Document:

EXHIBIT
10.1

 

CERIDIAN
CORPORATION

2004
LONG-TERM STOCK INCENTIVE PLAN

 

Restricted
Stock Unit Award Agreement

(U.S.
Employee)

 

 

This Agreement between you, [NAME], and Ceridian Corporation, a Delaware corporation (the
“Company”), is effective as of [GRANT DATE]
(the “Date of Grant”) and evidences the grant of a Restricted Stock Unit award
pursuant to the Ceridian Corporation 2004 Long-Term Stock Incentive Plan (the “Plan”).  Any capitalized term used in this Agreement
which is defined in the Plan shall have the same meaning as set forth in the
Plan, unless otherwise defined herein.  The Company intends that this
Agreement comply in form and operation with the requirements of Section 409A of
the Code.

 

1.                                       Award.  Effective
as of the Date of Grant, the Company has granted to you [NUMBER OF UNITS]
Restricted Stock Units, each Restricted Stock Unit representing the right to
receive a share of the common stock, par value $0.01 per share of the Company (“Common
Stock”), upon vesting as set forth in Section 3 below and subject to the terms
and conditions set forth in this Agreement and the Plan (“Restricted Stock
Units”).  The Restricted Stock Units
granted pursuant to this Agreement are not shares of Common Stock and do not
and shall not give you any of the rights and privileges of a shareholder of
Common Stock.  Your rights with respect
to the Restricted Stock Units shall remain forfeitable at all times prior to
the date or dates on which the Restricted Stock Units vest, and the
restrictions with respect to the Restricted Stock Units lapse, in accordance
with the terms of this Agreement.

 

2.                                       Restrictions on Transferability.  Restricted Stock Units may not be
sold, transferred, assigned, pledged or otherwise used as collateral by you
unless and until, and then only to the extent that, restrictions on
transferability shall have lapsed in accordance with the Plan and this
Agreement.  In this Agreement, the
lapsing of such transferability restrictions is referred to as “vesting,” and Restricted
Stock Units that are no longer subject to such transferability restrictions are
referred to as “vested.”

 

3.                                       Vesting of Restricted Stock Units.  Subject
to Sections 5, 6 and 9 of this Agreement, one-third of the Restricted Stock
Units will vest during the period of your employment with the Company and its
Subsidiaries (as defined in Section 12 of this Agreement) on each of the first,
second and third anniversaries of the Date of Grant.

 

4.                                       Payment of Restricted Stock Units. 
Following the vesting of a Restricted Stock Unit, the Company shall
promptly credit one share of Common Stock for such Restricted Stock Unit to a
certificateless book-entry stock account maintained for you by the Company’s
transfer agent (the “Transfer Agent”) or another custodian designated by the
Company.  You will receive written
notification from the Company of the vesting of all or a portion of your
Restricted Stock Units, and 

 

 

you will receive written instructions on how
you may transfer or obtain a stock certificate for your unrestricted shares.

 

5.                                       Termination of Employment.  If your employment with the Company
and all Subsidiaries terminates due to death or Disability (as defined in
Section 12 of this Agreement), all unvested Restricted Stock Units will
immediately and fully vest.  If your
employment with the Company and all Subsidiaries terminates due to Retirement
(as defined in Section 12 of this Agreement), all unvested Restricted Stock
Units will continue to vest as if your employment had not been terminated, and
the Company will not accelerate the payment of your Restricted Stock Units
prior to the date provided under Section 3 and 4, except upon death,
Disability, Change of Control (as defined in Section 12 of the Agreement) or as
may be permitted under Section 409A of the Code.  If your employment with the Company and all
Subsidiaries terminates for any other reason prior to a Change of Control, you
will immediately forfeit to the Company any Restricted Stock Units that have
not yet vested as of the employment termination date.

 

6.                                       Impact
of a Change of Control.  If a Change
of Control occurs, all unvested Restricted Stock Units will immediately and
fully vest.

