EXHIBIT 10.06
AMENDMENT NO. 1 TO
SEVERANCE COMPENSATION AGREEMENT
This Amendment No. 1 to the Severance Compensation
Agreement, dated as of January 31, 1996 (the "Amendment"), is
entered into by and among Xxxxxx X. XxXxxxxx (the "Executive"),
Comdata Holdings Corporation (the "Company"), and Ceridian
Corporation ("Ceridian").
RECITALS:
WHEREAS, the Company and the Executive are parties to that
certain Severance Compensation Agreement, dated as of November
29, 1994 (the "Agreement"), pursuant to which, among other
things, the Company agreed to provide the Executive with certain
severance benefits in the event of a "change in control"; and
WHEREAS, as a result of the Company's merger (the "Merger")
with Ceridian, a "change in control" as defined in Section 2 of
the Agreement has occurred and Ceridian has agreed to assume and
perform the Agreement;
NOW, THEREFORE, for and in consideration of the premises and
the mutual promises, covenants and conditions set forth in this
Amendment and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company,
the Executive and Ceridian hereby agree as follows:
1. Amendment of Agreement. The Agreement is hereby
amended, modified, and supplemented, effective as of the date
provided in Section 4 hereof, by this Amendment as set forth
below:
(a) Section 1 of the Agreement is hereby amended by
deleting such section from the Agreement in its entirety, and by
substituting in lieu thereof the following new section:
"1. Term. This Agreement shall terminate, except
to the extent that any obligation of the Company
hereunder remains unpaid as of such time, upon the
earlier of (i) the termination of the Executive's
employment with the Company based on death, Disability
(as defined in Section 3(b)), Retirement (as defined in
Section 3(c)), or Cause (as defined in Section 3(d)),
or by the Executive other than for Good Reason (as
defined in Section 3(e)); and (ii) June 12, 1997 if the
Executive has not terminated his employment for Good
Reason as of such time."
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(b) Section 3(e) of the Agreement is hereby amended by
deleting such Section 3(e) from the Agreement in its entirety,
and by substituting in lieu thereof the following new Section
3(e):
"(e) Good Reason. The Executive may terminate the
Executive's employment for Good Reason at any time
during the term of this Agreement. For purposes of
this Agreement, "Good Reason" shall mean any of the
following (without the Executive's express written
consent):
(i) the assignment to the Executive by the
Company of duties inconsistent with the
Executive's position, duties and responsibilities
with the Company, as described on Schedule 1
hereto, or a change in the Executive's titles or
offices from those shown on Schedule 1, or any
removal of the Executive from or any failure to
reelect the Executive to any of such positions,
except in connection with the termination of his
employment for Disability, Retirement or Cause or
as a result of the Executive's death or by the
Executive other than for Good Reason;
(ii) a reduction by the Company in the
Executive's base salary as in effect on December
12, 1995 or as the same may be increased from time
to time during the term of this Agreement;
(iii) the Executive's relocation to any
place other than Nashville (or Brentwood), except
for required travel by the Executive on the
Company's business to an extent substantially
consistent with the Executive's business travel
obligations at the time of the Merger, or a change
or replacement of the person to whom the Executive
reports;
(iv) any material breach by the Company of
any provision of this Agreement;
(v) any failure by the Company to obtain the
assumption of this Agreement by any successor or
assign of the Company; or
(vi) any purported termination of the
Executive's employment which is not effected
pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of
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this Agreement, no such purported termination
shall be effective."
(c) Section 4(a) of the Agreement is hereby amended by
deleting such Section 4(a) from the Agreement in its entirety,
and by substituting in lieu thereof the following new Section
4(a):
"(a) If the Company shall terminate the
Executive's employment other than pursuant to Section
3(b), 3(c) or 3(d) or if the Executive shall terminate
his employment for Good Reason, then the Company shall
pay to the Executive as severance pay in a lump sum, in
cash, on the fifth day following the Date of
Termination, an amount equal to the sum of (i) three
times the average of the aggregate annual salary paid
to the Executive by the Company during the three
calendar years preceding December 12, 1995 and (ii)
three times the highest bonus compensation paid to the
Executive for any of the three calendar years preceding
December 12, 1995 (the "Lump Sum Payment"). The Lump
Sum Payment shall be reduced by an amount equal to all
salary and bonus paid to the Executive by the Company
after December 12, 1995."
