SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-K

               Annual Report Pursuant to Section 13 or 15(d)
                  of the Securities Exchange Act of 1934
                For the fiscal year ended December 31, 1993

                       Commission File Number 1-1969

                           CERIDIAN CORPORATION

          (Exact name of Registrant as specified in its charter)

                     Delaware                      52-0278528
     (State or other jurisdiction of         (I.R.S. Employer
Identification No.)
     incorporation or organization)

                          8100 34th Avenue South
                       Minneapolis, Minnesota 55425
                 (Address of principal executive offices)
                      Telephone No.:  (612) 853-8100


        Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class:                    Name of each exchange on which
registered:
Common Stock, par value $.50 .........  New York Stock Exchange, Inc.; The
Chicago
                                        Stock Exchange; and Pacific Stock
Exchange
Depositary Shares, each representing a  One One-Hundredth
Interest in a Share of 5/% Cumulative Convertible
Exchangeable Preferred Stock, Par Value $100      New York Stock Exchange,
Inc.
5/% Cumulative Convertible
Exchangeable Preferred Stock, Par Value $100      None
5/% Convertible Subordinated Debentures Due 2008       None

Has the Registrant (1) filed all reports required by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months and (2)
been subject to such filing requirements for the past 90 days.    Yes   X
No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [  ]

The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of February 28, 1994 was $997,500,000.

The shares of Common Stock outstanding as of February 28, 1994 were
44,334,657.
                    DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1993 Annual Report to Stockholders of Registrant: Parts I & II
Portions of the Proxy Statement for Annual Meeting of Stockholders, May 11,
1994:  Parts III and IV

CERIDIAN CORPORATION PART I Item 1. Business. Ceridian Corporation ("Ceridian" or the "Company"), known as Control Data Corporation until June 1992, has been significantly reshaped through divesting or discontinuing various business units and by narrowing and reorienting the focus of certain of its continuing operations. As a result of these reshaping efforts, the Company is comprised of two business segments, Information Services and Defense Electronics, and operates with approximately one-fourth the revenue, assets and employees employed five years ago. Information Services Segment The Information Services segment provides technology-based services on a repetitive or subscription basis and consists of Ceridian Employer Services ("Employer Services") and The Arbitron Company ("Arbitron"), and two other services businesses that are not material to the Company's operations. The Information Services businesses collect, manage and analyze data on behalf of customers, and report information resulting from that process to customers. The products and services provided by the Information Service businesses address specified information management needs of other businesses to enable them to operate more efficiently and effectively. The technology-based products and services of the Information Services businesses are typically provided through long-term customer relationships that result in a high level of recurring revenue. Information regarding Information Services' revenue, operating profit or loss and identifiable assets for the years 1991-1993 is in Note G, "Segment Data," on page 44 of the Company's 1993 Annual Report to Stockholders, which is incorporated herein by reference. Employer Services. Employer Services offers a broad range of services designed to help employers manage their work forces more effectively, including payroll processing, payroll tax filing, human resource information services and employee assistance programs. Employer Services' revenue for the years 1991, 1992 and 1993 was $191.3 million, $209.9 million and $232.6 million, respectively. Markets. The employer services market covers a comprehensive range of information management and employer/employee assistance services, including payroll and payroll-related services, human resource information services and benefit plan management services. The market for these services is expected to continue to grow as companies continue to outsource administrative services. The factors driving this movement toward outsourcing include the increasing scope and complexity of legislation regulating businesses and their employees, the rising costs of providing payroll and other employer services in-house and the introduction of new types of employer services. - 1 -

Traditionally, the employer services market consisted of payroll processing, payroll tax filing and other services that were transaction- based, generally routinized and technology-oriented. These types of services continue to account for a significant portion of the employer services market and demand for these services continues to grow. In 1992, the payroll services market alone was estimated at $2.75 billion, which excludes the sizeable portion of the overall payroll market that was supported in-house rather than outsourced through third party providers. The employer services market is expanding into other value-added services that address other aspects of the employment relationship, such as human resource administration, benefits administration, compensation, staffing, training development and employee relations. Many employers seek to combine records for payroll and these value-added services to create a single database of employee information for on-line inquiry, updating and reporting in areas important to human resource administration and management. Employer Services believes that the ability to provide a number of these other services and to integrate payroll and human resource information databases can be an important factor in customer retention because it provides customers with a stronger connection to their payroll service provider and offers a means to distinguish its service from others provided in the market. Accordingly, it is increasingly important for companies in the employer services market, particularly for those targeting medium and large employers, to offer a wide range of services that are designed to address a broad spectrum of employer services needs. The Company segments the employer services market by classifying employers into three categories: small (fewer than 100 employees), medium (100 to 5,000 employees) and large (over 5,000 employees). Small employers in the payroll services market are relatively price sensitive, tend to focus more narrowly on payroll services and payroll tax filing and have low costs in switching from one provider to another. Medium and large employers generally require more complex, customized payroll services, have a greater need for additional services and integrated databases and have higher costs in switching from one provider to another. Services. A substantial portion of Employer Services' revenue is attributable to payroll processing and payroll tax filing services. During 1993, these services accounted for over 80% of Employer Services' total revenue. Payroll processing consists primarily of preparing and furnishing employee payroll checks, direct deposit advices and supporting journals, summaries and other reports. Payroll tax filing services consist primarily of processing federal, state and local withholding taxes on behalf of employers and remitting such taxes to the appropriate taxing authorities. These payroll-related services are typically priced on a fee-per-item- processed basis, and quarterly revenue consequently fluctuates with the volume of items processed. Employer Services also derives a portion of its payroll tax filing revenue from interest income it receives on tax filing deposits temporarily held pending remittance on behalf of customers to taxing authorities. As a result, quarterly revenue and profitability will vary as a result of changes in interest rates and in the amount of tax filing deposits held by Employer Services. The effect of interest rate - 2 -

