Exhibit 10.21
INDEMNIFICATION AGREEMENT
This Agreement, made and entered
into as of the
day of , 20 ,
(“Agreement”), by and between Ceridian Corporation, a
Delaware corporation
(“Company”), and
(“Indemnitee”):
WHEREAS, highly competent persons
may be reluctant to serve publicly-held corporations as directors
or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against
risks of claims and actions against them arising out of their
service to and activities on behalf of such corporations;
and
WHEREAS, the Board of Directors of
the Company has determined that difficulties in attracting and
retaining such persons are detrimental to the best interests of the
Company’s stockholders and that the Company should act to
assure such persons that there will be increased certainty of such
protection in the future; and
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so
indemnified; and
WHEREAS, Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that Indemnitee be so
indemnified;
NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement the
following terms shall have the meaning given here:
1.01 “Board” shall mean
the Board of Directors of the Company.
1.02 “Change of Control”
shall mean the first of the following events to occur:
|
|
(a)
|
there is
consummated a merger or consolidation to which the Company or any
direct or indirect subsidiary of the Company is a party if the
merger or consolidation would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) less than 60% of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation; or
|
|
|
(b)
|
the direct or
indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act” ) in the aggregate of securities of the Company
representing twenty percent (20%) or more of the total
combined voting power of the Company’s then issued and
outstanding securities is acquired by any person or entity, or
group of associated persons or entities acting in concert;
provided, however, that for purposes hereof, the following
acquisitions shall not constitute a Change of Control: (A) any
acquisition by the Company or any of its subsidiaries, (B) any
acquisition directly from the Company or any of its subsidiaries,
(C ) any acquisition by any employee benefit plan (or related trust
or fiduciary) sponsored or maintained by the Company or any
corporation controlled by the Company, (D) any acquisition by
an underwriter temporarily holding securities pursuant to an
offering of such securities, (E) any acquisition by a
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company, (F) any acquisition in
connection with which, pursuant to Rule 13d-1 promulgated pursuant
to the Exchange Act, the individual, entity or group is permitted
to, and actually does, report its beneficial ownership on Schedule
13G (or any successor Schedule); provided that, if any such
individual, entity or group subsequently becomes required to or
does report its beneficial ownership on Schedule 13D (or any
successor Schedule), then, for purposes of this paragraph, such
individual, entity or group shall be deemed to have first acquired,
on the first date on which such individual, entity or group becomes
required to or does so report on Schedule 13D, beneficial ownership
of all of the voting securities of the Company beneficially owned
by it on such date, and (G) any acquisition in connection with
a merger or consolidation which, pursuant to paragraph
(1) above, does not constitute a Change of Control;
or
|
|
|
(c)
|
there is
consummated a transaction contemplated by an agreement for the sale
or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets
to an entity, at least 60% of the combined voting power of the
voting securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of the
Company immediately prior to such sale; or
|
|
|
(d)
|
the
stockholders of the Company approve any plan or proposal for the
liquidation of the Company; or
|
- 2 -
|
|
(e)
|
a change in the
composition of the Board such that the “Continuity
Directors” cease for any reason to constitute at least a
majority of the Board. For purposes of this clause,
“Continuity Directors” means (A) those members of
the Board who were directors on the date hereof and (B) those
members of the Board (other than a director whose initial
assumption of office was in connection with an actual or threatened
election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company)
who were elected or appointed by, or on the nomination or
recommendation of, at least a two-thirds (2/3) majority of the
then-existing directors who either were directors on the date
hereof or were previously so elected or appointed; or
|
|
|
(f)
|
such other
event or transaction as the Board shall determine constitutes a
Change of Control.
|
1.03 “Corporate Status”
describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving at the
express written request of the Company, and includes the status of
a person who served as a director of Arbitron Inc. (previously
known as Ceridian Corporation) prior to the distribution to each of
Arbitron Inc.’s shareholders all shares of the
Company’s common stock on March 30, 2001 but only to the
extent that such service relates to such distribution or the New
Ceridian Business (as defined in the Distribution Agreement between
Arbitron Inc. and the Company, dated as of February 14,
2001).
1.04 “Disinterested
Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
1.05 “Effective Date”
means
,
20 .
