EXHIBIT 10.1

 

CERIDIAN CORPORATION

2004 LONG-TERM STOCK INCENTIVE PLAN

 

Non-Qualified Stock Option Agreement

(Non-employee Director)

 

THIS AGREEMENT is entered into and effective as of [GRANT DATE] (the “Date of
Grant”), by and between Ceridian Corporation, a Delaware corporation (the
“Company”), and [NAME] (the “Optionee”).

 

A.                                   The Company has adopted the Ceridian
Corporation 2004 Long-Term Stock Incentive Plan (as may be amended or
supplemented, the “Plan”) authorizing the Compensation and Human Resources
Committee of the Board of Directors of the Company (the “Committee”), to grant
stock options to Eligible Persons.

 

B.                                     The Company desires to give the Optionee
an inducement to acquire a proprietary interest in the Company and an added
incentive to advance the interests of the Company by granting to the Optionee an
option to purchase shares of common stock of the Company pursuant to the Plan.

 

Accordingly, the parties agree as follows:

 

1.                                       Grant of Option.

 

The Company hereby grants to the Optionee the right, privilege and option (the
“Option”) to purchase [NUMBER OF SHARES] shares (the “Option Shares”) of the
Company’s common stock, $0.01 par value (the “Common Stock”), according to the
terms and subject to the conditions hereinafter set forth and as set forth in
the Plan.  The Option granted hereunder shall not be an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).

 

2.                                       Option Exercise Price.

 

The per share price to be paid by Optionee in the event of an exercise of the
Option will be $[STRIKE PRICE].

 

3.                                       Duration of Option and Time of
Exercise.

 

3.1                                 Initial Period of Exercisability.  Except as
provided in Sections 3.2 and 3.3 hereof, the Option shall become exercisable in
full six months from the Date of Grant and shall become void and expire at
midnight (Minneapolis time) on the [TERM OF OPTION] anniversary of the Date of
Grant and may not be exercised after that time (the “Time of Option
Termination”).

 

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3.2                                 Termination of Service.  If Optionee’s
services as a director of the Company ceases by reason of death, Disability or
not standing for re-election to the Board, the Option shall become immediately
exercisable in full and remain exercisable until the Time of Option
Termination.  If Optionee voluntarily resigns from the Board (which does not
include the submission of an offer not to stand re-election as a director in
accordance with Company policies), Optionee shall have three months following
the date of such cessation of service as a director to exercise this Option (but
in no event after the Time of Option Termination), but only to the extent that
Optionee was entitled to exercise it as of the date of such cessation.  If
Optionee’s services as a director of the Company ceases for any reason other
than those specified earlier in this section, this Option shall remain
exercisable until the Time of Option Termination, but only to the extent that
Optionee was entitled to exercise it as of the date of such cessation.

 

3.3                                 Impact of Change of Control.  If a Change of
Control (as defined in Section 8 of this Agreement) occurs, the Option will
become immediately exercisable in full and will, notwithstanding the provisions
of Section 3.2 hereof, remain exercisable until the Time of Option Termination,
regardless of whether the Optionee remains as a director of the Company.  In
addition, if a Change of Control of the Company occurs, the Committee, in its
sole discretion and without the consent of the Optionee, may determine that the
Optionee will receive, with respect to some or all of the Option (and in
satisfaction of the applicable portion of the Option), as of the effective date
of any such Change of Control of the Company, cash in an amount equal to the
excess of the Fair Market Value (as defined in the Plan) of the applicable
Option Shares immediately prior to the effective date of such Change of Control
of the Company over the Option Exercise Price per share of the Option.

