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TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, dated as of ____________, 200_, by
and between Ceridian Corporation, a Delaware corporation to be renamed Arbitron
Inc. ("CERIDIAN"), and New Ceridian Corporation, a Delaware corporation to be
renamed Ceridian Corporation ("NEW CERIDIAN").
WHEREAS, Ceridian and New Ceridian have entered into a Distribution
Agreement (as defined below);
WHEREAS, prior to the Distribution Date (as defined in the Distribution
Agreement), Ceridian, acting through its direct and indirect Subsidiaries (as
defined in the Distribution Agreement) and divisions, conducted the Human
Resources Business, the Comdata Business and the Media Information Business
(each as defined in the Distribution Agreement);
WHEREAS, pursuant to the Distribution Agreement, Ceridian will
reorganize its business by separating from Ceridian the Human Resources Business
and the Comdata Business by (a) causing the Human Resources Business and the
Comdata Business to be owned and conducted, directly or indirectly, by New
Ceridian and its Subsidiaries, and (b) causing the Media Information Business to
continue to be owned and conducted, directly or indirectly, by Ceridian and its
remaining Subsidiaries;
WHEREAS, prior to the Distribution Date, the Media Information Business
received various support services from the Human Resource Business and the
Comdata Business; and
WHEREAS, following the Distribution Date, Ceridian and New Ceridian
desire that for purposes of continuity and transition New Ceridian continue to
provide certain services to Ceridian and its Subsidiaries, such services to be
provided in a manner as historically provided prior to the Distribution Date,
and on the terms and conditions as set forth in this Agreement and the Schedule
attached hereto.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 GENERAL. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Distribution
Agreement.
1.2 DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
(a) "CONFIDENTIAL INFORMATION" means any and all information
disclosed to the receiving party by a disclosing party
concerning such disclosing party or information regarding
other parties in the disclosing party's possession, custody or
under its control, in any form whatsoever, including without
limitation, visual, oral, graphic, electronic or model form.
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(b) "CONTACT PERSONS" means the persons set forth opposite each
Service on Schedule A attached to this Agreement, or such
persons' successors or substitute, who have been designated by
Ceridian and New Ceridian to handle all matters relating to
such Service.
(c) "DISTRIBUTION AGREEMENT" means that certain Distribution
Agreement, dated _____, 200_, by and between Ceridian and New
Ceridian.
(d) "EMPLOYEE BENEFITS INFORMATION" means information relating to
the administration of Ceridian's and New Ceridian's employee
benefit programs as provided in Schedule A attached to this
Agreement, including, but not limited to, information and/or
data submitted for reimbursement of, or in support of, any
benefits claims (including but not limited to health,
counseling, medical, dental or disability claims).
(e) "SERVICE" or "SERVICES" means each of the services described
in Schedule A attached to this Agreement to be provided by or
on behalf of New Ceridian to Ceridian pursuant to the terms
and conditions of this Agreement.
(f) "SERVICE CHARGE" shall have the meaning given such term in
Section 4.1 of this Agreement.
(g) "SERVICE DESCRIPTION" means the description of each individual
Service respectively provided in Schedule A to this Agreement.
(h) "STANDARD OF CARE" shall have the meaning given such term in
Section 2.2 of this Agreement.
(i) "TERM" shall have the meaning given such term in Section 3.1
of this Agreement.
ARTICLE 2.
SERVICES
2.1 SERVICES TO BE PROVIDED. In addition to any obligation New Ceridian has
to perform services for Ceridian pursuant to the Distribution Agreement
and subject to the terms of this Agreement, New Ceridian will provide,
or will cause a Subsidiary of New Ceridian to provide, to Ceridian or a
Subsidiary of Ceridian the Services during the Term in a manner and at
a level of service consistent in all material respects with the
services provided to the Media Information Business as it existed prior
to the Distribution Date.
2.2 STANDARD OF CARE. New Ceridian shall provide such Services exercising
the same degree of care, priority and diligence as it exercises in
performing the same or similar services for itself and its Affiliates
(collectively, the "STANDARD OF CARE").
2.3 MODIFICATION OF SERVICES. Schedule A to this Agreement identifies the
Services to be provided by New Ceridian and, subject to the mutual
agreement of the parties hereto acting reasonably, it may be amended
from time to time, to add any additional Services or to modify or
delete Services. During the Term, service upgrades and improvements
which New Ceridian provides to its own internal organizations will be
made available to
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Ceridian to the extent that the parties mutually agree upon the price
for any such upgrade or improvement.
