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As filed with the Securities and Exchange Commission on August 3, 1995
Registration Number 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 52-0278528
(State of incorporation) (I.R.S. Employer Identification Number)
8100 34th Avenue South
Minneapolis, Minnesota 55425
(Address of principal executive offices)
CERIDIAN CORPORATION 1993 LONG-TERM INCENTIVE PLAN
(Full title of the plan)
John A. Haveman
Vice President and Secretary
Ceridian Corporation
8100 34th Avenue South
Minneapolis, Minnesota 55425
(612) 853-7425
(Name, address and telephone number of agent for service)
Calculation of Registration Fee
Proposed Proposed
Title of maximum maximum
Securities Amount offering aggregate Amount of
to be to be price per offering Registration
registered registered (1) share(2) price (2) fee
Common Stock,
$.50 par value 3,000,000 shares $40.69 $122,070,000 $42,093.10
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933,
as amended, this Registration Statement includes an indeterminate number of
additional shares as may be issuable as a result of anti-dilution provisions
described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee, based on the average high and low sale prices reported for
the Registrant's Common Stock on the New York Stock Exchange on August 1, 1995.
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Part II Information Required in the Registration Statement
Explanatory Note
This Registration Statement on Form S-8 is being filed for the purpose of
registering an additional 3,000,000 shares of the common stock of Ceridian
Corporation (the "Company") to be issued pursuant to the Company's 1993
Long-Term Incentive Plan, as amended (the "Plan"), bringing the total number
of shares to be issued thereunder and registered under the Securities Act
of 1933 to 6,000,000 shares. Pursuant to Instruction E of Form S-8, other
than with respect to the sections set forth below (which reflect changes),
the contents of the Registration Statement on Form S-8, dated May 13, 1993
(Reg. No. 33-49601), which was previously filed with the Securities and
Exchange Commission relating to the Plan, are incorporated herein by reference.
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the Company are incorporated in this Registration
Statement by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994;
(2) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995;
(3) The Company's Current Report on Form 8-K dated January 19, 1995;
(4) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 ("Exchange Act") since
December 31, 1994; and
(5) The description of the Company's Common Stock, par value $.50
per share, contained in the Company's Registration Statement on Form S-8,
File No. 33-56351.
All documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
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Item 8. Exhibits
The following is a complete list of Exhibits filed or incorporated
by reference as part of this registration statement:
Exhibit Description
4.1 Restated Certificate of Incorporation of Ceridian Corporation
(incorporated by reference to Exhibit 4.01 to the Company's Registration
Statement on Form S-8 (File No. 33-54379))
4.2 Bylaws of Ceridian Corporation, as amended (incorporated by
reference to Exhibit 3.01 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30,1993 (File No. 1-1969))
5.1 Opinion and Consent of John A. Haveman
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of John A. Haveman (included in Exhibit 5.1)
24.1 Power of Attorney (included on page 4 of this
Registration Statement)
99.1 1993 Long-Term Incentive Plan, as amended
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Minneapolis, State of Minnesota,
on August 3, 1995.
CERIDIAN CORPORATION
By: /s/John A. Haveman
Vice President and Secretary
POWER OF ATTORNEY
We, the undersigned officers and directors of Ceridian
Corporation, hereby severally constitute John R. Eickhoff and John A. Haveman,
and either of them singly, our true and lawful attorneys with full power to
them, and each of them singly, to sign for us and in our name in the
capacities indicated below any and all amendments to this Registration
Statement on Form S-8 filed by Ceridian Corporation with the Securities
and Exchange Commission, and generally to do all such things in our
name and behalf in such capacities as may be necessary to enable Ceridian
Corporation to comply with the provisions of the Securities Act of 1933,
as amended, and all requirements of the Securities and Exchange Commission,
and we hereby ratify and confirm our signatures as they may be signed by
our said attorneys, or either of them, to any and all such amendments.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed as of August 3, 1995 by the
following persons in the capacities indicated.
/s/Lawrence Perlman /s/Ruth M. Davis
Lawrence Perlman Ruth M. Davis, Director
Chairman, President and
Chief Executive Officer
(Principal Executive Allen W. Dawson, Director
Officer and Director)
Ronald James, Director
/s/John R. Eickhoff
John R. Eickhoff /s/Richard G. Lareau
Executive Vice President Richard G. Lareau, Director
and Chief Financial
Officer (Principal /s/George R. Lewis
Financial Officer) George R. Lewis, Director
/s/Loren D. Gross Charles Marshall, Director
Loren D. Gross
Vice President and Corporate /s/Carole J. Uhrich
Controller (Principal Carole J. Uhrich, Director
Accounting Officer)
Richard W. Vieser, Director
/s/Paul S. Walsh
Paul S. Walsh, Director
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EXHIBIT INDEX
Exhibit Description Code
4.1 Restated Certificate of Incorporation of IBR
Ceridian Corporation
4.2 Bylaws of Ceridian Corporation, as amended IBR
5.1 Opinion and Consent of John A. Haveman E
23.1 Consent of KPMG Peat Marwick LLP E
23.2 Consent of John A. Haveman E
(included in Exhibit 5.1)
24.1 Power of Attorney (included on page 4
of the Registration Statement)
99.1 1993 Long-Term Incentive Plan, as amended E
Legend: E Electronic Filing
IBR Incorporated by Reference
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EXHIBIT 5.1
August 3 , 1995
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425
Re: Ceridian Corporation
Registration Statement on Form S-8
Dear Sir or Madam:
I have acted as counsel to Ceridian Corporation, a Delaware corporation
(the "Company") in connection with the registration by the Company of 3,000,000
additional shares of the Company's Common Stock, $.50 par value (the "Shares"),
pursuant to the Company's registration statement on Form S-8 which refers to
the Company's 1993 Long-Term Incentive Plan, as amended, and which is to be
filed with the Securities and Exchange Commission on August 3, 1995 (the
"Registration Statement").