1.06 “Enterprise” shall
mean the Company and any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the express written request of the
Company as a director, officer, employee, agent or
fiduciary.
1.07 “Expenses” shall
include all reasonable attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other
disbursements, costs, expenses and obligations paid or incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
1.08 “Good Faith” shall
mean Indemnitee having acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal
Proceeding, having had no reasonable cause to believe
Indemnitee’s conduct was unlawful.
- 3 -
1.09 “Independent
Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is,
nor in the past five years has been, retained to represent:
(i) the Company or Indemnitee in any matter material to either
such party, or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this
Agreement.
1.10 “Proceeding”
includes any action, suit, arbitration, alternate dispute
resolution mechanism. investigation, administrative hearing or any
other actual, threatened or completed proceeding whether civil,
criminal, administrative or investigative, other than one initiated
by Indemnitee. For purposes of the foregoing sentence, a
“Proceeding” shall not be deemed to have been initiated
by Indemnitee where Indemnitee seeks to enforce Indemnitee’s
rights under this Agreement pursuant to Article VIII of this
Agreement.
ARTICLE II
TERM OF AGREEMENT
This Agreement shall continue until
and terminate upon the later of: (i) 10 years after the date
that Indemnitee shall have ceased to serve as a director, officer,
employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which Indemnitee served at the express
written request of the Company; or (ii) the final termination
of all pending Proceedings in respect of which Indemnitee is
granted rights of indemnification or advancement of expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to
Article VIII of this Agreement relating thereto.
ARTICLE III
SERVICES BY INDEMNITEE, NOTICE OF
PROCEEDINGS
3.01 Services. Indemnitee agrees to
serve as a director. Indemnitee may at any time and for any reason
resign from such position (subject to any other contractual
obligation or any obligation imposed by operation of
law).
3.02 Notice of Proceeding.
Indemnitee agrees promptly to notify the Company in writing upon
being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder.
- 4 -
ARTICLE IV
INDEMNIFICATION
4.01 In General. If, by reason of
Indemnitee’s Corporate Status, Indemnitee was or is, or is
threatened to be made, a party to any proceeding by reason of
Indemnitee’s Corporate Status, the Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law in
effect on the date hereof and to such greater extent as applicable
law may thereafter from time to time permit. Such right of
indemnification shall include, but not be limited to, the rights
set forth in Sections 4.02, 4.03, 4.04 and 4.05 hereof.
4.02 Proceedings Other Than
Proceedings by or in the Right of the Company. Indemnitee shall be
entitled to the rights of indemnification provided in this
Section 4.02 if, by reason of Indemnitee’s Corporate
Status, Indemnitee was or is, or is threatened to be made, a party
to any Proceeding, other than a Proceeding by or in the right of
the Company. Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines, ERISA excise taxes or penalties and
amounts paid in settlement (including all interest, assessments,
and other charges paid or payable in connection with or in respect
of such Expenses), actually and reasonably incurred by Indemnitee
or on Indemnitee’s behalf in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in Good
Faith.
4.03 Proceedings by or in the Right
of the Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 4.03 if, by reason of
Indemnitee’s Corporate Status, Indemnitee was or is, or is
threatened to be made, a party to any Proceeding brought by or in
the right of the Company to procure a judgment in its favor.
Indemnitee shall be indemnified against Expenses, judgments,
penalties, fines, ERISA excise taxes or penalties, and amounts paid
in settlement (including all interest, assessments, and other
charges paid or payable in connection with or in respect of such
Expenses), actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with such Proceeding or any
claim issue or matter therein if Indemnitee acted in Good Faith.
Notwithstanding the foregoing, no such indemnification shall be
made in respect of any claim, issue or matter in such Proceeding as
to which Indemnitee shall have been adjudged to be liable to the
Company if applicable law prohibits such indemnification; provided,
however, that, if applicable law so permits, indemnification shall
nevertheless be made by the Company in such event if and only to
the extent that the Court of Chancery of the State of Delaware, or
the court in which such Proceeding shall have been brought or is
pending, shall determine.
4.04 Indemnification of a Party Who
is Wholly or Partly Successful. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee was or is, by
reason of Indemnitee’s Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified to the maximum extent permitted by
law, against all Expenses, judgments, penalties, fines, ERISA
excise taxes or penalties, and