2.4 INDEPENDENCE. Unless otherwise agreed in writing, all employees and
representatives of New Ceridian will be deemed for purposes of all
compensation and employee benefits matters to be employees or
representatives of New Ceridian and not employees or representatives of
Ceridian. In performing the Services, such employees and
representatives will be under the direction, control and supervision of
New Ceridian (and not Ceridian) and New Ceridian will have the sole
right to exercise all authority with respect to the employment
(including, without limitation, termination of employment), assignment
and compensation of such employees and representatives.
2.5 NON-EXCLUSIVITY. Nothing in this Agreement shall preclude Ceridian from
obtaining, in whole or in part, services of any nature that may be
obtainable from New Ceridian, from its own employees or from providers
other than New Ceridian.
2.6 COOPERATION. Ceridian shall, in a timely manner, take all such actions
as may be reasonably necessary or desirable in order to enable or
assist New Ceridian in the provision of the Services, including, but
not limited to, providing necessary information and specific written
authorizations and consents, and New Ceridian shall be relieved of its
obligations hereunder to the extent that Ceridian's failure to take any
such action renders performance by New Ceridian of such obligations
unlawful or impracticable.
2.7 LIMITATION ON SERVICES. New Ceridian shall not be required to expand
its facilities, incur new long-term capital expenses or employ
additional personnel in order to provide the Services to Ceridian.
Furthermore, New Ceridian shall not be obligated to provide Services
hereunder that are greater in nature and scope than the comparable
services provided by New Ceridian to Ceridian prior to the Distribution
Date, or that are greater in nature or scope than comparable services
provided by New Ceridian during the Term to its own internal
organizations, except as may be specifically provided on Schedule A to
this Agreement.
2.8 PERSONNEL. In providing the Services, New Ceridian as it deems
necessary or appropriate in its sole discretion, may (a) use the
personnel of New Ceridian or its Affiliates, and (b) employ the
services of third parties to the extent such third party services are
routinely utilized to provide similar services to other businesses of
New Ceridian or are reasonably necessary for the efficient performance
of any of such Services. Ceridian may retain at its own expense its own
consultants and other professional advisers.
2.9 RIGHT TO DETERMINE PRIORITY. If there is an unavoidable conflict
between the immediate needs of New Ceridian and those of Ceridian as to
the use of or access to a particular Service to be provided by New
Ceridian, New Ceridian shall have the right, in its sole discretion, to
establish reasonable priorities, at particular times and under
particular circumstances, as between New Ceridian and Ceridian. In any
such situation, New Ceridian shall provide notice to Ceridian of the
establishment of such priorities at the earliest practicable time.
ARTICLE 3.
TERM AND TERMINATION
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3.1 TERM. This Agreement shall become effective on the Distribution Date
and shall remain in force for a period of one year (the "TERM"), unless
terminated earlier pursuant to Section 3.2 below. Ceridian shall not
have any obligation to continue to use any of the Services and may
delete any Service from Schedule A that New Ceridian is providing to
Ceridian by giving New Ceridian sixty (60) days notice thereof. In the
event any Service is terminated by Ceridian, Schedule A shall be
amended to reflect such amendment to the Services.
3.2 TERMINATION.
(a) TERMINATION WITHOUT CAUSE. The obligation of New Ceridian to
provide or cause to be provided each Service to be provided
hereunder shall terminate on the earliest to occur of:
(i) The expiration of the Term;
(ii) The expiration of the term (including any available
renewal term) during which such Service is to be
provided as specified in Schedule A, each such term
to commence on the Distribution Date;
(iii) The date sixty (60) days following written notice
from New Ceridian that New Ceridian is discontinuing
permanently the provision of a Service to its own
internal organizations;
(iv) The date sixty (60) days (or such longer period as is
specified in Schedule A) after New Ceridian receives
written notice that Ceridian no longer desires that a
Service be provided; or
(v) The date of termination pursuant to Section 3.2(b).
