Document:

EXHIBIT 10

           
EXHIBIT 10.1

STOCK PURCHASE AGREEMENT

by and among

INFOTEC BUSINESS SYSTEMS, INC.

as Acquiror

AND

GALAXY NETWORKS INC.

as Acquiree

and

the Stockholders of

GALAXY NETWORKS INC.

   

November 11, 2004

AGREEMENT

THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into this 11th day of November 2004 by and among INFOTEC BUSINESS SYSTEMS, INC., a Nevada corporation (hereinafter referred to as “Infotec” or the “Purchaser”), GALAXY NETWORKS INC., a British Columbia corporation (hereinafter referred to as the “Company”) and the STOCKHOLDERS of GALAXY NETWORKS INC. (hereinafter referred to as the “Stockholders”).

RECITALS:

A.

The Stockholders own 100% of the issued and outstanding shares of the capital stock of the Company as set forth on Exhibit A hereto.

B.

Purchaser is willing to acquire all of the issued and outstanding capital stock of the Company, making the Company a 100% owned subsidiary, and the Stockholders desire to exchange all of their shares of the Company's capital stock for shares of Infotec Common Stock as  hereinafter provided.

C.

It is the intention of the parties hereto that:  (i) Purchaser shall acquire 100% of the issued and outstanding capital stock of the Company in exchange solely for  shares of Infotec’s Common Stock,  set forth below, representing approximately 52% of the outstanding capital stock of Infotec on an undiluted basis following completion of the acquisition contemplated by this Agreement (the "Exchange"); (iii) the Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended, (the "Act") and under the applicable securities laws of the state or jurisdiction where the Stockholders reside.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties hereto agree as follows:

Section 1.  Exchange of Shares.

1.1

Exchange of Shares.  Purchaser and the Stockholders hereby agree that the Stockholders shall, on the Closing Date (as hereinafter defined), exchange all of their issued and outstanding shares of the capital stock of the Company (the "Galaxy Shares") for 20,000,000 shares of Infotec’s Common Stock, $0.001 par value (the "Infotec Shares") set forth in Exhibit A hereto, representing approximately 52% of the outstanding capital stock of Infotec on an undiluted basis following the acquisition contemplated by this Agreement.  The number of shares of capital stock owned by the Stockholders and the number of Infotec Shares which the Stockholders will be entitled to receive in the Exchange is set forth in Exhibit A hereto.  

1.2

Delivery of Galaxy Shares and Contribution to Capital.  On the Closing Date, the Stockholders will deliver to Purchaser the certificates representing the Galaxy Shares, duly endorsed (or with executed stock powers) so as to make Purchaser the sole owner thereof.  Infotec shall deliver to the Stockholders the Infotec Shares to be delivered to the Stockholders.  

1.3

Investment Intent.  The Infotec Shares have not been registered under the Securities Act of 1933, as Amended, and may not be resold unless the Infotec Shares are registered under the Act or an exemption from such registration is available.  The Stockholders represent and warrant that they are acquiring the Infotec Shares for their own account, for investment, and not with a view to the sale or distribution of such Shares.  Each certificate representing the Infotec Shares will have a legend thereon incorporating language as follows:

"The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act").  The shares have been acquired for investment and may not be sold or transferred in the absence of an effective Registration Statement for the shares under the Act unless in the opinion of counsel satisfactory to the Company, registration is not required under the Act."

Section 2.  Representations and Warranties of the Company and the Stockholders.

The Company and the Stockholders, (except for Section 2.2 hereof, to the extent and subject to such Stockholders’ knowledge or office or employment or both) hereby represent and warrant as follows:

2.1

Organization and Good Standing; Ownership of Shares.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the Province of British Columbia, and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased or operated and such business is now conducted.  The Company is duly licensed or qualified and in good standing as a foreign corporation where the character of the properties owned by it or the nature of the business transacted by it make such licenses or qualifications necessary.  The Company does not have any subsidiaries except as reflected on Schedule 2.1 hereto.  There are no outstanding subscriptions, rights, options, warrants or other agreements obligating either the Company or the Stockholders to issue, sell or transfer any stock or other securities of the Company except as referred to on Exhibit 2.1.  

2.2

Ownership of Capital Stock.  Each of the Stockholders represents that he, she or it is the owner of record and beneficially of all of the shares of capital stock of the Company reflected on Exhibit A hereto, all of which shares are free and clear of all rights, claims, liens and encumbrances, and have not been sold, pledged, assigned or otherwise transferred except pursuant to this Agreement.

2.3

Financial Statements, Books and Records.  There has been previously delivered to Purchaser the unaudited balance sheet of the Company as of September 30, 2004 (the “Galaxy Balance Sheet”) and the related statements of operations for the period then ended (the “Financial Statements”).  The financial statements are true and accurate and fairly represent the financial position of the Company as at such dates and the results of its operations for the periods then ended, and have been prepared in accordance with generally accepted accounting principles consistently applied.  

2.4

No Material Adverse Changes.  Since the date of the Balance Sheet there has not been:

(i)

any material adverse change in the assets, operations, condition (financial or otherwise) or prospective business of the Company;

(ii)

any damage, destruction or loss materially affecting the assets, prospective business, operations or condition (financial or otherwise) of the Company, whether or not covered by insurance;

(iii)

any declaration, setting aside or payment of any dividend or distribution with respect to any redemption or repurchase of the Company's capital stock; 

(iv)

any sale of an asset (other than in the ordinary course of business) or any mortgage or pledge by the Company of any properties or assets; or

(v)

adoption of any pension, profit sharing, retirement, stock bonus, stock option or similar plan or arrangement.

2.5

Taxes.  The Company has prepared and filed all appropriate federal, provincial and local tax returns for all periods prior to and through the date hereof for which any such returns have been required to be filed by it and has paid all taxes shown to be due by said returns or on any assessments received by it or has made adequate provision for the payment thereof.

2.6

Compliance with Laws.  The Company has complied with all federal, provincial and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to it or its business which, if not complied with, would materially and adversely affect the business of the Company.  

2.7

No Breach.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not:

(i)

violate any provision of the Articles of Incorporation of the Company; 

(ii)

violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which the Company is a party or by or to which it or any of its assets or properties may be bound or subject;

(iii)

violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, the Company, or upon the properties or business of the Company; or 

(iv)

violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a materially adverse effect on the business or operations of the Company.  

2.8

Actions and Proceedings.  There is no outstanding order, judgment, injunction, award or decree of any court, governmental or regulatory body or arbitration tribunal against or involving the Company.  Except as is set out in Schedule 2.8 hereto, there is no action, suit or claim or legal, administrative or arbitral proceeding or (whether or not the defense thereof or liabilities in respect thereof are covered by insurance) pending or threatened against or involving the Company or any of its properties or assets.  There is no fact, event or circumstances that may give rise to any suit, action, claim, investigation or proceeding. 

2.9

Brokers or Finders.  No broker's or finder's fee will be payable by the Company in connection with the transactions contemplated by this Agreement, nor will any such fee be incurred as a result of any actions by the Company or the Stockholders, except as set out in Schedule 2.9 hereto.

2.10

Real Estate.  The Company neither owns real property nor is a party to any leasehold agreement, except as disclosed on Schedule 2.10 hereof.  

