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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.142-12
CERIDIAN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/X/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
$125
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
Preliminary Proxy Statement
------------------------------------------------------------------------
3) Filing Party:
Ceridian Corporation
------------------------------------------------------------------------
4) Date Filed:
March 4, 1994
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(CERIDIAN LOGO)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON MAY 11, 1994 AND PROXY STATEMENT
March 30, 1994
Dear Stockholder:
You are cordially invited to attend Ceridian Corporation's Annual Meeting of
Stockholders at the Carter Presidential Center, One Copenhill, Atlanta, Georgia
30307 on May 11, 1994 at 10 a.m. E.D.T. We are looking forward to this
opportunity to meet with stockholders. Whether or not you plan to attend, please
complete and return your proxy card.
The following pages contain the notice of meeting and the proxy statement,
which includes information about the nominees for election to the Board of
Directors. It also contains information about a proposal recommended by the
Board to restate the Company's certificate of incorporation.
Please return the accompanying proxy card as promptly as possible to ensure
that your vote is counted at the meeting.
Sincerely,
Lawrence Perlman
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Corporate Headquarters and Mailing Address:
8100 34th Avenue South
Minneapolis, MN 55425
(612) 853-8100
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CERIDIAN CORPORATION
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
The Annual Meeting of Stockholders of Ceridian Corporation, a Delaware
corporation (the "Company"), will be held at the Carter Presidential Center, One
Copenhill, Atlanta, Georgia 30307 on Wednesday, May 11, 1994 at 10 a.m., Eastern
Daylight Savings Time, for the following purposes:
(1) To elect directors for the following year;
(2) To adopt a restated certificate of incorporation for the Company as
recommended by the Board; and
(3) To transact such other business as may properly come before the meeting.
Stockholders of record of the Company's common stock at the close of
business on March 22, 1994 will be entitled to vote at the meeting and any
adjournments. No admission ticket will be necessary.
A list of stockholders entitled to vote at the meeting will be open for
examination by any stockholder for any purpose germane to the meeting during
ordinary business hours from April 27, 1994 through May 11, 1994, at the
Company's offices at 300 Embassy Row, 3rd Floor, Atlanta, Georgia 30328-1607.
By Order of the Board of Directors
John A. Haveman
SECRETARY
March 30, 1994
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, SIGN, DATE, AND RETURN
THE ACCOMPANYING PROXY CARD AS SOON AS POSSIBLE.
<PAGE>
CONTENTS
<TABLE>
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PAGE
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<S> <C>
General Information........................................................................................ 3
Election of Directors (Item 1)............................................................................. 4
The Board of Directors................................................................................... 4
Nominees for Director.................................................................................... 4
Committees of the Board of Directors..................................................................... 5
Directors' Compensation.................................................................................. 6
Compensation Committee Interlocks and Insider Participation.............................................. 6
Adoption of Restated Certificate of Incorporation (Item 2)................................................. 7
Introduction............................................................................................. 7
Description of Proposed Amendments....................................................................... 7
Compensation Committee Report on Executive Compensation.................................................... 9
Stock Price Performance Graph.............................................................................. 13
Executive Compensation..................................................................................... 14
Summary Compensation Table............................................................................... 14
Stock Option Grants...................................................................................... 15
Option Exercises and Option Values....................................................................... 15
Pension Plan............................................................................................. 16
Executive Employment Agreements.......................................................................... 16
Change of Control Provisions............................................................................. 17
Share Ownership Information................................................................................ 18
Share Ownership of Directors and Management.............................................................. 18
Share Ownership of Certain Beneficial Owners............................................................. 19
Independent Auditors....................................................................................... 20
Other Matters.............................................................................................. 20
Stockholder Proposals.................................................................................... 20
Compliance With Section 16(a) of the Securities Exchange Act............................................. 20
Solicitation of Proxies.................................................................................. 21
Form of Restated Certificate of Incorporation of Ceridian Corporation...................................... A-1
</TABLE>
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CERIDIAN CORPORATION
------------------
PROXY STATEMENT FOR ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 11, 1994
------------------------
GENERAL INFORMATION
This proxy statement and the enclosed proxy card are being mailed to
stockholders beginning on or about March 30, 1994 in connection with the
solicitation of proxies by the Board of Directors of Ceridian Corporation (the
"Company") for use at the Annual Meeting of Stockholders to be held on May 11,
1994 (the "Annual Meeting"). Holders of the Company's common stock (the "Common
Stock") of record at the close of business on March 22, 1994 will be entitled to
vote at the meeting. At the close of business on March 22, 1994, 44,382,089
shares of Common Stock were outstanding and entitled to vote at the meeting.
Each share of Common Stock is entitled to one vote.
When proxy cards are returned properly signed, the shares represented will
be voted as directed. When no direction is given, the shares will be voted as
recommended by the Board. The proxy also gives discretionary authority to vote
the shares on any other matter which may properly come before the meeting. A
stockholder may revoke a proxy at any time before it is exercised by filing a
revoking instrument with the Secretary of the Company, by submitting another
proxy card with a later date, or by voting in person at the meeting.
The Company's Bylaws specify that except as otherwise provided by Delaware
corporate law, the vote required to decide each matter to be brought before a
meeting of stockholders is a majority of the shares of Common Stock represented
in person or by proxy at the meeting and entitled to vote on the matter. Because
shares that are held by a person who abstains from voting on a particular matter
are treated as present and entitled to vote on that matter, an abstention has
the same effect as a vote against the matter. If, however, a broker indicates on
a proxy that it does not have discretionary authority to vote certain shares on
a particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter. In other words, broker non-votes are not
counted against such a proposal. With respect to Item 2 to be voted on at the
Annual Meeting, Adoption of Restated Certificate of Incorporation, Delaware
corporate law provides that the vote required to approve that matter is a
majority of all shares of Common Stock issued and outstanding. In other words,
abstentions and broker non-votes have the same effect as a vote against Item 2.
It is the Company's policy that all stockholder meeting proxies, ballots and
voting tabulations that identify the vote of a particular stockholder are to be
kept confidential if the stockholder has requested confidential treatment on the
proxy card or ballot. If the stockholder so requests, no such document will be
available for examination, nor will the identity and vote of any stockholder be
disclosed prior to the final tabulation of the vote at the stockholders' meeting
except (i) as necessary to meet applicable legal requirements; (ii) to allow the
independent election inspectors to count and certify the results of the vote; or
(iii) in the event of a proxy solicitation in opposition to the Board of
Directors based on an opposition proxy statement filed with the Securities and
Exchange Commission. The independent election inspectors may inform the Company
whether or not a particular stockholder has voted.
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ELECTION OF DIRECTORS
(ITEM 1)
THE BOARD OF DIRECTORS
The business of the Company is managed under the direction of the Board of
Directors, which met nine times in 1993. The Company's Bylaws provide that the
Board shall determine the number of directors, which is currently set at eight.
All eight directors presently serving on the Company's Board have agreed to
stand for re-election and have been designated by the Board as nominees for
director. See "Nominees for Director" for profiles of the nominees, each of whom
was previously elected by the stockholders.
The Board recommends a vote FOR and solicits proxies in favor of the
nominees named below. Proxies cannot be voted for more than eight people. If any
nominee becomes unable or unavailable to serve, proxies will be voted for
another nominee selected by the Board. Each person elected will hold office
until the 1995 Annual Meeting of Stockholders and until his or her successor is
duly elected and qualifies, or until earlier resignation or removal.
NOMINEES FOR DIRECTOR
RUTH M. DAVIS Dr. Davis, 65, has been President and Chief Executive Officer
of the Pymatuning Group, Inc., which specializes in technology management
services, since 1981. She serves as Chairman of the Board for the Aerospace
Corporation and as a trustee of Consolidated Edison Company of New York. Dr.
Davis is a director of Air Products and Chemicals, Inc.; Premark International,
Inc.; Principal Financial Group Inc.; Sprint Corporation; SofTech Inc.; Varian
Associates, Inc. and Giddings & Lewis, Inc. Dr. Davis has been a director of the
Company since 1984.
ALLEN W. DAWSON Mr. Dawson, 67, is Chairman Emeritus of Siecor Corporation
("Siecor"), a joint venture of Corning Glass Works and Siemens Communications
Systems, Inc. Siecor manufactures fiber optic cable and ancillary equipment.
From 1989 to 1991, Mr. Dawson was Chairman of the Executive Committee of Siecor,
and from 1980 to 1989 he was Chairman and Chief Executive Officer of Siecor. He
is also a director of VMX, Inc. Mr. Dawson has been a director of the Company
since 1986.
RONALD JAMES Mr. James, 43, is Vice President-Minnesota of U S WEST
Communications, Inc. ("U S WEST"). He has been employed by U S WEST since 1971,
and has held his current position since January 1990. Prior to that time, he
served as Vice President and General Manager, Large Business Markets beginning
in December 1987. Mr. James is a director of the St. Paul Companies, Inc. and
Great Hall Investment Funds, Inc. Mr. James has been a director of the Company
since 1991.
RICHARD G. LAREAU Mr. Lareau, 65, is a partner in the law firm of
Oppenheimer Wolff & Donnelly. He is a director of Nash-Finch Company, Merrill
Corporation and Northern Technologies International Corporation, and is a
trustee of the Mesabi Trust, a mineral royalty trust. Mr. Lareau has been a
director of the Company since 1971.
CHARLES MARSHALL Mr. Marshall, 64, served as Vice Chairman of American
Telephone and Telegraph Company from 1985 until his retirement in April 1989.
Mr. Marshall is a director of GATX Corporation, Grumman Corporation, HARTMARX
Corporation, SONAT Inc., Sundstrand Corporation and Zenith Electronics
Corporation. Mr. Marshall has been a director of the Company since 1989.