changes on Employer Services' revenue from interest received on tax filing balances has been lessened somewhat during 1993 as the result of intermediate-term interest rate swap agreements entered into by the Company with respect to a portion of the tax filing balances. These agreements effectively convert the interest earned on such portion of the tax filing balances from a floating rate to a fixed rate basis. Nevertheless, because the volume of payroll items processed increases in the first and fourth quarters of each year in connection with employers' year-end reporting requirements, and because the amount of tax filing deposits also tends to be greater in the first quarter, Employer Services' revenue and profitability tend to be greater in those quarters. Payroll processing is currently conducted by Employer Services at its district offices located throughout the United States, all of which are linked in a nationwide network. Employer Services' payroll processing system operates on proprietary software developed by Employer Services, which is continuously updated to accommodate regulatory changes affecting payroll accounting. Employer Services' payroll system allows customers to input their own payroll data via personal computers, transmit the data on- line to Employer Services for processing, retrieve reports and data files from Employer Services and print reports and, in certain instances, payroll checks or direct deposit advices on site. Customers can also input payroll data by telephone or batch transmittal, with payroll checks and related reports prepared by Employer Services at one of its district processing centers. Employer Services' payroll system also interfaces with both customer and third-party transaction processing systems to facilitate services such as direct deposit of payroll checks. Through its Minidata Services, Inc. subsidiary ("Minidata"), the Company provides payroll services to customers in the mid-Atlantic states with fewer than 100 employees. Employer Services' human resource information service provides application software to customers that enables them to combine their payroll and human resource information databases. This enables the customer to create a single database of employee information for on-line inquiry, updating and reporting in areas important to human resource administration and management. Employer Services' employee assistance service provides confidential, around-the-clock assessment and referral services to customers' employees to help them address legal and financial problems, substance abuse, childcare, eldercare and other personal problems. Employer Services maintains a network of professional counselors who are available to work with employees to solve problems and to provide referrals to specialists if such referrals are warranted by the circumstances. Sales and Marketing. Employer Services markets its services through a direct sales force operating through more than 35 district offices. As of December 31, 1993, Employer Services had approximately 380 salespeople compared to approximately 300 salespeople as of December 31, 1992. Employer Services also has established marketing relationships with banks - 3 -

and accounting firms, pursuant to which Employer Services offers its services to the business clients of these entities. Employer Services markets its services by identifying customers that use or are contemplating using a third party service provider. Although Employer Services' most significant source of customer leads are referrals from existing customers and from the numerous banks and accounting firms with which it has relationships, it also identifies potential customers through newspaper articles, periodicals, trade publications and, to a limited extent, direct mailings. As of January 31, 1994, Employer Services had approximately 27,500 contracts with approximately 20,000 different customers from a wide range of industries and markets. Strategy. Employer Services' strategy is to improve its operating margins and revenue growth by: Investing in Technology. Employer Services believes that improved technology and greater automation will allow it to deliver its services more cost-effectively, provide it with greater operational and product flexibility, and result in more user-friendly processes, documents and reports. Because Employer Services' existing payroll processing and payroll tax filing processes incorporate older technology, these processes require a significant amount of manual processing of information and are relatively labor intensive to install, maintain and customize. In the second quarter of 1993, Employer Services began a multi-year project to redesign its payroll processing system software to provide a system that will be more highly automated, easier and less costly to install and maintain and will provide greater flexibility to customers in terms of product and service options. The Company is capitalizing the cost of this software development effort, and expects to begin amortization of the costs as certain developmental milestones are achieved beginning in 1994. To address Employer Services' needs with respect to its payroll tax filing system, in October 1993 the Company acquired Systems Tax Service, Inc. ("STS"), a California-based payroll tax filing processor with a highly automated tax filing system. All of Employer Services' 1994 payroll tax filing processing will be conducted on STS' more highly automated payroll tax filing system, and Employer Services' tax filing processing operations in Baltimore will be discontinued when 1993 processing is completed. Other recent actions to improve Employer Services' technology and automation have included the December 1992 acquisition of the software applications division of Revelation Technologies, Inc., which has enhanced Employer Services' human resources information software development capabilities. The Company also completed the conversion of Employer Services' printing operations from impact printers to laser printers in 1992, which has eliminated the need to carry check - 4 -

stock and forms and has improved the quality of the resulting documents. Employer Services believes that the redesign of its payroll processing system software and the creation of a new generation of human resources information software, including applications in client/server and Windows* environments, are multi-year projects, will require a relatively high level of investment in technology (much of which will be capitalized) and will entail certain risks inherent in software development projects generally. Consolidating Operations. Employer Services is seeking to realize additional operational efficiencies by consolidating the payroll processing activities conducted in its district centers into fewer regional centers, and by creating a national telephone service support center to more efficiently and effectively handle customer inquiries. Employer Services expects that the consolidation of the payroll processing operations will occur over a multi-year period in conjunction with the redesign of its payroll processing software, and enable it to both upgrade and make more effective use of its processing capacity. By creating a national telephone support center during 1994, Employer Services believes that it can improve customer service by creating a single point of contact for most customer inquiries, while at the same time eliminating inefficiencies inherent in the current system involving multiple points of contact. Restructuring charges of $18.9 million recorded by Employer Services in the fourth quarter of 1993 primarily consist of the anticipated costs of consolidating these operations. Increasing Productivity and Size of Sales Force. Employer Services believes that increasing the effectiveness of its sales and marketing efforts and expanding the size of its sales force will be important factors in achieving its profitability and growth objectives. Employer Services intends to increase the effectiveness of sales and marketing efforts by orienting them more toward medium and large employers, which tend to purchase a greater variety of services, require more flexibility and customization in services offerings and have higher costs associated with changing providers. At the same time, the previously described efforts to upgrade technology should also increase sales effectiveness by shortening the length of the sales/installation cycle and by building greater flexibility into service offerings. For small employers, Employer Services is evaluating expanding the Minidata payroll processing system into additional markets. Employer Services plans to introduce the Minidata system on a test basis into certain Southern California markets during 1994. * Windows is a trademark of Microsoft Corporation - 5 -