2.11

Tangible Assets.  The Company has full title and interest in all machinery, equipment, furniture, leasehold improvements, fixtures, vehicles, structures, owned or leased by the Company, any related capitalized items or other tangible property material to the business of the Company (the "Tangible Assets").  The Company holds all rights, title and interest in all the Tangible Assets owned by it on the Galaxy Balance Sheet or acquired by it after the date of the Galaxy Balance Sheet, free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts or any other encumbrances.  All of the Tangible Assets are in good operating condition and repair and are usable in the ordinary course of business of the Company and conform to all applicable laws, ordinances and governmental orders, rules and regulations relating to their construction and operation.

2.12

Liabilities.  The Company does not have any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured, accrued or absolute, contingent or otherwise, including, without limitation, any liability on account of taxes, any other governmental charge or lawsuit (all of the foregoing collectively defined to as "Liabilities"), which were not fully, fairly and adequately reflected on the Galaxy Balance Sheet.  As of the Closing Date, the Company will not have any Liabilities, other than Liabilities fully and adequately reflected on the Galaxy Balance Sheet, except for Liabilities incurred in the ordinary course of business.

2.13

Operations of the Company.  Except as set forth on Schedule 2.13, from the date of the Galaxy Balance Sheet and though the Closing Date hereof, the Company has not and will hot have:

(i)

incurred any indebtedness for borrowed money;

(ii)

declared or paid any dividend or declared or made any distribution of any kind to any shareholder, or made any direct or indirect redemption, retirement, purchase or other acquisition of any shares in its capital stock;

(iii)

made any loan or advance to any stockholder, officer, director, employee, consultant, agent or other representative or made any other loan or advance otherwise than in the ordinary course of business; 

(iv)

except in the ordinary course of business, incurred or assumed any indebtedness or liability (whether or not currently due and payable);

(v)

disposed of any assets of the Company except in the ordinary course of business; 

(vi)

materially increased the annual rate of compensation of any executive employee of the Company; 

(vii)

increased, terminated, amended or otherwise modified any plan for the benefit of employees of the Company;

(viii)

issued any equity securities or rights to acquire such equity securities; or

(ix)

except in the ordinary course of business, entered into or modified any contract, agreement or transaction.  

2.14

Capitalization.  The authorized capital stock of the Company consists of the type and amount of shares as is set out in Schedule 2.14 hereof, which also sets out the number of each class presently issued and outstanding.  Except as disclosed on Schedule 2.14 hereof, neither the Company nor the Stockholders have granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the issued or unissued shares of capital stock of the Company.

2.15

Full Disclosure.  No representation or warranty by the Company or the Stockholders in this Agreement or in any document or schedule to be delivered by them pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to Infotec pursuant hereto or in connection with the negotiation, execution or performance of this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the businesses of the Company.

2.16

Representations and Warranties on Closing Date.  The representations and warranties contained in this Section 2 shall be true and complete on the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date.

2.17

Intangible Assets and Intellectual Property.  The Company has full title and interest in all intellectual property, goodwill or other intangible assets incorporated or used in, or material to the business of the Company (the "IP").  The Company holds all rights, title and interest in all the IP owned by it on the date of the Galaxy Balance Sheet or acquired by it thereafter, free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts or any other encumbrances, liabilities or contractual interests.  The IP is usable in the ordinary course of business of the Company and except as set out in Schedule 2.17 hereto, there is no known impediment or restriction to it being registered or protected in conformance with applicable laws, ordinances and governmental orders, rules and regulations relating to their registration or protection.  Except as set forth in Schedule 2.17 hereto, no royalties or fees are payable by the Company to any person by reason of the Company’s use of the IP. 

Section 3.  Representations and Warranties of Infotec

Infotec hereby represents and warrants to the Company and the Stockholders as follows:

3.1

Organization and Good Standing.  Infotec is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased, or operated and such business is now conducted.  Infotec does not have any subsidiaries except as listed on Schedule 3.1 hereof.

3.2

The Infotec Shares.  The Infotec Shares to be issued to the Stockholders have been or will have been duly authorized by all necessary corporate and stockholder actions and, when so issued in accordance with the terms of this Agreement, will be validly issued, fully paid and non- assessable.

3.3

Financial Statements; Books and Records.  There has been previously delivered to the Company the unaudited balance sheet of Infotec as at July 31, 2004  (the “Infotec Balance Sheet”) and the related statements of operations for the period then ended (the "Financial Statements"). The Financial Statements are true and accurate and fairly represent the financial position of the Company as at such dates and the results of its operations for the periods then ended, and have been prepared in accordance with generally accepted accounting principles consistently applied. 

3.4

No Material Adverse Changes.  Since the date of the Infotec Balance Sheet and except as otherwise disclosed in Schedule 3.4 or in Infotec reports or filings made under the Securities Exchange Act of 1934, there has not been:

(i)

any material adverse change in the assets, operations, condition (financial or otherwise) or prospective business of Infotec; 

(ii)

any damage, destruction or loss materially affecting the assets, prospective business, operations or condition (financial or otherwise) of Infotec, whether or not covered by insurance;

(iii)

any declaration, setting aside or payment of any dividend or distribution with respect to any redemption or repurchase of Infotec’s capital stock; 

(iv)

any sale of an asset (other than in the ordinary course of business) or any mortgage or pledge by Infotec of any properties or assets; or

(v)

adoption of any pension, profit sharing, retirement, stock bonus, stock option or similar plan or arrangement.

3.5

Taxes.  Infotec has prepared and filed all appropriate federal, state, provincial and local tax returns of every kind and category (including, without limitation, income taxes, estimated taxes, excise taxes, sales taxes, inventory taxes, use taxes, gross receipt taxes, franchise taxes and property taxes) for all periods prior to and through the date hereof for which any such returns have been required to be filed by it or the failure to make such filings and resulting liability would not be material relative to the results of operations of Infotec.  Infotec has paid all taxes shown to be due by said returns or on any assessments received by it or has made adequate provision for the payment thereof.

3.6

Compliance with Laws.  Infotec has complied with all federal, state, provincial and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to their businesses, including Federal and State securities laws, which, if not complied with, would materially and adversely affect the business of Infotec or the trading market for the shares of Infotec Common Stock.

3.7

No Breach.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not:

(i)

violate any provision of the Articles of Incorporation or By-Laws of Infotec ;

(ii)

violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which Infotec is a party or by or to which it or any of its assets or properties may be bound or subject;

(iii)

violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, Infotec or upon the properties or business of Infotec; or 

(iv)

violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a material adverse effect on the business or operations of Infotec.

3.8

Actions and Proceedings.  There is no outstanding order, judgment, injunction, award or decree of any court, governmental or regulatory body or arbitration tribunal against or involving Infotec.  There is no action, suit or claim or legal, administrative or arbitral proceeding or (whether or not the defense thereof or liabilities in respect thereof are covered by insurance) pending or threatened against or involving Infotec or any of its properties or assets.  Except as set forth on Schedule 3.8, there is no fact, event or circumstances that may give rise to any suit, action, claim, investigation or proceeding.

3.9

Brokers or Finders.  No broker’s or finder’s fee will be payable by Infotec in connection with the transactions contemplated by this Agreement, nor will any such fee be incurred as a result of any actions by Infotec, except as set out in Schedule 3.9 hereto.

