 31, 2001.
(6) "STARTING PRICE" means, with respect to any S&P 500 Company
(including the Company), the average daily last reported sales price of a share
of such company's common stock as reported in the WALL STREET JOURNAL during the
period October 1, 1998 through October 21, 1998.
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(e) If there is any change in the corporate structure or shares of
the Company of the types described in Sections 3.2(c) or 4.4 of the Plan, then
the number of Option Shares, the Starting Price and Ending Price specified in
this paragraph 4 and the per share price specified in paragraph 4(a) shall be
appropriately adjusted as contemplated by Sections 3.2(c) and 4.4 of the Plan so
as to prevent reduction or enlargement of your rights under this Agreement.
5. If your employment with the Company and all Subsidiaries is terminated
for Cause (as defined in Section 10.3(b) of the Plan), this Stock Option may not
be exercised after such termination of employment and will be forfeited, and all
of your rights under the Plan and this Agreement will immediately terminate.
6. If your employment with the Company and all Subsidiaries terminates
because of Death or Disability, this Stock Option shall immediately become
exercisable with respect to all of the Time-Based Option Shares, and shall
immediately become exercisable with respect to all of the Performance-Based
Option Shares if the stock price performance condition specified in paragraph
4(a) of this Agreement was satisfied prior to the date of such termination. If
your employment with the Company and all Subsidiaries terminates because of
Retirement, then this Stock Option shall continue to become exercisable (i) with
respect to the Time-Based Option Shares as specified in paragraph 3 of this
Agreement, and (ii) with respect to the Performance-Based Option Shares on the
date specified in paragraph 4(a) of this Agreement only if the stock price
performance condition specified in paragraph 4(a) was satisfied prior to the
date of such termination. To the extent this Stock Option is already exercisable
at the time your employment terminates due to Death, Disability or Retirement,
or becomes exercisable as provided in this paragraph 6, it will remain
exercisable until the date specified in paragraph 2 of this Agreement.
7. If a Change of Control Termination occurs, and if this Stock Option has
been outstanding for at least six months from the Date of Grant, then you shall
have the rights, if any, to accelerated exercisability of this Stock Option as
are specified in Section 12 of the Plan as in effect on the date of the Change
of Control, except that such accelerated exercisability shall be available with
respect to the Performance-Based Option Shares only if the stock price
performance condition specified in paragraph 4(a) of this Agreement was
satisfied prior to the date of such termination.
8. If your employment with the Company and all Subsidiaries terminates for
any reason other than as provided in paragraphs 6 or 7 of this Agreement, you
shall have three months following the date of such termination to exercise this
Stock Option (but in no event after the time it expires as set forth in
paragraph 2) to the extent that you were entitled to exercise it as of the date
of such termination. You will forfeit this Stock Option to the extent it has
not yet become exercisable as of such employment termination date. YOU
EXPRESSLY CONSENT TO THE TREATMENT OF THE PERFORMANCE-BASED OPTION SHARES OF
THIS STOCK OPTION IN THE MANNER SPECIFIED IN PARAGRAPHS 6, 7, AND 8 OF THIS
AGREEMENT AS APPLICABLE, EVEN UNDER CIRCUMSTANCES THAT WOULD OR COULD OTHERWISE
CONSTITUTE "DEATH", "DISABILITY", "RETIREMENT" OR "CHANGE OF CONTROL" AS
DEFINED IN THE PLAN AND THEREBY RESULT IN DIFFERING TREATMENT.
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9. If, at any time during the period that this Stock Option is or may yet
become exercisable in whole or in part, or at any time prior to one year after
the termination of your employment with the Company and all 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 Ceridian 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 notwithstanding any other provision of this Agreement (1) this Stock Option
shall terminate effective the date on which you enter into such activity, unless
terminated sooner by operation of another term of this Agreement or the Plan,
and (2) any gain realized by you from exercising all or any portion of this
Stock Option 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. Should any
provision of this paragraph be held invalid or illegal, such illegality shall
not invalidate the whole of this paragraph, but, rather, the agreement shall be
construed as if it did not contain the illegal part or narrowed to permit its
enforcement, and the rights and obligations of the parties shall be construed
and enforced accordingly. This paragraph does not replace other such agreements
you may have which also remain in effect.
10. 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 paragraph 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. Nothing in the Plan or this Agreement shall confer upon you any right
with respect to continued employment by the Company or any Subsidiary, nor
interfere in any way with the right of the Company or a Subsidiary to terminate
your employment at any time.
12. This Agreement is subject to all of the terms and conditions of the
Plan and, where any questions or matters of interpretation arise, the terms and
conditions of the Plan and the rules of the Committee administering the Plan
shall control.
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13. Neither you nor any other person shall have any rights as a
stockholder with respect to any Option Shares until you or such other person
shall have become a holder of record of such shares and, except as otherwise
provided in Section 4.4 of the Plan, no adjustments shall be made for dividends
or other distributions or rights as to which there is a record date preceding
the date you become the holder of record of such shares.
14. Any notice to be given with respect to this Stock Option, including
without limitation a notice of exercise, shall be addressed to the Company,
Attention: Corporate Treasury, at its principal executive office at 0000 00xx
Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Facsimile No. 000-000-0000, and any
notice to be given to you shall be addressed to you at the address given beneath
your signature below, or at such other address as either party may hereafter
designate in writing to the other.
15. Any notice of stock option exercise must specify the number of shares
with respect to which the Stock Option is being exercised and be accompanied by
either (i) payment in full of the purchase price for the shares exercised or
(ii) a Broker Exercise Notice in form and substance satisfactory to the Company.
The exercise of the Stock Option shall be deemed effective upon receipt by
Corporate Treasury of such notice and payment of the exercise price from the
Participant or the broker or dealer named in the Broker Exercise Notice. Any
such notice will not be deemed given until actual receipt by Corporate Treasury.
In Witness Whereof, Ceridian Corporation and you have executed this
Agreement as of the Date of Xxxxx.
CERIDIAN CORPORATION OPTIONEE
By
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Assistant Secretary [Name of Optionee]
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Address
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