LAWRENCE PERLMAN Mr. Perlman, 55, is Chairman, President and Chief
Executive Officer of the Company. He was named Chairman in November 1992, and
has been President and Chief Executive Officer since January 1990. Mr. Perlman
was President and Chief Operating Officer of the Company from December 1988 to
January 1990. He is a director of Inter-Regional Financial Group, Inc.; Seagate
Technology, Inc.; The Valspar Corporation and Computer Network Technology
Corporation. He is also a member of the National Advisory Board of the Chemical
Banking Corporation. Mr. Perlman has been a director of the Company since 1985.
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RICHARD W. VIESER Mr. Vieser, 66, retired in 1989 after having served as
Chairman, President and Chief Executive Officer of Lear Siegler, Inc. since
March 1987, and Chairman and Chief Executive Officer of FL Aerospace Corp. since
September 1986 and of FL Industries, Inc. since June 1985. He is a director of
Dresser Industries, Inc.; INDRESCO Inc.; Sybron Corporation and Varian
Associates, Inc. Mr. Vieser has been a director of the Company since 1988.
PAUL S. WALSH Mr. Walsh, 38, is Chief Executive Officer of GrandMet
Foods-Americas and of The Pillsbury Company, a wholly-owned subsidiary of Grand
Metropolitan PLC ("Grand Metropolitan"). Prior to assuming this position in
January 1993, Mr. Walsh was Joint Chief Operating Officer of Grand
Metropolitan's Food Sector from June 1991 to January 1993 and Chief Executive
Officer of its Pillsbury Brands division from January 1992 to January 1993;
Divisional Chief Executive of the Pillsbury Brands division of Grand
Metropolitan's Food Sector from July 1990 to June 1991; Chief Operating Officer
of Pillsbury Brands from April 1989 to July 1990; and Executive Vice President
and Chief Financial Officer of Grand Metropolitan Inc. from September 1988 to
April 1989. Mr. Walsh has been a director of the Company since 1991.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board elects an Executive Committee, an Audit Committee, a Compensation
and Human Resources Committee, a Nominating and Board Governance Committee and a
Quality and Technology Committee. The following are members of these committees
as of March 1, 1994:
<TABLE>
<S> <C>
Executive Committee: Nominating and Board
Lawrence Perlman, Chairman Governance Committee:
Ronald James Richard G. Lareau, Chairman
Richard G. Lareau Charles Marshall
Audit Committee: Paul S. Walsh
Richard W. Vieser, Chairman Quality and Technology Committee:
Ruth M. Davis Ruth M. Davis, Chairman
Allen W. Dawson Allen W. Dawson
Compensation and Human Resources Committee: Ronald James
Charles Marshall, Chairman Lawrence Perlman
Ronald James Richard W. Vieser
Richard G. Lareau
Paul S. Walsh
</TABLE>
The Executive Committee acts on matters that arise between Board meetings
and require immediate action. All actions by the Executive Committee are
reported to the Board for ratification. The Executive Committee acted seven
times in 1993.
The Audit Committee reviews and recommends to the Board the selection of the
Company's independent auditors, consults with the Company's independent auditors
and reviews the scope and significant findings of the audits performed by them,
reviews the adequacy and sufficiency of the Company's financial and accounting
controls, practices and procedures, the activities and recommendations of its
internal auditors, and its reporting policies and practices. The Audit Committee
met four times in 1993.
The Compensation and Human Resources Committee determines compensation
policies, practices and structures for key employees of the Company, approves
the compensation and benefits of executive officers, evaluates the performance
of the chief executive officer, reviews the process of managing executive
succession, diversity and development, and assesses the adequacy of the
Company's human resource principles and philosophy. This Committee met four
times in 1993.
The Nominating and Board Governance Committee reviews the composition,
organization and governance of the Board and its committees and recommends to
the Board the adoption of policies
5
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pertaining thereto, recommends to the Board compensation for non-management
directors, and serves as a nominating committee that considers all nominees,
including those recommended by stockholders, for Board membership. This
Committee met four times during 1993.
The Quality and Technology Committee reviews the systems and processes
comprising the Company's quality management program, evaluates the Company's
technological resources and assets, and assesses the Company's business plans
and strategies in light of external technology trends and internal technological
support. This Committee met three times in 1993.
During 1993, each director attended at least 75 percent of the meetings of
the Board and his or her committees.
DIRECTORS' COMPENSATION
Directors who are employees are not paid directors' fees. In 1993, directors
who were not employees were paid an annual retainer of $20,000, $900 for
attendance at Board meetings, $750 for attendance at committee meetings and
$1,000 per day for time spent on other Company business. In addition, the
chairmen of the Compensation, Audit and Quality and Technology Committees
received a supplemental annual retainer of $3,000. For 1994, the fee structure
and annual retainer will remain the same, but the supplemental annual retainer
will be extended to the chairman of the Nominating and Board Governance
Committee.
Under the 1993 Non-Employee Director Stock Plan, each director who is not an
employee of the Company receives a one-time grant of 1,000 shares of Common
Stock, restricted as to transfer, upon election to the Board for the first time
(current directors received this grant in 1993 when the Plan was approved by the
Company's stockholders), and an annual grant of an option (first received during
1993) to purchase 1,000 shares of Common Stock upon election or re-election to
the Board. A restricted stock award will be forfeited if the applicable
director's service on the Board is terminated for any reason other than death or
disability within six months from the date it was granted. Shares subject to a
restricted stock award may not be sold, transferred, pledged or otherwise
disposed of until such time as the director's service on the Board ceases. The
exercise price per share of each option granted to a director will be 100
percent of the fair market value of the underlying Common Stock on the date the
option is granted. An option will become exercisable in full six months after
its date of grant, and will expire 10 years from its date of grant.
Non-employee directors are also entitled to participate in a deferred
compensation plan. Each such director with at least 12 calendar quarters of
service as a director of the Company at the time he or she ceases to be a
director will receive (or, in the event of the director's death, his or her
beneficiary or estate shall receive) quarterly payments for the lesser of 48
calendar quarters or the number of quarters of service as a director. The amount
of each quarterly payment will be one-fourth of the amount of the director's
annual retainer at the time he or she ceases to be a director. The plan makes
such payments subject to conditions involving non-competition, preservation of
proprietary information and providing requested consulting services. If, within
two years of a change of control of the Company (defined as described under
"Executive Compensation -- Change of Control Provisions"), a director resigns
following a material adverse change in the conditions under which he or she
performs services as a director, or the director is removed from the Board for
any reason other than conduct constituting a felony or the willful failure to
fulfill duties as a director, the director will acquire a fully vested interest
in any benefit accrued under this plan, even though the director may not have
completed 12 calendar quarters of service as a director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Lareau, who served on the Company's Compensation and Human Resources
Committee during 1993, is a partner in the law firm of Oppenheimer Wolff &
Donnelly, which has provided and continues to provide legal representation to
the Company on various matters.
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ADOPTION OF RESTATED CERTIFICATE OF INCORPORATION
(ITEM 2)
INTRODUCTION
On February 4, 1994, the Board of Directors unanimously deemed advisable and
recommended that the Company's stockholders approve at the Annual Meeting a
proposal to adopt a restated certificate of incorporation for the Company in the
form attached to this proxy statement as Appendix A (the "Restated
Certificate"). The description set forth below of the Restated Certificate is
qualified in its entirety by the text of Appendix A, which is incorporated
herein by reference. As discussed below, the Restated Certificate would amend
the existing Certificate of Incorporation, as previously amended (the "Current
Certificate") by:
(1) Eliminating the Company's 4 1/2% Cumulative Preferred Stock ("4 1/2%
Preferred Stock"), of which there are no shares issued and outstanding, from
the Company's authorized capital stock;
(2) Eliminating the provision which requires the Board to give due
consideration to all relevant factors, including social and economic effects
on employees, customers, suppliers and other constituents, in evaluating a
takeover bid for the Company;
(3) Eliminating the provision which provides rights beyond those
provided by applicable law to holders of 25% or more of any class of capital
stock to inspect the Company's books and records; and
(4) Making additional minor changes generally in the interests of
modernization, clarity and brevity.
The Restated Certificate, which is included as Appendix A to this Proxy
Statement, is being presented to the stockholders for their adoption as a single
proposal. Stockholders are urged to read and consider carefully the proposed
Restated Certificate. The Restated Certificate incorporates by reference the
Certificate of Designation adopted by the Board in November 1993 specifying the
rights and preferences of the Company's recently issued 5 1/2% Cumulative
Convertible Exchangeable Preferred Stock ("5 1/2% Preferred Stock"). Because no
change is being made to that Certificate of Designation, it is not included as a
part of Appendix A to this Proxy Statement but is available from the Company
upon request.
The Board recommends that you vote FOR the adoption of the Restated
Certificate. The vote required to adopt the Restated Certificate is a majority
of the outstanding shares of Common Stock entitled to vote at the Annual
Meeting. If the proposal to adopt the Restated Certificate is approved by the
necessary vote, the Restated Certificate will become effective as of the date
and time it is filed with the Secretary of State of the State of Delaware. Such
filing will be made as soon as practicable following approval of the Restated
Certificate by the stockholders.
DESCRIPTION OF PROPOSED AMENDMENTS
ELIMINATION OF 4 1/2% PREFERRED STOCK. Under the Current Certificate, the
authorized capital stock of the Company consists of (i) 371,135 shares of 4 1/2%
Preferred Stock, of which no shares are currently issued and outstanding; (ii)
750,000 shares of Preferred Stock, of which 50,600 shares have been designated
as a series of 5 1/2% Preferred Stock and of which 47,200 shares are issued and
outstanding; and (iii) 100,000,000 shares of Common Stock, of which 44,382,089
shares were issued and outstanding as of the March 22, 1994 record date for the
Annual Meeting. The Restated Certificate would eliminate the 4 1/2% Preferred
Stock from the Company's authorized capital stock and delete all provisions in
the Current Certificate related thereto.