(b) TERMINATION FOR CAUSE. Subject to Section 7.3, if either party
hereto shall fail to adequately perform in any material
respect any of its material obligations under this Agreement
(other than a payment default) (the "DEFAULTING PARTY"), the
other party entitled to the benefit of such performance (the
"NON-DEFAULTING PARTY") may give thirty (30) days' written
notice to the Defaulting Party specifying the nature of such
failure or default and stating that the Non-Defaulting Party
intends to terminate this Agreement, either in its entirety or
partially as set forth in Section 3.2(c), if such failure or
default is not cured within thirty (30) days of such written
notice. If any failure or default so specified is not cured
within such 30-day period, the Non-Defaulting Party may elect
to immediately terminate this Agreement in whole or in part
with respect to the Defaulting Party; provided, however, that
if the failure or default relates to a dispute contested in
good faith by the Defaulting Party, the Non-Defaulting Party
may not terminate this Agreement pending the resolution of
such dispute in accordance with Section 7.4 hereof. Such
termination shall be effective upon giving a written notice of
termination from the Non-Defaulting Party to the Defaulting
Party and shall be without prejudice to any other remedy which
may be available to the Non-Defaulting Party against the
Defaulting Party.
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(c) PARTIAL TERMINATION. Under circumstances specified in Section
3.2(b) entitling the Non-Defaulting Party to terminate this
Agreement in its entirety, the Non-Defaulting Party shall have
the following options to partially terminate this Agreement
upon the same notice provisions as specified in Section
3.2(b):
(i) If the default relates to the payment for a Service,
New Ceridian may terminate this Agreement as to the
provision of that Service or all Services to
Ceridian, but continue this Agreement in all other
respects; or
(ii) If the default relates to the provision of a Service,
Ceridian may terminate this Agreement as to the
provision of that Service or all Services by New
Ceridian, but continue this Agreement in all other
respects.
3.3 EFFECT OF TERMINATION.
(a) Ceridian specifically agrees and acknowledges that all
obligations of New Ceridian to provide each Service for which
New Ceridian is responsible hereunder shall immediately cease
upon the termination of this Agreement. Upon the cessation of
New Ceridian's obligation to provide any Services, Ceridian
shall immediately cease using, directly or indirectly, such
Service (including, without limitation, any and all software
of New Ceridian or third party software provided through New
Ceridian, telecommunications services or equipment, or
computer systems or equipment).
(b) Upon termination of a Service with respect to which New
Ceridian holds books, records or files, including current or
archived copies of computer files, owned by Ceridian and used
by New Ceridian in connection with the provision of a Service
to Ceridian, New Ceridian will return all of such books,
records or files as soon as reasonably practicable; provided,
however, that New Ceridian may make a copy, at its expense, of
such books, records or files for archival purposes only.
(c) Without prejudice to the survival of the other agreements of
the parties, the following obligations shall survive the
termination of this Agreement: (a) the obligations of each
party under Section 3.3(b) and Articles 5 and 6, and (b) New
Ceridian's right to receive the Service Charges for the
Services provided by it hereunder pursuant to Section 4.1
below incurred prior to the effective date of termination.
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ARTICLE 4.
COMPENSATION
4.1 SERVICE CHARGE. As consideration for the provision of the Services,
Ceridian shall, for each Service performed, pay New Ceridian the
applicable fee for such Service set forth in Schedule A to this
Agreement, plus any additional charges as described below (such fee and
any additional charges being collectively referred to in this Agreement
as the "SERVICE CHARGE" for such Service. The fee for each Service
provided by New Ceridian shall be either (a) a base fee, as specified
in Schedule A, or (b) if not otherwise specified on Schedule A, New
Ceridian's fully loaded cost for such Service. Unless otherwise stated
in Schedule A, such allocations shall be made on a basis consistent
with the allocation methodology used by New Ceridian immediately prior
to the Distribution Date, which shall include a fair and reasonable
allocation for New Ceridian's employee benefit costs relating to
employees, and for New Ceridian's facilities and other overhead. In
addition to the Service Charge for such Services, New Ceridian shall
also be entitled to reimbursement from Ceridian upon receipt of
reasonable supporting documentation for all out-of-pocket expenses
incurred in connection with New Ceridian's provision of the Services
which are not included as part of the normal allocated cost. In the
event the Service is terminated, the Service Charge will be prorated
for the number of days of Service received in the calendar month (based
on a thirty day month) in which the Service is terminated.
4.2 INVOICING AND PAYMENTS.
(a) INVOICES. After the end of each month, New Ceridian, together
with its Affiliates and/or Subsidiaries providing Services
will submit one invoice to Ceridian for all Services provided
to Ceridian and Ceridian's Subsidiaries by New Ceridian during
such month. Such monthly invoices shall be issued when New
Ceridian issues its invoices in the ordinary course of its
business. Each invoice shall include a summary list of the
previously agreed upon Services for which there are fixed
dollar fees, together with documentation supporting each of
the invoiced amounts that are not covered by the fixed fee
agreements. The total amount set forth on such summary list
and such supporting detail shall equal the invoice total, and
will be provided under separate cover apart from the invoice.