3.10

Liabilities.  Infotec does not have any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured, accrued or absolute, contingent or otherwise, including, without limitation, any liability on account of taxes, any other governmental charge or lawsuit (all of the foregoing collectively defined to as "Liabilities"), which were not fully, fairly and adequately reflected on the Infotec Balance Sheet.  As of the Closing Date, Infotec will not have any Liabilities, other than Liabilities fully and adequately reflected on the Infotec Balance Sheet, except for Liabilities incurred in the ordinary course of business.

3.11

Operations of Infotec.  Except as set forth on Schedule 3.11 or in Infotec reports or filings made under the Securities Exchange Act of 1934, since the date of the Infotec Balance Sheet and through the Closing Date hereof, Infotec has not and will not have:

(i)

incurred any indebtedness for borrowed money;

(ii)

declared or paid any dividend or declared or made any distribution of any kind to any shareholder, or made any direct or indirect redemption, retirement, purchase or other acquisition of any shares in its capital stock;

(iii)

made any loan or advance to any shareholder, officer, director, employee, consultant, agent or other representative or made any other loan or advance otherwise than in the ordinary course of business; 

(iv)

except in the ordinary course of business, incurred or assumed any indebtedness or liability (whether or not currently due and payable);

(v)

disposed of any assets of Infotec except in the ordinary course of business; or

(vi)

materially increased the annual level of compensation of any executive employee of Infotec;

(vii)

increased, terminated amended or otherwise modified any plan for the benefit of employees of Infotec ;

(viii)

issued any equity securities or rights to acquire such equity securities; or

(ix)

except in the ordinary course of business, entered into or modified any contract, agreement or transaction. 

3.12

Authority to Execute and Perform Agreements.  Infotec has the full legal right and power and all authority and approval required to enter into, execute and deliver this Agreement and to perform fully their obligations hereunder.  This Agreement has been duly executed and delivered and is the valid and binding obligation of Infotec, enforceable in accordance with its terms, except as may be limited by bankruptcy, moratorium, insolvency or other similar laws generally affecting the enforcement of creditors' rights.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and the performance by Infotec of this Agreement, in accordance with its respective terms and conditions will not: 

(i)

require the approval or consent of any governmental or regulatory body, the Stockholders of Infotec, or the approval or consent of any other person; 

(ii)

conflict with or result in any breach or violation of any of the terms and conditions of, or constitute (or with any notice or lapse of time or both would constitute) a default under, any order, judgment or decree applicable to Infotec, or any instrument, contract or other agreement to which Infotec is a party or by or to which Infotec is bound or subject; or 

(iii)

result in the creation of any lien or other encumbrance on the assets or properties of Infotec.

3.13

Delivery of Periodic Reports; Compliance with 1934 Act.  Infotec has provided the Company and the Stockholders with all of its Periodic Reports filed with the Securities and Exchange Commission since January 1, 2003.  Infotec has filed all required Periodic Reports and is in compliance with its reporting obligations under the Securities Exchange Act of 1934.  All reports filed pursuant to such Act are complete and accurate in all material respects. All material contracts relative to Infotec are included in the Periodic Reports.  All material contracts and commitments for the provision or receipt of services or involving any obligation on the part of Infotec are included as exhibits to such periodic reports or are listed on Schedule 3.13 hereto. 

3.14

Capitalization.  The authorized capital stock of Infotec consists of 300,000,000 shares of common stock, $0.001 par value, of which 18,350,000 shares are presently issued and outstanding and 150,000,000 shares of preferred stock, $0.001 par value, of which no shares are presently issued and outstanding.  Except as indicated in Schedule 3.14 hereto or disclosed in its Periodic Reports, Infotec has not granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the issued or unissued shares of capital stock of Infotec.  

3.15

Full Disclosure.  No representation or warranty by Infotec in this Agreement or in any document or schedule to be delivered by it pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to the Company or the Stockholders pursuant hereto or in connection with the execution or performance of this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the business of Infotec.  

3.16

Representations and Warranties on Closing Date.  The representations and warranties contained in this Section 3 shall be true and complete on the Closing Date with the same force and effect as through such representations and warranties had been made on and as of the Closing Date. 

Section 4.  Covenants of Company and Stockholders

The Company and the Stockholders covenant to Purchaser as follows:

4.1

Conduct of Business.  From the date hereof through the Closing Date, the Stockholders and the Company shall cause the Company to conduct its business in the ordinary course and, without the prior written consent of Infotec, shall ensure that the Company does not undertake any of the actions specified in Section 2.13 hereof.  

4.2

Preservation of Business.  From the date hereof through the Closing Date, the Stockholders and the Company shall cause the Company to use its best efforts to preserve its business organization intact, keep available the services of its present employees, consultants and agents, maintain its present suppliers and customers and preserve its goodwill.  

4.3

Litigation.  The Company shall promptly notify Infotec of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against the Company or against any officer, director, employee, consultant, agent, stockholder or other representative with respect to the affairs of the Company.  

4.4

Continued Effectiveness of Representations and Warranties.  From the date hereof through the Closing Date, the Stockholders and the Company shall cause the Company to conduct its business in such a manner so that the representations and warranties contained in Section 2 shall continue to be true and correct on and as of the Closing Date and as if made on and as of the Closing Date, and shall:

(i)

promptly give notice to the Company or any event, condition or circumstance occurring from the date hereof through the Closing Date which would render any of the representations or warranties materially untrue, incomplete, insufficient or constitute a violation or breach of this Agreement; and

(ii)

supplement the information contained herein in order that the information contained herein is kept current, complete and accurate in all material respects.

Section 5.  Covenants of Infotec

Infotec covenants to the Company and the Stockholders as follows:

5.1

Conduct of Business.  From the date hereof through the Closing Date, Infotec shall conduct shall conduct their business in the ordinary course and, without the prior written consent of the Company, shall ensure that Infotec does not undertake any of the actions specified in Section 3.10 hereof.

5.2

Preservation of Business.  From the date hereof through the Closing Date, Infotec shall preserve their business organization intact and use its best efforts to preserve Infotec goodwill.

5.3

Litigation.  Infotec shall promptly notify the Company of any lawsuits, claims, proceedings or investigations which after the date hereof are threatened or commenced against Infotec or against any officer, director, employee, consultant, agent, or stockholder with respect to the affairs of Infotec.

5.4

Continued Effectiveness of Representations and Warranties.  From the date hereof through the Closing Date, Infotec shall conduct their business in such a manner so that the representations and warranties contained in Section 3 and Section 4 shall continue to be true and correct on and as of the Closing Date and as if made on and as of the Closing Date, and shall:

(i)

promptly give notice to the Company of any event, condition or circumstance occurring from the date hereof through the Closing Date which would render any of the representations or warranties materially untrue, incomplete, insufficient or constitute a violation or breach of this Agreement; and

(ii)

supplement the information contained herein in order that the information contained herein is kept current, complete and accurate in all material respects.

5.5

No Other Negotiations.  From the date hereof until the earlier of the termination of this Agreement or consummation of this Agreement, Infotec will not permit and will not authorize any officer or director of Infotec or any other person on its behalf to, directly or indirectly, solicit, encourage, negotiate or accept any offer from any party concerning the possible disposition of all or any substantial portion of the capital stock by merger, sale or any other means or any other transaction that would involve a change in control of Infotec, or any transaction in which Infotec contemplates issuing equity or debt securities.  

5.6

Board of Directors.  Simultaneously with the Closing, Carol Shaw and Barry Foreman shall be elected as directors of Infotec, and Robert Danvers shall resign as an officer and director.  