The Board believes the 4 1/2% Preferred Stock is obsolete and unnecessary
because the Company has no plans to reissue any shares of that stock. In
addition, in connection with the Company's recent public offering of 4,720,000
Depositary Shares, each representing a one one-hundredth interest in a
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share of the Company's 5 1/2% Preferred Stock, the Company agreed with the
underwriters not to issue any shares of the 4 1/2% Preferred Stock, and to use
its reasonable efforts to cause the stockholders of the Company to approve an
amendment to the Current Certificate to eliminate the 4 1/2% Preferred Stock
from the authorized capital stock of the Company.
ELIMINATION OF ARTICLE TENTH. Article Tenth of the Current Certificate
provides as follows:
"The Board of Directors of the Corporation, when evaluating any offer of
another party to (a) make a tender offer or exchange offer for any equity
security of the Corporation, (b) merge or consolidate the Corporation with
another corporation, or (c) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, shall, in
connection with the exercise of its judgment in determining what is in the
best interests of the Corporation and its stockholders, give due
consideration to all relevant factors, including without limitation the
social and economic effects on the employees, customers, suppliers and other
constituents of the Corporation and its subsidiaries and on the communities
in which the Corporation and its subsidiaries operate or are located."
The Board recognizes that when faced with a situation which Article Tenth is
meant to address, its obligation under Delaware law is to act, in the exercise
of its business judgment, in the best interests of the Company and its
stockholders. The Board's view is that Article Tenth, while well-intentioned, is
appropriate only to the extent that it is consistent with and does not detract
from the Board's overriding obligation to the Company and its stockholders. In
addition, the Board wishes to avoid having a provision such as Article Tenth
potentially cause any misperceptions as to the Board's view of its obligations
when faced with the type of situation Article Tenth was meant to address. For
these reasons, the Board has recommended the elimination of Article Tenth as
part of the Restated Certificate.
ELIMINATION OF SPECIAL INSPECTION RIGHT. Paragraph 3 of the General
Provisions contained in Article Fourth of the Current Certificate provides that:
"The books of this Corporation, including such books as show the names
of the stockholders thereof, and their places of residence and the number of
shares held by them, shall during the usual business hours of every business
day, be open for the inspection of any person or persons holding in the
aggregate twenty-five percent (25%) of any class of the outstanding capital
stock."
The Company has proposed to eliminate this provision in the Restated
Certificate because the Company is subject to provisions of Delaware law and
proxy rules adopted by the Securities and Exchange Commission (the "Commission")
which collectively provide various inspection and communication rights to
stockholders in certain circumstances, and which apply equally to all
stockholders without regard to the size of their holdings. The Board believes
that these provisions of Delaware law and of the proxy rules have struck an
appropriate balance between the business needs of a corporation on the one hand,
and the inspection and communication needs of stockholders on the other hand.
The Board also believes it preferable to address the inspection and
communication needs of all stockholders in an equitable manner, without regard
to an arbitrary stockholdings threshold. The Company knows of no person or group
of related persons who beneficially owns 25% or more of any class of the
Company's stock.
Under Section 220 of the Delaware General Corporation Law ("DGCL"), any
stockholder of record of a corporation has the right, upon an appropriate
written demand and during normal business hours, to inspect for any "proper
purpose" (a purpose reasonably related to such person's interest as a
stockholder) the corporation's stock ledger, a list of its stockholders and its
other books and records. Similarly, Section 219 of the DGCL also requires that a
corporation make available for inspection during normal business hours for at
least ten days before any meeting of stockholders a list of stockholders,
including their addresses and number of shares owned, entitled to vote at that
meeting. Such list may be examined by any stockholder for any purpose germane to
the meeting, and is to be made available in the city where the meeting is to be
held.
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Rule 14a-7 promulgated by the Commission under the Securities Exchange Act
of 1934 imposes an obligation on any corporation subject to that Rule (including
the Company) which is itself soliciting proxies in connection with a pending
stockholder vote (either through a stockholders' meeting or written consent
process) to either (i) provide a list of the corporation's stockholders to any
record or beneficial holder of that corporation's stock who requests such a list
for the purpose of sending such stockholders soliciting or communications
materials relating to the pending stockholder vote, or (ii) mail to its
stockholders soliciting or communications materials provided by such a
stockholder relating to the pending stockholder vote. The stockholder requesting
either such action must pay the costs incurred by the corporation in connection
therewith, and certify that the solicitation or communication relates to the
pending stockholder vote.
If the Restated Certificate of Incorporation is adopted and this provision
is eliminated, any person or group of persons who may, in the future, hold 25%
or more of any class of the Company's stock would no longer be entitled to
inspect the Company's books without a "proper purpose" under the DGCL, and would
have access to the Company's stockholder list only in the circumstances outlined
above under the DGCL and Rule 14a-7.
OTHER CHANGES. In addition to eliminating the provisions outlined above,
the Restated Certificate would make other minor, technical changes to the
Current Certificate by consolidating the Current Certificate, including all
existing amendments, and the proposed amendments into a single document and
eliminating from that document obsolete and unnecessary provisions. These
additional changes are summarized briefly as follows:
(a) Eliminating a provision specifying that no stockholder of any class
shall have any preemptive rights, since this is duplicative of Section
102(b)(3) of the DGCL;
(b) Rephrasing a provision regarding the powers and responsibilities of
the Board to track more precisely with Section 141 of the DGCL and to
eliminate superfluous references to specific powers of the Board;
(c) Eliminating provisions specifying the initial subscribers for the
Company's capital stock and the amount of such stock with which the Company
commenced business in 1912;
(d) Eliminating provisions which specify that the Company is to have
perpetual existence and that the private property of stockholders shall not
be subject to the payment of corporate debts, since these are duplicative of
Sections 102(b)(5) and (6) of the DGCL;
(e) Including in the list of representative rights, powers and
preferences that may be accorded by the Board to a series of Preferred Stock
an expanded description of the voting rights and rights upon dissolution
that may be accorded to a series of such Stock;
(f) Supplementing the provisions relating to the Preferred Stock with a
provision incorporating into the Restated Certificate the Certificate of
Designation adopted by the Board specifying the rights and preferences of
the recently issued 5 1/2% Preferred Stock; and
(g) Reordering, renumbering and captioning Articles and Sections for
purposes of clarity and enhanced readability.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation and Human Resources Committee (the "Committee"),
comprised solely of non-employee directors, is responsible for establishing and
administering the compensation program for the senior executive officers of the
Company. The Company's executive compensation program is intended to (i) provide
competitive levels of overall compensation to attract and retain well qualified
executives, (ii) motivate executives to achieve the short-and long-term
strategic goals of the Company and (iii) have a direct relationship to the
enhancement of stockholder value. The three components in the Company's
executive compensation program are base salary, annual incentive bonus and
long-term incentive compensation. The program is designed so that the target mix
of total
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compensation is 40% to 60% base salary, with the balance consisting of
performance-based variable components (annual incentive bonus and long-term
incentive compensation). Greater weight is given to performance-based
compensation at higher levels of responsibility within the Company.
Information regarding competitive compensation levels and practices for
positions comparable to executive officer positions within the Company is
obtained by the Committee from nationwide compensation survey information
collected and evaluated by independent consulting firms, and advice from an
independent, nationally recognized compensation consulting firm. As a result,
comparative compensation information is drawn from a broader range of companies
than those included in the industry indices contained in the performance graph
on page 13, and not all of the companies included in the performance graph
indices are included in the surveys utilized. Based on this information, the
Committee targets base salary, total cash compensation (salary plus annual
bonus) and long-term incentive award levels for each executive officer position
to fall in a range between the 50th and 75th percentiles of the relevant
compensation marketplace.
SALARY. The annual determination of an individual officer's salary within
the prescribed target range is based on a subjective assessment by the Committee
of the responsibilities of the position and the performance, experience and
current salary of the executive filling the position. The 1993 base salary for
executive officers was generally within the upper half of the targeted range.
ANNUAL INCENTIVE BONUS. The annual incentive program provides yearly cash
bonuses to executive officers, although the Committee may, in its discretion,
permit individuals to elect to receive part or all of their annual bonus in the
form of stock options rather than cash. The annual determination of an
individual officer's target bonus, expressed as a percentage of base salary, is
based on a subjective assessment by the Committee of the responsibilities of the
position, competitive practice and the Committee's philosophy regarding
performance-based compensation.
For 1993, target bonus percentages for executive officers other than Mr.
Perlman ranged from 30% to 55% of base salary, with the maximum possible bonus
twice the target amount. Of the total potential bonus, 80% consisted of a
financial component. In the case of staff officers, the financial component
consisted of a requirement that the Company achieve a specified level of
earnings per share ("EPS") during 1993. In the case of officers assigned to
operating units, one-fourth of the financial component consisted of the same
Company EPS requirement, while the balance consisted of a requirement that the
operating unit achieve a specified level of pre-tax earnings ("NPBT"). The 20%
non-financial component was based on the Committee's subjective assessment of
the executive officer's individual performance in the areas of quality
improvement and fostering workforce diversity. With respect to the financial
component, bonus payments at, above or below the target percentages could be
made depending on whether the financial performance of the Company (and, if
applicable, the business unit to which the executive is assigned) met, exceeded
or fell short of the applicable targeted financial goal. The targeted financial
component of the bonus would be payable if budgeted earnings were achieved, but
no financial component would be payable if an earnings threshold amount were not
achieved. The Committee approved threshold and superior earnings goals above and
below the target level, based on advice regarding competitive practices from the
Company's compensation consultant.
The Committee retains discretion to award the financial component of the
annual incentive if, in its judgment, bonuses are warranted despite the failure
of the Company or the business unit to achieve the minimum specified financial
goal. For 1993, the Committee adjusted the financial goals that had been
established at the beginning of the year so as to exclude the effect of
restructuring and extraordinary charges from the Company EPS and operating unit
NPBT calculations. The Committee felt that the restructuring plans adopted were
necessary and in the long-term best interests of the Company and its
stockholders, and that delay in adopting such restructuring plans would simply
have improved 1993 financial results at the expense of longer-term financial
performance. The Committee does not wish the annual incentive program to favor
short-term gain at the expense of longer-term performance. Similarly, the early
retirement of the Company's public debt with the proceeds of a
10
<PAGE>
public offering of preferred stock was viewed by the Committee as a very
positive development for the Company, despite the fact that early retirement of
the debt entailed an extraordinary charge. Following these adjustments, both the
financial and non-financial components of the 1993 annual incentive program were
paid above the target level for executive officers, resulting in bonus payments
for executive officers other than Mr. Perlman ranging between 45% and 86% of
base salary.
