EXHIBIT 10.16
CERIDIAN CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
PARTIES
CERIDIAN CORPORATION
0000 XXXX XXX XXXXXXXX XXXX
XXXXXXXXXXX, XXXXXXXXX 00000-0000
AND
XXXXX X. XXXX
XXXXXXXX XXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXXX
XX0 0XX
DATE: MARCH 24, 2003
RECITALS
A. Ceridian wishes to obtain the services of Executive for the duration of
this Agreement and Executive wishes to provide services for such
period.
B. Ceridian desires reasonable protection of Ceridian's Confidential
Information (as defined below).
C. Ceridian desires assurance that Executive will not compete with
Ceridian, engage in recruitment of Ceridian's employees or make
disparaging statements about Ceridian after termination of employment,
and Executive is willing to refrain from such competition, recruitment
and disparagement.
D. Executive desires to be assured of a minimum Base Salary (as defined
below) from Ceridian for Executive's services for the term of this
Agreement.
E. It is expressly recognized by the parties that Executive's acceptance
of, and continuance in, Executive's position with Ceridian and
agreement to be bound by the terms of this Agreement represents a
substantial commitment to Ceridian in terms of Executive's personal and
professional career and a foregoing of present and future career
options by Executive, for all of which Ceridian receives substantial
value.
F. The parties recognize that a Change of Control (as defined below) may
result in material alteration or diminishment of Executive's position
and responsibilities and substantially frustrate the purpose of
Executive's commitment to Ceridian and forbearance of career options.
G. The parties recognize that in light of the above-described commitment
and forbearance of career options, it is essential that, for the
benefit of Ceridian and its stockholders,
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provision be made for the possibility of a Change of Control
Termination (as defined below) in order to enable Executive to accept
and effectively continue in Executive's position in the face of
inherently disruptive circumstances arising from the possibility of a
Change of Control of Ceridian Corporation (as defined below), although
no such change is now contemplated or foreseen.
H. The parties wish to replace any and all employment and Change of
Control agreements between Executive and Ceridian Corporation.
NOW, THEREFORE, in consideration of Executive's acceptance of and continuance in
Executive's employment for the term of this Agreement and the parties' agreement
to be bound by the terms contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 "BASE SALARY" shall mean regular cash compensation paid on a periodic
basis exclusive of benefits, bonuses or incentive payments.
1.02 "BOARD" shall mean the Board of Directors of Parent Corporation.
1.03 "CERIDIAN" shall mean Ceridian Corporation, a Delaware corporation and,
except for purposes of Section 7.01(b) and (h), and Section 9.03 of
Article IX,
(a) any Subsidiary (as that term is defined in Section 1.06); and
(b) any successor in interest by way of consolidation, operation
of law, merger or otherwise.
1.04 "CONFIDENTIAL INFORMATION" shall mean information or material of
Ceridian which is not generally available to or used by others, or the
utility or value of which is not generally known or recognized as
standard practice, whether or not the underlying details are in the
public domain, including:
(a) information or material relating to Ceridian and its business
as conducted or anticipated to be conducted; business plans;
operations; past, current or anticipated services, products or
software; customers or prospective customers; relations with
business partners or prospective business partners; or
research, engineering, development, manufacturing, purchasing,
accounting, or marketing activities;
(b) information or material relating to Ceridian's inventions,
improvements, discoveries, "know-how," technological
developments, or unpublished writings or other works of
authorship, or to the materials, apparatus, processes,
formulae, plans or methods used in the development,
manufacture or marketing of Ceridian's services, products or
software;
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(c) information on or material relating to Ceridian which when
received is marked as "proprietary," "private," or
"confidential;"
(d) trade secrets of Ceridian;
(e) software of Ceridian in various stages of development,
software designs, web-based solutions, specifications,
programming aids, programming languages, interfaces, visual
displays, technical documentation, user manuals, data files
and databases of Ceridian; and
(f) any similar information of the type described above which
Ceridian obtained from another party and which Ceridian treats
as or designates as being proprietary, private or
confidential, whether or not owned or developed by Ceridian.
Notwithstanding the foregoing, "Confidential Information" does not
include any information which is properly published or in the public
domain provided, however, that information which is published by or
with the aid of Executive outside the scope of employment or contrary
to the requirements of this Agreement will not be considered to have
been properly published, and therefore will not be in the public domain
for purposes of this Agreement.
1.05 "PARENT CORPORATION" shall mean Ceridian Corporation and, except for
purposes of Article VIII and Section 9.03 of Article IX, any successor
in interest by way of consolidation, operation of law, merger or
otherwise. "Parent Corporation" shall not include any Subsidiary.
1.06 "SUBSIDIARY" shall mean: (a) any corporation at least a majority of
whose securities having ordinary voting power for the election of
directors (other than securities having such power only by reason of
the occurrence of a contingency) is at the time owned by Parent
Corporation and/or one or more Subsidiaries; and (b) any division or
business unit (or portion thereof) of Parent Corporation or a
corporation described in clause (a) of this Section 1.06.
