EXHIBIT 10.01
CERIDIAN CORPORATION
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
PARTIES:
CERIDIAN CORPORATION (a Delaware Corporation)
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
and
XXXXXXXX XXXXXXX ("Executive")
Dated as of November 8, 1996
RECITALS
A. Ceridian Corporation and Executive are parties to an
Executive Employment Agreement dated December 13, 1993,
which was amended in accordance with an Amendment to
Executive Employment Agreement dated June 20, 1996 (as so
amended, the "1993 Agreement").
B. Ceridian Corporation wishes to obtain the services of
Executive for a period extending beyond the term of the
1993 Agreement, and the Executive wishes to provide his
or her services for such period, on the terms and
conditions contained in this Amended and Restated
Employment Agreement (the "Agreement").
C. Ceridian Corporation desires reasonable protection of the
Company's Confidential Information (as defined below).
D. Ceridian Corporation desires assurance that Executive
will not compete with the Company (as defined below) or
engage in recruitment of the Company's employees for a
reasonable period of time after termination of
employment, and Executive is willing to refrain from
competition and recruitment.
E. Executive desires to be assured of a minimum Base Salary
(as defined below) from Ceridian (as defined below) for
Executive's services for the term of this Agreement
(unless terminated earlier pursuant to the terms of this
Agreement).
F. 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
1
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.
G. 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 forbearance of options.
H. The parties recognize that in light of the above-
described commitment and forbearance of options, it is
essential that, for the benefit of Ceridian and its
stockholders, provision be made for a Change in Control
Termination 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 Ceridian, although
no such change is now contemplated or foreseen.
I. 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, before withholding for federal, state and
local taxes, exclusive of benefits, bonuses or incentive
payments. "Base Salary" shall not be reduced by salary
reduction contributions made by Ceridian on behalf of
Executive to a cafeteria plan, 401(k) plan or other plan
providing for the deferral of compensation.
1.02 "Board" shall mean the Board of Directors of Ceridian.
1.03 "Cause" shall mean (a) fraud, (b) misrepresentation, (c) theft
or embezzlement of Company 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
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.
1.04 "Ceridian" shall mean Ceridian Corporation and any successor
in interest by way of consolidation, operation of law, merger
or otherwise. "Ceridian" shall not include any Subsidiary.
2
1.05 "Committee" shall mean the Compensation and Human Resources
Committee of the Board.
1.06 "Company" shall mean Ceridian and any Subsidiary (as that term
is defined in Section 1.09).
1.07 "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 the Company 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;
(b) information or material relating to the Company'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 the
Company'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
the Company obtained from another party and which the
Company treats as or designates as being proprietary,
private or confidential, whether or not owned or
developed by the Company.
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.
3
1.08 "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 (5) months.
1.09 "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 Ceridian and/or one or more Subsidiaries;
and (b) any division or business unit (or portion thereof) of
Ceridian or a corporation described in clause (a) of this
Section 1.09.
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 full-time and best efforts
to the Company and to fulfilling the duties of his position as
Chief Executive Officer of Ceridian, which shall include such
duties as may from time to time be assigned him by the Board,
provided that such duties are reasonably consistent with
Executive's education, experience, background and previous
duties as Chief Executive Officer of Ceridian. 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 and VII,
Executive's employment pursuant to this Agreement shall
continue until April 30, 2000. If employment is continued
after April 30, 2000 by mutual agreement, such employment
shall be terminable at will by either party and this Agreement
shall expire.
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 an annual Base Salary of $700,000 through December
31, 1997, and an annual Base Salary of $750,000 thereafter.
3.02 Annual Incentive Bonus. Executive shall participate during
the term of this Agreement in an executive Annual Incentive
Bonus Plan, whose annual payment at "target performance" shall
be 65% of annual Base Salary. Terms for the Annual Incentive
Bonus Plan, including the criteria for "target performance,"
shall be determined annually by the Committee, in its sole
discretion. Any bonus payable to Executive pursuant to the
Annual Incentive Bonus Plan for services rendered hereunder
during calendar year 1999 will be paid to Executive on or
before December 31, 1999.
4
3.03 Long-Term Incentive Awards. As of the date of this Agreement,
Executive shall be granted under the Ceridian Corporation 1993
Long-Term Incentive Plan (as amended through May 8, 1996)
("1993 LTIP") (i) an option to purchase 75,000 shares of
Ceridian Corporation common stock pursuant to a Stock Option
Award Agreement in the form attached hereto as Exhibit A, and
(ii) an option to purchase 150,000 shares of Ceridian
Corporation common stock pursuant to a Stock Option Award
Agreement in the form attached hereto as Exhibit B. Executive
shall also be granted under the 1993 LTIP (as it then exists)
an option to purchase 75,000 shares of Ceridian Corporation
common stock on January 30, 1997 pursuant to a Stock Option
Award Agreement in the form attached hereto as Exhibit C, and
an option to purchase 75,000 shares of Ceridian Corporation
common stock on each of April 30, 1997 and July 31, 1997, each
such award to be made pursuant to a Stock Option Award
Agreement in the form attached hereto as Exhibit D.
3.04 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 during the term of this Agreement, provided that
Executive accounts promptly for such expenses to Ceridian in
the manner prescribed from time to time by Ceridian.
3.05 Post-Retirement Expenses. If Executive's employment with
Ceridian terminates on or after April 30, 2000 or at an
earlier date pursuant to Section 4.05 hereof, Ceridian shall
make available to Executive a $200,000 allowance for post-
retirement perquisites of Executive's choosing. Within 30
days of the date of such termination, Executive shall provide
written notice to Ceridian of payments to be made on his
behalf directly to third-party provider(s) of such
perquisites, and of any Ceridian property such as office
furnishings, artwork or equipment that Executive desires to
purchase. Ceridian will debit against the allowance the total
of payments to be made to such third-party providers and the
fair market value (as determined by Ceridian) of any Ceridian
property that it is willing to sell to Executive and will pay
the balance of the allowance, less applicable withholding
taxes, if any, to Executive within 20 days of its receipt of
Executive's written notice.