LONG-TERM INCENTIVES. Long-term incentives are intended to emphasize the
link between executive compensation and improved long-term stock price
performance. Although the Company's 1993 Long-Term Incentive Plan provides for
the grant of stock options, restricted stock, stock appreciation rights and
performance units, stock options with a fair market value exercise price are
seen by the Committee as having a significant tie to increases in stockholder
value. As a result, stock options were the sole long-term incentive utilized for
executives during 1993, except for one restricted stock award made to a newly
hired executive. An annual award of stock options is typically made to each
executive officer, although additional awards may be made at the Committee's
discretion in circumstances such as promotions.
The annual determination of an individual officer's option award within the
range prescribed for his or her position is based on a subjective assessment by
the Committee of the responsibilities of the position and the performance and
experience of, and past option awards made to, the individual. For 1993, option
awards to executive officers were generally at the midpoint of the targeted
range.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Perlman's base salary during 1993
was $600,000, unchanged since 1990, and will remain at that level for 1994.
While the Committee believes Mr. Perlman has performed exceptionally well,
maintaining the base salary at this level was deemed appropriate to increasingly
orient his total compensation toward performance-based components. Mr Perlman's
1993 annual incentive was determined based solely on the Company's EPS, and
amounted to 97.5% of base salary as compared to a target of 65%, reflecting
above target earnings performance for the Company during 1993, after taking into
account the previously mentioned adjustments for restructuring and extraordinary
charges. Mr. Perlman elected at the beginning of 1993 to receive one-third of
his 1993 annual incentive in stock options, which resulted in the grant of an
option to acquire 39,998 shares. For purposes of this election, an option to
acquire one share was valued at one-third of the option exercise price.
Mr. Perlman was granted a stock option for 100,000 shares during 1993 as the
long-term incentive portion of his compensation package. In approving this
award, the Committee principally considered (i) Mr. Perlman's role in the
Company's improved 1993 operating performance, the successful offering of 5 1/2%
Preferred Stock and 1993 strategic planning efforts, (ii) the increase in the
Company's stock price during the year, (iii) the competitive range for Mr.
Perlman's position and (iv) the desire to increasingly orient his compensation
toward performance-based components.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION. During 1993, the Internal Revenue
Code (the "Code") was amended to impose on public companies, such as Ceridian,
an annual limit of $1 million on deductions for compensation payments made to
each of the chief executive officer and the four most highly paid executive
officers employed at fiscal year end. Compensation that is considered
"performance-based" according to the Code is not counted toward the $1 million
annual limit.
The Committee supports the concept that a significant portion of the total
compensation provided to an executive, particularly the chief executive officer
and others occupying positions of significant responsibility within the Company,
should be performance-based, and has attempted to implement and administer
programs that are consistent with this concept. For example, a large component
of the compensation provided to the five highest compensated officers is in the
form of stock options. The Code classifies stock options granted with a fair
market value exercise price as "performance-based."
Although the Committee has considered amending other elements of the
compensation program so they can be considered "performance-based" for purposes
of the Code, the Committee believes that it is more important for it to retain
the flexibility to tailor the compensation program in the manner it
11
<PAGE>
believes most beneficial to the Company and its stockholders, than it is to
qualify every aspect of the Company's executive compensation program as
"performance-based" for purposes of the Code. In addition, any non-deductible
amount of future compensation is not expected to be material to the Company, nor
would such non-deductibility financially disadvantage the Company in any manner
given the Company's tax position.
February 28, 1994 Compensation and Human Resources Committee
Charles Marshall, Chairman
Ronald James
Richard G. Lareau
Paul S. Walsh
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return during the period
1989-1993 for the Company's Common Stock, the S&P 500 Index, the S&P Computer
Software and Services Index and the S&P Electronics (Defense) Index. Although
the Stock Price Performance Graph in the Company's Proxy Statement for its 1993
Annual Meeting of Stockholders also included the cumulative total return for the
S&P Computer Systems Index, that Index has not been included in the graph below
because that Index no longer provides a meaningful comparison for any portion of
the Company since the 1992 dividend distribution by the Company to its
stockholders of all of the common stock of the Company's former computer systems
subsidiary, Control Data Systems, Inc.
This graph assumes the investment of $100 in the Company's Common Stock, the
S&P 500 Index and each of the industry indices on December 31, 1988, and the
reinvestment of all dividends as and when distributed. Included in the dividends
reinvested is the previously mentioned 1992 dividend distribution of the stock
of Control Data Systems, Inc. For purposes of this graph, it is assumed that the
shares of Control Data Systems stock were received on the September 1, 1992
ex-dividend date, sold at the closing market price on that date, and the
proceeds reinvested in shares of Ceridian Common Stock at the closing market
price on that date.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(CERIDIAN CORPORATION, THE S&P 500 INDEX AND INDUSTRY INDICES)
<TABLE>
<CAPTION>
S&P COMPUTER S&P
MEASUREMENT PERIOD CERIDIAN SOFTWARE AND ELECTRONICS
(FISCAL YEAR COVERED) CORPORATION SERVICES (DEFENSE) S&P 500 INDEX
- --------------------------------------------------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Measurement Pt-12/31/88 $100 $100 $100 $100
FYE 12/31/89 $ 92.44 $121.90 $128.38 $131.59
FYE 12/31/90 $ 45.26 $ 95.16 $139.41 $127.50
FYE 12/31/91 $ 55.46 $145.06 $195.12 $166.18
FYE 12/31/92 $ 90.59 $171.81 $201.95 $178.83
FYE 12/31/93 $112.86 $219.26 $263.97 $196.77
</TABLE>
13
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation for the past three years of
the Company's five most highly compensated officers as of December 31, 1993,
including the chief executive officer (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ --------------------------- PAYOUTS
OTHER RESTRICTED SECURITIES --------
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($)(1) (#) ($) ($)(2)
- ------------------------- ---- -------- ---------- ----------- ---------- --------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence Perlman 1993 $600,000 $390,109 -- -- 139,998(3) -- $ 4,497
Chairman, President and 1992 600,000 445,714 -- -- 170,000 -- 2,706
Chief Executive Officer 1991 600,000 156,000 -- -- 445,038(4)(5) -- --
Roger E. Handberg 1993 250,103 206,405 -- -- -- -- 43,136
Executive Vice President 1992 203,750 150,251 -- -- 88,175(5) $129,412 2,706
(6) 1991 190,000 121,220 -- -- 43,366(4)(5) 100,000 --
Stephen B. Morris 1993 250,008 165,375 -- -- 30,000 -- --
Vice President and 1992 20,834 9,375 -- -- 50,000 -- --
President, The Arbitron 1991 -- -- -- -- -- -- --
Company (7)
Patrick C. Sommers 1993 250,000 162,000 $ 254,407(8) -- 30,000 -- 288
Vice President and 1992 19,231 14,063 -- -- 50,000 -- --
President, Ceridian 1991 -- -- -- -- -- -- --
Employer Services (7)
Ronald L. Turner 1993 273,625 285,125(9) 98,067(8) $75,000 80,000 -- --
Vice President and 1992 -- -- -- -- -- -- --
President, Computing 1991 -- -- -- -- -- -- --
Devices International
(7)
<FN>
- ------------------------------
(1) The amount reported in the table represents the market value of the shares
of Common Stock awarded in 1993 on the date of grant, determined by
utilizing the closing price of the Company's Common Stock on the NYSE on
the grant date. Although holders of restricted stock are entitled to
receive any dividends payable on the Company's Common Stock, the Company
has not paid any cash dividends on such stock since 1985, and its current
ability to do so is limited by its domestic revolving credit agreement. At
the end of 1993, the number and value (based on the closing price of the
Company's Common Stock on the NYSE on December 31, 1993) of aggregate
restricted stock holdings of the individuals named in the table was as
follows:
NAME NO. OF SHARES VALUE ($)
------------------------------ ------------- ---------
Mr. Perlman................... 4,175 $ 79,325
Mr. Handberg.................. -- --
Mr. Morris.................... -- --
Mr. Sommers................... -- --
Mr. Turner.................... 5,000 95,000
(2) The amounts disclosed for each individual other than Mr. Handberg represent
the Company's contributions to the accounts of the named individuals in the
Company's Personal Investment Plan, a 401(k) defined contribution plan. The
1993 amount disclosed for Mr. Handberg consists of $40,423 paid in
connection with his retirement for accrued but unused personal days off,
and $2,713 in Company contributions to his account in the Personal
Investment Plan. Information for 1991 is not required to be disclosed.
(3) Includes an option to acquire 39,998 shares granted as a result of Mr.
Perlman's election to receive one-third of the value of his 1993 bonus in
the form of a stock option rather than cash.
(4) In November 1991, option holders were permitted to cancel existing options
in exchange for new option grants covering half the number of shares, as
disclosed in the Company's 1992 proxy statement. Amounts shown for 1991
include the amount of such replacement grants.
(5) Amounts shown reflect antidilution adjustments resulting from the spinoff
of Control Data Systems, Inc.
(6) Mr. Handberg retired from the Company effective December 31, 1993.
(7) Mr. Morris joined the Company as an executive officer in December 1992, Mr.
Sommers in November 1992 and Mr. Turner in January 1993.
(8) The amount disclosed in this column for Mr. Sommers includes $131,263 in
relocation expenses and $106,231 in tax reimbursement payments related to
the relocation expenses. The amount disclosed for Mr. Turner includes
$44,371 in relocation expenses and $35,910 in tax reimbursement payments
related thereto.
(9) The amount disclosed includes $50,000 paid at the time Mr. Turner joined
the Company, as well as his 1993 annual bonus.