(d) Section 4(b) of the Agreement is hereby amended by
deleting such Section 4(b) from the Agreement in its entirety,
and by substituting in lieu thereof the following new Section
4(b):
"(b) In addition to the lump sum payment provided
in Section 4(a), if the Company shall terminate the
Executive's employment other than pursuant to Sections
3(b), 3(c), or 3(d) or if the Executive shall terminate
his employment for Good Reason, then the Company (at
its expense) shall provide to the Executive term life
insurance and health and disability insurance
equivalent to that provided to the Executive
immediately prior to December 12, 1995 for a period of
two (2) years following the Date of Termination."
(e) Section 4(c) of the Agreement is hereby amended by
deleting such Section 4(c) from the Agreement in its entirety,
and by substituting in lieu thereof the following new Section
4(c):
"(c) In addition to the benefits provided in
Sections 4(a) and 4(b), if the Company shall terminate
the Executive's employment other than pursuant to
Sections 3(b), 3(c) or 3(d) or if the Executive shall
terminate his employment for Good Reason, then all of
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the Executive's stock awards, including, without
limitation, restricted stock and stock options awarded
to the Executive by the Company pursuant to the
Company's Stock Option and Restricted Stock Purchase
Plan, but excluding any Ceridian stock awards received
by the Executive after December 12, 1995, shall to the
extent not already vested and exercisable become fully
vested and exercisable. The Executive's stock options
shall be exercisable for a period of one year from the
Date of Termination unless a shorter period is required
by applicable law."
2. Assumption of Agreement by Ceridian. Pursuant to
Section 6 of the Agreement, Ceridian hereby expressly, absolutely
and unconditionally assumes and agrees to perform the Agreement
in the same manner and to the same extent that the Company would
be required to perform the Agreement after the Merger. Ceridian
further acknowledges that the term "Company" as used herein and
in the Agreement, shall include Ceridian, unless such reference
clearly indicates otherwise.
3. Consent to Continued Employment on New Terms. The
Executive hereby consents to his post-Merger positions, duties,
responsibilities and status as described on Schedule 1 hereto,
and agrees that his right to terminate the Agreement for Good
Reason will be determined with respect to the new definition of
"Good Reason" contained in this Amendment.
4. Effectiveness of this Amendment.
This Amendment shall become effective upon the
execution and delivery of this Amendment by the Company, the
Executive and Ceridian.
5. Representations and Warranties of Ceridian and the
Company.
In order to induce the Executive to enter into this
Amendment, the Company and Ceridian hereby make the following
representations and warranties to the Executive:
5.1. Corporate Power and Authorization. Each of the
Company and Ceridian has the requisite corporate power and
authority to execute, deliver and perform its obligations under
this Amendment and the Agreement.
5.2. No Conflict. Neither the execution and delivery
by the Company or Ceridian of this Amendment nor the performance
of the obligations required hereby nor compliance by the Company
or Ceridian with the terms, conditions and provisions hereof will
conflict with or result in a breach of any of the terms,
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conditions or provisions of the Certificate of Incorporation or
Bylaws of either the Company or Ceridian or any law, regulation,
order, writ, injunction or decree of any court or governmental
instrumentality or any agreement or instrument to which either
the Company or Ceridian is a party or by which any of its
properties is bound, or constitute a default thereunder or result
in the creation or imposition of any lien.
5.3. Authorization. The execution and delivery by the
Company and Ceridian of this Amendment and the performance of the
obligations contemplated hereby (i) have been duly authorized by
all necessary corporate action on the part of both the Company
and Ceridian and (ii) do not and will not require any
authorization, consent, approval or license from or any
registration, qualification, designation, declaration or filing
with, any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign.