All invoices shall be sent to the attention of Ceridian at the
address set forth in Section 7.8 hereof or to such other
address as Ceridian shall have specified by notice in writing
to New Ceridian.
(b) PAYMENT. Payment of all invoices in respect of Service shall
be made by check or electronic funds transmission in U.S.
Dollars, without any offset or deduction of any nature
whatsoever, within thirty (30) days of the invoice date.
Invoices unpaid as of such date shall accrue interest at an
annual rate of the lower of (i) two percentage points higher
than the reference rate publicly announced from time to time
by Bank of America, N.A. or (ii) the highest possible rate
allowed by applicable law. All payments shall be made to the
account designated by New Ceridian to Ceridian, with written
confirmation of payment sent by facsimile to New Ceridian or
other person designated thereby. If any payment is not paid
when due, New Ceridian shall have the right, without any
liability to Ceridian, or anyone claiming by or through
Ceridian, upon thirty (30) days' notice, to cease
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providing any or all of the Services provided by New
Ceridian to Ceridian, which right may be exercised by New
Ceridian in its sole and absolute discretion.
4.3 TAXES. To the extent not included directly in the price New Ceridian
charges for Services, Ceridian shall pay to New Ceridian the amount of
any taxes or charges set forth in (a) through (c) of this Section 4.3
imposed now or in the future by any Governmental Authority including
any increase in any such tax or charge imposed on New Ceridian after
the Distribution Date and during the Term of this Agreement.
(a) Any applicable sales, use, gross receipts, value added or
similar tax that is imposed as a result of, or measured by,
any Service rendered hereunder unless covered by an exemption
certificate.
(b) Any applicable real or personal property taxes, including any
special assessments, and any impositions imposed on New
Ceridian in lieu of or in substitution for such taxes on any
property used in connection with any Service rendered
hereunder.
(c) Any other governmental taxes, duties and/or charges of any
kind, excluding any income or franchise taxes imposed on New
Ceridian, which New Ceridian is required to pay with respect
to any Service rendered hereunder.
4.4 DISPUTED AMOUNTS. In the event Ceridian disputes the accuracy of any
invoice, Ceridian shall pay the undisputed portion of such invoice and
the parties hereto will promptly meet and seek to resolve the disputed
amount of the invoice. If Ceridian fails to pay any undisputed amount
owed under this Agreement, Ceridian shall correct such failure promptly
following notice of the failure, and shall pay New Ceridian interest on
the amount paid late at an annual interest rate equal to the lower of
(i) two percentage points higher than the reference rate publicly
announced from time to time by Bank of America, N.A. or (ii) the
highest possible rate allowed by applicable law, prorated for the
number of days such overdue amounts are outstanding.
ARTICLE 5.
CONFIDENTIALTY
5.1 CONFIDENTIALITY OBLIGATION. Each of the parties hereto agrees to keep
confidential and neither disclose to others nor use (or permit the use
of), except as permitted in this Agreement, any Confidential
Information or Employee Benefits Information received from the other
party pursuant to this Agreement, and shall keep, and shall cause its
consultants and advisors to keep, confidential all Confidential
Information and Employee Benefits Information received pursuant to or
in connection with this Agreement.
5.2 LIMITS ON DISCLOSURE. The receiving party shall treat all Confidential
Information and Employee Benefits Information in the same manner and
with the same degree of care (but in any event with no less of a degree
of care than is reasonable for such information) as it uses with
respect to its own Confidential Information and Employee Benefits
Information of like nature, and shall disclose Confidential Information
and Employee Benefits Information of the other party only to its
employees and agents who have a need to know it.
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5.3 EXCEPTIONS. The obligations set forth in this Article 5 shall not apply
with respect to any Confidential Information which:
(a) Is generally available to the public or subsequently becomes
generally available to the public through no breach by the
receiving party of its obligations under this Agreement or any
prior agreements between the parties hereto concerning
confidentiality;
(b) Is received from a third party who is legally free to disclose
such Confidential Information and who did not receive such
Confidential Information in confidence from the disclosing
party; or
(c) Is independently developed by the receiving party without
reference to the Confidential Information received from the
disclosing party.