ARTICLE II
EMPLOYMENT, DUTIES, TERM AND CONTINUOUS EMPLOYMENT
2.01 EMPLOYMENT. Upon the terms and conditions set forth in this Agreement,
Ceridian hereby employs Executive as Executive Vice President and
Executive accepts such employment. Executive shall report to the
President and Chief Executive Officer of Ceridian or his designee
("CEO").
2.02 DUTIES. Executive shall devote his full-time and best efforts to
Ceridian and to fulfilling the duties of his position which shall
include such duties as may from time to time be assigned him by
Ceridian, provided that such duties are reasonably consistent with
Executive's education, experience and background. Executive shall
comply with Ceridian's policies and procedures to the extent they are
not inconsistent with this Agreement in which case the provisions of
this Agreement prevail.
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2.03 TERM. Subject to the provisions of Articles IV and VIII, this Agreement
and Executive's employment shall continue until March 24, 2006 (the
"Initial Term"). On each anniversary of the Agreement, and subject to
the provisions of Articles IV and VIII, this Agreement and Executive's
employment shall be automatically extended for an additional one-year
period. For purposes hereof, the Initial Term, together with any
subsequent extensions thereof, are hereinafter referred to as the
"Term." Upon the occurrence of a Change of Control during the Term, all
applicable Change of Control protections set forth herein (including,
without limitation, those set forth in Article VII hereof) shall
continue to apply for the 24-month period commencing on the date of the
Change of Control.
2.04 CONTINUOUS EMPLOYMENT. Executive's continuous employment with Ceridian
for the purposes of the Employment Rights Xxx 0000 ("xxx 0000 Xxx")
commenced on 17 February 1997. No employment with a previous employer
counts for the purposes of the 1996 Act as part of Executive's period
of continuous employment.
ARTICLE III
COMPENSATION, EXPENSES, HOLIDAYS AND WORKPLACE
3.01 BASE SALARY. For all services rendered under this Agreement during the
Term, Ceridian shall pay Executive a minimum Base Salary of
(pound)185,000. If Executive's salary is increased from time to time
during the term of this Agreement, the increased amount shall be the
Base Salary for the remainder of the term. Executive's Base Salary
shall accrue from day to day and be payable in arrears by equal monthly
installments on the last day of each month.
3.02 BASE SALARY REVIEW. Executive's salary will be subject to reviews by
the Board at the first meeting of the Board in each calendar year,
which typically takes place in January or February. Each review will be
effective on and from the first payroll date following the first
meeting of the Board in each calendar year provided that the increase
(if any) of such salary will be a matter to be decided at the Board's
absolute discretion.
3.03 BONUS AND INCENTIVE. Bonus or incentive compensation shall be at the
sole discretion of Ceridian. Except as otherwise provided in Article
VII, Ceridian shall have the right, in accordance with their terms, to
alter, amend or eliminate any bonus or incentive plans, or Executive's
participation therein, without compensation to Executive.
3.04 MOTOR CAR.
(a) During Executive's employment under this Agreement and whilst
Executive is legally entitled to drive, Ceridian will provide
him with a motor car for use in the performance of his duties
under this Agreement. The type and model of the car will be
commensurate with his status in the reasonable opinion of the
CEO. At the date of this Agreement, the motor car deemed to be
commensurate with Executive's status is a Jaguar XK 8
convertible. Subject
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as follows Ceridian will pay all costs of road fund licence,
insurance premiums and running expenses in respect of the
motor car including fuel, oil, maintenance and repairs.
(b) Executive will be permitted reasonable use of the motor car
for his own private purposes (including use on holidays).
(c) Executive will take good care of the motor car and will
observe the terms and conditions of any policy of insurance
and all regulations issued from time to time by Ceridian
regarding the use of motor cars provided to its officers or
employees.
3.05 PENSION AND OTHER BENEFITS.
(a) Executive will be entitled to continue to be a member of the
Centrefile Pension Plan - Defined Contribution Section only
subject to and upon the trust deed and rules of the Pension
Plan from time to time in effect (including without limitation
any powers of alteration and discontinuance). As of the date
of this Agreement, Ceridian pays a 15% annual employer match
on the above mentioned plan. There is no assurance that this
employer match will be continued at the same rate or at all
during the term of this Agreement.
(b) There is no contracting out certificate in force in respect of
Executive's employment under the provisions of the Xxxxxxx
Xxxxxxx Xxx 0000. If Executive's rights or benefits under the
Pension Plan are altered or discontinued pursuant to the trust
deed and rules, Ceridian will not be obliged to provide any
additional or replacement scheme or pension benefits or to pay
damages or compensation to Executive.
(c) During his employment Executive will be entitled to
participate at Ceridian's expense in Ceridian's:
(1) life insurance scheme up to four times Executive's
Base Salary subject to any earnings cap imposed on
his salary for this purpose pursuant to Section 590C
of the Income and Corporation Taxes Xxx 0000;
(2) private medical expenses insurance scheme for the
benefit of Executive and his wife, and all dependent
children in full time education under the age of 25
(or all dependent children not in full time education
until the age of 21);
(3) permanent health insurance scheme
subject to the rules of the said schemes from time to time
(and any replacement schemes provided by Ceridian) and subject
to Executive (and where appropriate his wife and dependent
children) being eligible to participate in or benefit from
such schemes pursuant to their rules at a cost which is
acceptable to Ceridian.