Section 6.  Covenants

6.1

Corporate Examination and Investigations.  Prior to the Closing Date, the parties acknowledge that they have been entitled, through their employees and representatives, to make such investigation of the assets, properties, business and operations, books, records and financial condition of the other as they each may reasonably require.  No investigation by a party hereto shall, however, diminish or waive in any way any of the representations, warranties, covenants or agreements of the other party under this Agreement.

6.2

Expenses.  Each party hereto agrees to pay its own costs and expenses incurred in negotiating this Agreement and consummating the transactions described herein. 

6.3

Further Assurances.  The parties shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby.  Each such party shall use its best efforts to fulfill or obtain the fulfillment of the conditions to the Closing, including, without limitation, the execution and delivery of any documents or other papers, the execution and delivery of which are necessary or appropriate to the Closing.

6.4

Confidentiality.  In the event the transactions contemplated by this Agreement are not consummated, each of the parties hereto agree to keep confidential any information disclosed to each other in connection therewith for a period of one (1) year from the date hereof; provided, however, such obligation shall not apply to information which:  

(i)

at the time of disclosure was public knowledge; 

(ii)

after the time of disclosure becomes public knowledge (except due to the unauthorized action of the receiving party); or

(iii)

the receiving party lawfully had within its possession at the time of disclosure.

Section 7.  Conditions Precedent to the Obligation of Infotec to Close

The obligation of Infotec to enter into and complete the Closing is subject, at the option of Infotec, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by Infotec in writing.

7.1

Representations and Covenants.  The representations and warranties of the Company and the Stockholders contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.  The Company and the Stockholders shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Company and the Stockholders on or prior to the Closing Date.  The Company and the Stockholders shall have delivered to Infotec, if requested, a certificate, dated the Closing Date, to the foregoing effect.  

7.2

Governmental Permits and Approvals; Corporate Resolutions.  Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained.  The Board of Directors of the Company shall have approved the transactions contemplated by this Agreement and the Company shall have delivered to Infotec, if requested by Infotec, resolutions by its Board of Directors, certified by the Secretary of the Company, authorizing the transactions contemplated by this Agreement. 

7.3

Third Party Consents.  All consents, permits and approvals from parties to any contracts, loan agreements or other agreements with the Company which may be required in connection with the performance by the Company of its obligations under such contracts or other agreements after the Closing shall have been obtained.  

7.4

Satisfactory Business Review.  Infotec shall have satisfied itself, after review of the information provided hereby or in connection herewith, or following any discussions with management or representatives of the Company and the Stockholders that none of the information revealed thereby has resulted in or in the reasonable opinion of Infotec may result in a material adverse change in the assets, properties, business, operations or condition (financial or otherwise) of the Company.

7.5

Litigation.  No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the transactions contemplated hereby or to seek damages or a discovery order in connection with such transactions, or which has or may have, in the reasonable opinion of Infotec, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Company.  

7.6

Certificate of Good Standing.  Infotec shall have received a certificate of good standing dated at or about the Closing Date to the effect that the Company is in good standing under the laws of its jurisdictions of incorporation.  

7.7

Stock Certificates:  At the Closing, the Stockholders shall have delivered the certificates representing the Galaxy Shares, duly endorsed (or with executed stock powers) so as to make Infotec the sole owner thereof.  

7.8

Other Documents.  The Company and the Stockholders shall have delivered such other documents, instruments and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement or which may be reasonably requested in furtherance of the provisions of this Agreement.  

Section 8.  Conditions Precedent to the Obligation of the Company and Stockholders to Close

The obligation of the Company and the Stockholders to enter into and complete the Closing is subject, at the option of the Company and the Stockholders, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived in writing by the Company.

8.1

Representations and Covenants.  The representations and warranties of Purchaser contained in this Agreement shall be true in all material respects on the Closing Date with the same force and effect as though made on and as of the Closing Date.  Purchaser shall have performed and complied with all covenants and agreements required by the Agreement to be performed or complied with by Purchaser on or prior to the Closing Date.  Purchaser shall have delivered to the Company and the Stockholders, if requested, a certificate, dated the Closing Date and signed by executive officers of Purchaser, to the foregoing effect.  

8.2

Governmental Permits and Approvals; Corporate Resolutions.  Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained.  The Board of Directors of Infotec and Acquisition Sub shall have approved the transactions contemplated by this Agreement, and Purchaser shall have delivered to the Company and the Stockholders, if requested, resolutions by their Board of Directors certified by the Secretary of Purchaser authorizing the transactions contemplated by this Agreement.  

8.3

Third Party Consents.  All consents, permits and approvals from parties to any contracts, loan agreements or other agreements with Infotec which may be required in connection with the performance by Purchaser of their obligations under such contracts or other agreements after the Closing shall have been obtained.  

8.4

Satisfactory Business Review.  The Company and the Stockholders shall have satisfied themselves, after review of the information provided hereby or in connection herewith, or following any discussions with management or representatives of Infotec that none of the information revealed thereby has resulted in or in the reasonable opinion of the Company may result in a material adverse change in the assets, properties, business, operations or condition (financial or otherwise) of Infotec.  

8.5

Litigation.  No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the transactions contemplated hereby or to seek damages or a discovery order in connection with such transactions, or which has or may in the reasonable opinion of the Company, have a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of Infotec.  

8.6

Stock Certificates.  At the Closing, the Stockholders shall receive certificates representing the Infotec Shares to be received pursuant hereto and subject to the conditions previously described.  

8.7

Other Documents.  Purchaser shall have delivered such other instruments, documents and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement or which may be reasonably requested in furtherance of the provisions of this Agreement.

Section 9.  Survival of Representations and Warranties of Infotec

Notwithstanding any right of the Company and the Stockholders fully to investigate the affairs of Purchaser, the former shall have the right to rely fully upon the representations, warranties, covenants and agreements of Purchaser contained in this Agreement or in any document delivered by Purchaser or any of its representatives, in connection with the transactions contemplated by this Agreement.  All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing Date hereunder for twelve (12) months following the Closing.

Section 10.  Survival of Representations and Warranties of the Company and the Stockholders

Notwithstanding any right of Infotec fully to investigate the affairs of the Company, Infotec has the right to rely fully upon the representations, warranties, covenants and agreements of the Company and the Stockholders contained in this Agreement or in any document delivered to Infotec by the latter or any of their representatives in connection with the transactions contemplated by this Agreement.  All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing Date hereunder for twelve (12) months following the Closing.

Section 11.  Indemnification

11.1

Obligation of Purchaser to Indemnify.  Subject to the limitations on the survival of representations and warranties contained in Section 9, Purchaser hereby agrees to indemnify, defend and hold harmless the Company and the Stockholders from and against any losses, liabilities, damages, deficiencies, costs or expenses (including interest, penalties and reasonable attorneys' fees and disbursements) (a "Loss") based upon, arising out of or otherwise due to any inaccuracy in or any breach of any representation, warranty, covenant or agreement of Purchaser contained in this Agreement or in any document or other writing delivered pursuant to this Agreement.

11.2

Obligation of the Company and the Stockholders to Indemnify.  Subject to the limitations on the survival of representations and warranties contained in Section 10, the Company and the Stockholders agree to indemnify, defend and hold harmless Infotec from and against any Loss, based upon, arising out of or otherwise due to any inaccuracy in or any breach of any representation, warranty, covenant or agreement which they have made and which are contained in this Agreement or in any document or other writing delivered pursuant to this Agreement.