5.4 PERMITTED DISCLOSURES. Notwithstanding any provision of this Article 5
to the contrary, in exercising the rights granted under this Agreement,
New Ceridian may disclose Confidential Information to third parties for
the purpose of obtaining Services permitted hereunder; provided,
however, that (i) New Ceridian provides prior written notice to
Ceridian setting forth the name of the third party and the reason for
the disclosure, and (ii) any such third party to whom such Confidential
Information is disclosed shall have first entered into a written
agreement imposing such obligations on the third party that are at
least as stringent as those imposed on the parties to this Agreement.
5.5 SUBPOENA OR DEMAND. Notwithstanding any provision of this Article 5 to
the contrary, a party to this Agreement may disclose Confidential
Information and/or Employee Benefits Information pursuant to a subpoena
or demand for production of documents in connection with any suit or
arbitration proceeding, any administrative procedure or hearing before
a governmental or administrative agency or instrumentality thereof, or
any legislative hearing or other similar proceeding, provided that the
receiving party shall promptly notify the disclosing party of the
subpoena or demand and provided further that in such instances, the
parties hereto use their reasonable best efforts to maintain the
confidential nature of the Confidential Information and/or Employee
Benefits Information by protective order or other means.
5.6 GOVERNMENT AUDIT. Notwithstanding any provision of this Article 5 to
the contrary, a party to this Agreement may disclose Confidential
Information (other than information which is not required by U.S.
Government regulations to be made available to U.S. Government auditors
(e.g., internal audit reports)) to U.S. Government auditors upon
request during the performance of a governmental audit or review of any
U.S. Government contract of such party in the normal course of the
audit function and according to standard practices; provided that
prompt notice of the disclosure of such information shall be given
prior to such disclosure to the party from which the information was
obtained.
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ARTICLE 6.
LIMITATION OF LIABILITY; INDEMNITY
6.1 LIMITATION ON LIABILITY. New Ceridian shall have no liability to
Ceridian or any third party in connection with the provision of the
Services except to the extent such Services were provided in breach of
New Ceridian's Standard of Care and, in such a case, only to the extent
of the following:
(a) a dollar amount limited to the amount of insurance proceeds
paid to New Ceridian therefor from a third party insurance
company, and
(b) at the option of Ceridian, New Ceridian shall either:
(i) perform again the particular Service performed in
breach of the Standard of Care at no cost to
Ceridian, or
(ii) give Ceridian a refund of the portion of the Service
Charge attributable to the cost of performance of the
Service provided in breach of the Standard of Care.
IN NO EVENT SHALL NEW CERIDIAN BE LIABLE IN CONNECTION WITH ITS
PROVISION OF THE SERVICES FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING ANY FINES OR PENALTIES PAYABLE BY CERIDIAN TO ANY
GOVERNMENT AUTHORITY, OR FOR ANY LOSS OF PROFITS OR OTHER ECONOMIC
DAMAGES.
6.2 INDEMNITY. Ceridian hereby agrees to indemnify and hold New Ceridian
and its Affiliates, officers, directors, agents and employees
(collectively, the "INDEMNITEES") harmless from and against any and all
liabilities, losses, damages, expenses, fines and penalties of any
kind, including reasonable attorneys' fees and disbursements, incurred
by the Indemnitees either:
(a) as the result of any claim made against the Indemnitees by any
third party arising out of New Ceridian's provision of the
Services (except to the extent, and only to the extent, of New
Ceridian's liability to Ceridian for the respective Service as
provided in Section 6.1 above); and/or
(b) arising out of Ceridian's negligence or malfeasance in
connection with its use of the Services.
ARTICLE 7.
MISCELLANEOUS
7.1 INSURANCE. Except as may otherwise be provided in the Distribution
Agreement, New Ceridian shall procure and maintain fire, extended
casualty, public liability, worker's compensation, employer's liability
and such other types of insurance which are reasonably necessary to
protect itself consistent with past practice (which may include
self-insurance).
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7.2 AUDIT RIGHT. Upon reasonable prior written requests, Ceridian shall
have the right to audit New Ceridian's calculations and schedules
thereto, of the costs and expenses for the Services provided hereunder.
Upon the request of Ceridian, New Ceridian shall provide Ceridian with
copies of invoices relating to any third party costs and expenses
relating to the Services.