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3.06 BUSINESS EXPENSES. Ceridian shall, consistent with its policies in
effect from time to time, bear all ordinary and necessary business
expenses incurred by Executive in performing his duties as an employee
of Ceridian, provided that Executive accounts promptly for such
expenses to Ceridian in the manner prescribed from time to time by
Ceridian.
3.07 HOLIDAYS.
(a) In addition to normal public holidays, Executive will be
entitled to 27 working days' paid holiday in each calendar
year, such holiday to be taken at such time or times as may be
approved by the CEO.
(b) In each calendar year (apart from the year in which
Executive's employment commences or terminates) Executive will
be expected to take at least the 20 days' holiday (including
normal public holidays) to which he is entitled under the
Working Time Regulations 1998.
(c) Up to five days of holiday entitlement which is not taken by
the end of the calendar year to which it relates may be
carried forward.
(d) Executive's entitlement to paid holiday in the calendar year
in which his employment terminates will be 2 1/4 days for each
completed calendar month in that year rounded up to the
nearest day.
(e) Where Executive has taken more or less than his holiday
entitlement in the year his employment terminates, a
proportionate adjustment will be made by way of addition to or
deduction from (as appropriate) his final gross pay calculated
on a pro-rata basis.
3.08 PLACE OF WORK. Executive will perform his duties principally at
Ceridian Centrefile, Ceridian House, 25 Xxx Xxxx Xxxxxx,
Xxxxxxxxxxxxx, Xxxxxxxxxxxxx XX00XX and at such other place or places
as Ceridian reasonably requires. Executive may be required to travel
both inside and outside the United Kingdom in the course of his duties
but Ceridian will not require him without his prior consent to reside
anywhere outside the United Kingdom for a total period of more than
one month in any calendar year.
3.09 HOURS OF WORK. Ceridian's normal office hours are from 9:00 am to 5:00
pm Monday to Friday, but Executive will be required to work outside
these hours without additional remuneration in order to meet the
requirements of the business and for the proper performance of his
duties. In view of Executive's seniority and managerial duties and
responsibilities, Executive is regarded as a "managing executive" for
the purposes of the Working Time Regulations 1998.
ARTICLE IV
EARLY TERMINATION AND INCAPACITY
4.01 EARLY TERMINATION. This Article shall not apply to a Change of Control
Termination which is governed solely by the provisions of Article VII,
and does not alter the respective continuing obligations of the parties
pursuant to Articles V, VI, and IX.
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4.02 TERMINATION FOR CAUSE. Ceridian may terminate this Agreement and
Executive's employment immediately for cause. For the purpose hereof
"cause" means:
(a) fraud;
(b) misrepresentation;
(c) theft or embezzlement of Ceridian assets;
(d) intentional violations of law involving moral turpitude;
(e) failure to follow Ceridian's conduct and ethics policies;
and/or
(f) the continued failure by Executive to attempt in good faith to
perform his 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 performance
which specifically identifies the manner in which it is
alleged Executive has not attempted in good faith to perform
such duties.
In the event of termination for cause pursuant to this Section 4.02,
Executive shall be paid at the usual rate of Executive's annual Base
Salary through the date of termination specified in any written notice
of termination.
4.03 TERMINATION WITHOUT CAUSE. Either Executive or Ceridian may terminate
this Agreement and Executive's employment without cause on at least 75
days' written notice. In the event of termination of this Agreement and
of Executive's employment pursuant to this Section 4.03, compensation
shall be paid as follows:
(a) if the notice of termination is given by Executive, Executive
shall be paid at the usual rate of his annual Base Salary
through the 75 day notice period;
(b) if the notice of termination is given by Ceridian, (1)
Executive shall be paid at the usual rate of his annual Base
Salary through the 75 day notice period, however, Ceridian
shall have the option of making termination of the Agreement
and Executive's employment effective immediately upon notice
in which case Executive shall be paid a lump sum representing
the value of 75 days' worth of annual Base Salary; and (2)
Executive shall receive, starting within 15 days after the end
of the 75 day notice period, one year's Base Salary and the
equivalent cash value of one year's vehicle lease benefit in
kind (based on the prior year's benefit) payable, at the sole
discretion of Ceridian, in either the form of a lump sum
payment or on a regular payroll period basis. In addition,
Executive shall receive the bonus, if any, to which Executive
would otherwise have become entitled under all applicable
Ceridian annual bonus plans in effect at the time of
termination of this Agreement had Executive remained
continuously employed for the full fiscal year in which
termination occurred and continued to perform his duties in
the same manner as they were performed immediately prior to
termination, multiplied by 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
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which is 12. This bonus amount shall be paid within 15 days
after the date such bonus would have been paid had Executive
remained employed for the full fiscal year. In addition,
Ceridian shall provide or make arrangements for reasonable
outplacement services for Executive based on his level within
Ceridian.