5.4. Valid and Binding Effect. This Amendment has
been duly and validly executed and delivered by both the Company
and Ceridian and constitutes the legal, valid and binding
obligation of both the Company and Ceridian, enforceable in
accordance with its terms.
5.5. Absence of Default. Both Ceridian and the
Company acknowledge that as of the date of this Amendment,
neither Ceridian nor Comdata has any grounds for not performing
its obligations under the Agreement, and that through the date
hereof any claims or rights to set off that either may have
against the Executive are hereby waived in consideration of the
Executive's agreement to enter into this Amendment. As of the
date of this Amendment, the Executive is not aware of any such
claims.
6. Miscellaneous.
6.1. Amendment to Agreement. The Agreement is hereby,
and shall henceforth be deemed to be, amended, modified and
supplemented in accordance with the provisions hereof, and the
respective rights, duties and obligations under the Agreement
shall hereafter be determined, exercised and enforced under the
Agreement, as amended, subject in all respects to such
amendments, modifications, and supplements and all terms and
conditions of this Amendment. Initially capitalized terms used
in this Amendment shall have the meanings ascribed thereto in the
Agreement, as amended hereby, unless otherwise defined herein.
6.2. Ratification of the Agreement. Except as
expressly set forth in this Amendment, all agreements, covenants,
undertakings, provisions, stipulations, and promises contained in
the Agreement are hereby ratified, readopted, approved, and
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confirmed and remain in full force and effect.
6.3. No Implied Waiver. The execution, delivery and
performance of this Amendment shall not, except as expressly
provided herein, constitute a waiver or modification of any
provision of, or operate as a waiver of any right, power or
remedy of the Executive under, the Agreement or prejudice any
right or remedy that the Executive may have or may have in the
future under or in connection with the Agreement. The
representations and warranties of the Company and Ceridian
contained in this Amendment shall survive the execution and
delivery of this Amendment and the effectiveness hereof.
6.4. Governing Law. This Amendment shall be governed
by, and construed and enforced in accordance with, the laws of
the State of Tennessee.
6.5. Counterparts; Telecopy Execution. This Agreement
may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by facsimile shall be equally as
effective as delivery of a manually executed counterpart. Any
party delivering an executed counterpart of this Amendment by
facsimile shall also deliver a manually executed counterpart, but
the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this
Amendment.
IN WITNESS WHEREOF, the undersigned have caused this
Amendment to be executed by their duly authorized officers or in
their individual capacities as of the date first written above.
CERIDIAN: EXECUTIVE:
CERIDIAN CORPORATION /s/X. X. XxXxxxxx
/s/Xxxxxxx X. Xxxxxx Xxxxxx X. XxXxxxxx
By: Xxxxxxx X. Xxxxxx
COMPANY:
Its:VP Organization Resources
COMDATA HOLDINGS CORPORATION
/s/Xxxx X. Xxxxxxx
By: Xxxx X. Xxxxxxx
Its: VP & Asst Secretary
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SCHEDULE I
McTavish Severance Agreement
Post-Merger Position
and Title: Executive Vice President of Ceridian or any
successor-in-interest; President and Chief
Executive Officer of Comdata Network.
Reporting To: Xxxxx Xxxxxxx, Ceridian or any successor-in-
interest Chairman, President and Chief
Executive Officer.
Salary and Benefits:Annual salary of $348,140. The Executive is
eligible to participate in the 1996 Ceridian
Executive Incentive Plan with a target annual
payment, based on performance, of 40% of the
Executive's year-end annualized salary. The
maximum payout under the Plan is 60%.
Stock Awards: Non-qualified stock options to purchase
25,000 shares of Ceridian common stock and a
performance restricted stock award of 30,000
shares of common stock under Ceridian's 1993
Long-Term Incentive Plan.
Supplementary Executive
Benefits: The Executive will also be eligible for
supplementary executive benefits of $25,000
per year, payable monthly ($2,083 per month)
in addition to the Executive's base salary.
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