7.3 FORCE MAJEURE. Neither Ceridian nor New Ceridian shall be liable for
any delays in its performance hereunder caused by events beyond its
reasonable control (each a "FORCE MAJEURE EVENT") including, without
limitation: acts of God, acts of government, fire, equipment breakdown,
strikes or other similar labor disputes (settlements of which shall be
in the sole discretion of the employer), or the inability to acquire
materials or third-party services. Upon the occurrence of any event
which is reasonably expected to or does cause a delay in the
performance hereunder, the person or party hereto whose performance is
or may be delayed shall give prompt written notice thereof to the other
party to this Agreement. The parties hereto shall use reasonable
efforts to cooperate and minimize the impact of such Force Majeure
Event on the provision of the Services.
7.4 DISPUTES. In the event any dispute arises out of or in connection with
the execution, interpretation, performance or nonperformance of this
Agreement, New Ceridian and Ceridian agree to settle such dispute as
follows. The appropriate Contact Persons for such dispute shall
negotiate in good faith for a reasonable period of time to settle such
dispute; provided, however, such reasonable period shall not, unless
otherwise agreed by the parties in writing, exceed thirty (30) days
from the time the parties began such negotiations. If after such
reasonable period the Contact Persons are unable to settle the dispute,
New Ceridian and Ceridian agree to settle such dispute in accordance
with the dispute resolution mechanism set forth in Article VI of the
Distribution Agreement.
7.5 CONSENT TO JURISDICTION. Without limiting the provisions of Section 7.4
hereof, each of the parties hereto irrevocably submits to the exclusive
jurisdiction of (a) the District Court, County of Hennepin, Fourth
Judicial District, State of Minnesota, and (b) the United States
District Court for Minnesota in Minneapolis, Minnesota, for the
purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby. Each of the parties
agrees to commence any action, suit or proceeding relating hereto
either in the United States District Court for Minnesota in
Minneapolis, Minnesota or if such suit, action or other proceeding may
not be brought in such court for jurisdictional reasons, in the
District Court, County of Hennepin, Fourth Judicial District, State of
Minnesota. Each of the parties further agrees that service of any
process, summons, notice or document by U.S. registered mail to such
party's respective address set forth below shall be effective service
or process for any action, suit or proceeding in Minnesota with respect
to any matters to which it has submitted to jurisdiction in this
Section 7.5. Each of the parties irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby
in (i) the District Court, County of Hennepin, Fourth Judicial
District, State of Minnesota, or (ii) the United States District Court
for Minnesota in Minneapolis, Minnesota and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such
court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenience forum.
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7.6 BOOKS AND RECORDS. New Ceridian shall, upon reasonable notice and
during normal business hours, allow Ceridian's financing personnel
reasonable access to its books, records and other information necessary
to confirm the calculation of the compensation and reimbursement due
New Ceridian hereunder.
7.7 COMPLETE AGREEMENT; CONSTRUCTION. This Agreement, including the
Schedule attached hereto, shall constitute the entire agreement between
the parties with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings with
respect to such subject matter. In the event of any inconsistency
between this Agreement and the Schedule attached hereto, the Schedule
shall prevail.
7.8 NOTICES. All notices and other communications hereunder shall be in
writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the
parties at the following addresses (or at such other addresses for a
party as shall be specified by like notice) and will be deemed given on
the date on which such notice is received:
TO CERIDIAN:
9705 Patuxent Woods Drive
Columbia, MD 21046-1572
Fax: (412) 312-8613
Attn: General Counsel
TO NEW CERIDIAN:
3311 E. Old Shakopee Road
Minneapolis, MN 55425-1640
Fax: (952) 853-7272
Attn: General Counsel
7.9 WAIVERS. The failure of any party to require strict performance by any
other party of any provision in this Agreement will not waive or
diminish that party's right to demand strict performance thereafter of
that or any other provision hereof.
7.10 AMENDMENTS. Subject to the terms of Section 2.3 hereof, this Agreement
may not be modified or amended except by an agreement in writing signed
by each of the parties hereto.
7.11 ASSIGNMENT. This Agreement shall not be assignable, in whole or in
part, directly or indirectly, by any party hereto without the prior
written consent of the other parties hereto, and any attempt to assign
any rights or obligations arising under this Agreement without such
consent shall be void.
7.12 SUCCESSORS AND ASSIGNS. The provisions to this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
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7.13 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF MINNESOTA.
7.14 SEVERABILITY. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable
provisions.
7.15 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture
between the parties, it being understood and agreed that no provision
contained herein, and no act of the parties, shall be deemed to create
any relationship between the parties other than the relationship of
buyer and seller of services nor be deemed to vest any rights, interest
or claims in any third parties. The parties do not intend to waive any
privileges or rights to which they may be entitled.