ARTICLE IV
EARLY TERMINATION
4.01 Early Termination. Subject to the respective continuing
obligations of the parties pursuant to Articles V, VI, and
VIII, 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. The Board may terminate this Agreement
immediately for Cause by resolution duly adopted by a majority
vote of the entire membership of the Board. 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.
5
4.03 Termination By Board Without Cause. The Board, by resolution
duly adopted by a majority vote of the entire membership of
the Board, may terminate this Agreement and Executive's
employment without Cause on at least 75 days' written notice.
In the event of such termination, compensation shall be paid
as follows:
(a) Executive shall be paid at the usual rate of his annual
Base Salary through the date of termination specified in
the notice, provided, however, that the Board 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 Base Salary;
(b) Executive shall receive (1) within 15 days following
termination, a lump sum payment equivalent to two times
the annual Base Salary in effect for Executive
immediately prior to the date of such notice of
termination, and (2) upon execution and delivery to
Ceridian of a release (in the form attached as Exhibit E)
of all claims against Ceridian, an additional lump sum
payment equivalent to the annual Base Salary in effect
for Executive immediately prior to the date of such
notice of termination. Executive's entitlement to the
lump sum payments described in clauses (1) and (2) of the
preceding sentence shall be unaffected by any waiver or
limitation by Ceridian of the non-competition obligation
contained in Section 6.02.
(c) Executive shall be paid an amount equal to (1) the bonus,
if any, to which Executive would otherwise have become
entitled under the Annual Incentive Bonus Plan as 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 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(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.
(d) Executive's rights and benefits under any stock option
award granted prior to the date of this Agreement shall
become fully vested at termination and all such stock
options shall be immediately and fully exercisable.
4.04 Termination By Executive. Executive may terminate this
Agreement and Executive's employment without Cause on at least
75 days' written notice to Ceridian. In the event of such
termination, Executive shall be paid at the usual rate of his
annual Base Salary through the date of termination specified
in such notice (but not to exceed 75 days). The Board shall
have the option, following receipt of such notice, of making
termination of the Agreement and Executive's employment
effective immediately, in which case Executive shall be paid a
lump sum representing the value of 75 days' worth of Base
Salary.
6
4.05 Termination to Retain Designated Successor. If the Committee
makes a good faith determination during the term of this
Agreement that a person who has been designated by the non-
employee members of the Board as the intended successor to
Executive as Chief Executive Officer of Ceridian (the
"Successor") will accept such position only if his or her
employment as Chief Executive Officer of Ceridian becomes
effective immediately, the Committee shall so inform Executive
and Executive shall promptly notify the Committee of his
retirement as an officer and director of Ceridian. Upon the
Committee's receipt of Executive's retirement notice, this
Agreement and Executive's employment hereunder shall be
terminated. In the event of such termination, compensation
shall be paid as follows:
(a) Executive shall be paid at the usual rate of his annual
Base Salary until the later of (1) the end of the
calendar year in which such termination occurs, or (2) 75
days after such termination occurs;
(b) Executive shall be paid an amount equal to the bonus, if
any, to which Executive would otherwise have become
entitled under the Annual Incentive Bonus Plan as 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 "target
performance" goals had been achieved. The amount payable
pursuant to this Section 4.05(b) shall ordinarily be paid
at the time such bonus would have been paid had Executive
remained employed for the full fiscal year, but will be
paid immediately prior to the end of the calendar year in
which such termination occurred if Executive so requests.
(c) Executive shall be entitled to receive the payment
specified in Section 3.05 hereof.
(d) For purposes of any stock option or restricted stock
award or any other employee benefit plan existing on the
date of such termination, Executive's termination
pursuant to this Section 4.05 shall be deemed a voluntary
termination without Cause by Executive, and his rights
and benefits under such awards or plans in light of such
termination shall be determined in accordance with the
terms of the related award agreements or plans.
4.06 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 under the Annual Incentive
Bonus Plan for the year in which termination occurs had
"target performance" 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
7
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 4.06(c) below.
(b) In the event of Executive's 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 duties occurs.
(c) In the event of termination by reason of Executive's
death or Disability, Ceridian shall pay to Executive an
amount equal to (1) the amount Executive would have
received under the Annual Incentive Bonus Plan for the
year in which termination occurs had "target performance"
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.
4.07 Pension Supplement. If the Board terminates Executive's
employment pursuant to Section 4.03, Ceridian shall provide to
Executive, out of its general assets, a monthly supplemental
retirement benefit in an amount equal to the actuarial
equivalent of the difference, if any, between:
(a) the monthly benefit to which Executive would have been
entitled under the defined benefit pension plan or plans
in which he participated immediately prior to his
termination of employment if (1) an amount equivalent to
three times the annual Base Salary were taken into
account for purposes of determining his "final average
pay" or similar term (as then defined under the terms of
such plan or plans and determined without regard to the
limitation on the total amount of compensation that can
be taken into account under such plan or plans) for
either (A) the year in which Executive's termination of
employment occurred; or (B) the prior full year,
whichever provides the highest total final average pay;
and (2) Executive received one year of additional service
credit under any such plan for each year of Base Salary
to which Executive is entitled under clauses (1) and (2)
of Section 4.03(b);
(b) and the amount to which Executive is, in fact, entitled
under such plan or plans.