Expanding Human Resource Offerings. Employer Services believes that the introduction of additional human resource information management products and services which complement its existing products and services will play an important role in enabling it to achieve its profitability and growth objectives. Employer Services' goal is to identify the overall human resource information management needs arising out of the employment relationship, and address those needs through a broad range of integrated customer-driven solutions, such as outsourcing services, software applications and consulting services. The Company believes that broadening and integrating its product and service offerings should also play an important role in attracting and retaining customers by differentiating Employer Services from other service providers and by providing customers with a stronger connection to Employer Services. Making Strategic Acquisitions. To support its business strategy, Employer Services also intends to seek additional strategic acquisition opportunities that would allow it to either increase its market penetration, increase its technology or provide additional products. Over the last few years, Employer Services has made a number of strategic acquisitions, including STS in October 1993, Minidata in November 1991 and the software applications division of Revelation Technologies, Inc. in December 1992. Employer Services has also acquired a number of payroll service providers, including the customer bases of banks that are divesting their payroll service businesses. Employer Services also acquired, in December 1991, the employee assistance unit of Hazelden Foundation, which expanded Employer Services' customer base for employee assistance services. Competition. The employer services industry is characterized by intense competition in the small, medium and large employer segments of the market. Competitors in this market include national, regional and local third party providers, banks, divisions of diversified companies and in- house payroll processors. A substantial portion of the overall payroll market is supported in- house with the remainder supported by third party providers. Automatic Data Processing, Inc. ("ADP") is the dominant third party provider in the payroll market, with Employer Services and Paychex, Inc. ("Paychex") comprising the other two large, national providers. ADP and Employer Services serve all segments of the payroll market, while Paychex focuses on the small employer segment of the market. The remainder of the third party payroll market is highly fragmented and is represented by smaller regional and local competitors. There is significant industry consolidation as the larger national providers acquire smaller regional and local providers and as banks sell their payroll service operations. In addition, software companies have begun marketing application software to customers that allows these customers to support their payroll services in-house. - 6 -

The market for the non-payroll portion of the employer services industry is evolving and is not dominated by any one competitor. Rather, these markets are highly fragmented and, with respect to employee assistance programs, are dominated by small local providers. Currently, the principal competitive factors in the employer services market are price, quality and service. Employer Services believes that it is able to compete effectively in the overall employer services market with respect to all of these competitive factors. On average, during the last three years, customers generating 86% of Employer Services' payroll processing and tax filing revenue during any single year continued as customers in the following year. This percentage has increased in each of the last four years. In addition, Employer Services offers a range of services in addition to payroll processing and payroll tax filing services, and Employer Services believes that offering a broad range of human resource information management products and services will become an increasingly important competitive factor, particularly with respect to medium and large employers. Employer Services' ability to continue to compete effectively in the employer services market will depend to a large part on its ability to implement and effectively use new technology, offer new, innovative services and improve its sales efforts and visibility in this market. Arbitron. Arbitron is the leading provider of radio audience measurement information in terms of revenue and market share, and also provides media and marketing information to radio and television broadcasters, cable operators, advertising agencies and advertisers. Arbitron's proprietary data regarding radio audience size and demographics is provided to customers through multi-year subscription agreements. In addition, through various joint ventures and licensing arrangements, Arbitron has access to services that monitor television and other commercials and provide data regarding product purchasing decisions. Arbitron's revenue for the years 1991, 1992 and 1993 was $201.7 million, $178.3 million and $172.2 million, respectively. In October 1993, the Company announced the discontinuance of Arbitron's syndicated television and cable ratings service, effective the end of 1993. Through this service, Arbitron had provided local market television and cable audience measurement information gathered electronically and through written diaries. This service provided approximately 26% of Arbitron's 1993 revenue. Additional information regarding the discontinuance of this service is on page 23 of the Company's 1993 Annual Report to Stockholders, which is incorporated herein by reference. Markets. Because of the significant amounts spent by advertisers on radio advertising, radio broadcasters, advertising agencies and advertisers all have a strong interest in information regarding the size and composition of audiences for radio broadcasts. Nevertheless, the market for audience measurement of radio broadcasts, from which Arbitron currently derives most of its revenue, has grown slowly in recent years due in large - 7 -

measure to economic conditions, consolidation within the radio broadcast industry, and competition from other forms of media. As advertisers increasingly seek to tailor advertising strategies to target specific demographic groups through specific media, and as audiences become more fragmented with increased programming choices, the audience information needs of radio broadcasters, advertising agencies and advertisers become more complex. Increasingly, more detailed information regarding the demographics and buying behavior of audiences is required, as well as more sophisticated means to analyze such information. These trends are not confined to the radio broadcast industry, but also affect other media. As the importance of reaching niche audiences with targeted marketing strategies increases, broadcasters, publishers, advertising agencies and advertisers are requiring that information regarding exposure to advertising be provided on an individualized rather than a household basis and that such information be coupled with information regarding shopping patterns and purchaser behavior. The need for such qualitative information may create opportunities for innovative approaches to satisfy these information needs. Sales and Marketing. Arbitron is the leading supplier of radio audience measurement services, and provides these services to approximately 2,000 radio stations and 2,500 advertising agencies. Arbitron markets its products and services through a direct sales force operating through offices in six cities around the U.S. As of December 31, 1993, Arbitron had 60 salespeople. Contracts with customers vary in length from one to seven years. Services. Arbitron estimates audience size and demographics in the U.S. for local radio stations, and reports this and related data to its customers. This information is used by radio stations to price and sell advertising time and by advertising agencies and large corporate advertisers in purchasing advertising time. Arbitron also provides software applications and analytical services to assist subscribers in understanding and using this data. Arbitron uses listener diaries to gather radio listener data from sample households in the 261 local markets for which it currently provides radio ratings. Respondents mail the diaries to Arbitron's processing center in Laurel, Maryland, where Arbitron compiles periodic audience measurement estimates. The Company believes that the proprietary database which Arbitron has developed and maintains through its position as the leading provider of radio audience measurement data in the U.S. is a very valuable asset. The radio audience measurement service represents more than 90% of Arbitron's revenue, after taking into account the discontinuance of Arbitron's television and cable ratings service and the transfer of the majority of Arbitron's commercial monitoring revenue to the Competitive Media Reporting ("CMR") joint venture established with VNU Business Information Services, Inc. ("VNU"). Additional information regarding this transfer to CMR is on pages 24 and 25 of the Company's 1993 Annual Report to Stockholders, which is incorporated herein by reference. - 8 -