In this connection, I have examined originals or copies, certified
or otherwise identified to my satisfaction, of such corporate records,
certificates, and written and oral statements of officers and accountants
of the Company and of public officials, and other documents that I have
considered necessary and appropriate for this opinion and, based thereon,
I advise you that, in my opinion:
1. The Company has been duly incorporated and is validly existing
under the laws of the State of Delaware.
2. The Company has corporate authority to issue the Shares in the
manner and under the terms set forth in the Registration Statement.
3. The Shares have been duly authorized and, when issued in accordance
with the Plan referred to in the Registration Statement, will be validly
issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement and to its use as part of the Registration
Statement.
Very truly yours,
/s/John A. Haveman
John A. Haveman
Vice President, Secretary, and
Associate General Counsel
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Ceridian Corporation
We consent to the use of our reports incorporated herein by
reference.
/s/KPMG Peat Marwick LLP
Minneapolis, Minnesota
August 3, 1995
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EXHIBIT 99.1
AS AMENDED THROUGH JULY 26, 1995
CERIDIAN CORPORATION
1993 LONG-TERM INCENTIVE PLAN
(As Amended and Restated as of May 10, 1995)
1. Purpose of Plan.
The purpose of the Ceridian Corporation 1993 Long-Term Incentive Plan
(as amended and restated as of May 10, 1995) (the "Plan") is to advance the
interests of Ceridian Corporation (the "Company") and its stockholders by
enabling the Company and its Subsidiaries to attract and retain persons of
ability to perform services for the Company and its Subsidiaries by
providing an incentive to such individuals through equity participation in
the Company and by rewarding such individuals who contribute to the
achievement by the Company of its economic objectives.
2. Definitions.
The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Broker Exercise Notice" means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or
any related withholding tax obligations and remit such sums to the Company
and directs the Company to deliver stock certificates to be issued upon
such exercise directly to such broker or dealer.
2.3 "Change of Control" means an event described in Section 12.1 of the
Plan.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" means the group of individuals administering the Plan, as
provided in Section 3 of the Plan.
2.6 "Common Stock" means the common stock of the Company, par value $0.50
per share, or the number and kind of shares of stock or other securities
into which such Common Stock may be changed in accordance with Section 4.3
of the Plan.
2.7 "Disability" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to
the long-term disability plan of the Company or Subsidiary then covering
the Participant or, if no such plan exists or is applicable to the
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Participant, the permanent and total disability of the Participant within
the meaning of Section 22(e)(3) of the Code.
2.8 "Eligible Recipients" means all employees (including, without
limitation, officers and directors who are also employees) of the Company
or any Subsidiary.
2.9 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 "Fair Market Value" means, with respect to the Common Stock, as of any
date (or, if no shares were traded or quoted on such date, as of the next
preceding date on which there was such a trade or quote), the closing
market price per share of the Common Stock as reported on the New York
Stock Exchange Composite Tape on that date.
2.11 "Incentive Award" means an Option, Stock Appreciation Right,
Restricted Stock Award or Performance Unit granted to an Eligible Recipient
pursuant to the Plan.
2.12 "Incentive Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422
of the Code.
2.13 "Newly Hired Employee" means a person who has been an Eligible
Recipient for 90 days or less.
2.14 Non-Statutory Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.
2.15 "Option" means an Incentive Stock Option or a Non- Statutory Stock
Option.
2.16 "Participant" means an Eligible Recipient who receives one or more
Incentive Awards under the Plan.
2.17 "Performance Goal" means the absolute or relative measure of one or
more of the following alternatives as specified by the Committee in writing
for any Performance Period, the achievement of which is a condition
precedent to the vesting of a Performance Restricted Stock Award hereunder:
Total Return to Stockholders; fully diluted earnings per share for the
Company; or earnings before interest and taxes, return on equity or
invested capital, or revenue growth for the Company or a specified
Subsidiary or division of the Company. Any such Performance Goal shall be
established by the Committee on or before the latest date permissible to
enable the Performance Restricted Stock Award to qualify as
"performance-based compensation" under Section 162(m). For purposes of
this definition, any relative measure of Total Return to Stockholders shall
utilize the Company's Performance Ranking Position, and other financial
terms shall have the same meanings as used in the Company's financial
statements.
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2.18 "Performance Period" means the period of time during which Performance
Goals are measured to determine the vesting of Performance Restricted Stock
Awards.