4.04 TERMINATION IN THE EVENT OF DEATH. This Agreement shall terminate in
the event of death of Executive. In the event of Executive's death,
Ceridian shall pay:
(a) an amount equal to 12 months of Base Salary at the rate in
effect at the time of Executive's death, 12 months equivalent
cash value of current vehicle lease benefit in kind, plus the
amount Executive would have received in annual incentive plan
bonus for the year in which the death occurs had "target"
goals been achieved. The amount shall be paid as a lump sum as
soon as practicable following Ceridian's receipt of notice of
Executive's death.
(b) any amount equal to (1) the amount Executive would have
received in annual incentive plan bonus for the year in which
termination occurs had "target" goals been achieved,
multiplied by (2) a fraction, the numerator of which shall be
the number of whole months Executive was employed in the year
in which the death occurred and the denominator of which is
12. The amount payable pursuant to this Section 4.04(b) shall
be paid within 15 days after the date such bonus would have
been paid had Executive remained employed for the full fiscal
year.
(c) Such amounts 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.
4.05 RETIREMENT. Executive may terminate this Agreement and Executive's
employment as a result of Executive decision to retire from Ceridian.
Executive shall provide Ceridian with at least 75 days' written notice
of the date upon which Executive intends to retire. Executive shall be
paid at the usual rate of his annual Base Salary and shall continue the
use of his car lease through the date of retirement stipulated in the
written notice.
4.06 ENTIRE TERMINATION PAYMENT. The compensation provided for in this
Article IV for early termination of this Agreement and termination
pursuant to this Article IV shall constitute Executive's sole remedy
for such termination. Executive shall not be entitled to any other
termination or severance payment which may be payable to Executive
under any other agreement between Executive and Ceridian.
4.07 INCAPACITY.
(a) If Executive is absent from his duties as a result of illness
or injury he will notify Ceridian as soon as possible and
complete any self-certification forms which are required by
Ceridian. If the incapacity continues for a period of
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seven days or more he will produce to the Ceridian a medical
certificate to cover the duration of such absence.
(b) Subject to the rest of this Section 4.07 and subject to the
receipt of the appropriate certificates in accordance with
Section 4.07(a) above, if Executive is absent from his duties
as a result of illness or injury he will be entitled to
payment of his Base Salary at the full rate and enjoy his
benefits hereunder in respect of such illness or injury for a
period (in total) of up to 26 weeks in any period of 12 months
(whether the absence is intermittent or continuous).
Thereafter Executive will be entitled to payment of 60% of his
Base Salary during sickness absence for an indefinite period.
In addition, Ceridian shall pay to Executive any amount equal
to (1) the amount Executive would have received in annual
incentive plan bonus for the year in which the incapacity
occurred had "target" goals been achieved, multiplied by (2) a
fraction, the numerator of which shall be the number of whole
months prior to Executive's incapacity and the denominator of
which is 12. This amount shall be paid within 15 days after
the date such bonus would have been paid to Executive prior to
the occurrence of his incapacity.
(c) Executive's basic salary paid under Section 4.07(b) above will
include any Statutory Sick Pay payable and when this is
exhausted will be reduced by the amount of any Social Security
Sickness Benefit or other benefits recoverable by the
Executive (whether or not recovered).
(d) The provisions of this Section 4.07 and any right or
prospective right the Executive has or may have to receive any
benefits under Ceridian's permanent health insurance scheme
will not prejudice or limit in any way Ceridian's right to
terminate this Agreement pursuant to its terms.
(e) Whether or not Executive is absent by reason of sickness,
injury or other incapacity Executive will at the request of
the CEO agree to have a medical examination performed by a
doctor appointed and paid for by Ceridian and Executive hereby
authorises the CEO to have unconditional access to any report
or reports (including copies) produced relating to the
incapacity as a result of any such examination as the CEO may
from time to time require and entitlements to payments
pursuant to Section 4.07(b) will be conditional on the
Executive complying with the terms of this Section 4.07(e).
ARTICLE V
CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT
5.01 CONFIDENTIALITY. Executive acknowledges that Ceridian has taken
reasonable measures to preserve the secrecy of its Confidential
Information. Executive will not, during the term or after the
termination or expiration of this Agreement or his employment, publish,
disclose, or utilize in any manner any Confidential Information
obtained while employed by Ceridian. If Executive leaves the employ of
Ceridian, Executive will not, without Ceridian's prior written consent,
retain or take away any drawing, writing or other record in any form
containing any Confidential Information.
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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 transfer of
Executive's entire right, title and interest in such inventions,
improvements, discoveries, software, writings or other works of
authorship in Ceridian, at the request and the expense of Ceridian, and
Executive will do all acts and sign all instruments of assignment and
other papers Ceridian may reasonably request relating to applications
for patents, patents, copyrights, and the enforcement and protection
thereof. If Executive is needed, at any time, to give testimony,
evidence, or opinions in any litigation or proceeding involving any
patents or copyrights or applications for patents or copyrights, both
domestic and foreign, relating to inventions, improvements,
discoveries, software, writings or other works of authorship conceived,
developed or reduced to practice by Executive, Executive agrees to do
so, and if Executive leaves the employ of Ceridian, Ceridian shall pay
Executive at a rate mutually agreeable to Executive and Ceridian, plus
reasonable travelling or other expenses.