The benefit calculated under this Section 4.07 shall be paid
at the same time and in the same form as the benefit under the
plan with respect to which such calculation is made.
4.08 Entire Termination Payment. The compensation provided for in
this Article IV for early termination of this Agreement shall
constitute Executive's sole remedy for any 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.
8
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 its
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 the
vesting 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,
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.
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 in the attached Exhibit F and constituting the
written notification of its Subdivision 3.
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
9
business, which were conceived, made or written prior to the
date of this Agreement and which are excluded from this
Agreement.
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) the Company's business is conducted on a
worldwide basis, and (d) provision for non-competition and
non-recruitment obligations by Executive is critical to the
Company's continued economic well-being and protection of the
Company'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 executive of any other
firm or entity, engage in any commercial activity in
competition with any part of the Company's business as
conducted as of the date of such termination of
employment or with any part of the Company'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 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), "the Company's business"
shall include business conducted by the Company or its
affiliates and any partnership or joint venture in which
the Company or its affiliates is a partner or joint
venturer; provided that, "affiliate" as used in this
sentence shall not include any corporation in which the
Company 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.
(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
10
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 the Company's executives. 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) "Benefit Plan" means any formal or informal plan, program
or other arrangement heretofore or hereafter adopted by
the Company 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 Ceridian is a
party if the individuals and entities who were
stockholders of Ceridian 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; or
11
(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
Ceridian representing 25% or more of the total
combined voting power of Ceridian'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 Ceridian,
substantially as an entirety, to any person or
entity which is not a wholly-owned subsidiary of
Ceridian; or
(4) the stockholders of Ceridian approve any plan or
proposal for the liquidation of Ceridian; 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 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 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
Executive 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.
12
(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) 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
Ceridian'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
13
Article VII in full force and effect and operative
as if a Change of Control had occurred with respect
to the purchaser/transferee immediately after the
purchase/transfer becomes effective, and (B) such
purchaser/transferee has a creditworthiness
reasonably equivalent to Ceridian'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 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, Ceridian 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
14
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 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 Ceridian 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."
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 at
that time made available to employees terminating at age 55
with fifteen 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 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.
7.08 Pension Supplement.
(a) In the event of a Change of Control Termination, Ceridian
shall, within five days, make a lump sum payment to
Executive in an amount equal to the actuarial equivalent
of the difference, if any, between:
(1) the monthly benefit to which Executive would have
been entitled under the defined benefit pension plan
or plans in which he participated immediately prior
to his Change of Control Termination if the amount
of payment to which Executive is entitled under
Section 7.03 were taken into account for purposes of
15
determining his "final average pay" or similar term
(as then defined under the terms of such plan or
plans and determined without regard to the
limitation on the total amount of compensation that
can be taken into account under such plan or plans)
for either (A) the year in which the Change of
Control Termination occurred; or (B) the prior full
year, whichever provides the highest total final
average pay; and
(2) the amount to which Executive is, in fact, entitled
under such plan or plans.
For purposes of determining actuarial equivalencies for
the preceding sentence, the actuarial factors specified
in the particular plan or plans with respect to which the
determination is being made shall be applied.
(b) In the event of a Change of Control occurring after
Executive has become entitled to receive a pension
supplement under Section 4.07, Ceridian shall, within
five days of the Change of Control, make a lump sum
payment equivalent to the then present value of any such
vested future benefits. Said lump sum payment shall
constitute full satisfaction of Executive's entitlement
under said Section 4.07.
ARTICLE VIII
GENERAL PROVISIONS
8.01 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.
8.02 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the successors and assigns of
Ceridian, 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.
8.03 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 shown below:
(a) If to Ceridian:
Ceridian Corporation
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
16
Attention: Office of General Counsel
(b) If to Executive:
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.
8.04 Captions. The various headings or captions in this Agreement
are for convenience only and shall not affect the meaning or
interpretation of this Agreement.
8.05 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
Ceridian'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.
8.06 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.
8.07 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.
8.08 Modification. This Agreement may not be and shall not be
modified or amended except by written instrument signed by the
parties hereto.
8.09 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.
17
8.10 Arbitration. Because the parties recognize that resolving any
future differences in the courts can require a long time and
great expense, Ceridian 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 8.03 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.
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.
XXXXXXXX XXXXXXX CERIDIAN CORPORATION
/s/ Xxxxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxx
Title:Chairman, Compensation
Committee
Date:
Address:
18
EXHIBIT A
CERIDIAN CORPORATION
EMPLOYEE NON-STATUTORY STOCK OPTION
AWARD AGREEMENT
1993 Long-Term Incentive Plan
This Agreement is between Ceridian Corporation (the "Company") and
Xxxxxxxx Xxxxxxx (the "Participant") as of November 8, 1996 (the
"Date of Grant") pursuant to the 1993 Long-Term Incentive Plan of
the Company (the "Plan") to evidence the grant of a Non-Statutory
Stock Option (the "Stock Option") to the Participant pursuant to
the Plan. Any capitalized term used herein which is defined in the
Plan shall have the same meaning as set forth therein.
1. Effective as of the Date of Grant, the Company has granted to
the Participant the option to purchase from the Company, and
the Company has agreed to sell to the Participant, 75,000
shares of Common Stock at a price of $49.00 per share (the
"Option Shares").
2. This Stock Option shall become void and expire at midnight
(Minneapolis time) on the tenth anniversary of the Date of
Grant and may not be exercised after that time.
3. Subject to the provisions of paragraphs 4, 5, 6 and 7, and
provided the Participant has been continuously employed by the
Company or a Subsidiary since the Date of Grant, on November
8, 1997, this Stock Option shall become exercisable with
respect to one-third of the Option Shares, and upon each
succeeding November 8 this Stock Option shall become
exercisable with respect to an additional one-third of the
Option Shares.