2.19 "Performance Ranking Position" means the relative placement of the
Company's Total Return to Stockholders as measured against (i) the Total
Return to Stockholders of other companies in a nationally recognized index
such as the S&P 500, or in a peer group of companies selected by the
Committee prior to the commencement of a Performance Period, or (ii) the
performance of such nationally recognized index itself.
2.20 "Performance Restricted Stock Award" means a Restricted Stock Award
the vesting of which is conditioned upon the satisfaction of one or more
Performance Goals.
2.21 "Performance Unit" means a right granted to an Eligible Recipient
pursuant to Section 9 of the Plan to receive a payment from the Company, in
the form of stock, cash or a combination of both, upon the achievement of
established performance criteria.
2.22 "Previously Acquired Shares" means shares of Common Stock that are
already owned by the Participant.
2.23 "Restricted Stock Award" means an award of Common Stock granted to an
Eligible Recipient pursuant to Section 8 of the Plan that is subject to
the restrictions on transferability and the risk of forfeiture imposed by
the provisions of such Section 8.
2.24 "Retirement" means the termination (other than for "cause" as defined
in Section 10.3(b) of the Plan) of a Participant's employment or other
service on or after the date on which the Participant has attained the age
of 55 and has completed 10 years of continuous service to the Company or
any Subsidiary (determined in accordance with the retirement/pension plan
or practice of the Company or Subsidiary then covering the Participant,
provided that if the Participant is not covered by any such plan or
practice, the Participant will be deemed to be covered by the Company's
plan or practice for purposes of this determination).
2.25 "Section 162(m)" means Section 162(m) of the Code.
2.26 "Securities Act" means the Securities Act of 1933, as amended.
2.27 "Stock Appreciation Right" means a right granted to an Eligible
Recipient pursuant to Section 7 of the Plan to receive a payment from the
Company, in the form of stock, cash or a combination of both, equal to the
difference between the Fair Market Value of one or more shares of Common
Stock and the exercise price of such shares under the terms of such Stock
Appreciation Right.
2.28 "Subsidiary" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a
significant equity interest, as determined by the Committee.
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2.29 "Tax Date" means the date any withholding tax obligation arises under
the Code for a Participant with respect to an Incentive Award.
2.30 "Total Return to Stockholders" with respect to a company means the
total return to a holder of the common stock of that company during a
Performance Period as a result of his or her ownership of that stock during
such Performance Period, such total return to include both the appreciation
(or depreciation) in the per share price of such common stock during such
Performance Period, and the per share fair market value of all dividends
and distributions paid or distributed by such company with respect to such
common stock during such Performance Period, assuming that all such
dividends and distributions are reinvested in shares of such common stock
at their fair market value on the last trading day of the month in which
the dividend or distribution is paid or distributed.
3. Plan Administration.
3.1 The Committee. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, the Plan will
be administered by a committee (the "Committee") consisting solely of not
less than two members of the Board who are "disinterested persons" within
the meaning of Rule 16b-3 under the Exchange Act. To the extent consistent
with corporate law, the Committee may delegate to any directors or officers
of the Company the duties, power and authority of the Committee under the
Plan pursuant to such conditions or limitations as the Committee may
establish; provided, however, that only the Committee may exercise such
duties, power and authority with respect to Eligible Recipients who are
subject to Section 16 of the Exchange Act. Each determination,
interpretation or other action made or taken by the Committee pursuant to
the provisions of the Plan will be conclusive and binding for all purposes
and on all persons, and no member of the Committee will be liable for any
action or determination made in good faith with respect to the Plan or any
Incentive Award granted under the Plan.
3.2 Authority of the Committee.
(a) In accordance with and subject to the provisions of the Plan, the
Committee will have the authority to determine all provisions of Incentive
Awards as the Committee may deem necessary or desirable and as consistent
with the terms of the Plan, including, without limitation, the following:
(i) the Eligible Recipients to be selected as Participants; (ii) the nature
and extent of the Incentive Awards to be made to each Participant
(including the number of shares of Common Stock to be subject to each
Incentive Award, any exercise price, the manner in which Incentive Awards
will vest or become exercisable and whether Incentive Awards will be
granted in tandem with other Incentive Awards) and the form of written
agreement, if any, evidencing such Incentive Award; (iii) the time or times
when Incentive Awards will be granted; (iv) the duration of each Incentive
Award; and (v) the restrictions and other conditions to which the payment
or vesting of Incentive Awards may be subject. In addition, the Committee
will have the authority under the Plan in its sole discretion to pay the
economic value of any Incentive Award in the form of cash, Common Stock or
any combination of both.