</TABLE>
14
<PAGE>
STOCK OPTION GRANTS
The following table summarizes information regarding stock options granted
during 1993 to the Named Executives.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
- ---------------------------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED (#) FISCAL YEAR ($/SH)(2) DATE 5% ($) 10% ($)
- ----------------------- ------------- ----------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence Perlman 39,998(4) 3.8% $ 14.63 02/03/03 $ 368,658 $ 930,421
100,000(5) 9.5% 19.13 12/13/03 1,205,190 3,041,670
Roger E. Handberg -- -- -- -- -- --
Stephen B. Morris 30,000(5) 2.8% 19.13 12/13/03 361,557 912,501
Patrick C. Sommers 30,000(5) 2.8% 19.13 12/13/03 361,557 912,501
Ronald L. Turner 50,000(6) 4.7% 14.63 02/03/03 460,845 1,163,085
30,000(5) 2.8% 19.13 12/13/03 361,557 912,501
<FN>
- ------------------------------
(1) All options were granted under the 1993 Long-Term Incentive Plan. Under
that Plan, the Compensation Committee retains discretion, subject to plan
limits, to modify the terms of outstanding options, including
exercisability dates. Exercisability will be accelerated upon a change of
control of the Company, as defined in "Change of Control Provisions"
below.
(2) The per share exercise price of each option granted in 1993 is equal to
the market value (closing price on the NYSE) of a share of the Company's
Common Stock on the date of grant.
(3) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Company's Common Stock, overall market conditions and
the optionees' continued employment through the vesting period. The
amounts represented in this table may not necessarily be achieved.
(4) Option awarded in consideration of Mr. Perlman's election to receive
33 1/3% of his 1993 annual bonus in the form of a stock option rather than
cash. Original option grant in February 1993 of 53,315 shares,
corresponding to maximum potential bonus payment, was reduced to 39,998
shares in January 1994 upon determination of actual bonus payout. Option
became fully exercisable on January 24, 1994 in connection with such
determination.
(5) This option becomes exercisable in cumulative 33 1/3% installments on
January 1 of 1995, 1996 and 1997.
(6) This option becomes exercisable in cumulative 33 1/3% installments on
January 1 of 1994, 1995 and 1996.
</TABLE>
OPTION EXERCISES AND OPTION VALUES
The following table summarizes information regarding the exercise of stock
options during 1993 by the Named Executives, as well as the December 31, 1993
value of unexercised stock options held by the Named Executives.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS AT
YEAR END (#) FISCAL YEAR END ($)(1)
SHARES ACQUIRED VALUE -------------------------- ----------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ----------------- ----------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence Perlman.................. -- -- 261,846 493,190 $ 2,969,953 $ 3,000,335
Roger E. Handberg (2)............. -- -- 36,670 88,271 371,461 700,657
Stephen B. Morris................. -- -- -- 80,000 -- 212,500
Patrick C. Sommers................ -- -- -- 80,000 -- 156,000
Ronald L. Turner.................. -- -- -- 80,000 -- 218,500
<FN>
- ------------------------
(1) Represents the difference between the market value of the Company's Common
Stock on December 31, 1993 and the exercise price of the options.
(2) Although Mr. Handberg retired from the Company effective December 31,
1993, his stock options which were not yet exercisable as of that date
will become exercisable in accordance with the schedule prescribed at the
time the options were originally granted.
</TABLE>
15
<PAGE>
PENSION PLAN
The Company maintains a voluntary, tax qualified retirement plan (the
"Retirement Plan") which is funded by employee salary reduction contributions
and Company contributions. The amount of the annual benefit under the Retirement
Plan is based upon an employee's average annual compensation during the
employee's highest consecutive five-year earnings period with the Company while
participating in the Retirement Plan. Because the Internal Revenue Code limits
the annual benefit that may be paid from a tax-qualified plan such as the
Retirement Plan, the Company has established a Benefit Equalization Plan to
provide retirees with supplemental benefits so that they will receive, in the
aggregate, the benefits they would have been entitled to receive under the
Retirement Plan had these limits not been in effect.
The following table shows estimated annual benefits payable under the
Retirement Plan and the Benefit Equalization Plan to an employee who retires in
1994 at age 65:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 46,177 $ 61,569 $ 76,961 $ 92,353 $ 104,353
300,000 70,177 93,569 116,961 140,353 158,353
400,000 94,177 125,569 156,961 188,353 212,353
500,000 118,177 157,569 196,961 236,353 266,353
600,000 142,177 189,569 236,961 284,353 320,353
700,000 166,177 221,569 276,961 332,353 374,353
800,000 190,177 253,569 316,961 380,353 428,353
900,000 214,177 285,569 356,961 428,353 482,353
1,000,000 238,177 317,569 396,961 476,353 536,353
1,100,000 262,177 349,569 436,961 524,353 590,353
1,200,000 286,177 381,569 476,961 572,353 644,353
</TABLE>
Annual compensation for purposes of the Retirement Plan and the Benefit
Equalization Plan consists of salary and any annual bonus paid during the year
(whether payable in cash or stock options), less the amount contributed by the
employee to the Retirement Plan that year. Compensation for 1993 covered by
these Plans for the Named Executives is as follows: Mr. Perlman, $1,005,142; Mr.
Handberg, $623,366; Mr. Sommers, $263,485; and Mr. Turner, $323,625. Mr. Morris
elected not to participate in the Retirement Plan. For purposes of the
Retirement Plan and the Benefit Equalization Plan, an annual bonus is considered
part of annual compensation in the year in which it is paid, rather than the
year in which it was earned (the latter formulation being the basis on which
amounts are reported in the Summary Compensation Table).
As of March 1, 1994, years of credited service for the Named Executives were
as follows: Mr. Perlman, 13.76 years; Mr. Sommers, 1.31 years; and Mr. Turner,
1.18 years. Mr. Handberg retired from the Company on December 31, 1993.
Benefit amounts in the Pension Plan Table are computed assuming payments are
made on the normal life annuity basis and not under any of the various survivor
options. Benefits listed in the table are not subject to deduction for Social
Security or other offset amounts.
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of the Named Executives
other than Mr. Handberg. The term of each of these agreements is the later of
June 30, 1995 (December 31, 1998 in the case of Mr. Perlman) or two years after
a "change of control" (as defined in "Change of Control Provisions" below)
occurring before the normal contract termination date. These agreements
generally specify that the executives are required to devote full time to the
Company and will be compensated in accordance with the compensation policies of
the Company, and contain provisions regarding
16
<PAGE>
protection of confidential information, rights in any intellectual property
created by the executive, and restrictions on competition. If the Company
terminates an agreement without cause, the executive is entitled to receive a
lump sum payment equal to two years' base salary (three years in Mr. Perlman's
case). In addition, the agreement for Mr. Perlman provides that in the event of
such a termination, he would receive a supplemental retirement benefit
calculated by including the lump sum payment previously noted in the
determination of final average pay for purposes of computing retirement
benefits. Mr. Perlman's agreement additionally provides that the calculation of
such supplemental retirement benefit will include three additional years of
service credit. Also in the event of termination without cause, Mr. Perlman's
agreement provides that his rights and benefits under any restricted stock or
option plans will fully vest, and any restrictions on shares of stock received
under such plans will immediately lapse. Each agreement also contains a number
of change of control provisions described below under "Change of Control
Provisions."
CHANGE OF CONTROL PROVISIONS
The payment of benefits or vesting of awards under the Company's 1993
Long-Term Incentive Plan ("1993 LTIP"), 1990 Long-Term Incentive Plan ("1990
LTIP"), and the executive employment agreements described above accelerates upon
a "change of control" or a "change of control termination." For these purposes,
a "change of control" is defined as (1) a merger or consolidation involving the
Company if less than 50 percent of the Company's voting stock after the business
combination is held by persons who were stockholders before the business
combination; (2) a sale of the assets of the Company substantially as an
entirety; (3) ownership by a person or group of at least 20 percent of the
Company's voting securities; (4) approval by the stockholders of a plan for the
liquidation of the Company; and (5) certain changes in the composition of the
Company's Board of Directors. The term "change of control termination" refers to
either of the following if it occurs within two years of a "change of control"
of the Company: (i) termination of an executive's employment by the Company for
reasons other than substantial nonperformance of duties or conduct constituting
a felony involving moral turpitude; or (ii) the executive terminates employment
with the Company for "good reason." "Good reason" is generally defined as an
adverse change in an executive's responsibilities, authority, compensation or
working conditions, or a material breach of an employment agreement by the
Company.
All restrictions on restricted stock held by an executive pursuant to the
1993 LTIP will immediately lapse, and all options granted under the 1993 LTIP
will become exercisable immediately upon a change of control. Under the 1990
LTIP, the same results follow a change of control termination. Within 30 days
following a change of control termination, a participant in the 1990 LTIP may
generally require the Company to purchase any shares of stock awarded to the
participant under the plan as to which restrictions on transfer lapsed because
of the change of control termination. The purchase price will equal the fair
market value of the shares on the day prior to the change of control.
The executive employment agreements described above also provide that
following a change of control termination, an executive is entitled to receive a
lump sum payment that is one dollar less than three times the executive's
"annualized includable compensation," which is the average annual compensation
received by the executive from the Company and includable in the executive's
gross income during the five most recent taxable years ending before the change
of control. The agreement for Mr. Perlman provides that the amount of this lump
sum payment is to be included in the determination of final average pay for
purposes of computing supplemental retirement benefits. This lump sum payment
would be in lieu of any other severance payment specified in an executive
employment agreement. The executive employment agreements and stock based
incentive plans also provide that all change of control compensation pertaining
to an executive must be less than the amount which would be considered a
"parachute payment" under the Internal Revenue Code.