 

4.                                       Manner of Option Exercise.

 

4.1                                 Notice.  This Option may be exercised by the
Optionee in whole or in part from time to time, subject to the conditions
contained in the Plan and in this Agreement, by delivery, in person, by
facsimile or electronic transmission or through the mail, to the Company at its
principal executive office in Minneapolis, Minnesota USA (Attention:  Corporate
Treasury), of a written notice of exercise.  Such notice must be in a form
satisfactory to the Committee, must identify the Option, must specify the number
of Option Shares with respect to which the Option is being exercised, and must
be signed by the person or persons so exercising the Option.  Such notice must
be accompanied by payment in full of the total exercise price and any applicable
taxes for the Option Shares to be purchased.  In the event that the Option is
being exercised, as provided by the Plan and Section 3.2 of this Agreement, by
any person or persons other than the Optionee, the notice must be accompanied by
appropriate proof of right of such person or persons to exercise the Option.  If
the Optionee retains the Option Shares purchased, as soon as practicable after
the effective exercise of the Option, the Optionee will be recorded on the stock
transfer books of the Company as the owner of the Option Shares purchased, and
the Company will deliver to the Optionee one or more duly issued stock
certificates evidencing such ownership.

 

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4.2                                 Payment.  At the time of exercise of the
Option, the Optionee must pay the total exercise price of the Option Shares to
be purchased entirely in cash (including a check, bank draft or money order,
payable to the order of the Company); provided, however, that the Committee, in
its sole discretion and upon terms and conditions established by the Committee,
may allow such payment to be made, in whole or in part, by tender of a Broker
Exercise Notice or Previously Acquired Shares (as such terms are defined in
Section 8 of this Agreement), or by a combination of such methods.  In the event
the Optionee is permitted to pay the total purchase price of the Option in whole
or in part with Previously Acquired Shares, the value of such shares will be
equal to their Fair Market Value on the date of exercise of the Option.  The
delivery of any shares already owned by the Optionee may be made through
delivery of a written attestation of ownership if permitted by the Committee.

 

5.                                       Rights and Restrictions of Optionee;
Transferability.

 

5.1                                 Rights as a Stockholder.  The Optionee will
have no rights as a stockholder unless and until all conditions to the effective
exercise of the Option (including, without limitation, the conditions set forth
in Sections 4 and 6 of this Agreement) have been satisfied and the Optionee has
become the holder of record of such shares.  No adjustment will be made for
dividends or distributions with respect to the Option Shares as to which there
is a record date preceding the date the Optionee becomes the holder of record of
such Option Shares, except as may otherwise be provided in the Plan or
determined by the Committee in its sole discretion.

 

5.2                                 Restrictions on Transfer.  Except as
otherwise provided by the Committee, neither the Option nor any rights under the
Option shall be transferable by the Optionee other than by will or by the laws
of descent and distribution.  The Committee may establish procedures as it deems
appropriate for the Optionee to designate a Person or Persons, as beneficiary or
beneficiaries, to exercise the rights of the Optionee and receive any property
distributable with respect to the Option in the event of the Optionee’s death. 
The Option shall be exercisable during the Optionee’s lifetime only by the
Optionee or, if permissible under applicable law, by the Optionee’s guardian or
legal representative.  Neither the Option nor any right under any the Option may
be pledged, alienated, attached or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.

 

6.                                       Securities Law and Other Restrictions.

 

Notwithstanding any other provision of the Plan or this Agreement, the Company
will not be required to issue, and the Optionee may not sell, assign, transfer
or otherwise dispose of, any Option Shares, unless (a) there is in effect with
respect to the Option Shares a registration statement under the Securities Act
of 1933, as amended, and any applicable state or foreign securities laws or an
exemption from such registration, (b) the Option Shares have been admitted for
trading on the New York Stock Exchange or any other securities exchange or the
National Association of Securities Dealers, Inc. that are

 

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applicable to the Company, and (c) there has been obtained any other consent,
approval or permit from any other regulatory body which the Committee, in its
sole discretion, deems necessary or advisable.  The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing Option Shares, as may be deemed necessary or advisable by the
Company in order to comply with such securities law or other restrictions.

 

7.                                       Adjustments.

 

In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Common Stock, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company or other similar corporate transaction or event
affects the Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Common Stock (or other securities or other property)
subject to the Option and (ii) the exercise price with respect to the Option.

 

8.                                       Certain Definitions.

 

For purposes of this Agreement, the following additional definitions will apply:

 

(a)                                  “Broker Exercise Notice” means a written
notice pursuant to which Optionee, upon exercise of an Option, irrevocably
instructs a broker or dealer to sell a sufficient number of shares or loan a
sufficient amount of money to pay all or a portion of the exercise price of the
Option and remit such sum to the Company and directs the Company to deliver
stock certificates to be issued upon such exercise directly to such broker or
dealer.