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(b) Except as otherwise provided in the remainder of this Paragraph
3.2(b), the Committee will have the authority under the Plan to amend or
modify the terms and conditions of any outstanding Incentive Award in any
manner, so long as the amended or modified terms are permitted by the Plan
as then in effect (including the requirement under Section 6.2 that an
Option exercise price will never be less than 100% of the Fair Market Value
of the Common Stock on the date of grant), and any Participant adversely
affected by such amended or modified terms has consented to such amendment
or modification. No amendment or modification to an Incentive Award,
however, whether pursuant to this Section 3.2 or any other provisions of
the Plan, will be deemed to be a regrant of such Incentive Award for
purposes of this Plan. The Committee shall not have the authority under
the Plan to accelerate the exercisability or vesting of, or otherwise
terminate or relax any restrictions relating to, any Incentive Award except
in the case of death, Disability or Retirement of a Participant, or except
to the extent that the exercise of such discretion by the Committee does
not affect Incentive Awards involving, in the aggregate over the life of
the Plan, more than 3% of the total number of shares of Common Stock
authorized for issuance under the Plan. The Committee shall not have the
authority under the Plan to authorize the grant of replacement Option or
Stock Appreciation Right awards in substitution for pre-existing Incentive
Awards of those types that have been or are to be surrendered and canceled
at any time when the Fair Market Value of the Common Stock is less than the
exercise price applicable to such surrendered and canceled Incentive
Awards. [As amended through July 26, 1995]
(c) In the evebt if (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, extraordinary dividend or
divestiture (including a spin-off) or any other change in corporate
structure or shares, (ii) any purchase, acquisition, sale or disposition of
a significant amount of assets or a significant business, (iii) any change
in accounting principles or practices, or (iv) any other similar change, in
each case with respect to the Company (or any Subsidiary or division
thereof) or any other entity whose performance is relevant to the grant or
vesting of an Incentive Award, the Committee (or, if the Company is not the
surviving corporation in any such transaction, the board of directors of
the surviving corporation) may, without the consent of any affected
Participant, amend or modify the grant or vesting criteria of any
outstanding Incentive Award that is based in whole or in part on the
financial performance of the Company (or any Subsidiary or division
thereof) or such other entity so as equitably to reflect such event, with
the desired result that the criteria for evaluating such financial
performance of the Company or such other entity will be substantially the
same (in the sole discretion of the Committee or the board of directors of
the surviving corporation) following such event as prior to such event;
provided, however, that the amended or modified terms are permitted by the
Plan as then in effect.
4. Shares Available for Issuance.
4.1 Maximum Number of Shares Available. Subject to adjustment as provided
in Section 4.3 of the Plan, the maximum number of shares of Common Stock
that will be available for issuance under the Plan will be
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6,000,000 shares. The shares available for issuance under the Plan may, at
the election of the Committee, be either treasury shares or shares
authorized but unissued, and, if treasury shares are used, all references
in the Plan to the issuance of shares will, for corporate law purposes, be
deemed to mean the transfer of shares from treasury.
4.2 Limitation on Individual Awards in Any Taxable Year. The maximum
number of shares of Common Stock that may be the subject of Incentive
Awards made to any Eligible Recipient in any one taxable year of the
Company shall not exceed 250,000 shares (the "Maximum Annual Grant").
4.3 Accounting for Incentive Awards. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards
will be applied to reduce the maximum number of shares of Common Stock
remaining available for issuance under the Plan. Any shares of Common
Stock that are subject to an Incentive Award that lapses, expires, is
forfeited or for any reason is terminated unexercised or unvested and any
shares of Common Stock that are subject to an Incentive Award that is
settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan.
4.4 Adjustments to Shares and Incentive Awards. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares,
rights offering, divestiture or extraordinary dividend (including a
spin-off) or any other change in the corporate structure or shares of the
Company, the Committee (or, if the Company is not the surviving corporation
in any such transaction, the board of directors of the surviving
corporation) will make appropriate adjustments (which determination will be
conclusive) as to (i) the number and kind of securities available for
issuance under the Plan, (ii) the Maximum Annual Grant, and (iii) in order
to prevent dilution or enlargement of the rights of Participants, the
number, kind and, where applicable, exercise price of securities subject to
outstanding Incentive Awards.
5. Participation.
Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are
expected to contribute to the achievement of economic objectives of the
Company or its Subsidiaries. Eligible Recipients may be granted from time
to time one or more Incentive Awards, singly or in combination or in tandem
with other Incentive Awards, as may be determined by the Committee in its
sole discretion. Incentive Awards will be deemed to be granted as of the
date specified in the grant resolution of the Committee, which date will be
the date of any related agreement with the Participant.
6. Options.
6.1 Grant. An Eligible Recipient may be granted one or more Options under
the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by
the Committee in its sole discretion. The Committee may designate whether
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an Option is to be considered an Incentive Stock Option or a Non-Statutory
Stock Option.
6.2 Exercise Price. The per share price to be paid by a Participant upon
exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant but will not be less than 100% of the Fair
Market Value of one share of Common Stock on the date of grant. Unless
otherwise determined by the Committee, the per share exercise price of
Options granted under the Plan will be equal to 100% of the Fair Market
Value of one share of Common Stock on the date of grant.
6.3 Exercisability and Duration. An Option will become exercisable at such
times and in such installments as may be determined by the Committee in its
sole discretion at the time of grant; provided, however, that no Option may
be exercisable prior to six months (other than Options described in
Section 6.6 of the Plan or as provided in Section 10 of the Plan) or after
10 years from its date of grant. Unless the Committee determines
otherwise, an Option granted under the Plan will be exercisable for
10 years from its date of grant and will become exercisable on a cumulative
basis with respect to one-third of the shares subject to such Option on
each January 1 occurring at least six months after its date of grant.
6.4 Payment of Exercise Price. The total purchase price of the shares to
be purchased upon exercise of an Option will be paid entirely in cash
(including check, bank draft or money order); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established
by the Committee, may allow such payments to be made, in whole or in part,
by tender of a Broker Exercise Notice, Previously Acquired Shares or a
combination of such methods.