The Company has established a benefits protection trust for various
employees (principally executives), directors and certain retired executives of
the Company. The trust agreement provides that if, following a change of
control, benefits payable under any plan or agreement covered by the
17
<PAGE>
trust (which generally includes all executive employment agreements, benefit and
incentive plans for officers and directors, and separation agreements with
certain former executives) are improperly withheld by the Company from any trust
beneficiary, the trustee shall, upon the request of such beneficiary, pursue the
claims of the beneficiary against the Company, including the commencement of
legal proceedings against the Company if necessary. The Company is obligated to
reimburse the trustee for all fees and expenses incurred in connection
therewith. To the extent the Company fails to do so, the trustee may pay such
fees and expenses from the trust. The Company has provided initial funding of
$100,000 to the trust for this purpose, and upon a threatened change of control
(as defined in the trust agreement), the trustee would require the Company to
provide an additional $2,900,000 of funding for this purpose. The trust
agreement also provides for the establishment of an account for the payment of
benefits under the Benefit Equalization Plan after a change of control.
SHARE OWNERSHIP INFORMATION
SHARE OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 28, 1994 by each director
or nominee for director, by each of the Named Executives and by all executive
officers and directors as a group.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL SHARES OF COMMON STOCK
OR IDENTITY OF GROUP BENEFICIALLY OWNED (1)
- ------------------------------------------------------------------------------- -----------------------
<S> <C>
Directors
Ruth M. Davis................................................................ 2,873(2)
Allen W. Dawson.............................................................. 3,000(3)
Ronald James................................................................. 2,100(3)
Richard G. Lareau............................................................ 4,500(4)
Charles Marshall............................................................. 4,000(3)
Lawrence Perlman............................................................. 538,107(5)
Richard W. Vieser............................................................ 4,000(3)
Paul S. Walsh................................................................ 2,000(3)
Named Executive Officers
Stephen B. Morris............................................................ 16,667(6)
Patrick C. Sommers........................................................... 16,667(6)
Ronald L. Turner............................................................. 21,667(6)
All executive officers, directors and nominees as a group...................... 813,819(7)
<FN>
- ------------------------
(1) Unless otherwise noted, all of the shares shown are held by individuals
possessing sole voting and investment power with respect to such shares,
and the individual shareholdings shown do not represent 1% or more of the
Company's outstanding Common Stock.
(2) Includes 273 shares beneficially owned through an IRA and 1,000 shares not
outstanding but deemed beneficially owned by virtue of the right to
acquire them pursuant to exercisable stock options.
(3) Includes 1,000 shares not outstanding but deemed beneficially owned by
virtue of the right to acquire them pursuant to exercisable stock options.
(4) Does not include 500 shares of common stock owned by Mr. Lareau's wife as
to which Mr. Lareau may be deemed to share voting and investment power,
but as to which shares he disclaims any beneficial interest. Includes
1,000 shares not outstanding but deemed beneficially owned by virtue of
the right to acquire them pursuant to exercisable stock options.
(5) Represents 1.2% of the outstanding shares of Common Stock, based on the
number of shares issued and outstanding as of February 28, 1994. Includes
448,740 shares not outstanding but deemed beneficially owned by virtue of
the right to acquire them pursuant to exercisable stock options.
</TABLE>
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<TABLE>
<S> <C>
(6) Includes 16,667 shares not outstanding but deemed beneficially owned by
virtue of the right to acquire them pursuant to exercisable stock options.
(7) Represents 1.8% of the outstanding shares of Common Stock, based on the
number of shares issued and outstanding as of February 28, 1994. Includes
689,159 shares not outstanding but deemed beneficially owned by virtue of
the right of members of the group to acquire them pursuant to exercisable
stock options. These shares are treated as outstanding only when deter-
mining the amount and percent owned by the group. Does not include 500
shares as to which voting and investment power may be deemed shared, but
as to which beneficial ownership is disclaimed.
</TABLE>
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock by each stockholder who is known by the
Company to own beneficially more than 5% of the outstanding Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS(1)
- -------------------------------------- -------------------- -------------
<S> <C> <C>
Ark Asset Management Co., Inc. 4,517,200(2) 10.2%
One New York Plaza
New York, NY 10004
The Equitable Companies Incorporated 4,048,055(3) 9.1%
787 Seventh Avenue
New York, NY 10019
FMR Corp. 2,308,597(4) 5.1%
82 Devonshire Street
Boston, MA 02109
<FN>
- ------------------------
(1) Percentage calculated based on the number of shares of the Company's
common stock issued and outstanding as of February 28, 1994.
(2) Beneficial ownership as of December 31, 1993 as reported in Schedule 13G
dated February 7, 1994. Represents sole power to vote 3,501,500 shares,
and sole power to dispose or direct the disposition of 4,356,600 shares.
(3) Beneficial ownership as of December 31, 1993 as reported in Schedule 13G
dated February 9, 1994. These securities are held by Alliance Capital
Management L.P. and Donaldson, Lufkin & Jenrette Securities Corporation,
both subsidiaries of The Equitable Companies Incorporated, largely on
behalf of client discretionary investment advisory accounts. Represents
sole power to vote or direct the vote of 3,030,400 shares, sole power to
dispose or direct the disposition of 4,031,000 shares, and shared power to
dispose or direct the disposition of 17,055 shares (including 13,255
shares that would be issuable upon conversion of the Company's 5 1/2%
Preferred Stock). Does not include 32,336 shares reported in the Schedule
13G as beneficially owned as a result of the assumed conversion of certain
of the Company's 8 1/2% Convertible Subordinated Debentures due June 15,
2011 (the "Debentures"), since those Debentures were redeemed effective
January 18, 1994.
(4) Beneficial ownership as of December 31, 1993 as reported in Schedule 13G
dated February 11, 1994. These securities are beneficially owned by
Fidelity Management & Research Company and Fidelity Management Trust
Company, both wholly-owned subsidiaries of FMR Corp., as a result of
acting as investment adviser to certain investment companies or as
investment manager of certain institutional accounts. Represents sole
power to dispose or direct the disposition of 2,308,597 shares and sole
power to vote or direct the vote of 447,027 shares. Included in the total
number of shares reported as beneficially owned are 1,116,500 shares that
would be issuable upon
</TABLE>
19
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<TABLE>
<S> <C>
conversion of 5 1/2% Preferred Stock. Does not include 1,319,335 shares
reported in the Schedule 13G as beneficially owned as a result of the
assumed conversion of Debentures, since the Debentures were redeemed
effective January 18, 1994.
</TABLE>
The parties identified in the table above have stated in their Schedules 13G
that the Company securities they hold were acquired in the ordinary course of
business and were not acquired for the purpose of and do not have the effect of
changing or influencing the control of the Company and were not acquired in
connection with or as a participant in any transaction having such purpose or
effect.
INDEPENDENT AUDITORS
The Board has selected KPMG Peat Marwick, the Company's present auditors, to
audit the accounts of the Company for the year ending December 31, 1994.
The Board has requested that representatives of KPMG Peat Marwick attend the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so, and will be available to respond to stockholder questions.
OTHER MATTERS
STOCKHOLDER PROPOSALS
Any stockholder proposal to be included in the proxy materials for the 1995
Annual Meeting of Stockholders must be received by the Company on or before
November 30, 1994.
The Company's Bylaws require advance written notice to the Company of
stockholder-proposed business or of a stockholder's intention to make a
nomination for director at an annual meeting of stockholders. They also limit
the business which may be conducted at any special meeting of stockholders to
business brought by the Company's Board. Specifically, the Bylaws provide that
business may be brought before an annual meeting by a stockholder only if the
stockholder provides written notice to the Secretary of the Company not less
than 50 or more than 75 days prior to the meeting, unless notice of the date of
the meeting is given to stockholders or is publicly announced less than 65 days
prior to the meeting. In that case, a stockholder's notice of proposed business
must be provided no later than 15 days following the date notice of the annual
meeting was mailed or the public announcement of the date was made, whichever is
earlier. The Company's 1995 Annual Meeting of Stockholders will be held on May
10, 1995. A stockholder's notice must set forth (i) a description of the
proposed business and the reasons therefor, (ii) the name and record address of
the stockholder proponent, (iii) the class and number of shares of Company stock
owned by the stockholder and (iv) a description of any material interest of the
stockholder in the proposed business.
The Bylaws also provide that a stockholder may nominate a director at an
annual meeting only after providing advance written notice to the Secretary of
the Company within the time limits described above. The stockholder's notice
shall set forth all information about each nominee that would be required under
Securities and Exchange Commission ("SEC") rules in a proxy statement soliciting
proxies for the election of such nominee, as well as the nominee's business and
residence address. The notice must also set forth the name and record address of
the stockholder proponent and the class and number of shares of Company stock
owned by the stockholder proponent.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires the Company's
directors, executive officers and persons who beneficially own more than 10% of
the Company's Common Stock to file with the SEC reports of ownership regarding
the Common Stock and other equity securities of the Company. These persons are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file. To the Company's knowledge, based on a review of the
copies of such reports furnished to the Company during the period January 1,
1993 to February 14, 1994, all
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Section 16(a) filing requirements applicable to its officers, directors and 10%
beneficial owners were complied with, except that Ronald L. Turner filed his
Initial Statement of Beneficial Ownership on Form 3 one day late due to business
travels.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. The Company has
retained Georgeson & Company, New York, New York, to aid in solicitation of
proxies. The fees and expenses of Georgeson & Company are estimated at $15,000.
Officers and employees of the Company may solicit proxies by further
mailings, by telephone and telegraph, and by personal conversations. No special
compensation will be paid to such persons for these tasks. The Company may
reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of the stock entitled to be voted
at the meeting.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (AN ANNUAL FILING WITH
THE SEC) FOR THE YEAR ENDED DECEMBER 31, 1993 MAY BE OBTAINED WITHOUT CHARGE BY
WRITING TO CERIDIAN CORPORATION, STOCKHOLDER SERVICES DEPARTMENT, 8100 34TH
AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55425.