 

7.                                       Dividend Equivalents and Distributions.  If
there is any change in the number or character of Common Stock of the Company
(through any stock dividend or other distribution, recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation split-up,
spin-off, combination, repurchase or exchange of shares or otherwise), you
shall then receive the number and type of securities or other consideration
which you would have received if such Restricted Stock Units had vested prior
to the event changing the number or character of the outstanding Common
Stock.  Any additional shares of Common
Stock, any other securities of the Company and any other property (including
cash dividends or other cash distributions) distributed with respect to the
Restricted Stock Units shall be subject to the same restrictions, terms and
conditions as the Restricted Stock Units to which they relate, shall be
promptly deposited with the Transfer Agent or another custodian designated by
the Company, and shall be distributed to you at the same time the Restricted
Stock Units become free of restrictions on transferability.

 

8.                                       Continued
Employment.  Nothing in this
Agreement shall confer upon you any right with respect to continuance of
employment by the Company or any of its Subsidiaries, nor interfere in any way
with the right of the Company or any of its Subsidiaries to terminate your
employment at any time.

 

9.                                       Prohibited Activities.

 

(a)                                  You agree that you
will not take any Adverse Actions (as defined in Section 9(b) below) against
the Company or any Subsidiary at any time during the period that the Restricted
Stock Units have not vested in full or at any time before one year following
your termination of employment with the Company or any Subsidiary, whichever is
later (the “Restricted Period”).  You
acknowledge that damages which may arise from a breach of this Section 9 may be
impossible to ascertain or prove with certainty.  Notwithstanding anything in this Agreement or
the Plan to the contrary, in the event that the Company determines in its 

 

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sole discretion that you have taken Adverse Actions
against the Company or any Subsidiary at any time during the Restricted Period,
in addition to other legal remedies which may be available, (i) the Company
will be entitled to an immediate injunction from a court of competent
jurisdiction to end such Adverse Action, without further proof of damage, (ii)
you will forfeit any Restricted Stock Units that are not yet vested effective
the date on which you enter into such activity, and (iii) any taxable income
realized by you from the grant or vesting of Restricted Stock Units during a
period beginning six months prior to the date on which you enter into such
activity shall be paid by you to the Company.

(b)                                 For purposes of
this Agreement, an “Adverse Action” will mean any of the following:  (i) failing to adhere to the Company’s Code
of Conduct; (ii) engaging in any commercial activity in competition with any
part of the business of the Company or any Subsidiary as conducted during the
Restricted Period; (iii) diverting or attempting to divert from the Company or
any Subsidiary any business of any kind, including, without limitation,
interference with any business relationships with suppliers, customers,
licensees, licensors, clients or contractors; (iv) participating in the
ownership, operation or control of, being employed by, or connected in any
manner with any person or entity which solicits, offers or provides any
services or products similar to those which the Company or any Subsidiary
offers to its customers or prospective customers; (v) making, or causing or
attempting to cause any other person or entity to make, any statement, either
written or oral, or conveying any information about the Company or any
Subsidiary that is disparaging or that
in any way reflects negatively on the Company or any Subsidiary; or (vi)
engaging in any other activity that is hostile, contrary or harmful to the
interests of the Company or any Subsidiary, including, without limitation,
influencing or advising any person who is employed by or in the service of the
Company or any Subsidiary to leave such employment or service to compete with
the Company or any Subsidiary or to enter into the employment or service of any
actual or prospective competitor of the Company or any Subsidiary, influencing
or advising any competitor of the Company or any Subsidiary to employ to
otherwise engage the services of any person who is employed by or in the
service of the Company or any Subsidiary, or improperly disclosing or otherwise
misusing any trade secrets or confidential information regarding the Company or
any Subsidiary.