Section 12.  The Closing

The Closing shall take place on or prior to November 11, 2004.  At the Closing, the parties shall provide each other with such documents as may be necessary or appropriate in order to consummate the transactions contemplated hereby including evidence of due authorization of the Agreement and the transactions contemplated hereby.

Section 13.  Miscellaneous

13.1

Waivers.  The waiver of a breach of this Agreement or the failure of any party hereto to exercise any right under this Agreement shall in no event constitute waiver as to any future breach whether similar or dissimilar in nature or as to the exercise of any further right under this Agreement.

13.2

Amendment.  This Agreement may be amended or modified only by an instrument of equal formality signed by the parties or the duly authorized representatives of the respective parties.

13.3

Assignment.  This Agreement is not assignable except by operation of law.

13.4

Notices.  Until otherwise specified in writing, the mailing addresses of both parties of this Agreement shall be as follows:

The Company or 

Edward Clunn

Stockholders: 

GALAXY NETWORKS INC.

#343 - 13988 Cambie Rd.

Richmond, British Columbia   V6V 2K4

CANADA

Infotec

Robert Danvers  

INFOTEC BUSINESS SYSTEMS, INC.

1400 - 400 Burrard St.

Vancouver, British Columbia   V6C 3G2

CANADA

Any notice or statement given under this Agreement shall be deemed to have been given if sent by registered mail addressed to the other party at the address indicated above or at such other address, which shall have been furnished in writing to the addressor.

13.5

Governing Law.  This Agreement shall be construed, and the legal relations by the parties determined, in accordance with the laws of the Province of British Columbia, Canada, thereby precluding any choice of law rules which may direct the applicable of the laws of any other jurisdiction.

13.6

Publicity.  No publicity release or announcement concerning this Agreement or the transactions contemplated hereby shall be issued by any party hereto at any time from the signing hereof without advance approval in writing from Infotec and the Company, of the form and substance thereof except as required to stay in compliance with the Infotec reporting obligations under the Securities Exchange Act of 1934.

13.7

Entire Agreement.  This Agreement (including the Exhibits and Schedules hereto) and the collateral agreements executed in connection with the consummation of the transactions contemplated herein contain the entire agreement among the parties with respect to the purchase and issuance of the Galaxy Shares and the Infotec Shares and related transactions, and supersede all prior agreements, written or oral, with respect thereto.

13.8

Headings.  The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

13.9

Severability of Provisions.  The invalidity or unenforceability of any term, phrase, clause, paragraph, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforcement of any other provision or any part thereof.

13.10

Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed, shall constitute an original copy hereof, but all of which together shall consider but one and the same document.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

Infotec Business Systems, Inc.  

By: /s/Robert Danvers_______________

Name: Robert Danvers_______________

Its: President_______________________

 Galaxy NETWORKS Inc.

By: /s/Edward Clunn______________

Name: Edward Clunn_______________

Its: Secretary_____________________

Stockholders:

WITNESS:

By: /s/Tracer Lee________________

/s/Jianping Shen________________

Jianping Shen

Name: ___________________________

Address: _________________________

Address: _________________________

WITNESS:

By: /s/Carmen Cheung_____________

/s/Stephen Liu__________________

Spartan Micro Inc.

Name: ___________________________

Address: _________________________

Address: _________________________

WITNESS:

By: /s/Barry Foreman_____________

/s/Edward Clunn_________________

Edward Clunn

Name: ___________________________

Address: _________________________

Address: _________________________

1

Exhibit A

EXCHANGE WITH GALAXY NETWORKS INC.

                                                                                            
Infotec

                                                       
Shares
of                      
Shares to

Name
of                                     
the company
to                
be received    

Shareholders                                
be
exchanged                   
at Closing  

 

 

Jianping Shen

40

   750,000

Spartan Micro Inc.

   (Stephen Liu)

30

   500,000

Edward Clunn

30

 12,750,000

Carol Shaw

-   

 3,000,000

Barry Foreman

     -   

  3,000,000

   100

20,000,000

2

Schedule 2.10

REAL ESTATE OF GALAXY NETWORKS INC.

      Galaxy Networks  Inc., leases its office premises of 800 square feet at suite 343 - 13988 Cambie Rd., Richmond, British Columbia on a month to month basis since September. 2003

3

Schedule 2.13

BORROWINGS OF GALAXY NETWORKS INC.

Since the date of the Galaxy Balance Sheet, the Company has incurred indebtedness or borrowed monies as follows:

Name of Lender

    Amount    

Type and Term

_______

Totals

$00,000

 

4

Schedule 2.14

CAPITALIZATION OF GALAXY NETWORKS INC.

Authorized Capital Of Galaxy Networks Inc. 

Class 

                                                                  

  Number  

Class A Voting Common Shares without par value

1,000,000

Class B Non-Voting Common Shares without par value

1,000,000

Class C Non-Voting Common Shares without par value

1,000,000

Issued Capital Of Galaxy Networks Inc.

Class 

Class A Common shares without par value

100 

5

Schedule 2.8

ACTIONS AND PROCEEDINGS OF GALAXY NETWORKS INC.

6

Schedule 2.9

FEES OF GALAXY NETWORKS INC.

Infotec 

Common Shares

   to be Issued    

250,000

250,000

_______

Totals

 500,000

7

Schedule 3.1

SUBSIDIARIES OF INFOTEC BUSINESS SYSTEMS, INC.

Jurisdiction of

Subsidiary

Incorporation

% Ownership

Infotec Business Strategies, Inc. 

British Columbia, Canada

100.0%

Eventec Inc.

Nevada, U.S.A.

100.0%

  

8

Schedule 3.4 & 3.11

MATERIAL CHANGES & OPERATIONS OF INFOTEC

On November 9, 2004, Infotec Business Systems, Inc. (“Infotec”), Cackleberries Entertainment, Inc., a British Columbia corporation (“Cackleberries”) and Ralph Scobie, Eronne Ward, Dave Anderson and Ken Rolston, the Former Stockholders of Cackleberries (“Former Stockholders”), mutually executed a Share Exchange Termination Agreement (the “Agreement”) which terminated and voided the Stock Purchase Agreement between the parties dated September 29, 2004.

Under the terms of the Agreement, Infotec, Cackleberries and the Former Stockholders agreed to terminate and void an agreement dated September 29, 2004 related to Infotec’s acquisition of 99% of the issued shares of Cackleberries in consideration for the issuance of 23,760,000 Infotec common shares to the Former Stockholders.  Infotec has agreed to return 198,000 common shares of Cackleberries to the Former Stockholders and the Former Stockholders have agreed to return for cancellation of 23,760,000 common shares of Infotec.  Additionally, Ralph Scobie and Eronne Ward, appointees to the board of directors consequent to the Share Purchase Agreement of September 29, 2004, have resigned their positions as officers and directors of the company.  Other related transactions, including the issuance of 1,650,000 common shares of Infotec for a related finders fee and the issuance of 2,000,000 common shares of Infotec to settle certain debts of Cackleberries have also been cancelled.EXHIBIT 10.1

 

CERIDIAN CORPORATION

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

PARTIES

 

Ceridian Corporation

3311 East Old Shakopee Road

Minneapolis, Minnesota 55425-1640

 

and

 

Douglas C. Neve

(“Executive”)

 

Date:      March 14, 2005

 

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.