By Order of the Board of Directors
John A. Haveman
SECRETARY
Minneapolis, Minnesota
March 30, 1994
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<PAGE>
APPENDIX A
RESTATED CERTIFICATE OF INCORPORATION
OF
CERIDIAN CORPORATION
Ceridian Corporation, a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
(a) The name of the corporation is Ceridian Corporation. The original
Certificate of Incorporation of the corporation was filed with the Secretary of
State of the State of Delaware on May 31, 1912, and the name under which it was
originally incorporated was Commercial Credit Company. The name of the
corporation was changed to Control Data Corporation effective August 16, 1968,
and to Ceridian Corporation effective May 31, 1992.
(b) Pursuant to and in accordance with the provisions of Sections 242 and
245 of the General Corporation Law of the State of Delaware, this Restated
Certificate of Incorporation restates, integrates and amends the provisions of
the Certificate of Incorporation of this corporation, and such amendment and
restatement has been duly adopted by the majority vote of the corporation's
stock entitled to vote thereon at the corporation's annual meeting of
stockholders on May 11, 1994, in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.
(c) The text of the Certificate of Incorporation of the corporation as
heretofore amended or supplemented is hereby restated and amended to read in its
entirety as follows:
ARTICLE I.
NAME
The name of this corporation is
CERIDIAN CORPORATION
(hereinafter referred to as the "Corporation").
ARTICLE II.
REGISTERED OFFICE
The address of the registered office of the Corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, 19801. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.
ARTICLE III.
BUSINESS
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware as from time to time amended (the "General Corporation Law").
ARTICLE IV.
AUTHORIZED CAPITAL STOCK
A. The total number of shares of all classes of stock which the Corporation
shall have authority to issue is One Hundred Million, Seven Hundred Fifty
Thousand (100,750,000), consisting of Seven Hundred Fifty Thousand (750,000)
shares of the par value of One Hundred Dollars ($100.00)
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per share of preferred stock (the "Preferred Stock"), having a total par value
of Seventy-Five Million Dollars ($75,000,000), and One Hundred Million
(100,000,000) shares of common stock of the par value of fifty cents ($.50) per
share (the "Common Stock"), having a total par value of Fifty Million Dollars
($50,000,000).
B. Shares of Preferred Stock may be issued, from time to time, in one or
more series, with such designations, voting powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof as shall be stated and expressed in the resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors. The Board of Directors, in such resolution or resolutions (a copy of
which shall be filed and recorded as required by law), is also expressly
authorized to fix:
(1) the distinctive serial designations and the division of such shares
into series and the number of shares of a particular series, which may be
increased or decreased, but not below the number of shares thereof then
outstanding, by a certificate made, signed, filed and recorded as required
by law;
(2) the annual dividend rate for the particular series, and the date or
dates from which dividends on all shares of such series shall be cumulative,
if dividends on stock of the particular series shall be cumulative;
(3) the redemption price or prices for the particular series;
(4) the right, if any, of the holders of a particular series to convert
such stock into other classes of stock, and the terms and conditions of such
conversion to the extent not otherwise herein provided;
(5) the obligation, if any, of the Corporation to purchase and retire
and redeem shares of a particular series as a sinking fund or redemption or
purchase account, the terms thereof and the redemption price or prices per
share for such series redeemed pursuant to the sinking fund or redemption
account, if shares so redeemed are to be redeemable at a price or prices
other than the redemption price or prices for shares not so redeemed;
(6) the rights, if any, of the holders of such series of Preferred Stock
upon the voluntary or involuntary liquidation, dissolution or winding-up of
the Corporation or in the event of any merger or consolidation of or sale of
assets by the Corporation; and
(7) the voting powers, if any, of the holders of any series of Preferred
Stock generally or with respect to any particular matter, which may be less
than, equal to or greater than one vote per share, and which may, without
limiting the generality of the foregoing, include the right, voting as a
series by itself or together with the holders of any other series of
Preferred Stock or all series of Preferred Stock as a class, to elect one or
more directors of the Corporation generally or under such specific
circumstances and on such conditions, as shall be provided in the resolution
or resolutions of the Board adopted pursuant hereto, including, without
limitation, in the event there shall have been a default in the payment of
dividends on or redemption of any one or more series of Preferred Stock.
C. (1) In the event of any liquidation, dissolution or winding-up of the
affairs of the Corporation, then before any distribution or payment shall have
been made to the holders of the Common Stock, the holders of the Preferred Stock
of each series shall be entitled to be paid, or to have set apart in trust for
payment, an amount equal to that stated and expressed in the resolution or
resolutions adopted by the Board of Directors which provide for the issue of
such series, respectively. The remaining assets of the Corporation shall be
distributed solely among the holders of Common Stock according to their
respective shares.
(2) Except as may otherwise be required by law, and subject to the
provisions of such resolution or resolutions as may be adopted by the Board
pursuant to Paragraph B of this Article IV granting the holders of one or more
series of Preferred Stock exclusive voting powers with respect to
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any matter, each share of Common Stock shall have one vote on all matters voted
upon by the stockholders. Except where some mandatory provision of law requiring
the vote or consent of the holders of some stated proportion of the shares of
any class of stock or any series of any class of stock shall be controlling or
where this Restated Certificate of Incorporation or any amendment hereto shall
otherwise provide, the vote or consent of the holders of all or any portion of
any class of stock, as a class, or of any series of any class of stock, as a
series, shall not be required for any action whatsoever to be taken or
authorized by the stockholders of the Corporation, including any amendment of
this Restated Certificate of Incorporation.
Pursuant to the authority contained in this Article IV, the Board of
Directors adopted resolutions authorizing the creation and issuance of a series
of 5 1/2% Cumulative Convertible Exchangeable Preferred Stock, which such
resolutions were set forth in a Certificate of Designation filed with the
Secretary of State of the State of Delaware on December 22, 1993. A copy of such
resolutions are attached to this Restated Certificate of Incorporation as
Exhibit A and are incorporated herein by reference. [Exhibit A has not been
included as part of this Appendix A to Ceridian Corporation's Proxy Statement
for its Annual Meeting of Stockholders on May 11, 1994.]
ARTICLE V.
BOARD OF DIRECTORS
A. The business and affairs of the Corporation shall be conducted and
managed by, or under the direction of, the Board of Directors. In furtherance
and not in limitation of the powers conferred on the Board by this Restated
Certificate of Incorporation and by the General Corporation Law, the Board is
specifically authorized to adopt, amend or repeal the Bylaws of the Corporation,
in such form and with such terms as the Board may determine.
B. The Board, pursuant to the Bylaws of the Corporation or by resolution
passed by a majority of the then-authorized number of directors, may designate
two or more of their number to constitute an Executive Committee, which
Executive Committee, to the fullest extent permitted by law and as provided for
in said resolution or in the Bylaws of the Corporation, shall have and may
exercise any or all of the powers of the Board in the management of the business
and affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers that may require it.
C. Both stockholders and directors shall have power, if the Bylaws so
provide, to hold their meetings either inside or outside the State of Delaware,
to have one or more offices in addition to the registered office in Delaware,
and to keep the books of this Corporation (subject to the provisions of the
General Corporation Law) outside of the State of Delaware at such places as may
be from time to time designated by them.
D. This Corporation may, in its Bylaws, confer powers additional to the
foregoing upon the Board of Directors, in addition to the powers and authorities
expressly conferred upon the Board by the General Corporation Law.
ARTICLE VI.
CERTAIN TRANSACTIONS
A. Where stockholder authorization, adoption or approval is required by the
General Corporation Law for any of the following transactions, such
authorization, adoption or approval shall require the affirmative vote of at
least two-thirds of the outstanding stock of the Corporation entitled to vote
thereon:
(1) Any plan of merger or consolidation of the Corporation with another
corporation;
(2) Any sale, lease or exchange of all or substantially all the property
and assets of the Corporation;
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(3) Any issuance or delivery of capital stock or other securities or
obligations of the Corporation in exchange or payment for any property or
assets; or
(4) Any agreement, contract or other arrangement providing for any of
the transactions described above.
B. This Article VI shall not require that the holders of any class or
series of stock vote separately as such class or series nor affect or increase
the percentage requirement of any such vote by
class or series where otherwise required by law or other provisions of this
Restated Certificate of Incorporation.
ARTICLE VII.
LIMITATION OF LIABILITY
A director of this Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation thereof is not
permitted under the General Corporation Law as the same exists or may hereafter
be amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing
hereunder with respect to any act or omission occurring prior to such repeal or
modification.
ARTICLE VIII.
BUSINESS COMBINATIONS
A. In addition to the requirements of (i) law, and (ii) the other
provisions of this Restated Certificate of Incorporation, including without
limitation Article VI, the affirmative vote or consent of that fraction of the
outstanding shares of Common Stock of the Corporation entitled to vote, but not
less than two-thirds, determined by using as the numerator a number equal to the
sum of (i) the outstanding shares of Common Stock Beneficially Owned by
Controlling Persons, plus (ii) two-thirds of the remaining number of outstanding
shares of Common Stock that are not Beneficially Owned by directors or Executive
Officers of the Corporation and as the denominator a number equal to the total
number of outstanding shares of Common Stock of the Corporation entitled to
vote, shall be required for the adoption or authorization of a Business
Combination unless:
(1) The Business Combination will result in an involuntary sale,
redemption, cancellation or other termination of ownership of all shares of
Common Stock of the Corporation owned by stockholders who do not vote in
favor of, or consent in writing to, the Business Combination and the cash or
fair value of other readily marketable consideration to be received by such
stockholders for such shares shall at least be equal to the Minimum Price
Per Share, and
(2) A proxy statement responsive to the requirements of the Securities
Exchange Act of 1934 shall be mailed to the stockholders of the Corporation
for the purpose of soliciting stockholder approval of the proposed Business
Combination.
B. For purposes of this Article VIII, the following definitions shall
apply:
(1) "AFFILIATE" shall mean a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with another Person.
(2) "ASSOCIATE" shall mean (1) any corporation or organization of which
a Person is an officer or partner or is, directly or indirectly the
Beneficial Owner of five percent or more of any class of equity securities,
(2) any trust or other estate in which a Person has a five percent or larger
beneficial interest of any nature or as to which a Person serves as trustee
or in a similar fiduciary capacity, (3) any spouse of a Person, and (4) any
relative of a Person, or any relative of a spouse of a Person, who has the
same residence as such Person or spouse.