4. If Participant's employment should be terminated by the
Company or any Subsidiary for Cause (as defined in Section
1.03 of the Amended and Restated Executive Employment
Agreement, dated as of November 8, 1996, between Executive and
the Company (the "Employment Agreement")), this Stock Option
may not be exercised after such termination of employment, and
all rights of the Participant under the Plan and this
Agreement will immediately terminate.
5. If the Participant's employment with the Company and all
Subsidiaries should terminate by reason of death or
Disability, the Stock Option shall become immediately
exercisable in full and will remain exercisable for the period
specified in paragraph 2 of this Agreement.
6. If the Participant's employment with the Company and all
Subsidiaries should terminate by reason of Retirement, the
Stock Option shall continue to become exercisable in
accordance with the terms of this Agreement and the Plan, and
may be exercised at any time before it becomes void and
expires as set forth in paragraph 2 hereof.
7. Subject to paragraph 8 hereof, if the Participant's employment
with the Company and all Subsidiaries should terminate for any
reason other than as provided in paragraphs 4, 5 and 6 hereof,
the Participant shall forfeit any portion of the Stock Option
that has not yet become exercisable as of the employment
termination date. To the extent that the Participant was
entitled to exercise the Stock Option as of the date of such
termination, the Stock Option will remain exercisable for a
period of 90 days after the date of such termination (but in
no event after the time it becomes void and expires as set
forth in paragraph 2 hereof).
8. If a Change of Control occurs, and if this Stock Option has
been outstanding for at least three months from the Date of
Grant, then the Participant 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.
9. Nothing in the Plan or this Agreement shall confer upon the
Participant any right with respect to continuance of
employment by the Company or any Subsidiary, nor interfere in
any way with the right of the Company or a Subsidiary to
terminate the Participant's employment at any time.
10. (a) Except as provided in paragraph 10(b) below, this Option
grant, the Stock Option forming a part thereof, and the
Participant's rights under this Agreement shall be
nontransferable (i.e., may not be sold, pledged, donated or
otherwise assigned or transferred) by the Participant, either
voluntarily or involuntarily, except by will or by applicable
law, and any attempt to do so shall void this Stock Option
grant and Agreement. Except as provided in paragraph 10(b)
below, this Stock Option shall be exercisable during the
Participant's lifetime only by the Participant or by the
Participant's guardian or other legal representative.
(b) This Stock Option and the Participant's rights under this
Agreement may be transferred by the Participant to (i) the
spouse, ex-spouse, children, step-children or grandchildren of
the Participant (the "Family Members"), (ii) a trust or trusts
for the exclusive benefit of such Family Members, (iii) a
partnership in which such Family Members are the only
partners, or (iv) such other persons or entities as the
Committee, in its discretion, may permit, provided that (1)
there may be no consideration for such a transfer (other than
the possible receipt of an ownership interest in an entity to
which such a transfer is made), (2) timely written notice of
the transfer must be provided to the Company by the
Participant, and (3) subsequent transfers of this Stock Option
are prohibited except for those in accordance with paragraph
10(a) above. Following transfer, this Stock Option and the
rights of any transferee with respect thereto shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to the transfer, including that
the events of termination of employment as provided in this
Agreement shall continue to be applied with respect to the
Participant, with the transferee bound by the consequences of
any such termination of employment as specified in this
Agreement. The Company shall be under no obligation to
provide notice of termination of the Participant's employment
to any transferee of this Stock Option. Notwithstanding any
transfer of this Stock Option, the Participant shall remain
subject to and liable for any employment-related taxes in
connection with the exercise of this Stock Option.
2
11. Neither the Participant nor any other person shall have any
rights as a stockholder with respect to any Option Shares
until the Participant or 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 the
Participant becomes the holder of record of such shares.
12. This Agreement is subject to all of the terms and conditions
of the Plan and, where any questions or interpretations arise,
the terms and conditions of the Plan and the rules of the
Committee administering the Plan shall control.
13. 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 in Minneapolis, Minnesota and
any notice to be given to the Participant shall be addressed
to the Participant at the address given beneath the
Participant's signature hereto, or at such other address as
either party may hereafter designate in writing to the other.
14. 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 has executed this
Agreement by duly authorized signature and the Participant has
signed this Agreement effective as of the date first written above.
CERIDIAN CORPORATION PARTICIPANT
By
Secretary Xxxxxxxx Xxxxxxx
PARTICIPANT'S MAILING ADDRESS
3
EXHIBIT B
CERIDIAN CORPORATION
EMPLOYEE NON-STATUTORY STOCK OPTION
AWARD AGREEMENT
1993 Long-Term Incentive Plan
This Agreement is between Ceridian Corporation (the "Company") and
Xxxxxxxx Xxxxxxx (the "Participant") as of November 8, 1996 (the
"Date of Grant") pursuant to the Ceridian Corporation 1993 Long-
Term Incentive Plan (the "Plan") to evidence the grant of a Non-
Statutory Stock Option (the "Stock Option") to the Participant
pursuant to the Plan. Any capitalized term used herein 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, the Company has granted to
the Participant the option to purchase from the Company, and
the Company has agreed to sell to the Participant, 150,000
shares of Common Stock at a price of $49.00 per share (the
"Option Shares").
2. This Stock Option shall become void and expire at midnight
(Minneapolis time) on the tenth anniversary of the Date of
Grant and may not be exercised after that time.
3. Subject to the provisions of paragraphs 4 through 8 of this
Agreement, and provided the Participant has been continuously
employed by the Company or a Subsidiary since the Date of
Grant, this Stock Option shall become exercisable with respect
to all of the Option Shares on November 8, 2003.