5.05 EXECUTIVE'S DECLARATION. Executive has no inventions, data bases,
improvements, discoveries, software, writings or other works of
authorship useful to Ceridian in the normal course of business, which
were conceived, made or written prior to the date of this Agreement and
which are excluded from this Agreement.
5.06 SURVIVAL. The obligations of this Article V shall survive the
expiration or termination of this Agreement and Executive's employment.
ARTICLE VI
NON-COMPETITION, NON-RECRUITMENT, AND NON-DISPARAGEMENT
6.01 GENERAL. The parties hereto recognize and agree that (a) Executive is a
senior executive of Ceridian and is a key executive of Ceridian, (b)
Executive has received, and will in the future receive, substantial
amounts of Confidential Information, (c) Ceridian's business is
conducted on a worldwide basis, and (d) provision for non-competition,
non-recruitment and non-disparagement obligations by Executive is
critical to Ceridian's continued economic well-being and protection of
Ceridian's Confidential Information. In light of these considerations,
this Article VI sets forth the terms and conditions of Executive's
obligations of non-competition, non-
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recruitment and non-disparagement subsequent to the termination of this
Agreement and/or Executive's employment for any reason other than a
Change of Control Termination. Section 6.02 and 6.03 of this Agreement
shall be of no further force or effect upon a Change of Control
Termination.
6.02 NON-COMPETITION.
(a) During the term of this Agreement, Executive will devote full
time and energy to furthering Ceridian's business and will not
pursue any other business activity without Ceridian's written
consent. Unless the obligation is waived or limited by
Ceridian in accordance with subsection (b) of this Section
6.02, Executive agrees that during his employment with
Ceridian and for a period of 12 months following termination
of employment for any reason other than a Change of Control
Termination ("Non-Compete Period"), Executive will not within
the UK directly or indirectly, alone or as a partner, officer,
director, shareholder or employee of any other firm or entity,
engage in any commercial activity in competition with any part
of Ceridian's business as conducted as of the date of such
termination of employment or with any part of Ceridian's
contemplated business with respect to which Executive has
Confidential Information. For purposes of this subsection (a),
"shareholder" shall not include beneficial ownership of less
than five percent (5%) of the combined voting power of all
issued and outstanding voting securities of a publicly held
corporation whose stock is traded on a major stock exchange.
Also for purposes of this subsection (a), "Ceridian's
business" shall include business conducted by Ceridian or its
affiliates and any partnership or joint venture in which
Ceridian or its affiliates is a partner or joint venturer;
provided that, "affiliate" as used in this sentence shall not
include any corporation in which Ceridian has ownership of
less than fifteen percent (15%) of the voting stock.
(b) At its sole option Ceridian may, by written notice to
Executive at any time within the Non-Compete Period, waive or
limit the time and/or geographical area in which Executive
cannot engage in competitive activity.
(c) During the Non-Compete Period, prior to accepting employment
with or agreeing to provide consulting services to, any firm
or entity which offers competitive products or services,
Executive shall give 30 days prior written notice to Ceridian.
Such written notice shall describe the firm and the employment
or consulting services to be rendered to the firm or entity,
and shall include a copy of the written offer of employment or
engagement of consulting services. 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) In the event Executive has provided notice to Ceridian
pursuant to subsection (c) of this Section 6.02 and has not
accepted employment with or agreed to provide consulting
services to, any firm or entity directly as a result of his
non-competition obligation pursuant to this Section 6.02,
Ceridian shall pay Executive an amount equal to the usual rate
of Executive's Base Salary in effect at the time of
termination on a regular payroll period basis until the end of
the Non-Compete Period. There shall be credited against
Ceridian's
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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 set forth in
subsection (a) hereof, no payment shall be required by
Ceridian with respect to the portion of the Non-Compete Period
which has been waived.
(e) In the event Executive fails to provide notice to Ceridian
pursuant to subsection (c) of this Section 6.02 and/or in
anyway violates its non-competition obligation pursuant to
Section 6.02, Ceridian may enforce all of its rights and
remedies provided to it under this Agreement, in law and in
equity, and Executive shall be deemed to have expressly waived
any rights he may have had to payments under subsection (d) of
this Section 6.02.
6.03 NON-RECRUITMENT. During the term of employment and for a period of 12
months following termination of employment for any reason other than a
Change of Control Termination, Executive will not directly or
indirectly hire any of Ceridian's employees who are employed by
businesses for which Executive has or had management responsibility, or
solicit any of Ceridian's employees who are employed by businesses for
which Executive has or had management responsibility for the purpose of
hiring them or inducing them to leave their employment with Ceridian,
nor will Executive own, manage, operate, join, control, consult with,
participate in the ownership, management, operation or control of, be
employed by, or be connected in any manner with any person or entity
which engages in the conduct proscribed in this Section 6.03. 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 NON-DISPARAGEMENT. Executive will not, during the term or after the
termination or expiration of this Agreement or Executive's employment,
make disparaging statements, in any form, about Ceridian, its officers,
directors, agents, employees, products or services which Executive
knows, or has reason to believe, are false or misleading.