 

(c)                                  Should any
provision of this Section 9 of the Agreement be held invalid or illegal, such
illegality shall not invalidate the whole of this Section 9 of the Agreement,
but, rather, this Agreement 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, you expressly agree that should the duration of or geographical
extent of, or business activities covered by, any provision of this Agreement
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 or enforceably be covered.  You acknowledge the uncertainty of the law in
this respect and expressly stipulate that this Agreement shall be construed in
a manner that renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable law.  This Section 9 of the Agreement does not
replace and is in addition to any other agreements you may have with the
Company

 

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or any of its Subsidiaries on the matters addressed
herein. This Section 9 shall not apply to any termination which takes place on
or following a Change of Control.

10.                                 Payment of Amounts Owed.  By accepting this Agreement, you
consent to a reduction from any amounts the Company owes you from time to time
(including wages or other compensation) of any amount you owe the Company under
Section 9 of this Agreement.  If the
Company does not recover by means of set-off the full amount you owe it, you
agree to immediately repay the unpaid balance to the Company.

 

11.                                 Tax Withholding.  In order to comply with all applicable
federal, state, local or foreign income tax laws or regulations, the Company
may take such action as it deems appropriate to ensure that all applicable
federal, state, local or foreign payroll, withholding, income or other taxes,
which are your sole and absolute responsibility, are withheld or collected from
you.  In order to assist you in paying
all or a portion of the applicable taxes to be withheld or collected upon the
grant or vesting of the Restricted Stock Units, the Committee, in its
discretion and subject to such additional terms and conditions as it may adopt,
may permit you to satisfy such tax obligations by (a) electing to have the Company withhold
a portion of the shares of Common Stock otherwise to be delivered upon the vesting
of the Restricted Stock Units with a Fair Market Value equal to the amount of
such taxes or (b) delivering to the Company shares of Common Stock other
than the shares of Common Stock obtained from the vested Restricted Stock Units
with a Fair Market Value equal to the amount of such taxes.  The election, if any, must be made on or
before the date that the amount of tax to be withheld is determined.

 

12.                                 Certain Definitions.  For
purposes of this Agreement, the following additional definitions will apply:

 

(a)                                  “Cause”  will have the meaning set forth in any
employment or other agreement or policy applicable to you or, if no such
agreement or policy exists, will mean (i) failure to adhere to the Company’s
Code of Conduct, (ii) dishonesty, fraud, misrepresentation, theft, embezzlement
or injury or attempted injury, in each case related to the Company or any
Subsidiary, (iii) any unlawful or criminal activity of a serious nature, (iv)
any breach of duty, habitual neglect of duty or unreasonable job performance,
or (v) any material breach of any employment, service, confidentiality or
noncompete agreement entered into with the Company or any Subsidiary.

 

(b)                                 “Change of Control”  shall mean the first of the following events
to occur, provided that such event constitutes a “change of control” within the
meaning of Section 409A of the Code:

 

(i)                                     there is consummated a merger or
consolidation to which the Company or any direct or indirect subsidiary of the
Company  is a party if the merger or
consolidation would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) less than 60% of the

 

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combined voting power of the securities of the Company
or such surviving entity or any parent thereof outstanding immediately after
such merger or consolidation; or

 

(ii)                                  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 the Company
representing 35% or more of the total combined voting power of the Company’s
then issued and outstanding securities is acquired by any person or entity or
group of associated persons or entities acting in concert; provided, however,
that for purposes hereof, the following acquisitions shall not constitute a
Change of Control: (1) any acquisition by the Company or any of its
subsidiaries, (2) any acquisition directly from the Company or any of its
subsidiaries, (3) any acquisition by any employee benefit plan (or related
trust or fiduciary) sponsored or maintained by the Company or any corporation
controlled by the Company, (4) any acquisition by an underwriter temporarily
holding securities pursuant to an offering of such securities, (5) any acquisition
by a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company, (6) any acquisition in connection with which, pursuant to Rule
13d-1 promulgated pursuant to the Exchange Act, the individual, entity or group
is permitted to, and actually does, report its beneficial ownership on Schedule
13G (or any successor Schedule); provided that, if any such individual, entity
or group subsequently becomes required to or does report its beneficial
ownership on Schedule 13D (or any successor Schedule), then, for purposes of
this paragraph, such individual, entity or group shall be deemed to have first
acquired, on the first date on which such individual, entity or group becomes
required to or does so report, beneficial ownership of all of the voting
securities of the Company beneficially owned by it on such date, and (7) any
acquisition in connection with a merger or consolidation which, pursuant to
paragraph (b)(i) above, does not constitute a Change of Control; or