4. Subject to paragraphs 5 through 8 of this Agreement, the
exercisability of all of the Option Shares shall be
accelerated to April 30, 2000 if, in connection with
Participant's Retirement, the conditions specified in
subparagraphs 4(a) and (b) are satisfied on that date.
(a) The successor to Participant as chief executive officer
of the Company shall have been designated by a majority
vote of the non-employee members of the Board and such
person shall be employed by the Company (or one of its
Subsidiaries).
(b) 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 180 day period ending
April 28, 2000 must be greater than or equal to $70.00.
The per share price specified in subparagraph 4(b) shall be
subject to appropriate adjustment as provided in Section
3.2(a) of the Plan so as to prevent diminution or enlargement
of Participant's rights hereunder if events of the type
specified in Section 3.2(c)of the Plan (such as stock splits
or stock dividends) occur.
5. If Participant's employment should be terminated by the
Company or any Subsidiary for Cause (as defined in Section
1.03 of the Amended and Restated Executive Employment
Agreement, dated as of November 8, 1996, between Executive and
the Company (the "Employment Agreement")), this Stock Option
may not be exercised after such termination of employment, and
all rights of the Participant under the Plan and this
Agreement will immediately terminate.
6. (a) Subject to paragraph 8 hereof, if Participant's
employment with the Company terminates pursuant to Section
4.05 of the Employment Agreement, and if the person specified
in subparagraph 4(a) hereof is employed by the Company on such
termination date, then the exercisability of some or all of
the Option Shares may be accelerated. The portion of the
Option Shares as to which exercisability shall be accelerated
pursuant to this paragraph 6 (referred to herein as the
"Accelerated Exercisability Shares") shall be determined in
accordance with the following formula:
Accelerated Exercisability Ratio x Option Shares = Accelerated
Exercisability Shares
where the Accelerated Exercisability Ratio shall be determined
by dividing (a) the difference between (i) the average closing
price of a share of the Company's common stock on the New York
Stock Exchange for the 20 consecutive trading days ending the
day before the date Participant's employment terminates
pursuant to Section 4.05 of the Employment Agreement (the
"Average Price") and (ii) the Stock Option exercise price
specified in paragraph 1 hereof (the "Exercise Price") by (b)
the difference between (i) $70.00 and (ii) the Exercise Price.
Notwithstanding the foregoing, the Accelerated Exercisability
Ratio shall under no circumstances be more than 1.00, and
shall be zero if the increase from the Exercise Price to the
Average Price reflects a compound annualized rate of
appreciation for the time period from the Date of Grant to
Participant's employment termination date of less than 11%.
(b) To illustrate the operation of subparagraph 6(a) hereof,
if Participant's employment with the Company terminates on
November 8, 1998 pursuant to Section 4.05 of the Employment
Agreement, if the average closing price of a share of the
Company's common stock on the New York Stock Exchange for the
20 consecutive trading days ending November 7, 1998 is $63.00
(which reflects a compound annualized rate of appreciation
from the Date of Grant to November 8, 1998 of more than 11%),
and if the condition set forth in subparagraph 4(a) is then
satisfied, 100,000 of the Option Shares would be subject to
accelerated exercisability, computed as follows:
($63.00 - $49.00) x 150,000 = 100,000
($70.00 - $49.00)
7. Subject to paragraph 8 hereof, if the Participant's employment
with the Company and all Subsidiaries terminates for any
reason other than as provided in paragraphs 5 and 6 hereof,
the Participant shall forfeit any portion of the Stock Option
that has not yet become exercisable as of the employment
termination date. To the extent that the Participant was
entitled to exercise the Stock Option as of the date of such
termination, the Stock Option will remain exercisable for the
period specified in paragraph 2 of this Agreement. The
Participant expressly consents to any amendment of Sections
10.1(a) and 10.2(a) of the Plan that would permit the
Committee to provide in an agreement evidencing the grant of
an Option under the Plan for different treatment of such an
Option upon termination of employment due to death, Disability
or Retirement than is specified in Sections 10.1(a) and
10.2(a) of the Plan, and Participant further expressly
consents to the treatment of the Stock Option granted
hereunder in the manner specified in paragraphs 6 and 7 of
this Agreement in the event of his death or under
circumstances that would or could otherwise constitute
"Disability" or "Retirement" as defined in the Plan.
8. If (i) a Change of Control occurs, (ii) this Stock Option has
been outstanding for at least three months from the Date of
Grant, and (iii) the average closing price of a share of the
Company's common stock on the New York Stock Exchange during
any 20 consecutive trading days during the 180 day period
ending on the date of the Change of Control has been greater
than or equal to $70.00, then and only then will the
Participant have the rights, if any, to accelerated
exercisability of this Stock Option as are specified in
Section 12.2(a) of the Plan as in effect on the date of the
Change of Control.
2
9. Nothing in the Plan or this Agreement shall confer upon the
Participant any right with respect to continuance of
employment by the Company or any Subsidiary, nor interfere in
any way with the right of the Company or a Subsidiary to
terminate the Participant's employment at any time.
10. (a) Except as provided in paragraph 10(b) below, this Option
grant, the Stock Option forming a part thereof, and the
Participant's rights under this Agreement shall be
nontransferable (i.e., may not be sold, pledged, donated or
otherwise assigned or transferred) by the Participant, either
voluntarily or involuntarily, except by will or by applicable
law, and any attempt to do so shall void this Stock Option
grant and Agreement. Except as provided in paragraph 10(b)
below, this Stock Option shall be exercisable during the
Participant's lifetime only by the Participant or by the
Participant's guardian or other legal representative.