Because Arbitron believes it will become increasingly important to address the more comprehensive information needs of the broadcast industry, it has entered into several cooperative arrangements in recent years. Through its CMR joint venture, Arbitron has access to services which: (i) monitor television, radio, newspaper, magazine and billboard advertisements and compile information regarding advertising expenditures for broadcasters, publishers, advertising agencies, and advertisers, (ii) provide copies of broadcast commercials (video and audio as well as storyboards), (iii) compile video clips of news events, and (iv) track the amount of space and the estimated cost of advertisements in newspapers, magazines, outdoor advertising and other print media. In December 1991, Arbitron entered into a five-year license with VNU as to certain markets, including exclusive rights as to radio broadcasters, to market the "Scarborough Report," which provides information regarding product/service usage and media usage in 55 major U.S. markets. The Scarborough Report measures products purchased based on a sample of consumers in the relevant markets. Arbitron has also entered into a cross license with Information Resources, Inc. ("IRI"), under which Arbitron may obtain point-of-sale packaged goods purchasing information gathered by IRI and resell this information on a royalty-free basis to broadcasters. Strategy. Arbitron's primary strategy is to maintain its competitive position, increase its revenue and strengthen its profitability by: Enhancing Radio Audience Measurement. Arbitron intends to enhance its radio audience measurement service so as to increase the value of that service to customers and increase Arbitron's radio-related revenue. Arbitron has announced plans to increase the sample size of its radio surveys by 70% over the next three years. Expanding the size of its diary-based surveys is a cost-effective means of enhancing the reliability of its audience estimates. Arbitron has also introduced a new personal computer-based application that gives radio broadcasters flexible and unlimited access to Arbitron's database, and enables them to more effectively analyze that information and develop sales strategies for maximum effectiveness. Arbitron also plans to develop applications that will enable customers to link information provided by Arbitron's database with other information from other databases (such as product movement information) so as to enable customers to further refine sales strategies and compete more effectively for advertising dollars. Introducing Qualitative Services. Arbitron is beginning to test market in certain smaller markets a new, locally oriented, qualitative audience research service. The goal of this service is to provide a profile of the broadcast audience in terms of local media, retail and consumer preferences so that local broadcasters will have information that helps them develop targeted sales and programming strategies to attract a larger share of the marketing dollars spent by local advertisers. The service will be diary and questionnaire based, and will also involve telephone surveys of participants. As such, the investment required to initiate this service during 1994 and to expand it in following years is expected to be relatively low. - 9 -

Utilizing Cooperative Arrangements. Arbitron intends to further develop its capabilities and technologies through alliances and licensing arrangements that will enable it to gather, analyze and integrate broadcasting, product purchasing and advertising data from various sources and provide the comprehensive information and systems that broadcasters, advertising agencies and advertisers require to market their products more effectively. In this regard, Arbitron is involved in the very early stages of a cooperative effort to develop a passive, personalized electronic measurement device to record broadcast listening or viewing. Arbitron's annual investment being directed toward this development effort is relatively low. Competition. Arbitron does not currently have any major competitors for its radio audience measurement service, although a competing radio audience measurement service utilizing a different methodology is seeking to establish itself. Arbitron also competes with providers of other forms of research used by broadcasters, advertising agencies and advertisers. Other Services. The Company's TeleMoney Services business provides network-based transaction services, credit and debit card authorization and check verification. TeleMoney's primary customers include banks, independent sales organizations that subcontract technical aspects of credit card processing for banks, and major merchants. The market for electronic payment authorization and processing is consolidating rapidly. The Company's Business Information Services business ("BIS") runs custom data processing applications for customers (primarily the U.S. government) and delivers them via its timesharing network. Neither of these businesses is material to the Company's overall operations. Responsibility for BIS has been transferred to Computing Devices International effective January 1, 1994. Defense Electronics Segment - Computing Devices International The Defense Electronics segment, consisting of Computing Devices International ("Computing Devices"), develops, manufactures and markets electronic systems, subsystems and components, and provides systems integration and other services, primarily to government defense agencies. Information regarding Computing Devices' revenue, operating profit or loss and identifiable assets for the years 1991-1993 is in Note G, "Segment Data," on page 44 of the Company's 1993 Annual Report to Stockholders, which is incorporated herein by reference. Markets. The defense contracting market is currently in the process of dramatic change. With changing geo-political conditions, defense spending has declined and the number of companies serving the defense industry has decreased. Computing Devices believes these trends are likely to continue. At the same time, the defense market focus has shifted from strategic defense (nuclear) to tactical defense (non-nuclear) as the threat of military conflicts shifts toward regional and ethnic conflicts. - 10 -

The reduction in overall defense spending and the shift in focus toward tactical defense needs is also shifting the focus of defense spending. Computing Devices believes that a greater emphasis will be placed by its customers on extending the service life of existing military equipment by upgrading, enhancing and retrofitting such equipment. Computing Devices also believes that budgetary constraints will result in greater reductions by defense agencies in procurement spending than in research and development spending. In addition, although there will continue to be opportunities in the production of equipment and hardware, greater opportunities are expected in providing software and systems integration services as the use of commercial and open systems hardware architectures becomes more widespread. Products and Services. Computing Devices' products and services feature its capabilities in signal processing, digital image manipulation, "ruggedized" subsystems for harsh environments and real-time software systems. These products and services are produced primarily through its operations in the U.S. and Canada, with only a small portion produced in the United Kingdom ("U.K."). A majority of Computing Devices' revenue is attributable to products and services relating to avionics systems, including the AN/AYK-14 standard Navy airborne mission computer systems; communications systems, including the Iris tactical command, control and communications system; and intelligence and surveillance systems, including advanced parallel processing and reconnaissance systems. The remainder of Computing Devices' revenue is primarily attributable to products and services relating to shipboard subsystems, anti-submarine warfare subsystems, ground subsystems, space processing, display subsystems and tactical reconnaissance systems. Computing Devices employs technology developed through internal research and development, contract research and development and customer funded development programs. During 1991, Computing Devices secured, through its Canadian subsidiary, a contract to modernize the tactical command, control and communications system used by the Canadian armed forces in defense and peacekeeping situations. This system, called Iris, incorporates a broad range of technologies, including satellite, fiber optic and microwave communication. During 1993 and in 1992, the Company recorded revenue of $105 million and $69 million, respectively, with respect to this contract. This contract has a remaining term of approximately seven years and estimated total remaining revenue of approximately $860 million over the life of the contract. Although Computing Devices' Canadian subsidiary is the prime contractor under this contract, a significant portion of the contract has been subcontracted to other communications technology companies. Under this contract, Computing Devices receives periodic advances from its customer through April 1994. Thereafter, Computing Devices will begin receiving monthly progress payments which will be subject to a percentage holdback until Computing Devices achieves the next quarterly contract milestone. Approximately 51% and 59%, respectively, of Computing Devices' revenue for 1993 and for 1992 was derived from contracts with the U.S. Government or with prime contractors to the U.S. Government, and approximately 30% and - 11 -