 

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

 

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

 

(v)                                 a change in the composition of the
Board such that the “Continuity Directors” cease for any reason to constitute
at least a majority of the Board.  For
purposes of this clause, “Continuity Directors” means those members of the
Board who either (i) were directors on January 29, 2002, or (ii) were elected
by, or on the nomination or recommendation of, at least a two-thirds (2/3)
majority of the then-existing Board (other than a director whose initial
assumption of office was in 

 

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connection
with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the Company); or

 

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

 

(c)                                  “Disability” means your
disability such as would entitle you to receive disability income benefits
pursuant to the long-term disability plan of the Company or Subsidiary then
covering you or, if no such plan exists or is applicable to you, your permanent
and total disability within the meaning of Section 22(e)(3) of the Code,
provided you are considered “disabled” within the meaning of Section 409A of
the Code.

 

(d)                                 “Retirement” means the
termination (other than for Cause or by reason of death or Disability) of your
employment or other service on or after the date on which you have attained the
age of 55 and have completed 10 years of continuous service to the Company or
any Subsidiary (such period of service to be determined in accordance with the
service policy or practices of the Company or Subsidiary for which you were
employed).

 

(e)                                  “Subsidiary” means (i) any
entity that, directly or indirectly through one or more intermediaries, is
controlled by the Company or (ii) any entity in which the Company has a
significant equity interest, in each case as determined by the Committee.

 

13.                         Subject
to Plan. The Award and the Restricted Stock Units granted and issued
pursuant to this Agreement have been granted and issued under, and are subject
to the terms of, the Plan. The terms of the Plan are incorporated by reference
in this Agreement in their entirety, and by execution of this Agreement, you
acknowledge having received a copy of the Plan. The provisions of this
Agreement will be interpreted as to be consistent with the Plan, and any
ambiguities in this Agreement will be interpreted by reference to the Plan. In
the event that any provision of this Agreement is inconsistent with the terms
of the Plan, the terms of the Plan will prevail.

 

14.                         Governing
Law. The validity, construction, interpretation, administration and effect
of this Agreement will be governed by and construed exclusively in accordance
with the laws of the State of Delaware, without regard to its conflicts of law
principles.

 

15.                         Successors
and Assigns. This Agreement will be binding upon and inure to the benefit
of the successors and permitted assigns of you and the Company.

 

[The
Remainder of the Page Left Intentionally Blank]

 

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

 

	
  CERIDIAN CORPORATION

  	
   

  	
  AWARD RECIPIENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME]

  
	
  Its

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mailing Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee Number

  	
   

  
	
   

  	
   

  	
   

  
	
  Version:
  02-17-06

  	
   

  	
   

  

 

7EXHIBIT
10.2

 

CERIDIAN
CORPORATION

2004
LONG-TERM STOCK INCENTIVE PLAN

 

Non-Qualified Stock Option Agreement

(U.S.
Employee: Time Based Stock Option)

 

THIS AGREEMENT is entered
into and effective as of [GRANT DATE]
(the “Date of Grant”), by and between Ceridian Corporation, a Delaware
corporation (the “Company”), and [NAME] (the “Optionee”).  Any capitalized term used in this Agreement which is defined in the
Plan shall have the meaning as set forth in the Plan, unless otherwise defined
herein.