6.05 SURVIVAL AND ENFORCEABILITY. The obligations of this Article VI shall
survive the expiration or termination of this Agreement and Executive's
employment. Should any provision of this Article VI be held invalid or
illegal, such illegality shall not invalidate the whole of this Article
VI or the Agreement, but, rather, Article VI 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. In furtherance of and not in
limitation of the foregoing, Executive expressly agrees that should the
duration of or geographical extent of, or business activities covered
by, any provision of this Article VI be in excess of that which is
valid or enforceable under applicable law, then such provision shall be
construed to cover only that duration, extent or activities that may
validly be covered. Executive acknowledges the uncertainty of the law
in this respect and expressly stipulates that this Article VI shall be
construed in a manner that renders its provisions valid and enforceable
to the maximum extent (not exceeding its express terms) possible under
applicable law. This Article VI does not replace and is in addition to
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any other agreements Executive may have with Ceridian on the matters
addressed herein.
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 Ceridian
for the direct or indirect provision of compensation to
Executive (including groups or classes of participants or
beneficiaries of which 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
Executive.
(b) "CHANGE OF CONTROL" shall mean the first of the following
events to occur:
(1) there is consummated a merger or consolidation to
which Ceridian or any direct or indirect subsidiary
of Ceridian is a party if the merger or consolidation
would result in the voting securities of Ceridian
outstanding immediately prior to such merger or
consolidation continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity or any
parent thereof) less than 60% of the combined voting
power of the securities of Ceridian or such surviving
entity or any parent thereof outstanding immediately
after such merger or consolidation; or
(2) the direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act" ) in the
aggregate of securities of Ceridian representing
twenty percent (20%) or more of the total combined
voting power of Ceridian's then issued and
outstanding securities is acquired by any person or
entity, or group of associated persons or entities
acting in concert; provided, however, that for
purposes hereof, the following acquisitions shall not
constitute a Change of Control: (A) any acquisition
by Ceridian or any of its subsidiaries, (B) any
acquisition directly from Ceridian or any of its
subsidiaries, (C ) any acquisition by any employee
benefit plan (or related trust or fiduciary)
sponsored or maintained by Ceridian or any
corporation controlled by Ceridian, (D) any
acquisition by an underwriter temporarily holding
securities pursuant to an offering of such
securities, (E) any acquisition by a corporation
owned, directly or indirectly, by the stockholders of
Ceridian in substantially the same proportions as
their ownership of stock of Ceridian, (F) any
acquisition in connection with which, pursuant to
Rule 13d-1 promulgated pursuant to the Exchange Act,
the individual, entity or group is permitted to, and
actually does, report its beneficial ownership on
Schedule 13G (or any successor Schedule); provided
that, if any such individual, entity or group
subsequently
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becomes required to or does report its beneficial
ownership on Schedule 13D (or any successor
Schedule), then, for purposes of this paragraph, such
individual, entity or group shall be deemed to have
first acquired, on the first date on which such
individual, entity or group becomes required to or
does so report on Schedule 13D, beneficial ownership
of all of the voting securities of Ceridian
beneficially owned by it on such date, and (G) any
acquisition in connection with a merger or
consolidation which, pursuant to paragraph (1) above,
does not constitute a Change of Control; or
(3) there is consummated a transaction contemplated by an
agreement for the sale or disposition by Ceridian of
all or substantially all of Ceridian's assets, other
than a sale or disposition by Ceridian of all or
substantially all of Ceridian's assets to an entity,
at least 60% of the combined voting power of the
voting securities of which are owned by stockholders
of Ceridian in substantially the same proportions as
their ownership of Ceridian immediately prior to such
sale; 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 such that
the "Continuity Directors" cease for any reason to
constitute at least a majority of the Board. For
purposes of this clause, "Continuity Directors" means
(A) those members of the Board who were directors on
the date hereof and (B) those members of the Board
(other than a director whose initial assumption of
office was in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of Ceridian) who were elected or appointed
by, or on the nomination or recommendation of, at
least a two-thirds (2/3) majority of the
then-existing directors who either were directors on
the date hereof or were previously so elected or
appointed; or
(6) such other event or transaction as the Board shall
determine constitutes a Change of Control.
(c) "CHANGE OF CONTROL TERMINATION" means, with respect to
Executive, either of the following events occurring on or
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)
failure to follow Ceridian's conduct and ethics
policies; or
(2) Termination of employment with Ceridian by Executive
for Good Reason.