(b) This Stock Option and the Participant's rights under this
Agreement may be transferred by the Participant to (i) the
spouse, ex-spouse, children, step-children or grandchildren of
the Participant (the "Family Members"), (ii) a trust or trusts
for the exclusive benefit of such Family Members, (iii) a
partnership in which such Family Members are the only
partners, or (iv) such other persons or entities as the
Committee, in its discretion, may permit, provided that (1)
there may be no consideration for such a transfer (other than
the possible receipt of an ownership interest in an entity to
which such a transfer is made), (2) timely written notice of
the transfer must be provided to the Company by the
Participant, and (3) subsequent transfers of this Stock Option
are prohibited except for those in accordance with paragraph
10(a) above. Following transfer, this Stock Option and the
rights of any transferee with respect thereto shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to the transfer, including that
the events of termination of employment as provided in this
Agreement shall continue to be applied with respect to the
Participant, with the transferee bound by the consequences of
any such termination of employment as specified in this
Agreement. The Company shall be under no obligation to
provide notice of termination of the Participant's employment
to any transferee of this Stock Option. Notwithstanding any
transfer of this Stock Option, the Participant shall remain
subject to and liable for any employment-related taxes in
connection with the exercise of this Stock Option.
11. Neither the Participant nor any other person shall have any
rights as a stockholder with respect to any Option Shares
until the Participant or 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 the
Participant becomes the holder of record of such shares.
12. Except as provided in paragraphs 7 and 8 of this Agreement,
this Agreement is subject to all of the terms and conditions
of the Plan and, where any questions or interpretations arise,
the terms and conditions of the Plan and the rules of the
Committee administering the Plan shall control.
13. 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 in Minneapolis, Minnesota and
any notice to be given to the Participant shall be addressed
to the Participant at the address given beneath the
Participant's signature hereto, or at such other address as
either party may hereafter designate in writing to the other.
14. 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
3
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 has executed this
Agreement by duly authorized signature and the Participant has
signed this Agreement effective as of the date first written above.
CERIDIAN CORPORATION PARTICIPANT
By
Secretary Xxxxxxxx Xxxxxxx
PARTICIPANT'S MAILING ADDRESS
4
EXHIBIT C
CERIDIAN CORPORATION
EMPLOYEE NON-STATUTORY STOCK OPTION
AWARD AGREEMENT
1993 Long-Term Incentive Plan
This Agreement is between Ceridian Corporation (the "Company") and
Xxxxxxxx Xxxxxxx (the "Participant") as of January 30, 1997 (the
"Date of Grant") pursuant to the 1993 Long-Term Incentive Plan of
the Company (the "Plan") to evidence the grant of a Non-Statutory
Stock Option (the "Stock Option") to the Participant pursuant to
the Plan. Any capitalized term used herein which is defined in the
Plan shall have the same meaning as set forth therein.
1. Effective as of the Date of Grant, the Company has granted to
the Participant the option to purchase from the Company, and
the Company has agreed to sell to the Participant, 75,000
shares of Common Stock at a price of $37.00 per share (the
"Option Shares").
2. This Stock Option shall become void and expire at midnight
(Minneapolis time) on the tenth anniversary of the Date of
Grant and may not be exercised after that time.
3. Subject to the provisions of paragraphs 4, 5, 6 and 7, and
provided the Participant has been continuously employed by the
Company or a Subsidiary since the Date of Grant, on January
30, 1998 this Stock Option shall become exercisable with
respect to one-third of the Option Shares, and upon each
succeeding January 30 this Stock Option shall become
exercisable with respect to an additional one-third of the
Option Shares.
4. If Participant's employment should be terminated by the
Company or any Subsidiary for Cause (as defined in Section
1.03 of the Amended and Restated Executive Employment
Agreement, dated as of November 8, 1996, between Executive and
the Company (the "Employment Agreement")), this Stock Option
may not be exercised after such termination of employment, and
all rights of the Participant under the Plan and this
Agreement will immediately terminate.
5. If the Participant's employment with the Company and all
Subsidiaries should terminate by reason of death or Disability
or pursuant to Section 4.05 of the Employment Agreement, the
Stock Option shall become immediately exercisable in full and
will remain exercisable for the period specified in paragraph
2 of this Agreement.
6. Subject to paragraph 7 hereof, if the Participant's employment
with the Company and all Subsidiaries of the Company should
terminate for any reason other than as provided in paragraphs
4 and 5 hereof, the Participant shall forfeit any portion of
the Stock Option that has not yet become exercisable as of the
employment termination date. To the extent that the
Participant was entitled to exercise the Stock Option as of
the date of such termination, the Stock Option will remain
exercisable for the period specified in paragraph 2 of this
Agreement. The Participant expressly consents to any
amendment of Section 10.2(a) of the Plan that would permit the
Committee to provide in an agreement evidencing the grant of
an Option under the Plan for different treatment of such an
Option upon termination of employment due to Retirement than
is specified in Section 10.2(a) of the Plan, and Participant
further expressly consents to the treatment of the Stock
Option granted hereunder in the manner specified in paragraphs
5 and 6 of this Agreement under circumstances that would or
could otherwise constitute "Retirement" as defined in the
Plan.
7. If a Change of Control occurs, and if this Stock Option has
been outstanding for at least three months from the Date of
Grant, then the Participant 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.
8. Nothing in the Plan or this Agreement shall confer upon the
Participant any right with respect to continuance of
employment by the Company or any Subsidiary, nor interfere in
any way with the right of the Company or a Subsidiary to
terminate the Participant's employment at any time.