 

A.                                   The
Company has adopted the Ceridian Corporation 2004 Long-Term Stock Incentive
Plan (as may be amended or supplemented, the “Plan”) authorizing the Compensation
and Human Resources Committee of the Board of Directors of the Company (the “Committee”),
to grant stock options to employees of the Company and its Subsidiaries (as
defined in Section 9 of the Agreement).

 

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

 

Accordingly, the parties
agree as follows:

 

1.                                       Grant
of Option.

 

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

 

2.                                       Option
Exercise Price.

 

The
per share price to be paid by Optionee in the event of an exercise of the
Option will be $[STRIKE PRICE]  (“Option Exercise Price”).

 

3.                                       Duration
of Option and Time of Exercise.

 

3.1                                 Initial
Period of Exercisability.  Except as
provided in Sections 3.2 and 3.3 hereof, the Option shall become exercisable
with respect to one-third of the Option Shares on each of the first, second and
third anniversaries of the Date of Grant. 
The foregoing rights to exercise the Option will be cumulative with
respect to the Option Shares becoming exercisable on each such date, but in no
event will the Option be exercisable after, and the Option will become void and
expire as to all unexercised Option Shares at, 5:00 p.m. (Minneapolis,
Minnesota USA time) on fifth anniversary of the Date of Grant (the “Time of
Option Termination”).

 

1

 

3.2                                 Termination
of Employment.

 

(a)                                  Termination Due to Death or
Disability.  In the event the Optionee’s
employment with the Company and all Subsidiaries is terminated by reason of
death or Disability (as such term is defined in Section 9 of this Agreement),
the Option will become immediately exercisable in full and remain exercisable
until the Time of Option Termination.

 

(b)                                 Termination
Due to Retirement.  In the event the
Optionee’s employment with the Company and all Subsidiaries is terminated by
reason of Retirement (as such term is defined in Section 9 of this Agreement)
prior to a Change of Control (as such term is defined in Section 9 of this
Agreement), the Option will continue to become exercisable until the Option is
exercisable in full pursuant to the terms of Section 3.1 of this Agreement as
if the Optionee had not terminated employment.

 

(c)                                  Termination
for Reasons Other Than Death, Disability or Retirement.  In the event that the Optionee’s employment
with the Company and all Subsidiaries is terminated for any reason other than
death, Disability or Retirement, or the Optionee is in the employ of a
Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless
the Optionee continues in the employ of the Company or another Subsidiary), all
rights of the Optionee under the Plan and this Agreement will immediately
terminate without notice of any kind, and the Option will no longer be
exercisable; provided, however, that, if such termination is due to any reason
other than termination by the Company or any Subsidiary for Cause (as defined
in Section 9 of this Agreement) prior to a Change of Control, the Option will
remain exercisable to the extent exercisable as of such termination for a
period of three months after such termination (but in no event after the Time
of Option Termination).

 

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

 

4.                                       Manner
of Option Exercise.

 

4.1                                 Notice. 
This Option may be exercised by the Optionee in whole or in part from
time to time, subject to the conditions contained in the Plan and in this
Agreement, by delivery, in person, by facsimile or electronic transmission or
through the mail, to the Company at its principal executive office in
Minneapolis, Minnesota USA (Attention: 
Corporate Treasury), of a written notice of exercise.  Such notice must be in a form satisfactory to
the Committee, must identify the Option, must specify the number of Option
Shares with respect to which the Option is being exercised, and must be signed
by the person or persons so exercising the Option.  Such

 

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notice must be accompanied by payment
in full of the total exercise price and any applicable taxes for the Option
Shares to be purchased.  In the event
that the Option is being exercised, as provided by the Plan and Section 5.3 of
this Agreement, by any person or persons other than the Optionee, the notice
must be accompanied by appropriate proof of right of such person or persons to
exercise the Option.  If the Optionee
retains the Option Shares purchased, as soon as practicable after the effective
exercise of the Option, the Optionee will be recorded on the stock transfer
books of the Company as the owner of the Option Shares purchased, and the
Company will deliver to the Optionee one or more duly issued stock certificates
evidencing such ownership.