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A Change of Control Termination by Executive shall not,
however, include termination by reason of death. A termination
of Executive's employment by Ceridian shall not constitute a
termination described in clauses (A) through (D) of Section
7.01(c)(1) unless (i) there has been delivered to Executive by
the Board, at least 10 days prior to such termination, a
written notice which specifically identifies conduct described
in clauses (A), (B), (C) or (D) of Section 7.01(c)(1) in which
the Board believes Executive has engaged and provides
Executive an opportunity to cure such conduct and (ii) the
Board has duly adopted (following the expiration of the
aforementioned cure period) a resolution, by the affirmative
vote of not less than two-thirds (2/3) of the entire
membership of the Board at a meeting of the Board which was
called and held for the purpose of considering such
termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the
good faith opinion of the Board, the Executive was guilty of
conduct described in clauses (A), (B), (C) or (D) of Section
7.01(c)(1), and specifying the particulars thereof in detail.
For purposes of this Agreement, Executive's employment shall
be deemed to have been terminated pursuant to a Change of
Control Termination, if Executive's employment is terminated
by Ceridian other than for the reasons described in clauses
(A) through (D) of Section 7.01(c)(1) during the pendency of a
Potential Change of Control and Executive reasonably
demonstrates that such termination was at the request or
direction of a person or entity who has entered into an
agreement, the consummation of which would result in a Change
of Control, or is otherwise in connection with or in
anticipation of a Change of Control (whether or not a Change
of Control ever occurs). For purposes of this Agreement, in
the event of a termination described in the preceding
sentence, a Change of Control will be deemed to have occurred
immediately prior to the termination of Executive's employment
for purposes of this Agreement.
(d) "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 on or 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
(it being expressly understood that Executive shall
have Good Reason if he ceases to be an executive
officer of a publicly-held corporation);
(2) A reduction by Ceridian in Executive's Base Salary,
bonus opportunity as in effect immediately prior to
the Change of Control or as the same may be increased
from time to time thereafter or any failure by
Ceridian to pay any portion of Executive's
compensation when due;
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(3) Ceridian requiring Executive to be based anywhere
other than within 50 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, 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 and 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 employment duties;
(6) If Executive's primary employment duties are with a
Subsidiary, the sale, merger, contribution, transfer
or any other transaction in conjunction with which
Parent Corporation's ownership interest in such
Subsidiary decreases below the level specified in
Section 1.06 of Article I unless (A) this Agreement
is assigned to the purchaser/transferee with the
provisions of Article VII in full force and effect
and operative as if a Change of Control has occurred
with respect to the purchaser/transferee as Parent
Corporation immediately after the purchase/transfer
becomes effective, and (B) such purchaser/transferee
has a creditworthiness reasonably equivalent to
Parent Corporation's; or
(7) Any material breach of this Agreement by Ceridian.
Executive's right to terminate employment for Good Reason
shall not be affected by Executive's incapacity due to
physical or mental illness. Executive's continued employment
shall not constitute consent to, or a waiver of rights with
respect to, any event constituting Good Reason hereunder.
(e) "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.
(f) "POTENTIAL CHANGE OF CONTROL" shall be deemed to have occurred
if the event set forth in any one of the following subsections
shall have occurred: (A) Ceridian enters into an agreement,
the consummation of which would result in the occurrence of a
Change of Control; (B) Ceridian or any person or entity
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publicly announces an intention to take or to consider taking
actions which, if consummated, would constitute a Change of
Control; (C) any person becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Ceridian representing 15% or more
of either the then outstanding shares of common stock of
Ceridian or the combined voting power of Ceridian's then
outstanding securities; or (D) the Board adopts a resolution
to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
7.02 TERMINATION BY EXECUTIVE. The termination of Executive's employment as
described in Section 7.01(c)(2) 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.
(a) In the event of a Change of Control Termination, Ceridian
shall, within five days of such termination, make a lump sum
payment to Executive in an amount equal to three times the sum
of (a) 12 months of Base Salary at the rate in effect at the
time of Executive's termination (without giving effect to any
reduction in Base Salary constituting Good Reason), (b) the
bonus, if any, that Executive would have earned under all
applicable Ceridian bonus plans for the year in which the
termination occurs had "superior" goals been achieved (without
giving effect to any reduction in bonus opportunity
constituting Good Reason), (c) a cash equivalent value of the
annual vehicle lease program Executive would have received in
the year in which the termination occurs, and (d) the highest
annual aggregate amount of employer contributions made by
Ceridian on behalf of Executive into the Centrefile Pension
Plan -- Defined Contribution Section over the last three
fiscal years prior to termination of Executive. Ceridian shall
also pay to Executive, within five days of such termination, a
prorated portion of Executive's bonus compensation for the
fiscal year in which the Change of Control Termination occurs
(assuming that any applicable performance objectives were
achieved at the "target" level of performance and without
giving effect to any reduction in bonus opportunity
constituting Good Reason) calculated by multiplying (A) the
maximum achievable amount of such bonus compensation by (B) a
fraction, the numerator of which is the number of days in the
applicable fiscal year through the date of termination and the
denominator of which is 365.
(b) Following a Change of Control Termination, Ceridian shall
provide Executive with outplacement services suitable to the
Executive's position for a period of three years or, if
earlier, until the first acceptance by the Executive of an
offer of employment. Following a Change of Control
Termination, Ceridian shall reimburse Executive for all
customary relocation expenses incurred by Executive in one
move out of Executive's state of residence within the one year
period following such Change of Control Termination.
