CERIDIAN CORPORATION
PERFORMANCE-BASED STOCK OPTION AWARD AGREEMENT
1993 LONG-TERM INCENTIVE PLAN
This Agreement between you, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and Ceridian Corporation (the
"Company") is dated as of JULY 22, 1998 (the "Date of Grant") and evidences the
grant of a Non-Statutory Stock Option (the "Stock Option") to you pursuant to
the 1993 Long-Term Incentive Plan of the Company (the "Plan").
1. Any capitalized term used in this Agreement which is defined in the
Plan shall have the same meaning as set forth in the Plan. When used in this
Agreement, the following additional terms shall have the meanings indicated:
(a) "TOTAL RETURN TO SHAREHOLDERS" means, with respect to the Company
or any other S&P 500 Company, the total return to a holder of the common stock
of such company as a result of his or her ownership of such common stock during
the Measurement Period, such total return (i) to be expressed as a percentage of
an assumed initial investment in such common stock as of July 22, 1998 and (ii)
to include both the appreciation in the per share price of such common stock
during the Measurement Period and the per share fair market value of all
dividends and distributions paid or distributed by such company with respect to
such common stock during the Measurement Period, assuming that all such
dividends and distributions are reinvested in shares of such common stock at
their Fair Market Value on the last trading day of the month in which the
dividend or distribution is paid or distributed. For purposes of calculating
TRS for the Company or any other S&P 500 Company, the assumed initial investment
in such company's common stock as of July 22, 1998 shall be at the applicable
Starting Price, and the value of a share of such company's common stock at the
end of the Measurement Period shall be the applicable Ending Price.
(b) "ENDING PRICE" means, with respect to any S&P 500 Company
(including the Company), the average daily last reported sales price of a share
of such company's common stock as reported in the WALL STREET JOURNAL during the
period June 1, 2001 through June 30, 2001.
(c) "FAIR MARKET VALUE" (i) with respect to the Company has the same
meaning as specified in Section 2.10 of the Plan, and (ii) with respect to any
other S&P 500 Company means the last reported sales price of a share of such
company's common stock on the date in question as reported in the Wall Street
Journal.
(d) "MEASUREMENT PERIOD" means the period July 22, 1998 through June
30, 2001.
(e) "S&P 500 COMPANIES" means the companies that comprise the
Standard & Poors' 500 Stock Index as it existed on July 22, 1998, and which are
still publicly traded on June 30, 2001.
(f) "STARTING PRICE" means, with respect to any S&P 500 Company
(including the Company), the average daily last reported sales price of a share
of such
company's common stock as reported in the WALL STREET JOURNAL during the
period July 1, 1998 through July 22, 1998.
2. Effective as of the Date of Grant, and subject to the terms and
conditions of the Plan and this Agreement, the Company has granted to you the
option to purchase from the Company, and the Company has agreed to sell to you,
40,000 shares of Common Stock at a price of $61.50 per share (the "Option
Shares").
3. This Stock Option will become void and expire at 5:00 p.m.
(Minneapolis time) on the tenth anniversary of the Date of Grant and may not be
exercised after that time.
4. Except as otherwise expressly provided in Sections 5 through 8 of this
Agreement, this Stock Option will become exercisable at the times specified in
this Section 4, but only if, at the time specified, you have been continuously
employed by the Company or a Subsidiary since the Date of Grant. If this Stock
Option becomes exercisable, it will remain exercisable until the date specified
in Section 3 of this Agreement.
(a) This Stock Option will become exercisable with regard to all of
the Option Shares as of December 31, 2000 if the average closing price of a
share of the Company's Common Stock on the New York Stock Exchange for any 20
consecutive trading days during the period beginning on the Grant Date and
ending on December 31, 2000 is equal to or greater than $84.50.
(b) If the condition specified in paragraph (a) of this Section 4 is
not satisfied, this Stock Option will become exercisable with regard to all of
the Option Shares if the average closing price of a share of the Company's
Common Stock on the New York Stock Exchange for any 20 consecutive trading day
period that ends during the period beginning January 1, 2001 and ending June 30,
2001 is equal to or greater than $84.50. If this condition is satisfied, this
Stock Option will become exercisable as of the day immediately following the
completion of such 20 day period.
(c) If neither of the conditions specified in paragraphs (a) and (b)
of this Section 4 are satisfied, this Stock Option will, nevertheless, become
exercisable with regard to all of the Option Shares as of June 30, 2001 if the
Company's rank for Total Return to Shareholders among S&P 500 Companies during
the Measurement Period is at least at the 60th percentile.
(d) Notwithstanding Paragraphs (a) through (c) of this Section 4,
this Stock Option shall become exercisable with respect to all of the Option
Shares on March 31, 2008.
(e) If there is any change in the corporate structure or shares of
the Company of the types described in Sections 3.2(c) or 4.4 of the Plan, then
the number of Option Shares, the Starting Price and Ending Price specified in
Section 1 and the per share price specified in Paragraphs 4(a) and (b) shall be
appropriately adjusted as contemplated by Sections 3.2(c) and 4.4 of the Plan so
as to prevent reduction or enlargement of your rights under this Agreement.
5. If your employment is terminated by the Company or any Subsidiary for
Cause (as defined in Section 10.3(b) of the Plan), this Stock Option may not be
exercised after such
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termination of employment and will be forfeited, and all of your rights under
the Plan and this Agreement will immediately terminate.