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(3) "BENEFICIAL OWNERSHIP" shall include without limitation (i) all
shares directly or indirectly owned by a Person, by an Affiliate of such
Person or by an Associate of such Person or such Affiliate, (ii) all shares
which such Person, Affiliate or Associate has the right to acquire through
the exercise of any option, warrant or right (whether or not currently
exercisable), through the conversion of a security, pursuant to the power to
revoke a trust, discretionary account or similar arrangement, or pursuant to
the automatic termination of a trust, discretionary account or similar
arrangement, and (iii) all shares as to which such Person, Affiliate or
Associate directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise (including without limitation any
written or unwritten agreement to act in concert but specifically excluding
any participation agreement, arrangement, understanding or relationship
between or among any two or more commercial banks made or established in
connection with and in furtherance of a bona fide lending arrangement with
the Corporation and/or one or more Subsidiaries) has or shares voting power
(which includes the power to vote or to direct the voting of such shares )
or investment power (which includes the power to dispose or to direct the
disposition of such shares) or both.
(4) "BUSINESS COMBINATION" shall mean (a) any merger or consolidation of
the Corporation with or into a Controlling Person or Affiliate of a
Controlling Person or Associate of such Controlling Person or Affiliate; (b)
any sale, lease, exchange, transfer or other disposition, including without
limitation a mortgage or any other security device of all or any Substantial
Part of the assets of the Corporation, including without limitation any
voting securities of a Subsidiary, or of a Subsidiary, to a Controlling
Person or Affiliate of a Controlling Person or Associate of such Controlling
Person or Affiliate; (c) any merger into the Corporation, or into a
Subsidiary, of a Controlling Person or any Affiliate of a Controlling Person
or an Associate of such Controlling Person or Affiliate; (d) any sale,
lease, exchange, transfer or other disposition to the Corporation or a
Subsidiary of all or any part of the assets of a Controlling Person or
Affiliate of a Controlling Person or Associate of such Controlling Person or
Affiliate but not including any dispositions of assets which, if included
with all other dispositions consummated during the same fiscal year of the
Corporation by the same Controlling Person, Affiliates thereof and
Associates of such Controlling Person or Affiliates, would not result in
dispositions during such year by all such Persons of assets having an
aggregate fair value (determined at the time of disposition of the
respective assets) in excess of one percent of the total consolidated assets
of the Corporation (as shown on its audited balance sheet as of the end of
the fiscal year preceding the proposed disposition), provided, however, that
in no event shall any disposition of assets be excepted from stockholder
approval by reason of the preceding exclusion if such disposition, when
included with all other dispositions consummated during the same, and
immediately preceding four, fiscal years of the Corporation by the same
Controlling Person, Affiliates thereof and Associates of such Controlling
Person or Affiliates, would result in dispositions by all such Persons of
assets having an aggregate fair value (determined at the time of disposition
of the respective assets) in excess of two percent of the total consolidated
assets of the Corporation (as shown on its audited balance sheet as of the
end of the fiscal year preceding the proposed disposition); (e) any
reclassification of Common Stock of the Corporation, or any recapitalization
involving Common Stock of the Corporation, consummated within five years
after a Controlling Person becomes a Controlling Person; and (f) any
agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination; but,
notwithstanding anything to the contrary herein, Business Combination shall
not include (i) any Section 253 Merger or (ii) any transaction involving a
Controlling Person or Affiliate of a Controlling Person or Associate of such
Controlling Person or Affiliate which is to be consummated or become
effective after such Controlling Person has been a Controlling Person for at
least five years.
(5) "CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
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(6) "CONTROLLING PERSON" shall mean any Person who Beneficially Owns a
number of shares of Common Stock of the Corporation, whether or not such
number includes shares not then outstanding or entitled to vote, which
exceeds a number equal to ten percent of the outstanding shares of Common
Stock of the Corporation entitled to vote.
(7) "EXECUTIVE OFFICER" shall mean any officer of the Corporation who is
elected to his or her position by action of the Board of Directors of the
Corporation.
(8) "MINIMUM PRICE PER SHARE" shall mean the sum of (a) the higher of
(i) the highest gross per share price paid or agreed to be paid to acquire
any shares of Common Stock of the Corporation Beneficially Owned by a
Controlling Person, provided such payment or agreement to make payment was
made within five years immediately prior to the record date set to determine
the stockholders entitled to vote or consent to the Business Combination in
question, or, in the case of a Section 253 Merger, five years immediately
prior to the effective date of such Section 253 Merger, or (ii) the highest
per share closing public market price for such Common Stock during such five
year period, plus (b) the aggregate amount, if any, by which five percent
for each year, beginning on the date on which such Controlling Person became
a Controlling Person, of such higher per share price exceeds the aggregate
amount of all Common Stock dividends per share paid in cash since the date
on which such Person became a Controlling Person. The calculation of the
Minimum Price Per Share shall require appropriate adjustments for capital
changes, including without limitation stock splits, stock dividends and
reverse stock splits.
(9) "PERSON" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated
organization, a government or political subdivision thereof and any other
entity.
(10) "SECTION 253 MERGER" shall mean any merger of the Corporation into
another corporation which is a Controlling Person or Affiliate of such
Controlling Person or Associate of such Controlling Person or such Affiliate
pursuant to Section 253 of the General Corporation Law, as amended from time
to time, or any successor or replacement statute, provided that such
amended, successor or replacement statute does not give voting rights to the
stockholders of the Corporation with respect to the merger. While such
voting rights are part of Section 253, a merger under such section shall not
be a Section 253 Merger for purposes of this Article VIII.
(11) "SECURITIES EXCHANGE ACT OF 1934" shall mean the Securities
Exchange Act of 1934, as amended from time to time as well as any successor
or replacement statute.
(12) "SUBSIDIARY" shall mean any corporation more than twenty-five
percent of whose outstanding securities representing the right to vote for
the election of directors is Beneficially Owned by the Corporation and/or
one or more Subsidiaries.
(13) "SUBSTANTIAL PART" shall mean more than ten percent of the total
assets of the corporation in question, as shown on its audited balance sheet
as of the end of the most recent fiscal year ending prior to the time the
determination is being made.
C. This Article VIII shall not be altered, changed or repealed unless the
amendment effecting such alteration, change or repeal shall have received the
affirmative vote or consent of that fraction of the outstanding shares of Common
Stock of the Corporation entitled to vote, but not less than two-thirds,
determined by using as the numerator a number equal to the sum of (i) the
outstanding shares of Common Stock Beneficially Owned by Controlling Persons,
plus (ii) two-thirds of the remaining number of outstanding shares of Common
Stock that are not Beneficially Owned by directors or Executive Officers of the
Corporation and as the denominator a number equal to the total number of
outstanding shares of Common Stock of the Corporation entitled to vote.
D. A Controlling Person shall be subject to all fiduciary and other
standards of conduct and obligations imposed by law and shall be considered not
to have met such standards of conduct and obligations unless such Controlling
Person shall, in the event of a Section 253 Merger, pay or cause to
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be paid for each share of Common Stock of the Corporation as to which share
ownership is being sold, redeemed, cancelled or otherwise terminated by means of
the Section 253 Merger, cash, or other readily marketable consideration having a
fair value, at least equal to the Minimum Price Per Share, provided, however,
that this requirement shall not apply to any Section 253 Merger involving a
Controlling Person or Affiliate of a Controlling Person or Associate of such
Controlling Person or Affiliate to become effective after such Controlling
Person has been a Controlling Person for at least five years.
ARTICLE IX.
AMENDMENT OF RESTATED CERTIFICATE
Except as herein otherwise provided, this Corporation reserves the right to
amend, alter, change or repeal any provision in this Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by the General
Corporation Law, and all rights conferred on stockholders herein are granted
subject to this reservation.
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IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed under the seal of the Corporation this day of , 1994.
By: _________________________________
Name:____________________________
Title:___________________________
[SEAL]
ATTEST:
By: _________________________________
Name:____________________________
Title:___________________________
articles(bf)
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CERIDIAN CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 11, 1994
The undersigned hereby appoints Lawrence Perlman and John A. Haveman, and
either of them, as Proxy or Proxies, with full power of substitution, to vote
in the manner indicated on the reverse side hereof, and with the discretionary
authority as to any other matters that may properly come before the meeting,
all of the undersigned's shares of Ceridian Corporation Common Stock held of
record on March 22, 1994 at the Annual Meeting of Stockholders to be held May
11, 1994 and at any adjournment thereof.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
ON THE REVERSE SIDE. THE PROXY COMMITTEE CANNOT VOTE YOUR SHARES UNLESS YOU
SIGN AND RETURN THIS CARD.
This proxy when properly signed, will be voted in the manner directed. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS
AND FOR PROPOSAL 2.
(Continued, and to be signed and dated, on the reverse side)
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/ /
The Board recommends a vote FOR all nominees.
1. Election of Directors / / FOR / / WITHHELD / / FOR, EXCEPT YOU MAY
WITHHOLD AUTHORITY TO
VOTE FOR ANY NOMINEE
BY CROSSING OUT HIS OR
HER NAME.
Nominees: R.M. Davis, A.W. Dawson, R. James, R.G. Lareau, C. Marshall,
L. Perlman, R.W. Vieser, P.S. Walsh
The Board recommends a vote FOR Proposal 2.
2. Proposal to approve the adoption of a Restated Certificate of
Incorporation for Ceridian Corporation.
/ / FOR / / AGAINST / / ABSTAIN
If you wish to have your vote on all matters
kept confidential in accordance with
Ceridian Corporation policy, check here.
Address Change / /
and/or Comments
Mark Here / / PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0290
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full title
as such.
Dated: ____________________________, 1994
_________________________________________
Signature
_________________________________________
Signature if held jointly
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