 

4.2                                 Payment. 
At the time of exercise of the Option, the Optionee must pay the total
exercise price of the Option Shares to be purchased entirely in cash (including
a check, bank draft or money order, payable to the order of the Company);
provided, however, that the Committee, in its sole discretion and upon terms and
conditions established by the Committee, may allow such payment to be made, in
whole or in part, by tender of a Broker Exercise Notice or Previously Acquired
Shares (as such terms are defined in Section 9 of this Agreement), or by a
combination of such methods.  In the
event the Optionee is permitted to pay the total purchase price of the Option
in whole or in part with Previously Acquired Shares, the value of such shares
will be equal to their Fair Market Value on the date of exercise of the Option.  The delivery of any shares already owned by
the Optionee may be made through delivery of a written attestation of ownership
if permitted by the Committee.

 

5.                                       Rights
and Restrictions of Optionee; Transferability.

 

5.1                                 Employment. 
Nothing in this Agreement will interfere with or limit in any way the
right of the Company or any Subsidiary to terminate the employment of the
Optionee at any time, nor confer upon the Optionee any right to continue in the
employ of the Company or any Subsidiary at any particular position or rate of
pay or for any particular period of time.

 

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

 

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

 

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5.4                                 Restrictions Regarding Employment.

 

(a)                                  The
Optionee agrees that he or she will not take any Adverse Actions (as defined
below) against the Company or any Subsidiary at any time during the period that
the Option is or may yet become exercisable in whole or in part or at any time
before one year following the Optionee’s termination of employment with the
Company or any Subsidiary, whichever is later (the “Restricted Period”).  The Optionee acknowledges that damages which
may arise from a breach of this Section 5.4 may be impossible to ascertain or
prove with certainty.  Notwithstanding
anything in this Agreement or the Plan to the contrary, in the event that the
Company determines in its sole discretion that the Optionee has taken Adverse
Actions against the Company or any Subsidiary at any time during the Restricted
Period, in addition to other legal remedies which may be available, (i) the
Company will be entitled to an immediate injunction from a court of competent
jurisdiction to end such Adverse Action, without further proof of damage, (ii)
the Committee will have the authority in its sole discretion to terminate
immediately all rights of the Optionee under the Plan and this Agreement
without notice of any kind, and (iii) the Committee will have the authority in
its sole discretion to rescind the exercise of all or any portion of the Option
to the extent that such exercise occurred within six months prior to the date
the Optionee first commences any such Adverse Actions and require the Optionee
to disgorge any profits (however defined by the Committee) realized by the
Optionee relating to such exercised portion of the Option or any Option Shares
issued or issuable upon such exercise. 
Such disgorged profits paid to the Company must be made in cash
(including check, bank draft or money order) or, with the Committee’s consent,
shares of Common Stock with a Fair Market Value on the date of payment equal to
the amount of such payment.  The Company
will be entitled to withhold and deduct from future wages of the Optionee (or
from other amounts that may be due and owing to the Optionee from the Company
or a Subsidiary) or make other arrangements for the collection of all amounts
necessary to satisfy such payment obligation.

 

(b)                                 For
purposes of this Agreement, an “Adverse Action” will mean any of the following:  (i) failing to adhere to the Company’s Code
of Conduct; (ii) engaging in any commercial activity in competition with the
business conducted by the Company or any Subsidiary as conducted during the
Restricted Period; (iii) diverting or attempting to divert from the Company or
any Subsidiary any business of any kind, including, without limitation,
interference with any business relationships with suppliers, customers,
licensees, licensors, clients or contractors; (iv) participating in the
ownership, operation or control of, being employed by, or connected in any
manner with any person or entity which solicits, offers or provides any
services or products similar to those which the Company or any Subsidiary
offers to its customers or prospective customers; (v) making, or causing or attempting
to cause any other person or entity to make, any statement, either written or
oral, or conveying any information about the Company or any Subsidiary that is
disparaging or that in any way reflects negatively on the Company or any
Subsidiary; or (vi) engaging in any other activity that is hostile, contrary or
harmful to the interests of the Company or any Subsidiary, including, without
limitation, influencing or advising any person who is employed by or in the
service of the Company or any Subsidiary to leave such employment or service to
compete with the Company or any Subsidiary or to 