24%, respectively, of Computing Devices' revenue for 1993 and for 1992 was derived from contracts with the Canadian Government or with prime contractors to the Canadian Government. See "Government Contracts" below, with respect to certain terms and conditions of government contracts. Sales and Marketing. Computing Devices markets its products and services through a direct sales force operating through sales offices located in the U.S., Canada, the U.K. and France. As of December 31, 1993, Computing Devices had 50 salespeople. Sales of products and services are made principally through competitive proposals in response to requests for bids from government agencies and prime contractors. In addition, Computing Devices has independent sales agents who represent Computing Devices' products and services in a number of European and Asian markets. Strategy. Computing Devices' strategy is to improve its competitive position and operating margins by: Reducing Operating Costs. Computing Devices believes that in light of decreases in defense spending and over-capacity among defense contractors, and increasing price sensitivity from its government customers, future success will be dependent in large measure upon becoming a low cost provider of products and services. Toward this end, Computing Devices intends to reduce overhead and increase productivity through consolidating operations, increasing the level of automation in its production and development facilities and providing increased employee training. Computing Devices' revenue per employee in 1993 increased by approximately 16% in 1993 compared to 1992. Focusing in Areas of Expertise. Computing Devices intends to continue to focus its efforts in its current areas of expertise, including additional product and service areas that Computing Devices believes will continue to experience growth and in which Computing Devices' capabilities will enable it to compete favorably. Computing Devices intends to continue to pursue tactical (as opposed to strategic) defense programs and will use technology developed through both internal and contract research and development. Computing Devices believes that spending on tactical systems will not be reduced to the same extent as spending on strategic systems and that greater emphasis will be placed on weapons sophistication, electronics, surveillance and intelligence. Computing Devices also believes that there will be greater emphasis on the insertion of new technology into existing military equipment in order to reduce the costs (including substantial training costs) associated with the development and production of new equipment. Emphasizing Existing Geographic Markets. Computing Devices intends to continue to emphasize specific segments of the North American and U.K. defense electronics markets where it believes significant opportunities exist, including opportunities in the upgrade, enhancement and retrofit of existing military equipment. The Company may seek to expand its presence in these market segments through strategic acquisitions. - 12 -

Leveraging Existing Products for New Applications. Computing Devices also intends to adapt existing products and services in response to business opportunities in other worldwide defense markets and in civilian and civil government markets. In so doing, Computing Devices may, from time to time, establish cooperative arrangements with other entities where their expertise or familiarity with other markets would prove beneficial. For example, Computing Devices and Northwest Airlines are jointly developing an electronic data library system to manage information required to operate commercial airliners. Competition. Computing Devices faces intense competition with respect to all of its products and services. Many of Computing Devices' significant competitors, such as E-Systems, Inc., Loral Corporation and the Hughes Electronics subsidiary of General Motors Corporation, are companies (or divisions or subsidiaries of companies) that are larger and have substantially greater financial resources than Computing Devices. Computing Devices also competes with companies of various sizes operating within a particular market segment. The principal competitive factors include price, technical compliance, service and ability to perform in accordance with the established schedule. Due to the diversity and specialized nature of the products produced and services provided and the governmental security restrictions applicable to certain of Computing Devices' activities, it is difficult to generalize as to Computing Devices' market position in certain segments of its business. Computing Devices does believe, however, that it is able to compete effectively in each of its market segments with respect to these competitive factors. In particular, Computing Devices believes that its high rate of schedule adherence is one of its principal competitive advantages. The demonstrated ability to complete a project within the required time schedule is an important factor to governments and prime contractors in selecting companies for new projects. Computing Devices currently has preferred supplier status with two prime contractors, with the U.S. Government with respect to Navy mass storage systems and avionics computers and with the Canadian Government with respect to display systems, anti-submarine warfare systems and communication systems. Government Contracts. Companies which do business with governments are subject to certain unique business risks. Among these are dependence on annual government appropriations, changing policies and regulations, complexity of design and possible cost overruns. Any government contract may be terminated by the government at any time it believes that such termination would be in its best interests. In such event, Computing Devices would generally be entitled to receive payments for its allowable costs and, in general, a proportionate share of its fee or profit for the work actually performed. Approximately 78% of Computing Devices' revenue for 1993 came from government contracts which were fixed price contracts. Under this type of contract, the price paid to Computing Devices is not subject to adjustment by reason of the costs incurred by the Company in the performance of the contract, except for costs incurred due to contract changes ordered by the - 13 -