 

1

 

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, 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.

 

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 f/k/a New Ceridian Corporation, and, except for purposes of Section
7.01(b) and (h), and Section 9.02 of Article IX,

 

(a)                                  any Subsidiary (as that term is defined in
Section 1.07); 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,

 

2

 

processes, formulae, plans or methods used in the
development, manufacture or marketing of Ceridian’s services, products or
software;

 

(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                        “Disability” shall mean the inability of Executive to
perform his or her duties under this Agreement because of illness or incapacity
for a continuous period of six months.

 

1.06                        “Parent Corporation” shall mean Ceridian Corporation and, except
for purposes of Article VIII and Section 9.02 of Article IX, any successor in
interest by way of consolidation, operation of law, merger or otherwise.  “Parent Corporation” shall not include any
Subsidiary.

 

1.07                        “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 1.07.

 

3

 

ARTICLE II

 

EMPLOYMENT, DUTIES AND TERM

 

2.01                  Employment.  Upon
the terms and conditions set forth in this Agreement, Ceridian hereby employs
Executive, and Executive accepts such employment.

 

2.02                   Duties. 
Executive shall devote his full-time and best efforts to Ceridian and to
fulfilling the duties of his or her position which shall include such duties as
may from time to time be assigned him or her 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.

 

2.03                   Term. 
Subject to the provisions of Articles IV and VIII, this Agreement and
Executive’s employment shall continue until March 14, 2008 (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.

 

ARTICLE III

 

COMPENSATION AND EXPENSES

 

3.01                        Base Salary.  For
all services rendered under this Agreement during the Term, Ceridian shall pay
Executive a minimum Base Salary, at no less than the annual rate currently
being paid or, if Executive is not currently in Ceridian’s employ, at the
annual rate specified in the written offer of employment.  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.

 

3.02                        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.

 

3.03                        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 or her duties as an employee of Ceridian, provided that
Executive 

 

4

 

accounts promptly for such expenses to Ceridian in
the manner prescribed from time to time by Ceridian.

 

ARTICLE IV

 

EARLY TERMINATION

 

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.

 

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 or her duties as reasonably assigned to Executive
pursuant to Section 2.02 of Article II of this Agreement for a period of 60
days after a written demand for such 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 or her 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 or her
annual Base Salary through the 75 day notice period, however, Ceridian shall
have the option of making termination of the

 

5

 

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, two years’ Base Salary and annual perquisite cash
adder 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 or her
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 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 or her level within Ceridian.
The payment and provision of the severance payments and benefits provided for
in this Section 4.03 are conditioned upon Executive executing a release,
similar to that attached as Exhibit A, of all claims against Ceridian.

 

4.04                        Termination In The Event of Death
or Disability.  This
Agreement shall terminate in the event of death or Disability of Executive.

 

(a)                                  In the event of Executive’s death, Ceridian
shall pay an amount equal to 12 months of Base Salary and annual perquisite
cash adder at the rate in effect at the time of Executive’s death 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.  Such amount shall be paid (1) to the
beneficiary or beneficiaries designated in writing to Ceridian by Executive,
(2) in the absence of such designation to the surviving spouse, or
(3) if there is no surviving spouse, or such surviving spouse disclaims
all or any part, then the full amount, or such disclaimed portion, shall be
paid to the executor, administrator or other personal representative of Executive’s
estate.  The amount shall be paid as a
lump sum as soon as practicable following Ceridian’s receipt of notice of
Executive’s death.  All such payments
shall be in addition to any payments due pursuant to Section 4.04(c)
below.

 

(b)                                 In the event of Executive’s Disability, Base
Salary shall be terminated as of the end of the month in which the last day of
the six-month period of Executive’s inability to perform his or her duties
occurs.

 

(c)                                  In the event of termination by reason of
Executive’s death or Disability, 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

 

6

 

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 or Disability occurred and the denominator of which is 12.  The amount payable pursuant to this Section 4.04(c)
shall be paid within 15 days after the date such bonus would have been paid had
Executive remained employed for the full fiscal year.

 

4.05                        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 annual perquisite cash adder through the date of
retirement stipulated in the written notice.

 

4.06                        Long Term Care Insurance. 
Ceridian provides Executive and, if applicable, Executive’s spouse with
insurance coverage related to the payment of certain nursing home and home
health care expenses (the “Long Term Care Policy”).  Ceridian shall continue to pay any remaining
premiums under the Long Term Care Policy for Executive and, if applicable,
Executive’s spouse in the event of (a) Executive’s retirement, (b) Executive’s
termination without cause by Ceridian or (c) a Change of Control
Termination.  If Executive’s termination
of employment is as a result of Executive’s death and Executive has a spouse
with a Long Term Care Policy, then Ceridian shall continue to pay any remaining
premiums under the Long Term Care Policy for Executive’s spouse.  For purposes of this Section 4.06, “continuous
service” shall have the meaning set forth in the Ceridian Corporation
Retirement Plan, regardless of whether or not Executive is eligible to
participate in this pension plan.

 

4.07                        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.

 

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/her 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.

 

7

 

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 traveling or other expenses.

 

5.05                        Inventions Developed on Executive’s
Own Time.  The
two immediately preceding sections entitled “Disclosure” and “Instruments of
Assignment” do not apply to inventions in which a Ceridian claim of any rights
will create a violation of Chapter 181 Minnesota Statutes, Section 181.78,
reproduced below and constituting the written notification of its Subdivision 3.

 

181.78 Agreements; terms relating to inventions

 

Subdivision 1.

 

Any provision in an employment agreement which provides that an
employee shall assign or offer to assign any of the employee’s rights in an
invention to the employer shall not apply to an invention for which no
equipment, supplies, facility or trade secret information of the employer was
used and which was developed entirely on the employee’s own time, and
(1) which does not relate (a) directly to the business of the
employer or (b) to the employer’s actual or demonstrably anticipated
research or development, or (2) which does not result from any work
performed by the employee for the employer. 
Any provision which purports to apply to such an invention is to

 

8

 

that extent against the public policy of this state and is to that extent
void and unenforceable.

 

Subdivision 2.

 

No employer shall require a provision made void and unenforceable by
subdivision 1 as a condition of employment or continuing employment.

 

Subdivision 3.

 

IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1, 1977,
CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN OR OFFER TO ASSIGN ANY OF
THE EMPLOYEE’S RIGHTS IN ANY INVENTION TO AN EMPLOYER, THE EMPLOYER MUST ALSO,
AT THE TIME THE AGREEMENT IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE
EMPLOYEE THAT THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO
EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS
USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE’S OWN TIME, AND (1) WHICH
DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (b) TO THE
EMPLOYER’S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2)
WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER.

 

5.06                        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.

 

5.07                        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-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

 

9

 

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 or her employment with
Ceridian and for a period of two years following
termination of employment for any reason other than a Change of Control
Termination (“Non-Compete Period”), Executive will not 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 geographic 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 or her 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

 

10

 

of the Non-Compete Period.  There shall be credited against Ceridian’s
obligation to make such payments any other payments made by Ceridian to
Executive pursuant to Article IV of this Agreement.  In the event that Ceridian elects, pursuant
to subsection (b) of this Section 6.02, to waive all or any portion of the
non-competition obligation 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 two years 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, or solicit any of Ceridian’s employees 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

 

11

 

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 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

 

12

 

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 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 Compensation” means any payment or benefit (including any
transfer of property) in the nature of compensation, to or for the benefit of
Executive under this Agreement or any Other Agreement or Benefit Plan, which is
considered to be contingent on a change in the ownership or effective control
of Ceridian for purposes of Section 280G of the Code.