6. If your employment with the Company and all Subsidiaries terminates
because of death, Disability or a Change of Control Termination, or if the
Company or any applicable Subsidiary terminates your employment without Cause,
this Stock Option shall immediately become exercisable in full if the stock
price performance condition specified in paragraph 4(a) of this Agreement was
satisfied prior to the date of such termination.
7. If your employment with the Company and all Subsidiaries terminates
for any reason prior to December 31, 2000 other than as provided in Section 6 of
this Agreement, you will forfeit this Stock Option and all of your rights under
the Plan and this Agreement will immediately terminate. If your employment with
the Company and all Subsidiaries terminates on or after December 31, 2000 due to
Retirement, and if at that time this Stock Option is not yet exercisable, this
Stock Option may become exercisable after such termination if either of the
conditions specified in Paragraphs 4(b) and 4(c) of this Agreement is satisfied.
If neither of such conditions is satisfied following a termination of employment
on or after December 31, 2000 due to your Retirement, or if your employment with
the Company and all Subsidiaries terminates on or after December 31, 2000 for
any reason other than Retirement or as provided in Section 6 of this Agreement,
you will forfeit this Stock Option and all of your rights under the Plan and
this Agreement will immediately terminate. YOU EXPRESSLY AGREE THAT EXCEPT AS
SPECIFICALLY PROVIDED IN SECTION 6 OF THIS AGREEMENT, YOU WILL HAVE NO RIGHT TO
ACCELERATED EXERCISABILITY OF THIS STOCK OPTION UNDER SECTION 12 OF THE PLAN IN
THE EVENT OF A CHANGE OF CONTROL OR A CHANGE OF CONTROL TERMINATION, AND AGREE
THAT FOR PURPOSES OF THIS STOCK OPTION, SECTION 12 OF THE PLAN SHALL OTHERWISE
BE DEEMED TO HAVE BEEN RESCINDED BY THE BOARD. YOU ALSO EXPRESSLY CONSENT TO
THE TREATMENT OF THIS STOCK OPTION IN THE MANNER SPECIFIED IN THIS SECTION 7
UNDER CIRCUMSTANCES THAT WOULD OR COULD OTHERWISE CONSTITUTE "RETIREMENT" AS
DEFINED IN THE PLAN.
8. If, at any time during the period that this Stock Option is or may yet
become exercisable in whole or in part, or at any time prior to one year after
the termination of your employment with the Company and all Subsidiaries,
whichever is later, you (i) engage in any commercial activity in competition
with any part of the business of the Company or its Subsidiaries, (ii) divert or
attempt to divert from Ceridian or its Subsidiaries any business of any kind,
including, without limitation, interference with any business relationships with
suppliers, customers, licensees, licensors, clients or contractors, (iii) make,
or cause or attempt to cause any other person to make, any statement, either
written or oral, or convey any information about the Company which is
disparaging or which in any way reflects negatively upon the Company, or (iv)
engage in any other activity that is inimical, contrary or harmful to the
interests of the Company or its Subsidiaries, including influencing or advising
any person who is employed by or in the service of the Company or its
Subsidiaries to leave such employment or service to compete with the Company or
its Subsidiaries or to enter into the employment or service of any actual or
prospective competitor of the Company or its Subsidiaries, or influencing or
advising any competitor of the Company or its Subsidiaries to employ or to
otherwise engage the services of any person who is employed by or in the service
of the Company or its Subsidiaries, or improperly disclosing or otherwise
misusing any confidential information regarding the Company or its Subsidiaries,
then notwithstanding any other provision of this Agreement (1) this Stock Option
shall terminate effective the date on
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which you enter into such activity, unless terminated sooner by operation of
another term of this Agreement or the Plan, and (2) any gain realized by you
from exercising all or any portion of this Stock Option during a period
beginning six months prior to the date on which you enter into such activity
shall be paid by you to the Company.
9. By accepting this Agreement, you consent to a reduction from any
amounts the Company owes you from time to time (including wages or other
compensation) of any amount you owe the Company under Section 8 of this
Agreement. If the Company does not recover by means of set-off the full amount
you owe it, you agree to immediately repay the unpaid balance to the Company.
10. Nothing in the Plan or this Agreement shall confer upon you any right
with respect to continued employment by the Company or any Subsidiary, nor
interfere in any way with the right of the Company or a Subsidiary to terminate
your employment at any time.
11. Except as otherwise expressly provided in Sections 4 through 8 of this
Agreement, this Agreement is subject to all of the terms and conditions of the
Plan and, where any questions or matters of interpretation arise, the terms and
conditions of the Plan and the rules of the Committee administering the Plan
shall control.
12. Neither you nor any other person shall have any rights as a
stockholder with respect to any Option Shares until you or such other person
shall have become a holder of record of such shares and, except as otherwise
provided in Section 4.4 of the Plan, no adjustments shall be made for dividends
or other distributions or rights as to which there is a record date preceding
the date you become the holder of record of such shares.
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 at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇, and any
notice to be given to you shall be addressed to you at the address given beneath
your signature below, or at such other address as either party may hereafter
designate in writing to the other.
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.
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In Witness Whereof, Ceridian Corporation and you have executed this
Agreement as of the Date of Grant.
OPTIONEE
CERIDIAN CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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