government. Thus, under fixed price contracts, the Company bears the risk of cost overruns, which may result from factors such as the need to bid on programs in advance of design completion, unforeseen technological difficulties, design complexity and uncertain cost factors, particularly in connection with multi-year contracts. Multi-year fixed price contracts in Canada and the U.K. normally allow for price revision based on government price indices. Computing Devices is usually entitled to invoice governments for monthly progress payments on fixed price and cost reimbursable contracts. Computing Devices does not normally acquire inventory in advance of contract award, and does not maintain significant stocks of finished products for sale. Moreover, Computing Devices obtains advance funding from customers in connection with certain of its contracts. The amount of progress payments and customer advances and the amount of the holdback from such payments and advances affect the amount of working capital necessary for Computing Devices to finance work-in-process costs in the performance of these contracts. Governments typically do not recognize interest or other costs associated with the use of capital and, therefore, the timing of payments may have adverse effects on Computing Devices' profitability. Computing Devices also performs work under cost reimbursable and incentive type contracts. Cost reimbursable contracts provide for reimbursement of costs incurred, to the extent such costs are allowable under applicable government regulations, plus a fee. Under incentive type contracts, the amount of profit or fee realized varies with the attainment of incentive goals such as costs incurred, delivery schedule, quality and other criteria. Fixed price contracts normally carry a higher profit rate than cost reimbursable and incentive type contracts to compensate for higher business risk. In addition, government law and regulation provides that certain types of costs may not be included in either the directly- billed cost or the indirect overheads for which the government is responsible. Many of these so-called "unallowable" costs include ordinary costs of doing business in a commercial context. These costs must be borne out of the pretax profit of the corporation and, thus, tend to reduce margins on government work. Recognition of profits is based upon estimates of final performance, which may change as contracts progress. Work may be performed prior to formal authorization or adjustment of contract price for increased work scope, change orders and other funding adjustments. Because of the complexity of government contracts and applicable regulations, contract disputes may occur. The resolution of such disputes may affect the profitability of Computing Devices in performing these contracts. The Company believes that adequate provision has been made in its financial statements for these and other normal uncertainties incident to its Computing Devices business. Changes to procurement regulations in recent years, as well as the U.S. Government's drive against "fraud, waste and abuse" in defense procurement systems have increased the complexity and cost of doing business with the U.S. Government. Some of these changes have redefined - 14 -

the ability to recover various standard business costs that the U.S. Government will not allow, in whole or in part, as the cost of doing business on U.S. Government contracts. Other legal and regulatory practices have increased the number of auditors, inspectors general and investigators. Computing Devices is classified by the Defense Contract Audit Agency as a "low risk" contractor. If, however, Computing Devices were to be determined to be in noncompliance with any of the applicable laws and regulations, the possibility would exist for penalties and debarment or suspension from receiving additional U.S. Government contracts. International Sales. International sales of Computing Devices' products and services totaled approximately $216 million and $167 million, respectively, or 48% and 41%, respectively, of Computing Devices' total revenue in 1993 and in 1992. Most of these products and services were produced by Computing Devices' Canadian or U.K. subsidiaries for customers in those countries. Because most of Computing Devices' cross-border sales involve technologically advanced products, services and expertise, export control regulations may limit the type of products and services that may be offered and the countries and governments to which sales may be made. Although cross-border sales could be adversely affected by changes in government export policies, Computing Devices has not historically experienced significant obstacles to cross-border sales due to export controls. Computing Devices' international sales are subject to risks inherent in foreign commerce, including currency fluctuations and devaluations, changes in foreign governments and their policies, differences in foreign laws and difficulties in negotiating and litigating with foreign sovereigns. Computing Devices believes that it has mitigated certain of these risks by obtaining letters of credit and advance payments, by contractual protections on currency fluctuations and by denominating contracts in U.S. dollars where possible. Divestitures and Discontinued Operations Ceridian's results over the past five years have been significantly affected by the performance and subsequent sale, spin-off or closing of a number of its businesses. Included among those businesses are Imprimis Technology Incorporated, a manufacturer of magnetic disk drives, sold in 1989; ETA Systems Incorporated, developer of a line of super-computers, closed in 1989, VTC Incorporated, a semiconductor manufacturer, disposed of in 1989, Micrognosis, Inc., a supplier of trading room information systems, sold in 1990, and SAMI, Incorporated, a market research operation, the assets of which were disposed of in 1990. Because these operations did not meet the criteria for treatment as discontinued operations, their results, including the restructure charges and gains associated with their dispositions, are included in Ceridian's results from continuing operations and significantly affect the years 1989 and 1990. Three other significant businesses which Ceridian has disposed of are shown as discontinued operations in Ceridian's consolidated financial statements. These businesses are the Computer Products business, which was separately incorporated as Control Data Systems, Inc. and whose stock was - 15 -

then distributed to Ceridian's stockholders as of July 31, 1992; the Automated Wagering division, which provided on-line computer-based networks for state lotteries and which was sold in June 1992; and the Empros energy management systems division, which was sold March 1993. Investments in Affiliated Companies In past years, the Company invested in limited partnerships formed to construct and operate Business and Technology Centers ("BTCs"). In February 1994, the Company disposed of its interest in the remaining five partnerships, as well as the remaining BTC it owned. This disposition had no impact on the Company's results of operations. Additional Information Patents. The Company owns or is licensed under a number of patents which relate to its products and are of importance to its business. However, the Company believes that none of its businesses is materially dependent upon any particular patent or license, or any particular group of patents or licenses. Instead, the Company believes that its success and growth are far more dependent, among other things, on the quality of its services and products and its reputation with its customers. Backlog. The Company's backlog is attributable to the Defense Electronics segment, since no backlog amount is determinable for revenue from the Company's Information Services businesses. Backlog does not include those portions of government contracts for which funding has not yet been approved. Effective with this report and in consideration of the previously discussed change in funding for the Iris contract, the remaining Iris contract value is included in backlog. Previously, the Company had only included Iris contract value for which cash advances had been received. Prior year amounts have been revised to provide comparable data. As of December 31, 1993, the backlog of the Company's orders is $1,213 million, of which $862 million relates to the Iris contract and $351 million relates to other contracts and programs. At the end of the previous year, the comparable total backlog was $1,309 million, of which Iris represented $979 million and other contracts and programs represented $330 million. The portion of the backlog at the end of 1993 expected to be reflected in 1994 revenue is $349 million (29%), of which Iris represents $143 million and the remainder of the backlog is $206 million. Without regard to the Iris contract (which is a fixed price contract with the Canadian government), the portion of the remaining backlog at December 31, 1993 and 1992, respectively, under government prime and subcontracts was 89% and 75% and the portion under fixed-price contracts was 81% and 72%. Including the Iris contract, the portion of the total backlog at December 31, 1993 and 1992, respectively, under government prime and subcontracts was 97% and 94% and the portion under fixed-price contracts was 95% and 94%. - 16 -