9. (a) Except as provided in paragraph 9(b) below, this Option
grant, the Stock Option forming a part thereof, and the
Participant's rights under this Agreement shall be
nontransferable (i.e., may not be sold, pledged, donated or
otherwise assigned or transferred) by the Participant, either
voluntarily or involuntarily, except by will or by applicable
law, and any attempt to do so shall void this Stock Option
grant and Agreement. Except as provided in paragraph 9(b)
below, this Stock Option shall be exercisable during the
Participant's lifetime only by the Participant or by the
Participant's guardian or other legal representative.
(b) This Stock Option and the Participant's rights under this
Agreement may be transferred by the Participant to (i) the
spouse, ex-spouse, children, step-children or grandchildren of
the Participant (the "Family Members"), (ii) a trust or trusts
for the exclusive benefit of such Family Members, (iii) a
partnership in which such Family Members are the only
partners, or (iv) such other persons or entities as the
Committee, in its discretion, may permit, provided that (1)
there may be no consideration for such a transfer (other than
the possible receipt of an ownership interest in an entity to
which such a transfer is made), (2) timely written notice of
the transfer must be provided to the Company by the
Participant, and (3) subsequent transfers of this Stock Option
are prohibited except for those in accordance with paragraph
9(a) above. Following transfer, this Stock Option and the
rights of any transferee with respect thereto shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to the transfer, including that
the events of termination of employment as provided in this
Agreement shall continue to be applied with respect to the
Participant, with the transferee bound by the consequences of
any such termination of employment as specified in this
Agreement. The Company shall be under no obligation to
provide notice of termination of the Participant's employment
to any transferee of this Stock Option. Notwithstanding any
transfer of this Stock Option, the Participant shall remain
subject to and liable for any employment-related taxes in
connection with the exercise of this Stock Option.
10. Neither the Participant nor any other person shall have any
rights as a stockholder with respect to any Option Shares
until the Participant or 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 the
Participant becomes the holder of record of such shares.
11. Except as provided in paragraph 6 of this Agreement, this
Agreement is subject to all of the terms and conditions of the
Plan and, where any questions or interpretations arise, the
terms and conditions of the Plan and the rules of the
Committee administering the Plan shall control.
12. 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 in Minneapolis, Minnesota and
any notice to be given to the Participant shall be addressed
2
to the Participant at the address given beneath the
Participant's signature hereto, or at such other address as
either party may hereafter designate in writing to the other.
13. 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 has executed this
Agreement by duly authorized signature and the Participant has
signed this Agreement effective as of the date first written above.
CERIDIAN CORPORATION PARTICIPANT
By
Secretary Xxxxxxxx Xxxxxxx
PARTICIPANT'S MAILING ADDRESS
3
EXHIBIT D
CERIDIAN CORPORATION
EMPLOYEE NON-STATUTORY STOCK OPTION
AWARD AGREEMENT
1993 Long-Term Incentive Plan
This Agreement is between Ceridian Corporation (the "Company") and
Xxxxxxxx Xxxxxxx (the "Participant") as of [April 30, 1997] [July
31, 1997] (the "Date of Grant") pursuant to the 1993 Long-Term
Incentive Plan of the Company (the "Plan") to evidence the grant of
a Non-Statutory Stock Option (the "Stock Option") to the
Participant pursuant to the Plan. Any capitalized term used herein
which is defined in the Plan shall have the same meaning as set
forth therein.
1. Effective as of the Date of Grant, the Company has granted to
the Participant the option to purchase from the Company, and
the Company has agreed to sell to the Participant, 75,000
shares of Common Stock at a price of $[FMV on Date of Grant]
per share (the "Option Shares").
2. This Stock Option shall become void and expire at midnight
(Minneapolis time) on the tenth anniversary of the Date of
Grant and may not be exercised after that time.
3. Subject to the provisions of paragraphs 4, 5, 6 and 7, and
provided the Participant has been continuously employed by the
Company or a Subsidiary since the Date of Grant, on April 30,
2000 this Stock Option shall become exercisable with respect
to all of the Option Shares.
4. If Participant's employment should be terminated by the
Company or any Subsidiary for Cause (as defined in Section
1.03 of the Amended and Restated Executive Employment
Agreement, dated as of November 8, 1996, between Executive and
the Company (the "Employment Agreement")), this Stock Option
may not be exercised after such termination of employment, and
all rights of the Participant under the Plan and this
Agreement will immediately terminate.
5. If the Participant's employment with the Company and all
Subsidiaries should terminate by reason of death or Disability
or pursuant to Section 4.05 of the Employment Agreement, the
Stock Option shall become immediately exercisable in full and
will remain exercisable for the period specified in paragraph
2 of this Agreement.
6. Subject to paragraph 7 hereof, if the Participant's employment
with the Company and all Subsidiaries of the Company should
terminate for any reason other than as provided in paragraphs
4 and 5 hereof, the Participant shall forfeit any portion of
the Stock Option that has not yet become exercisable as of the
employment termination date. To the extent that the
Participant was entitled to exercise the Stock Option as of
the date of such termination, the Stock Option will remain
exercisable for the period specified in paragraph 2 of this
Agreement. The Participant expressly consents to any
amendment of Section 10.2(a) of the Plan that would permit the
Committee to provide in an agreement evidencing the grant of
an Option under the Plan for different treatment of such an
Option upon termination of employment due to Retirement than
is specified in Section 10.2(a) of the Plan, and Participant
further expressly consents to the treatment of the Stock
Option granted hereunder in the manner specified in paragraphs
5 and 6 of this Agreement under circumstances that would or
could otherwise constitute "Retirement" as defined in the
Plan.
7. If a Change of Control occurs, and if this Stock Option has
been outstanding for at least three months from the Date of
Grant, then the Participant 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.