6.5 Manner of Exercise. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained in
the Plan and in the agreement evidencing such Option, by delivery in
person, by facsimile or electronic transmission or through the mail of
written notice of exercise to the Company, Attention: Corporate Treasury,
at its principal executive office in Minneapolis, Minnesota and by paying
in full the total exercise price for the shares of Common Stock to be
purchased in accordance with Section 6.4 of the Plan.
6.6 Options or Stock in Lieu of Bonus. Without limiting in any way the
authority of the Committee to establish the terms and conditions of Options
or other Incentive Awards, the Committee may allow Eligible Recipients to
elect to receive some or all of their annual cash bonus in the form of
Non-Statutory Stock Options or shares of Common Stock rather than cash.
The Committee will have the sole authority to determine whether to allow
such an election and to establish the terms and conditions to such an
election, which terms and conditions will be set forth in the agreement
evidencing such Options or Incentive Awards.
7. Stock Appreciation Rights.
7.1 Grant. An Eligible Recipient may be granted one or more Stock
Appreciation Rights under the Plan, and such Stock Appreciation Rights will
be subject to such terms and conditions, consistent with the other
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provisions of the Plan, as may be determined by the Committee in its sole
discretion.
7.2 Exercise Price. The exercise price of a Stock Appreciation Right will
be determined by the Committee, in its discretion, at the date of grant but
will not be less than 100% of the Fair Market Value of one share of Common
Stock on the date of grant.
7.3 Exercisability and Duration. A Stock Appreciation Right will become
exercisable at such times and in such installments as may be determined by
the Committee in its sole discretion at the time of grant; provided,
however, that no Stock Appreciation Right may be exercisable prior to six
months (other than as provided in Section 10 of the Plan) or after 10 years
from its date of grant. Unless the Committee determines otherwise, a Stock
Appreciation Right granted under the Plan will be exercisable for 10 years
from its date of grant and will become exercisable on a cumulative basis
with respect to one-third of the shares subject to such Stock Appreciation
Right on each January 1 occurring at least six months after its date of
grant. A Stock Appreciation Right will be exercised by giving notice in
the same manner as for Options, as set forth in Section 6.5 of the Plan.
8. Restricted Stock Awards.
8.1 Grant. An Eligible Recipient may be granted one or more Restricted
Stock Awards under the Plan, and such Restricted Stock Awards will be
subject to such terms and conditions, consistent with the provisions of the
Plan, as may be determined by the Committee in its sole discretion. The
Committee may impose such restrictions or conditions, not inconsistent with
the provisions of the Plan, to the vesting of such Restricted Stock Awards
as it deems appropriate, including, without limitation, that the
Participant remain in the continuous employ or service of the Company or a
Subsidiary for a certain period, that the Participant or the Company (or
any Subsidiary or division thereof) satisfy certain performance criteria;
provided, however, that any Restricted Stock Award made on or after May 10,
1995 to an Eligible Recipient other than a Newly Hired Employee must be a
Performance Restricted Stock Award. Other than as provided in Section 10.4
of the Plan, (i) no Restricted Stock Award may vest prior to six months
from its date of grant, and (ii) any Restricted Stock Award that is not a
Performance Restricted Stock Award may vest only over a period of at least
three years from the date such Award was granted, the rate at which the
shares subject to such Award may vest during such period shall not be more
favorable to the Participant than vesting in equal annual installments, and
the Participant must remain in the continuous employ or service of the
Company or a Subsidiary during such period. [As amended through July 26,
1995]
8.2 Rights as a Stockholder; Transferability. Except as provided in
Sections 8.1, 8.3 and 13.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common
Stock issued to the Participant as a Restricted Stock Award under this
Section 8 upon the Participant becoming the holder of record of such
shares as if such Participant were a holder of record of shares of
unrestricted Common Stock.
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8.3 Dividends and Distributions. Unless the Committee determines otherwise
in its sole discretion (either in the agreement evidencing the Restricted
Stock Award at the time of grant or at any time after the grant of the
Restricted Stock Award), any dividends or distributions (including regular
quarterly cash dividends) paid with respect to shares of Common Stock
subject to the unvested portion of a Restricted Stock Award will not be
subject to the same restrictions as the shares to which such dividends or
distributions relate and will be currently paid to the Participant. In the
event the Committee determines not to pay such dividends or distributions
currently, the Committee will determine in its sole discretion whether any
interest will be paid on such dividends or distributions. In addition, the
Committee, in its sole discretion, may require such dividends and
distributions to be reinvested (and in such case the Participants consent
to such reinvestment) in shares of Common Stock that will be subject to the
same restrictions as the shares to which such dividends or distributions
relate.
8.4 Enforcement of Restrictions. To enforce the restrictions referred to
in this Section 8, the Committee may place a legend on the stock
certificates referring to such restrictions and may require Participants,
until the restrictions have lapsed, to keep the stock certificates,
together with duly endorsed stock powers, in the custody of the Company or
its transfer agent or to maintain evidence of stock ownership, together
with duly endorsed stock powers, in a certificateless book-entry stock
account with the Company's transfer agent for its Common Stock.