7.16 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and delivered to
the other parties.
7.17 CONFLICT WITH PERSONNEL AGREEMENT. In the event of a conflict between
the provisions of this Transition Services Agreement and the provisions
of the Personnel Agreement, the provisions of the Personnel Agreement
shall control.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
CERIDIAN CORPORATION
By:
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Its:
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NEW CERIDIAN CORPORATION
By:
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Its:
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SCHEDULE A
SERVICES
<TABLE>
<CAPTION>
DURATION OF SERVICE
FOLLOWING DISTRIBUTION
SERVICE DESCRIPTION DATE SERVICE CHARGE CONTACT PERSONS(1)
----------------------------------------- ------------------------ ------------------------ -----------------------------
<S> <C> <C> <C>
The following Tax Services: One Year $250,000 per year J. Burkle
(New Ceridian)
- US, state and local income tax
return preparation, including W. Walsh
quarterly estimated tax filings (Ceridian)
and declarations for fiscal year
2001 for Ceridian and Scarborough
JV
- State and local monthly sales and
use tax return preparation and
filings
- State and local property tax
filings
- Accounting for Income Taxes in
accordance with FASB 109,
including quarterly income
tax provision computations and
interactions with Ceridian's CPA
firm
- International tax planning and
coordination with local tax
experts and authorities
- As necessary, quarterly and year
end tax meetings with Ceridian's
senior management
- Tax research and planning as
required
- Includes fixed asset system
- Includes Fixed Asset System
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Stockholder Services Six Months $1,000 per month A. Stark
(New Ceridian)
- Legal Transfers - includes:
Transfer shares to another
shareholder; J. Dwyer (Ceridian)
Transfer shares from a
custodian to a minor who
is now of age;
Transfer shares from a
deceased individual or
joint tenants;
Legal name change
- Replacement of lost, missing,
stolen or non-receive stock
stock certificates
- Escheatment of accounts
- Tax questions regarding
cost basis
- Stock-splits
- Stock exchanges from
acquisitions
- Historical information
regarding financial
information, acquisitions and
divestitures, old stock
and bond issue
- Assist with transfer agent's
shareholder database
Stock Option Administration: Unless specifically $2,000 per month, S. Groehler
indicated below, regardless of the (New Ceridian)
services will be for early termination of
six months other services J. Dwyer
(Ceridian)
- Complete the reverse spin January 26, 2001
adjustments and balancing
of all Ceridian outstanding
stock options
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- Provide a new Equity Edge software February 15, 2001
database (post-reverse spin of
outstanding options; current and
initial HR information on
optionees; plan guidelines) to
Ceridian
- Prepare post-reverse spin January 26, 2001
conversion statements for
Ceridian optionees
- Complete 2000 year-end reporting 2 months
along with W. Olson (including
FAS 123) and balancing for
Ceridian both for pre- and post
reverse spin
- Complete stock option exercises 1.5 months
until transfer of database,
provided Ceridian has decided
which broker(s) they wish to use
and how they will handle incoming
option funds (option price and tax
withholding), account balancing
and journal entry transaction
input, tax deductions and bank
account balancing Ceridian will
also need to decide if they will
use newly issued shares or
Treasury shares
- Provide copies of agreements for March 1, 2001
outstanding Ceridian optionees
- Provide backup copy of year-end March 1, 2001
reporting and FAS 123 reporting
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- Assist Ceridian in working with 2 months
E*Trade or other outside
outsourcing vendor in preparation
for taking over administration
- Will agree to enter in (after
February 15, 2001) one new set of
annual awards if determined and
approved by Ceridian compensation
committee prior to releasing
Ceridian database to outsourcing
vendor (if first vesting does not
occur for at least 6 months from
award date); data must be
provided from Ceridian with all
required information.
- Will provide phone consulting
services for Ceridian administrator
and/or outsourcing vendor
EIP (Deferred Compensation) Two Months $1,000 B. McDowell
Administration Services (New Ceridian)
(assumes same plan design as New K. Ross
Ceridian) (Ceridian)
OPEN ENROLLMENT:
- Determine eligibility and provide
The Benefits Group (TBG) with a
census report
- TBG prepares enrollment packages
- New Ceridian Executive
Compensation Department (EC)
notifies Ceridian Payroll of
contributions
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- EC notifies Ceridian HR office to
set deferred compensation flag on
Ceridian HR Database
- EC sends confirmations to Ceridian
participants via e-mail regarding
their contributions
- EC provides Ceridian Pensions with
a list of participants
NEWLY HIRED:
- EC prepares enrollment packages
following above procedure for newly
eligible employees per Ceridian's
instructions
TERMINATIONS/RETIREMENTS
- EC notifies TBG of termination
requesting valuation
- TBG notifies employee requesting
authorization for payment form be
completed and returned
- EC processes distribution through
Trustee of EIP
ONGOING
- Monthly, EC tracks contributions
and audits bank reports
- Quarterly, EC provides current
addresses for quarterly reports and
audits those reports
Note: If different plan design,
we would be
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<PAGE>
interested in assisting you,
however, we would have to
understand what is involved before
quoting a price.