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(c) In the event of a Change of Control Termination, all
outstanding Ceridian options and other equity awards held by
Executive shall become fully vested and exercisable and, if
applicable, free from all restrictions.
7.04 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 Bank of America
National Trust and Savings Association, New York, New York or its
successor in interest; or (b) the maximum rate permitted by Inland
Revenue in the United Kingdom.
7.05 ATTORNEYS' FEES. In the event Executive incurs any legal expense to
enforce or defend his 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. Such payments shall be made within five (5)
business days after delivery of Executive's written requests for
payment accompanied with such evidence of fees and expenses incurred as
Ceridian reasonably may require.
7.06 BENEFITS CONTINUATION. In the event of a Change of Control Termination,
Executive shall, until age 65, be entitled to receive from Ceridian
health coverage substantially equivalent to the coverage Executive had
on the day immediately prior to the Change of Control, including any
coverage then in effect for Executive's spouse, domestic partner or
dependents. Executive shall be required to pay no more for the above
mentioned benefit than the amount Executive would have been required to
pay had Executive continued to be an active employee of Ceridian. If
the provision of any such coverage to Executive causes inclusion of any
amount in Executive's gross income that would not have been so included
had Executive received such coverage as an active employee, Ceridian
shall pay Executive the amount necessary to wholly offset the taxes
attributable to such amount and the tax reimbursement amounts paid
pursuant to this sentence.
7.07 MITIGATION; OFFSET. Following a Change of Control Termination,
Executive is not required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by pursuant to this
Article VII. The amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by Executive
as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive
to Parent Corporation, any Subsidiary or otherwise.
ARTICLE VIII
CHANGE OF SUBSIDIARY STATUS
In the event that, prior to a Change of Control: (a) a Subsidiary is sold,
merged, contributed, or in any other manner transferred, or if for any reason
Parent Corporation's ownership interest in any such Subsidiary falls below the
level specified in Section 1.07, (b) Executive's primary employment duties are
with the Subsidiary at the time of the occurrence of such
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event, and (c) Executive does not, in conjunction therewith, transfer employment
directly to Parent Corporation or another Subsidiary, then:
(1) If Executive gives his written consent to the assignment of
this Agreement to such Subsidiary, or to the purchaser or new
majority interest holder of such Subsidiary, (and such
assignment is accepted) this Agreement shall remain in full
force and effect between Executive and the assignee, except
that the provisions of Article VII of this Agreement shall
become null and void;
(2) If such assignment is not accepted by the Subsidiary or
purchaser, then this Agreement shall be deemed to have been
terminated by Ceridian without cause pursuant to Section 4.03
of Article IV; and
(3) In all other cases, this Agreement shall be deemed terminated
for cause pursuant to Section 4.02 of Article IV.
ARTICLE IX
GENERAL PROVISIONS
9.01 DISCIPLINARY AND GRIEVANCE PROCEDURES. Except and to the extent of any
procedure implied by statute, Ceridian has a formal disciplinary or
grievance procedure which is applicable to Executive.
9.02 COLLECTIVE AGREEMENTS. There are no collective agreements which
directly affect Executive's terms and conditions of employment.
9.03 SUCCESSORS AND ASSIGNS. Except as otherwise provided in Article VIII,
this Agreement shall be binding upon and inure to the benefit of the
successors and assigns of Parent Corporation and each Subsidiary,
whether by way of merger, consolidation, operation of law, assignment,
purchase or other acquisition of substantially all of the assets or
business of Ceridian, and any such successor or assign shall absolutely
and unconditionally assume all of Ceridian's obligations hereunder.
9.04 NOTICES. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and
be delivered or mailed to any such party at its address:
(a) Ceridian Corporation
0000 Xxxx Xxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Office of General Counsel
(b) In the case of Executive shall be:
At the address listed on the last page of this Agreement.
Either party may, by notice hereunder, designate a changed
address. Any notice, if mailed properly addressed, postage
prepaid, registered or certified mail, shall be deemed
dispatched on the registered date or that stamped on the
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certified mail receipt, and shall be deemed received within
the second business day thereafter or when it is actually
received, whichever is sooner.
9.05 CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of
this Agreement.
9.06 GOVERNING LAW. This Agreement will be governed by and interpreted in
accordance with the law of England and Wales and the parties to this
Agreement submit to the exclusive jurisdiction of the English Courts in
relation to any claim, dispute or matter arising out of or relating to
this Agreement.
9.07 CONSTRUCTION. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
9.08 WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right or remedy granted hereby or by any
related document or by law.
9.09 MODIFICATION. Any changes or amendments to this Agreement must be in
writing and signed by both parties.
9.10 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the
matters herein agreed upon. This Agreement replaces in full all prior
employment or Change of Control agreements or understandings of the
parties hereto with respect to such subject matter, and any and all
such prior agreements or understandings are hereby rescinded by mutual
agreement.
[Remainder of This Page Left Intentionally Blank]
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IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
EXECUTIVE CERIDIAN CORPORATION
/s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Xxxxx X. Xxxx
Title: Senior Vice President, Human
Resources
Address:
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