9. Performance Units.
An Eligible Recipient may be granted one or more Performance Units
under the Plan, and such Performance Units will be subject to such terms
and conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee may
impose such restrictions or conditions, not inconsistent with the
provisions of the Plan, to the vesting of such Performance Units as it
deems appropriate, including, without limitation, that the Participant
remain in the continuous employ or service of the Company or any Subsidiary
for a certain period or that the Participant or the Company (or any
Subsidiary or division thereof) satisfy certain performance criteria. The
Committee will have the sole discretion either to determine the form in
which payment of the economic value of vested Performance Units will be
made to the Participant (i.e., cash, Common Stock or any combination
thereof) or to consent to or disapprove the election by the Participant of
the form of such payment.
10. Effect of Termination of Employment or Other Service.
10.1 Termination Due to Death or Disability. In the event a Participant's
employment or other service with the Company and all Subsidiaries is
terminated by reason of death or Disability:
(a) All outstanding Options then held by the Participant will
become immediately exercisable in full and will remain exercisable for the
remainder of their terms;
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(b) All Restricted Stock Awards then held by the Participant
that have not vested as of such termination will be terminated and
forfeited; and
(c) All Performance Units and Stock Appreciation Rights then
held by the Participant will vest and/or continue to vest and, with respect
to Stock Appreciation Rights, will remain exercisable in the manner
determined by the Committee and set forth in the agreement evidencing such
Incentive Awards.
10.2 Termination Due to Retirement. Except as otherwise provided in
Section 12 of the Plan, in the event a Participant's employment or other
service with the Company and all Subsidiaries is terminated by reason of
Retirement:
(a) All outstanding Options then held by the Participant will
continue to become exercisable in accordance with their terms;
(b) All Restricted Stock Awards then held by the Participant
that have not vested as of such termination will be terminated and
forfeited; and
(c) All Performance Units and Stock Appreciation Rights then
held by the Participant will vest and/or continue to vest and, with respect
to Stock Appreciation Rights, will remain exercisable in the manner
determined by the Committee and set forth in the agreement evidencing such
Incentive Awards.
10.3 Termination for Reasons Other than Death, Disability or Retirement.
(a) Except as otherwise provided in Section 12 of the Plan, in
the event a Participant's employment or other service is terminated with
the Company and all Subsidiaries for any reason other than death,
Disability or Retirement, or a Participant is in the employ or service of a
Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company
(unless the Participant continues in the employ or service of the Company
or another Subsidiary), all rights of the Participant under the Plan and
any agreements evidencing an Incentive Award will immediately terminate
without notice of any kind, no Options or Stock Appreciation Rights then
held by the Participant will thereafter be exercisable and all Restricted
Stock Awards then held by the Participant that have not vested will be
terminated and forfeited; provided, however, that if such termination is
due to any reason other than termination by the Company or any Subsidiary
for "cause," all outstanding Options then held by such Participant will
remain exercisable to the extent exercisable as of such termination for a
period of three months after such termination (but in no event after the
expiration date of any such Option) and all Performance Units and Stock
Appreciation Rights will vest and/or continue to vest and, with respect to
Stock Appreciation Rights, will remain exercisable in the manner determined
by the Committee and set forth in the agreement evidencing such Incentive
Awards.
(b) For purposes of this Section 10.3, "cause" will be as
defined in any employment or other agreement or policy applicable to the
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Participant or, if no such agreement or policy exists, will mean
(i) dishonesty, fraud, misrepresentation, embezzlement or material and
deliberate injury or attempted injury, in each case related to the Company
or any Subsidiary, (ii) any unlawful or criminal activity of a serious
nature, (iii) any willful breach of duty, habitual neglect of duty or
unreasonable job performance, or (iv) any material breach of any
employment, service, confidentiality or noncompete agreement entered into
with the Company or any Subsidiary.
10.4 Modification of Rights Upon Termination. Notwithstanding the other
provisions of this Section 10, upon a Participant's termination of
employment or other service with the Company and all Subsidiaries, the
Committee may, in its sole discretion (which may be exercised before or
following such termination) but consistent with the limitations of
Paragraph 3.2(b) of the Plan, cause Options or Stock Appreciation Rights
(or any part thereof) then held by such Participant to become exercisable
and/or remain exercisable following such termination of employment or
service and Restricted Stock Awards and Performance Units then held by such
Participant to vest and/or continue to vest following such termination of
employment or service, in each case in the manner determined by the
Committee. [Amended as of July 26, 1995]
10.5 Date of Termination of Employment or Other Service. Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to
have terminated on the date recorded on the personnel or other records of
the Company or the Subsidiary for which the Participant provides employment
or other service, as determined by the Committee in its sole discretion
based upon such records.
11. Payment of Withholding Taxes.
11.1 General Rules. The Company is entitled to (a) withhold and deduct from
future wages of the Participant (or from other amounts which may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary
to satisfy any and all federal, state and local withholding and employment-
related tax requirements attributable to an Incentive Award, including,
without limitation, the grant, exercise or vesting of, or payment of
dividends with respect to, an Incentive Award or a disqualifying
disposition of stock received upon exercise of an Incentive Stock Option,
or (b) require the Participant promptly to remit the amount of such
withholding to the Company before taking any action with respect to an
Incentive Award.