8. Nothing in the Plan or this Agreement shall confer upon the
Participant any right with respect to continuance of
employment by the Company or any Subsidiary, nor interfere in
any way with the right of the Company or a Subsidiary to
terminate the Participant's employment at any time.
9. (a) Except as provided in paragraph 9(b) below, this Option
grant, the Stock Option forming a part thereof, and the
Participant's rights under this Agreement shall be
nontransferable (i.e., may not be sold, pledged, donated or
otherwise assigned or transferred) by the Participant, either
voluntarily or involuntarily, except by will or by applicable
law, and any attempt to do so shall void this Stock Option
grant and Agreement. Except as provided in paragraph 9(b)
below, this Stock Option shall be exercisable during the
Participant's lifetime only by the Participant or by the
Participant's guardian or other legal representative.
(b) This Stock Option and the Participant's rights under this
Agreement may be transferred by the Participant to (i) the
spouse, ex-spouse, children, step-children or grandchildren of
the Participant (the "Family Members"), (ii) a trust or trusts
for the exclusive benefit of such Family Members, (iii) a
partnership in which such Family Members are the only
partners, or (iv) such other persons or entities as the
Committee, in its discretion, may permit, provided that (1)
there may be no consideration for such a transfer (other than
the possible receipt of an ownership interest in an entity to
which such a transfer is made), (2) timely written notice of
the transfer must be provided to the Company by the
Participant, and (3) subsequent transfers of this Stock Option
are prohibited except for those in accordance with paragraph
9(a) above. Following transfer, this Stock Option and the
rights of any transferee with respect thereto shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to the transfer, including that
the events of termination of employment as provided in this
Agreement shall continue to be applied with respect to the
Participant, with the transferee bound by the consequences of
any such termination of employment as specified in this
Agreement. The Company shall be under no obligation to
provide notice of termination of the Participant's employment
to any transferee of this Stock Option. Notwithstanding any
transfer of this Stock Option, the Participant shall remain
subject to and liable for any employment-related taxes in
connection with the exercise of this Stock Option.
10. Neither the Participant nor any other person shall have any
rights as a stockholder with respect to any Option Shares
until the Participant or 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 the
Participant becomes the holder of record of such shares.
11. Except as provided in paragraph 6 of this Agreement, this
Agreement is subject to all of the terms and conditions of the
Plan and, where any questions or interpretations arise, the
terms and conditions of the Plan and the rules of the
Committee administering the Plan shall control.
12. 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 in Minneapolis, Minnesota and
any notice to be given to the Participant shall be addressed
2
to the Participant at the address given beneath the
Participant's signature hereto, or at such other address as
either party may hereafter designate in writing to the other.
13. 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 has executed this
Agreement by duly authorized signature and the Participant has
signed this Agreement effective as of the date first written above.
CERIDIAN CORPORATION PARTICIPANT
By
Secretary Xxxxxxxx Xxxxxxx
PARTICIPANT'S MAILING ADDRESS
3
EXHIBIT E
RELEASE
I, Xxxxxxxx Xxxxxxx, in consideration of the payment of
dollars ($ ), subject to appropriate
withholding, which includes compensation to which I would not be
otherwise entitled, do hereby fully and completely release and
waive any and all claims, complaints, causes of action or demands
of whatever kind which I have or may have against Ceridian
Corporation, its predecessors, successors, subsidiaries and
affiliates and all past and present members of the Board of
Directors, officers, employees and agents of those persons and
companies arising out of any actions, conduct, decisions, behavior
or events occurring up to the date of my execution of this Release.
I understand and accept that this Release specifically covers
but is not limited to any and all claims, complaints, causes of
action or demands which I have or may have against the above-
referenced released parties relating in any way to the terms,
conditions and circumstances of my employment up to the date of my
signature below, any form of employment discrimination prohibited
under the Minnesota Human Rights Act, Title VII of the Federal
Civil Rights Act of 1964 and the Federal Age Discrimination in
Employment Act. I further understand that this Release extends to
but is not limited to all claims which I may have based on
statutory or common law claims for negligence or other breach of
duty, wrongful discharge, breach of contract, breach of any express
or implied promise, misrepresentation, fraud, retaliation, breach
of public policy, infliction of emotional distress, defamation,
promissory estoppel, failure to pay wages or any other theory,
whether legal or equitable.
This Release does not change any rights I have under presently
existing employee benefit plans of Ceridian Corporation. My
signature on this release represents the sole agreement between me
and Ceridian Corporation. No prior promises, representations, or
understandings relative to any terms or conditions of my employment
are to be considered as part of this agreement unless expressed in
writing in this release.
I also understand that if I unsuccessfully dispute the
enforceability of this release, I agree to pay Ceridian
Corporation's attorneys' fees. I agree to return the severance
payment I receive before any attempt is made to dispute the
enforceability of this release. Because we recognize that
resolving any future differences we may have in the courts can take
a long time and be expensive, Ceridian Corporation and I agree that
our only remedy for all disputes one of us may have with the other
that are not released by this Agreement and arise out of my
employment, the termination of my 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. Ceridian
Corporation and I agree that the aggrieved party must send written
notice of any claim to the other party by certified mail, return
receipt requested. Written notice to Ceridian Corporation shall be
sent to its Secretary at 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX
00000-0000, and to me at the most current address shown for me in
Ceridian records. The arbitrator shall apply the law of the state
in which the claim arose, or federal law, or both, as applicable to
the claim(s) asserted.
Date: Xxxxxxxx Xxxxxxx
EXHIBIT F
Minnesota Revised Statutes Section 1-181.78
181.78 Agreements; terms relating to inventions
Subdivision 1. Any provision in an employment agreement which
provides that an employee shall assign or offer to assign any of
the employee's rights in an invention to the 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 AN
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.