 

4

 

enter into the employment
or service of any actual or prospective competitor of the Company or any
Subsidiary, influencing or advising any competitor of the Company or any
Subsidiary to employ to otherwise engage the services of any person who is
employed by or in the service of the Company or any Subsidiary, or improperly
disclosing or otherwise misusing any trade secrets or confidential information
regarding the Company or any Subsidiary.

 

(c)                                  Should
any provision of this Section 5.4 of the Agreement be held invalid or illegal,
such illegality shall not invalidate the whole of this Section 5.4 of the
Agreement, but, rather, the Agreement 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, the Optionee expressly agrees that should the
duration of or geographical extent of, or business activities covered by, any
provision of this Agreement 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 or enforceably be covered.  The Optionee acknowledges the uncertainty of
the law in this respect and expressly stipulates that this Agreement shall be
construed in a manner that renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable
law.  This Section 5.4 of the Agreement
does not replace and is in addition to any other agreements the Optionee may
have with the Company or any of its Subsidiaries on the matters addressed
herein.  This Section 5.4 shall not apply
to any termination that occurs on or following a Change of Control.

 

6.                                       Securities
Law and Other Restrictions.

 

Notwithstanding
any other provision of the Plan or this Agreement, the Company will not be
required to issue, and the Optionee may not sell, assign, transfer or otherwise
dispose of, any Option Shares, unless (a) there is in effect with respect to
the Option Shares a registration statement under the Securities Act of 1933, as
amended, and any applicable state or foreign securities laws or an exemption
from such registration, (b) the Option Shares have been admitted for trading on
the New York Stock Exchange or any other securities exchange or the National
Association of Securities Dealers, Inc. that are applicable to the Company, and
(c) there has been obtained any other consent, approval or permit from any
other regulatory body which the Committee, in its sole discretion, deems necessary
or advisable.  The Company may condition
such issuance, sale or transfer upon the receipt of any representations or
agreements from the parties involved, and the placement of any legends on
certificates representing Option Shares, as may be deemed necessary or
advisable by the Company in order to comply with such securities law or other
restrictions.

 

7.                                       Withholding
Taxes.

 

In order to comply with all applicable federal,
state, local or foreign income tax laws or regulations, the Company may take
such action as it deems appropriate to ensure that all applicable federal,
state, local or foreign payroll, withholding, income or other taxes, which are
the sole and absolute responsibility of the Optionee, are withheld or collected
from the Optionee.  In order to assist
the Optionee in paying all or a portion of the applicable taxes to be withheld
or collected upon exercise of the Option, the Committee, in its discretion and
subject to such

 

5

 

additional
terms and conditions as it may adopt, may permit the Optionee to satisfy such
tax obligation by using Previously Acquired Shares with a Fair Market Value
equal to the amount of such taxes.  If
permitted by the Committee, the Optionee must elect to use Previously Acquired
Shares on or before the date that the amount of tax to be withheld is
determined.

 

8.                                       Adjustments.

 

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

 

9.                                       Certain Definitions.

 

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

 

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

 

(b)                                 “Cause”  will have the meaning set forth in any
employment or other agreement or policy applicable to the Optionee or, if no
such agreement or policy exists, will mean (i) failure to adhere to the Company’s
Code of Conduct, (ii) dishonesty, fraud, misrepresentation, theft, embezzlement
or injury or attempted injury, in each case related to the Company or any
Subsidiary, (iii) any unlawful or criminal activity of a serious nature, (iv)
any breach of duty, habitual neglect of duty or unreasonable job performance,
or (v) any material breach of any employment, service, confidentiality or
noncompete agreement entered into with the Company or any Subsidiary.