 

13

 

(d)                                 “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.

 

A Change of Control
Termination by Executive shall not, however, include termination by reason of
death or Disability.  A termination of
Executive’s employment by Ceridian shall not constitute a termination described
in clauses (A) through (D) of Section 7.01(d)(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(d)(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(d)(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(d)(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.

 

(e)                                  “Code” means the Internal Revenue Code of 1986, as
amended.  Any reference to a section of
the Code shall include the corresponding section of such Code as from time to
time amended.

 

14

 

(f)                                    “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 or annual perquisite cash adder 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;

 

(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 or her employment duties;

 

(6)                                  If Executive’s primary employment duties are
with a Subsidiary, the sale, merger, contribution, transfer or any other
transaction in conjunction with which Parent Corporation’s ownership interest
in such Subsidiary decreases below the level specified in Section 1.07 of
Article I unless (A) this Agreement is assigned to the

 

15

 

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.

 

(g)                                 “Other Agreements” means any agreement, contract or
understanding heretofore or hereafter entered into between Executive and
Ceridian for the direct or indirect provision of compensation to Executive.

 

(h)                                 “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
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(d)(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 (i) 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), (ii) 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

 

16

 

(without giving effect to
any reduction in bonus opportunity constituting Good Reason), (iii) the annual
perquisite cash adder Executive would have received in the year in which the
termination occurs (without giving effect to any reduction in the annual
perquisite cash adder constituting Good Reason), (iv) the highest annual
aggregate amount of basic and performance matching contributions made by Ceridian
on behalf of Executive into the Ceridian Corporation Savings and Investment
Plan (“401(k) Plan”) over the last three fiscal years prior to termination of
Executive, and (v) the highest annual aggregate amount of 401(k) Restoration
Match (as defined in the Ceridian Corporation Deferred Compensation Plan (“DCP”))
and Supplemental Matching Credit (as defined in the DCP) made by Ceridian on
behalf of Executive into the DCP 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)                                 Neither the payments made to Executive
pursuant to this Section 7.03 nor any other compensation to be provided to
Executive by Ceridian pursuant to this Agreement or any Other Agreement or
Benefit Plan which may be considered Change of Control Compensation shall be
subject to any limitation on Change of Control Compensation which may otherwise
be expressed in any such Other Agreement or Benefit Plan.

 

(c)                                  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.

 

(d)                                 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.

 

(e)                                  The payments
and benefits described in this Article VII shall be conditioned upon Executive
executing (and not effectively rescinding) a release of claims against Ceridian
substantially identical to that attached as Exhibit A hereto.]

 

17

 

7.04                        Tax Reimbursement.

 

(a)                                  Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payments or
distributions by Ceridian, any person or entity whose actions result in a
Change of Control or any person or entity affiliated with the Company or such
person or entity, to or for the benefit of Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any payments required under this
Section 7.04) (collectively, the “Payments”) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred
by Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as
the “Excise Tax”), then Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that, after payment by
Executive of all taxes (and any interest or penalties imposed with respect to
such taxes), including any income taxes and Excise Tax imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.

 

(b)                                 Subject to the
provisions of Section 7.04(d), all determinations required to be made under
this Section 7.04, including whether and when a Gross-Up Payment is required
and the amount such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by Ceridian’s external auditors (the “Accounting
Firm”), which shall provide detailed supporting calculations both to Ceridian
and Executive within 15 business days of the receipt of notice from Executive
that there has been a Payment, or such earlier time as is requested by
Ceridian.  In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the “Accounting
Firm” hereunder).  All fees and expenses
of the Accounting Firm shall be borne solely by Ceridian.  Any Gross-Up Payment, as determined pursuant
to this Section 7.04, shall be paid by Ceridian to Executive within five days
of the receipt of the Accounting Firm’s determination.  Any determination by the Accounting Firm
shall be binding upon Ceridian and Executive.

 

(c)                                  As a result of uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which should
have been made by Ceridian will not have been made (“Underpayment”), consistent
with the calculations required to be made hereunder.  In the event that Ceridian exhausts its
remedies pursuant to Section 7.04(d) and Executive thereafter is required to
make a payment of any additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such

 

18

 

Underpayment shall be
promptly paid by Ceridian to or for the benefit of Executive.

 

(d)                                 Executive shall
notify Ceridian in writing of any claim by the Internal Revenue Service or any
other taxing authority that, if successful, would require the payment by
Ceridian of any Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than ten business
days after Executive knows of such claim and shall apprise Ceridian of the
nature of such claim and the date on which such claim is requested to be
paid.  Executive shall not pay such claim
prior to the expiration of the thirty-day period following the date on which it
gives such notice to Ceridian (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due).  If Ceridian notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall:

 

(i)                                     give Ceridian any information reasonably
requested by Ceridian relating to such claim;

 

(ii)                                  take such action in connection with
contesting such claim as Ceridian shall reasonably request in writing from time
to time, including accepting legal representation with respect to such claim by
an attorney reasonably selected by Ceridian;

 

(iii)                               cooperate with Ceridian in good faith in order to
effectively contest such claim; and

 

(iv)                              permit Ceridian to participate in any proceedings
relating to such claim;

 

provided, however, that
Ceridian shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the
foregoing provisions of this Section 7.04(d), Ceridian shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
Ceridian shall determine; provided further, however, that if Ceridian directs
Executive to pay such claim and sue for a refund, Ceridian shall advance the
amount of such payment to Executive on an interest-free basis and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise
Tax or income tax

 

19

 

(including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided
further that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.  Furthermore, Ceridian’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

(e)                            If, after the receipt by Executive of an
amount advanced by Ceridian pursuant to Section 7.04(d), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to Ceridian’s complying with the requirements of Section 7.04(d))
promptly pay to Ceridian the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto).  If, after the receipt by Executive of an
amount advanced by Ceridian pursuant to Section 7.04(d), a determination is
made that Executive shall not be entitled to any refund with respect to such claim
and Ceridian does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

 

7.05                        Interest.  In
the event Ceridian does not make timely payment in full of the Change of
Control Termination Payment described in Section 7.03, Executive shall be
entitled to receive interest on any unpaid amount at the lower of:  (a) the prime rate of interest (or such
comparable index as may be adopted) established from time to time by the Bank
of America National Trust and Savings Association, New York, New York or its
successor in interest; or (b) the maximum rate permitted under Section
280G(d)(4) of the Internal Revenue Code.

 

7.06                        Attorneys’ Fees.  In
the event Executive incurs any legal expense to enforce or defend his or her
rights under this Article VII of this Agreement, or to recover damages for
breach thereof, Executive shall be entitled to recover from Ceridian any
expenses for attorneys’ fees and disbursements incurred. 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.