11.2 Special Rules. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 11.1 of the Plan by
electing to tender Previously Acquired Shares, a Broker Exercise Notice or
a combination of such methods.
12. Change of Control.
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12.1 Definitions. For purposes of this Section 12, the following
definitions will be applied:
(a) "Change of Control" will mean any of the following events:
(i) a merger or consolidation to which the Company is a party if
the individuals and entities who were stockholders of the Company
immediately prior to the effective date of such merger or consolidation
have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
of less than 50% of the total combined voting power for election of
directors of the surviving corporation following the effective date of such
merger or consolidation;
(ii) the direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) in the aggregate of securities of the
Company representing 25% or more of the total combined voting power of the
Company's then issued and outstanding securities by any person or entity,
or group of associated person or entities acting in concert;
(iii) the sale of the properties and assets of the Company
substantially as an entirety, to any person or entity which is not a
wholly-owned subsidiary of the Company;
(iv) the stockholders of the Company approve any plan or proposal
for the liquidation of the Company; or
(v) a change in the composition of the Board at any time during
any consecutive 24 month period such that the "Continuity Directors" cease
for any reason to constitute at least a 70% majority of the Board. For
purposes of this clause, "Continuity Directors" means those members of the
Board who either (1) were directors at the beginning of such consecutive
24 month period, or (2) were elected by, or on the nomination or
recommendation of, at least a two-thirds majority of the then-existing
Board of Directors.
(b) "Change of Control Action" will mean any payment (including any
benefit or transfer of property) in the nature of compensation, to or for
the benefit of a Participant under any arrangement, which is considered to
be contingent on a Change of Control for purposes of Section 280G of the
Code. As used in this definition, the term "arrangement" includes, without
limitation, any agreement between a Participant and the Company and any and
all of the Company's salary, bonus, incentive, restricted stock, stock
option, compensation or benefit plans, programs or arrangements, and will
include this Plan.
(c) "Change of Control Termination" will mean, with respect to a
Participant, any of the following events occurring within two years after a
Change of Control:
(i) Termination of the Participant's employment with the Company
and all of its Subsidiaries by the Company or any Subsidiary for any
reason, with or without cause, except for conduct by the Participant
constituting (1) a felony involving moral turpitude under either federal
law or the law of the state of the Company's incorporation or (2) the
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Participant's willful failure to fulfill his employment duties with the
Company or any Subsidiary; provided that for purposes of this clause (2),
an act or failure to act by the Participant shall not be "willful" unless
done, or omitted to be done, in bad faith and without reasonable belief
that the Participant's action or omission was in the best interests of the
Company or a Subsidiary; or
(ii) Termination of employment with the Company and all of its
Subsidiaries by the Participant for Good Reason. A Change of Control
Termination shall not include a termination of employment by reason of
death, Disability or Retirement.
(d) "Good Reason" will mean a good faith determination by the
Participant, in the Participant's sole and absolute judgment, that any one
or more of the following events has occurred, without the Participant's
express written consent, after a Change of Control:
(i) A change in the Participant's reporting responsibilities,
titles or offices as in effect immediately prior to the Change of Control,
or any removal of the Participant from, or any failure to re-elect the
Participant to, any of such positions, which has the effect of diminishing
the Participant's responsibility or authority; or
(ii) A reduction by the Company or its Subsidiaries in the
Participant's base salary as in effect immediately prior to the Change of
Control or as the same may be increased from time to time thereafter; or
(iii) The Company or its Subsidiaries requiring the Participant
to be based anywhere other than within twenty-five miles of the
Participant's job location at the time of the Change of Control; or
(iv) Without replacement by a plan, program or arrangement
providing benefits to the Participant equal to or greater than those
discontinued or adversely affected:
(1) the failure by the Company or its Subsidiaries to
continue in effect, within its maximum stated term, any pension, bonus,
incentive, stock ownership, purchase, option, life insurance, health,
accident, disability, or any other employee compensation or benefit plan,
program or arrangement, in which the Participant is participating
immediately prior to a Change of Control; or
(2) the taking of any action by the Company or its
Subsidiaries that would adversely affect the Participant's participation or
materially reduce the Participant's benefits under any of such plans,
programs or arrangements; or
(v) The taking of any action by the Company or its Subsidiaries
that would materially adversely affect the physical conditions existing at
the time of the Change of Control in or under which the Participant
performs his employment duties; or
(vi) If the Participant's primary employment duties are with a
Subsidiary of the Company, the sale, merger, contribution, transfer or any
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other transaction as a result of which the Company no longer directly or
indirectly controls or has a significant equity interest in such
Subsidiary; or
(vii) Any material breach by the Company or one of its
Subsidiaries of any employment agreement between the Participant and the
Company or such Subsidiary.
12.2 Acceleration of Vesting. Subject to the "Limitation on Change of
Control Compensation" contained in Section 12.3 of the Plan, in the event
of a Change of Control Termination with respect to a Participant, and
without further action of the Committee:
(a) Each Option granted to such Participant that has been outstanding
at least six months will become immediately exercisable in full and will
remain exercisable until the expiration date of such Option.