 

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

 

(i)             there
is consummated a merger or consolidation to which the Company  or any direct or indirect subsidiary of the
Company  is a party if the merger or
consolidation would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) less than 60% of the combined
voting power of the securities of 

 

6

 

the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation; or

 

(ii)          the
direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) in the aggregate of securities of the Company
representing 20% or more of the total combined voting power of the Company’s
then issued and outstanding securities is acquired by any person or entity or
group of associated persons or entities acting in concert; provided, however,
that for purposes hereof, the following acquisitions shall not constitute a
Change of Control: (1) any acquisition by the Company or any of its
subsidiaries, (2) any acquisition directly from the Company or any of its
subsidiaries, (3) any acquisition by any employee benefit plan (or related
trust or fiduciary) sponsored or maintained by the Company or any corporation
controlled by the Company, (4) any acquisition by an underwriter temporarily
holding securities pursuant to an offering of such securities, (5) any
acquisition by a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of
stock of the Company, (6) any acquisition in connection with which, pursuant to
Rule 13d-1 promulgated pursuant to the Exchange Act, the individual, entity or
group is permitted to, and actually does, report its beneficial ownership on
Schedule 13G (or any successor Schedule); provided that, if any such
individual, entity or group subsequently becomes required to or does report its
beneficial ownership on Schedule 13D (or any successor Schedule), then, for
purposes of this paragraph, such individual, entity or group shall be deemed to
have first acquired, on the first date on which such individual, entity or
group becomes required to or does so report, beneficial ownership of all of the
voting securities of the Company beneficially owned by it on such date, and (7)
any acquisition in connection with a merger or consolidation which, pursuant to
paragraph (c)(i) above, does not constitute a Change of Control; or

 

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

 

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

 

(v)         a
change in the composition of the Board such that the “Continuity Directors”
cease for any reason to constitute at least a majority of the Board.  For purposes of this clause, “Continuity
Directors” means those members of the Board who either (i) were directors on
January 29, 2002, or (ii) were elected by, or on the nomination or
recommendation of, at least a two-thirds (2/3) majority of 

 

7

the
then-existing Board (other than a director whose initial assumption of office
was in connection with an actual or threatened election contest, including but
not limited to a consent solicitation, relating to the election of directors of
the Company); or

 

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

 

(d)                                 “Disability”
means the disability of the Optionee such as would entitle the Optionee to
receive disability income benefits pursuant to the long-term disability plan of
the Company or Subsidiary then covering the Optionee or, if no such plan exists
or is applicable to the Optionee, the permanent and total disability of the
Optionee within the meaning of Section 22(e)(3) of the Code.

 

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

 

(f)                                    “Retirement”
means the termination (other than for Cause or by reason of death or
Disability) of the Optionee’s employment or other service on or after the date
on which the Optionee had attained the age of 55 and had completed 10 years of
continuous service to the Company or any Subsidiary (such period of service to
be determined in accordance with the service policy or practices of the Company
or Subsidiary for which the Optionee was employed).

 

(g)                                 “Subsidiary”
means (i) any entity that, directly or indirectly through one or more
intermediaries, is controlled by the Company or (ii) any entity in which the
Company has a significant equity interest, in each case as determined by the
Committee.

 

10.                                 Subject
to Plan.

 

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

 

11.                                 Miscellaneous.

 

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

 

11.2                           Governing Law. 
The validity, construction,
interpretation, administration and effect of this Agreement will be governed by
and construed exclusively in accordance with the laws of the State of Delaware,
without regard to its conflicts of law principles.

 

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

 

8

 

and understandings relating to the
grant and exercise of the Option and the administration of the Plan.

 

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

 

[The
Remainder of This Page Left Intentionally Blank]

 

9

 

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

 

	
  CERIDIAN
  CORPORATION

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME]

  
	
  Its

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mailing Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee Number

  	
   

  

 

Version:  2/17/2006

 

10

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