Research and Development. The table below sets forth the amount of the Company's research and development expenses for the periods indicated. Year ended December 31, 1993 1992 1991 (Dollars in millions) Research and development $33.4 $30.5 $34.6 Percent of revenues 3.8% 3.7% 4.5% Customer sponsored research and development $77.4 $59.6 $60.9 The Company's research and development efforts, including those sponsored cooperatively by the Company and other participants, are generally described earlier in this Item in the descriptions of the Company's business segments. The amounts shown above as customer sponsored research and development primarily represent government funded product development efforts. Geographic Segment Data. For financial information regarding the Company's U.S. and international operations, as well as revenue from the U.S. and Canadian governments, see the Note G, "Segment Data" on page 44 of the Company's 1993 Annual Report to Stockholders, which is incorporated herein by reference. Employees. As of December 31, 1993, the Company employed approximately 7,600 people in its continuing operations on a full- or part- time basis. - 17 -

Item 2. Properties. At February 28, 1994, the Company's principal production and office facilities were located in the metropolitan areas of Minneapolis, Minnesota; Atlanta, Georgia; Cleveland, Ohio; Beltsville and Laurel, Maryland; New York, New York; Ottawa and Calgary, Canada; and Hastings, England. The following table summarizes the usage and location of the Company's facilities as of February 28, 1994. (In thousands of square feet) Type of Property Interest U.S. Non-U.S. Worldwide Owned 341 310 651 Leased 3,286 341 3,627 Total Square Feet 3,627 651 4,278 Utilization Manufacturing and Warehousing 387 461 848 Office, Computer Center and Other 1,901 190 2,091 Vacant/Idle 212 -- 212 Leased or Subleased to Others 1,127 -- 1,127 Total Square Feet 3,627 651 4,278 The 4.3 million square feet of aggregate space reflected a decrease of 0.9 million square feet from February 28, 1993. Most of this decrease was due to the disposition of vacant or idle space and the sale in February 1994 of the remaining BTCs. Space subject to assigned leases is not included in the table above, and the Company remains secondarily liable under all such leases. These assigned leases involve 1.9 million square feet of space and future rental obligations totalling $52.5 million. The principal elements of these amounts are 0.7 million square feet and $13.2 million related to the spin-off of Control Data Systems, and 1.2 million square feet and $39.0 million related to the 1989 sale of Imprimis Technology Incorporated to Seagate Technology, Inc. The Company does not anticipate any material nonperformance by the assignees of these leases. Except for two buildings utilized by Computing Devices' Canadian subsidiary (which are subject to mortgages securing $10.1 million in debt - 18 -

obligations), no facilities owned by the Company are subject to any major encumbrances. The Company believes that all of the facilities it currently utilizes in its continuing operations are adequate for their intended purposes and are adequately maintained. Utilization of those facilities varies among the Company's operations. Generally, most of the facilities relating to Employer Services are reasonably necessary for current and anticipated output levels of that business. As a result of the decision to discontinue its television and cable ratings service, Arbitron has excess capacity at its Beltsville and Laurel, Maryland facilities, but has established restructure reserves for the expected cost of such facilities in excess of continuing requirements. There is also excess production capacity in the Defense Electronics segment. Efforts are ongoing to identify operations and facilities that can be consolidated and to dispose of excess or idle space. Item 3. Legal Proceedings. Information regarding legal proceedings involving the Company and its subsidiaries is incorporated by reference in Note O, Legal Matters, on page 52 of the Company's 1993 Annual Report to Stockholders, which is incorporated herein by reference. Item 4. Submission of Matters to a Vote of Security Holders. None. - 19 -

Executive Officers of the Registrant The executive officers of Ceridian as of March 1, 1994, are as follows: Executive Name (Age) Position Officer Since Lawrence Perlman (55) Chairman, President and 1980 Chief Executive Officer John R. Eickhoff (53) Vice President and 1989 Chief Financial Officer Loren D. Gross (48) Vice President and Corporate 1993 Controller Linda J. Jadwin (50) Vice President, 1990 Corporate Communications Glenn W. Jeffrey (47) Executive Vice President 1990 James D. Miller (45) Vice President, Strategic 1993 Initiatives Stephen B. Morris(50) Vice President and President, 1992 The Arbitron Company Patrick C. Sommers(46) Vice President and 1992 President, Ceridian Employer Services Ronald L. Turner(47) Vice President and President, 1993 Computing Devices International The executive officers of the Company are elected by the Board of Directors or appointed by the Company's Chief Executive Officer. They serve at the pleasure of the Board of Directors and the Chief Executive Officer. They are customarily elected each year at the first meeting of the Board of Directors immediately following the annual meeting of stockholders. - 20 -