 

(b)                                 “Change of Control” shall mean the first of
the following events to occur:

 

(i)  there is consummated a merger or consolidation to which the Company or any
direct or indirect subsidiary of the Company is a party if the merger or
consolidation would result in the voting securities of the Company 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 the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation; or

 

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(ii)  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 the
Company representing 20% or more of the total combined voting power of the
Company’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 of hereof, the following acquisitions shall not
constitute a Change of Control: (1) any acquisition by the Company or any of its
subsidiaries, (2) any acquisition directly from the Company or any of its
subsidiaries, (3) any acquisition by any employee benefit plan (or related trust
or fiduciary) sponsored or maintained by the Company or any corporation
controlled by the Company, (4) any acquisition by an underwriter temporarily
holding securities pursuant to an offering of such securities, (5) any
acquisition by a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, (6) 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 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, beneficial ownership of all of the voting
securities of the Company beneficially owned by it on such date, and (7) any
acquisition in connection with a merger or consolidation which, pursuant to
paragraph (b)(i) above, does not constitute a Change of Control; or

 

(iii)  there is consummated a transaction contemplated by an agreement for the
sale or disposition by the Company of all or substantially all of the Company’s
assets, other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity, at least 60% of the combined voting
power of the voting securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale; or

 

(iv)  the stockholders of the Company approve any plan or proposal for the
liquidation of the Company; or

 

(v)  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 those members of the
Board who either (i) were directors on

 

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January 29, 2002, or (ii) were elected by, or on the nomination or
recommendation of, at least a two-thirds (2/3) majority of the then-existing
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 the
Company); or

 

(vi)  such other event or transaction as the Board shall determine constitutes a
Change of Control.

 

(c)                                  “Disability” means the permanent and total
disability of the Optionee within the meaning of Section 22(e)(3) of the Code.

 

(d)                                 “Previously Acquired Shares” means shares of
Common Stock that are already owned by the Optionee or that are to be issued
upon the exercise of the Option.

 

9.                                       Subject to Plan.

 

The Option and the Option Shares granted and issued pursuant to this Agreement
have been granted and issued under, and are subject to the terms of, the Plan. 
The terms of the Plan are incorporated by reference in this Agreement in their
entirety, and the Optionee, by execution of this Agreement, acknowledges having
received a copy of the Plan.  The provisions of this Agreement will be
interpreted as to be consistent with the Plan, and any ambiguities in this
Agreement will be interpreted by reference to the Plan.  In the event that any
provision of this Agreement is inconsistent with the terms of the Plan, the
terms of the Plan will prevail.

 

10.                                 Miscellaneous.

 

10.1                           Binding Effect.  This Agreement will be binding
upon the heirs, executors, administrators and successors of the parties to this
Agreement.

 

10.2                           Governing Law.  This Agreement and all rights and
obligations under this Agreement will be construed in accordance with the Plan
and governed by the laws of the State of Delaware, without regard to conflicts
or choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive laws of another
jurisdiction.

 

10.3                           Entire Agreement.  This Agreement and the Plan
set forth the entire agreement and understanding of the parties to this
Agreement with respect to the grant and exercise of the Option and the
administration of the Plan and supersede all prior agreements, arrangements,
plans and understandings relating to the grant and exercise of the Option and
the administration of the Plan.

 

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10.4                           Amendment and Waiver.  Other than as provided in
the Plan, this Agreement may be amended, waived, modified or canceled only by a
written instrument executed by the parties to this Agreement or, in the case of
a waiver, by the party waiving compliance.

 

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In Witness Whereof, you and Ceridian Corporation have executed this Agreement as
of the Date of Grant.

 

 

CERIDIAN CORPORATION

OPTIONEE

 

 

 

 

By:

 

 

 

 

Name:

 

 

[NAME]

Its:

 

 

 

 

Mailing Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By execution of this Agreement, Optionee
acknowledges having received a copy of
the Plan.

 

 

 

Version: 7-27-2005

 

 

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