(b) Each Restricted Stock Award (including any Performance Restricted
Stock Award) granted to such Participant that has been outstanding for at
least six months will immediately become fully vested.
(c) All Performance Units and Stock Appreciation Rights then held by
such Participant will vest and/or continue to vest and, with respect to
Stock Appreciation Rights, will remain exercisable in the manner determined
by the Committee and set forth in the agreement evidencing such Incentive
Awards.
12.3 Limitation on Change of Control Compensation. A Participant will not
be entitled to receive any Change of Control Action which would, with
respect to the Participant, constitute a "parachute payment" for purposes
of Section 280G of the Code. In the event any Change of Control Action
would, with respect to the Participant, constitute a "parachute payment,"
the Participant will have the right to designate those Change of Control
Action(s) which would be reduced or eliminated so that the Participant will
not receive a "parachute payment."
12.4 Limitations on Committee's and Board's Actions. Prior to a Change of
Control, the Participant will have no rights under this Section 12, and
the Board will have the power and right, within its sole discretion to
rescind, modify or amend this Section 12 without the consent of any
Participant. In all other cases, and notwithstanding the authority granted
to the Committee or Board to exercise discretion in interpreting,
administering, amending or terminating this Plan, neither the Committee nor
the Board will, following a Change of Control, have the power to exercise
such authority or otherwise take any action that is inconsistent with the
provisions of this Section 12.
13. Rights of Eligible Recipients and Participants Transferability.
13.1 Employment or Service. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate
the employment or service of any Eligible Recipient or Participant at any
time, nor confer upon any Eligible Recipient or Participant any right to
continue in the employ or service of the Company or any Subsidiary.
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13.2 Rights as a Stockholder. As a holder of Incentive Awards (other than
Restricted Stock Awards), a Participant will have no rights as a
stockholder unless and until such Incentive Awards are exercised for, or
paid in the form of, shares of Common Stock and the Participant becomes the
holder of record of such shares. Except as otherwise provided in the Plan,
no adjustment will be made for dividends or distributions with respect to
such Incentive Awards as to which there is a record date preceding the date
the Participant becomes the holder of record of such shares, except as the
Committee may determine in its discretion.
13.3 Restrictions on Transfer. Except pursuant to testamentary will or the
laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of any Participant in an Incentive Award prior
to the exercise or vesting of such Incentive Award will be assignable or
transferable, or subjected to any lien, during the lifetime of the
Participant, either voluntarily or involuntarily, directly or indirectly,
by operation of law or otherwise. A Participant will, however, be entitled
to designate a beneficiary to receive an Incentive Award upon such
Participant's death, and in the event of a Participant's death, payment of
any amounts due under the Plan will be made to, and exercise of any Options
and Stock Appreciation Rights (to the extent permitted pursuant to
Section 10 of the Plan) may be made by, the Participant's legal
representatives, heirs and legatees.
13.4 Non-Exclusivity of the Plan. Nothing contained in the Plan is intended
to modify or rescind any previously approved compensation plans or programs
of the Company or create any limitations on the power or authority of the
Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.
14. Securities Law and Other Restrictions.
Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to
issue any shares of Common Stock under this Plan, and a Participant may not
sell, assign, transfer or otherwise dispose of shares of Common Stock
issued pursuant to Incentive Awards granted under the Plan, unless
(a) there is in effect with respect to such shares a registration statement
under the Securities Act and any applicable state securities laws or an
exemption from such registration under the Securities Act and applicable
state securities laws, and (b) there has been obtained any other consent,
approval or permit from any other regulatory body which the Committee, in
its sole discretion, deems necessary or advisable. The Company may
condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement
of any legends on certificates representing shares of Common Stock, as may
be deemed necessary or advisable by the Company in order to comply with
such securities law or other restrictions.
15. Plan Amendment, Modification and Termination.
The Board may suspend or terminate the Plan or any portion thereof at
any time, and may amend the Plan from time to time in such respects as the
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Board may deem advisable in order that Incentive Awards under the Plan will
conform to any change in applicable laws or regulations or in any other
respect the Board may deem to be in the best interests of the Company;
provided, however, that no amendments to the Plan will be effective without
approval of the stockholders of the Company if stockholder approval of the
amendment is then required pursuant to Rule 16b-3 under the Exchange Act,
Section 422 of the Code or the rules of the New York Stock Exchange. No
termination, suspension or amendment of the Plan may adversely affect any
outstanding Incentive Award without the consent of the affected
Participant; provided, however, that this sentence will not impair the
right of the Committee to take whatever action it deems appropriate under
Section 4.3 and Section 12.4 of the Plan.
16. Effective Date and Duration of the Plan.
The Plan is effective as of February 3, 1993, the date it was adopted
by the Board. The Plan will terminate at midnight on February 3, 1999, and
may be terminated prior thereto by Board action, and no Incentive Award
will be granted after such termination. Incentive Awards outstanding upon
termination of the Plan may continue to vest, or become free of
restrictions, in accordance with their terms.
17. Miscellaneous.
17.1 Governing Law. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and
actions relating to the Plan will be governed by and construed exclusively
in accordance with the laws of the State of Minnesota.
17.2 Successors and Assigns. The Plan will be binding upon and inure to the
benefit of the successors and permitted assigns of the Company and the
Participants.
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