 

7.07                        Benefits Continuation.  In
the event of a Change of Control Termination, Executive shall, until age 65, be
entitled to receive from Ceridian health, dental, accidental death and
dismemberment, and life insurance 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

 

20

 

dependents. 
Executive shall be required to pay no more for the above mentioned
benefits than the amount Executive would have been required to pay had
Executive continued to be an active employee of Ceridian.  If continuation of any of such coverage is
made available to employees terminating at age 55 with 15 or more years of
service, Executive shall be required to pay no more for continuation than is
required of such employees on the day immediately prior to the Change of
Control.  If 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 federal and state income taxes attributable to
such amount and the tax reimbursement amounts paid pursuant to this sentence.

 

7.08                        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
event, and (c) Executive does not, in conjunction therewith, transfer
employment directly to Parent Corporation or another Subsidiary, then:

 

(1)                                  If Executive gives his or her 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.

 

21

 

ARTICLE IX

 

GENERAL PROVISIONS

 

9.01                        No Adequate Remedy.  The
parties declare that it is impossible to measure in money the damages which
will accrue to either party by reason of a failure to perform any of the
obligations under this Agreement and therefore injunctive relief is
appropriate.  Therefore, if either party
shall institute any action or proceeding to enforce the provisions hereof, such
party against whom such action or proceeding is brought hereby waives the claim
or defense that such party has an adequate remedy at law, and such party shall
not urge in any such action or proceeding the claim or defense that such party
has an adequate remedy at law.

 

9.02                        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.

 

9.03                        Notices.  All
notices, requests and demands given to or made pursuant hereto shall, except as
otherwise specified herein, be in writing and be delivered or mailed to any
such party at its address:

 

(a)                                  Ceridian Corporation

3311 East Old Shakopee Road

Minneapolis, Minnesota
55425-1640

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 certified mail receipt, and shall be
deemed received within the second business day thereafter or when it is
actually received, whichever is sooner.

 

9.04                        Captions.  The
various headings or captions in this Agreement are for convenience only and
shall not affect the meaning or interpretation of this Agreement.

 

9.05                        Governing Law.  The
validity, construction and performance of this Agreement shall be governed by
the laws of the State of Minnesota and any and every legal proceeding arising
out of or in connection with this Agreement shall be brought in the appropriate
courts of the State of Minnesota, each of the parties hereby consenting to the

 

22

 

exclusive jurisdiction of said courts for this
purpose.  The parties hereto expressly
recognize and agree that the implementation of this Governing Law provision is
essential in light of the fact that Parent Corporation’s corporate headquarters
and its principal executive offices are located within the State of Minnesota,
and there is a critical need for uniformity in the interpretation and
enforcement of the employment agreements between Ceridian and its senior
executives.

 

9.06                        Construction. 
Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

9.07                        Waivers.  No
failure on the part of either party to exercise, and no delay in exercising,
any right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right or remedy
granted hereby or by any related document or by law.

 

9.08                        Modification.  Any
changes or amendments to this Agreement must be in writing and signed by both
parties.

 

9.09                        Entire Agreement.  This
Agreement constitutes the entire agreement and understanding between the
parties hereto in reference to all the matters herein agreed upon.  This Agreement replaces in full all prior
employment 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 Page Left Intentionally Blank]

 

23

 

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/ Douglas C. Neve

  	
   

  	
  By:

  	
  /s/ Gary M. Nelson

  	
   

  
	
  Douglas C. Neve

  	
   

  	
  Gary M. Nelson

  
	
  Title: Executive Vice
  President and

  Chief Financial Officer

  	
   

  	
  Executive Vice President, Chief

  Administrative Officer, General

  Counsel and Corporate Secretary

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

24

 

Exhibit A

 

RELEASE

 

I, Douglas C. Neve, in
consideration of the payments of $              
subject to appropriate withholding, which includes compensation to which I
would not be otherwise entitled, do, except as specifically provided below,
hereby fully and completely release and waive any and all claims, complaints,
causes of action or demands of whatever kind which I have or may have against
Ceridian Corporation, its predecessors, successors, subsidiaries and affiliates
and all past and present members of the Board of Directors, officers, employees
and agents of those persons and companies (“Ceridian”) arising out of any
actions, conduct, decisions, behavior or events occurring up to the date of my
execution of this Release.

 

I understand and accept
that this Release specifically covers but is not limited to any and all claims,
complaints, causes of action or demands which I have or may have against the
above-referenced released parties relating in any way to the terms, conditions
and circumstances of my employment up to the date of my signature below, any
form of employment discrimination prohibited under any state’s human rights
act, Title VII of the Federal Civil Rights Act of 1964 and the Federal Age
Discrimination in Employment Act.  I
further understand that this Release extends to but is not limited to all
claims which I may have based on statutory or common law claims for negligence
or other breach of duty, wrongful discharge, breach of contract, breach of any
express or implied promise, misrepresentation, fraud, retaliation, breach of
public policy, infliction of emotional distress, defamation, promissory
estoppel, failure to pay wages or any other theory, whether legal or equitable.
Notwithstanding the foregoing, I do not waive my rights to (i) enforce the
performance by Ceridian of its obligations under the Executive Employment
Agreement between myself and Ceridian (including, without limitation, the
obligation to make the payments and provide the benefits described in Article
VII thereof if applicable), (ii) any pension or other employee benefits payable
pursuant to the terms of the applicable plans of Ceridian or any affiliate,
which benefits shall be paid or provided in accordance with the terms of such
plans or (iii) indemnification from Ceridian with respect to my service with
Ceridian, whether provided pursuant to Ceridian’s bylaws or otherwise.

 

Nothing contained herein,
however, shall be construed to prohibit me from filing a charge with the Equal
Employment Opportunity Commission, but my release includes a release of my
right to file a court action or to seek individual remedies or damages in any
Equal Employment Opportunity Commission-filed court action, and my release of
these rights shall apply with full force and effect to any proceedings arising
from or relating to such a charge.

 

I agree that my only
remedy for any dispute I have about the enforceability of this Release shall be
to submit that dispute to final and binding arbitration in accordance with the
rules of the American Arbitration Association. 
Ceridian and I agree that I must send written notice of any claim to
Ceridian by certified mail, return receipt requested.  Written notice to Ceridian shall be sent to
its Secretary at 3311 East Old Shakopee Road, Minneapolis, MN 55425-1640.

 

1

 

I understand that I may
rescind this Release if I do so in writing, delivered by certified mail, return
receipt requested, to Office of the General Counsel, Ceridian Corporation, 3311
East Old Shakopee Road, Minneapolis, MN 55425-1640, within fifteen (15)
calendar days of the date of my signature below.  Upon the expiration of fifteen (15) calendar
days from the date indicated below, if I have not rescinded this Release, then
Ceridian Corporation shall promptly deliver to me the above-referenced payment,
subject to appropriate withholding, this Release being contingent upon payment
of that sum.

 

If sent by mail, the
rescission must be:

 

•              Postmarked within the 15
calendar-day period;

•              Properly addressed to Ceridian;
and

•              Sent by certified mail, return
receipt requested.

 

By my signature below, I
acknowledge that I fully understand and accept the terms of this Release, and I
represent and agree that my signature is freely, voluntarily and knowingly
given.  I have had 21 days in which to
consider this agreement.  By my signature
below, I further acknowledge that I have been provided a full opportunity to
review and reflect on the terms of this Release and to seek the advice of legal
counsel of my choice, which advice I have been encouraged to obtain.

 

If I do not execute this
Release within 30 days after I receive it, the offer Ceridian has made for a
payment herein is null and void.

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Douglas C. Neve

  

 

2

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