- Train appropriate personnel
Employee Stock Purchase Plan Six Months $1,000 per Offering C. Niesen
Administration Services Period (New Ceridian)
GENERAL: Offering Periods: J. Marshall and J. Dwyer
- Calculate purchase price, max 1/16/01 - 3/15/01 (Ceridian)
number of shares per participant 3/16/01 - 6/15/01
and limit
- Complete summary report and
forward to Ceridian HR and Finance
- Receive file on disk from payroll
- Complete Merrill Lynch information
worksheet
- Forward disk and worksheet to
Merrill Lynch
- Train designated Ceridian personnel
- Prepare Management Reports
DISQUALIFYING DISPOSITIONS:
- Ceridian Application Services (CAS) One Year $1,875 per year
will produce a file with name/ (includes CAS charges)
address of Ceridian employees
who have transferred stock during
the year
- Letters sent to Ceridian employees
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- Returned letters are used to
update file who transferred or
disposed of shares
- Letters sent to Ceridian employees
informing them of total dollar
amount to be included on W2
- Provide report to Ceridian Tax
Dept
- Train designated Ceridian personnel
Risk Management Consulting Six Months $1,000 per month B. Glaser
(New Ceridian)
- Training and consultation to
personnel designated with this M. Reilly
responsibility (Ceridian)
Pension Plan Calculations Services: Six Months $150 per calculation C. Dockendorf and T.
McNamara
- Preparation of pension estimates (New Ceridian)
and final calculations, including
trustee notifications W. Mello
(Ceridian)
Pension Plan Consulting Services: Six Months $1,000 per month C. Dockendorf
(New Ceridian)
- Assistance with establishing
pension calculation procedures J. Marshall
following transition services (Ceridian)
- Miscellaneous consulting on
pension administration
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Pension Systems Support Services: Six Months $600 per month D. Deraney and
S. Schott
- Monthly compensation and (New Ceridian)
demographic updates to WyPen to
support pension calculation Arbitron System Support
administration (Ceridian)
Pension Plan Qualified Domestic Six Months $350 per QDRO per plan C. Dockendorf
Relations Orders Services: for legal review, PLUS (New Ceridian)
fully-loaded costs for
- Preparation of Qualified Domestic actuarial J. Marshall (Ceridian)
Relations Order (QDRO) calculations, if
calculations. required, and $100 for
payment commencement
administration
401(k) Asset Transfer Services: Two Months $2,000 per month C. Dockendorf
(New Ceridian)
- Manage records and asset transfer
from New Ceridian 401(k) plans to J. Marshall (Ceridian)
Ceridian 401(k) plan
Benefits Reporting Six months C. Dockendorf
(New Ceridian)
- Training and consulting regarding
statutory mandated reporting J. Dwyer
requirements (5500's) (Ceridian)
Job Pricing Services Six Months to - No charge for T. Lynch
One Year survey data (New Ceridian)
- Ceridian to have access from New - Job pricings and
Ceridian to Radford, Towers, & stock option K. Ross
Hewitt Exec. Comp. Surveys (Also analysis (i.e., (Ceridian)
Towers Stock Option Data Base) grant ranges,
grant pools,
etc.) $300/hour
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- EC to gather and analyze market - Pass-through
data for requested Ceridian charges only if
executive positions and make services of
recommendations consulting firm
is required
Diversity Resources Services: N. Anderson
(New Ceridian)
- External and Internal Complaint One Year $100 per hour
Administration K. Ross
(Ceridian)
- Establish ADR Process Two Months $1,000 per month
Legislative Monitoring and Analysis One Year $30,000 per year J. O'Connell
(New Ceridian)
W. Walsh
(Ceridian)
</TABLE>
(1) The parties to this Agreement agree that either party may upon prior written
notice to the other party substitute or replace the Contact Persons identified
on this Schedule A.
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