Lawrence Perlman has been President and Chief Executive Officer of the Company since January 1990, and was appointed Chairman in November 1992. Mr. Perlman was President and Chief Operating Officer of the Company from December 1988 to January 1990. He is a director of Inter-Regional Financial Group, Inc.; Seagate Technology, Inc.; The Valspar Corporation; and Computer Network Technology Corporation. He is also a member of the National Advisory Board of the Chemical Banking Corporation. Mr. Perlman has been a director of the Company since 1985. John R. Eickhoff has been Vice President and Chief Financial Officer of the Company since June 1993. Mr. Eickhoff was Vice President and Corporate Controller of the Company from July 1989 to June 1993, and was Controller of the Company's Computer Systems and Services Group from August 1987 to July 1989. Loren D. Gross has been Vice President and Corporate Controller of the Company since July 1993. Mr. Gross was Assistant Corporate Controller of the Company from March 1987 to July 1993. Linda J. Jadwin has been Vice President, Corporate Communications of the Company since March 1990. Ms. Jadwin was Vice President, Communications and Administration of the Company's Computer Products business from April 1989 to March 1990; and Vice President, Communications of Imprimis Technology Incorporated from September 1988 to March 1989. Glenn W. Jeffrey has been Executive Vice President of the Company since December 1992. Mr. Jeffrey was Executive Vice President, Organization Resources of the Company from June 1990 to December 1992; President of Jeffrey & Associates, an executive and organization development firm, from September 1989 to June 1990; and Vice President, Human Resources, Corporate Staff and Restaurants, for The Pillsbury Company from August 1988 to April 1989. James D. Miller has been Vice President, Strategic Initiatives of the Company since January 1993. From February 1989 to January 1993, Mr. Miller was Vice President and Associate General Counsel for the Company. Stephen B. Morris has been Vice President of the Company and President of The Arbitron Company since December 1992. Mr. Morris was President and Chief Executive Officer, Vidcode, Inc., which electronically monitors, verifies and reports the broadcast of television commercials, from August 1990 to December 1992; and Director and co-founder of Spectra Marketing Systems, a micro-marketing firm, from March 1987 to March 1992. Prior to that time, he spent seventeen years at General Foods Corporation, the last three as General Manager/President of the Maxwell House Division. - 21 -

Patrick C. Sommers has been Vice President of the Company and President of Ceridian Employer Services since November 1992. Mr. Sommers was President, GTE Industry Services, a group of diversified companies providing software, medical information, networking and publishing products and services, from April 1990 to November 1992; and President, D&B Information Resources, Inc., a subsidiary of Dun & Bradstreet Corporation which collects and assimilates information into databases, from May 1988 to April 1990. Ronald L. Turner has been Vice President of the Company and President of Computing Devices International since January 1993. Mr. Turner was President and Chief Executive Officer, GEC-Marconi Electronics Systems Corporation, a defense electronics company, from March 1987 to January 1993. - 22 -

PART II All information incorporated by reference into Items 5 through 8 below is contained in the financial portion of the 1993 Annual Report to Stockholders of Ceridian Corporation, which is filed with this report as Exhibit 13. Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. The Company's common stock, par value $.50 per share ("Common Stock"), is listed and trades on the New York Stock Exchange as well as on the Chicago and Pacific Stock Exchanges. The following table sets forth the high and low sales prices for a share of Common Stock on the New York Stock Exchange. 1993 1992 High Low High Low 4th Quarter 19-7/8 17-1/2 17-1/4 13-3/4 3rd Quarter 18-1/2 14-3/8 16 13-1/8 2nd Quarter 16-1/8 13 14-1/8 11 1st Quarter 16-1/8 14-3/8 12-3/4 9-1/8 The number of holders of record of Common Stock on February 28, 1994 was approximately 24,050. No dividends have been declared or paid on the Common Stock since 1985. For information regarding restrictions on Ceridian's ability to pay cash dividends on its Common Stock or to repurchase that stock, see Note K entitled "Financing Arrangements" on page 49 and the discussion on page 31 of "Management's Discussion and Analysis of Financial Condition and Results of Operations," both of which are incorporated herein by reference. Item 6. Selected Financial Data. See "Selected Five-Year Data" on page 1, which is incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 20 through 31, which is incorporated herein by reference. Item 8. Financial Statements and Supplementary Data. The financial statements described in Item 14(a)1. of this report are incorporated herein by reference. See "Supplementary Quarterly Data (Unaudited)" on page 53, which is incorporated herein by reference. Item 9. Disagreements on Accounting and Financial Disclosure. None. - 23 -

PART III Item 10. Directors and Executive Officers of the Registrant. See information regarding the directors and nominees for director of Ceridian under the heading "Nominees for Director" on pages 4 and 5 of the Proxy Statement for the Annual Meeting of Stockholders, May 11, 1994 (the "Proxy Statement"), which is incorporated herein by reference. See the information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 under the heading "Compliance With Section 16(a) of the Securities Exchange Act" on page 20 of the Proxy Statement, which is incorporated herein by reference. Information regarding the executive officers of Ceridian is on pages 20 through 22 of this Report, and is incorporated herein by reference. Item 11. Executive Compensation. See information under the headings "Directors' Compensation" on page 6 of the Proxy Statement and "Executive Compensation" on pages 14 through 18 of the Proxy Statement, all of which is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. See information under the heading "Share Ownership Information" on pages 18 through 20 of the Proxy Statement, which is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions. See information under the heading "Compensation Committee Interlocks and Insider Participation" on page 6 of the Proxy Statement, which is incorporated herein by reference. - 24 -

PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) 1. Financial Statements of Registrant Incorporated by reference from the pages indicated in the 1993 Annual Report to stockholders of Ceridian Corporation into Part II, Item 8, of this Report: Page Report of Management . . . . . . . . . . . . . . . . 32 Independent Auditors' Report . . . . . . . . . . . . 33 Consolidated Statements of Operations for the years ended December 31, 1993, 1992 and 1991. . . . . . . . . . . 34 Consolidated Balance Sheets as of December 31, 1993 and 1992. . . . . . . . . . . . . . 35 Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1992 and 1991. . . . . . . . . . . 36-37 Notes to Consolidated Financial Statements for the three years ended December 31, 1993 . . . . . . . 38-52 (a) 2. Financial Statement Schedules of Registrant Included in Part IV of this Report: Page Independent Auditors' Report on financial statement schedules . . . . . . . . . . . . . . . 29 Schedule VII - Guarantees of securities of other issuers. . . . . . . . . . . . . . . . . 30 Schedule VIII - Valuation and qualifying accounts 31-32 All other financial statement schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes. - 25 -

(a) 3. Exhibits The following is a complete list of Exhibits filed or incorporated by reference as part of this report. Exhibit Description 2.01 Asset Purchase Agreement, dated as of March 4, 1992, as amended, among the Company as seller, and Video Lottery Technologies, Inc., and Automated Wagering International, Inc. as purchasers (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated June 23, 1992 (File No. 1-1969)). 2.02 Asset Purchase Agreement, dated as of March 14, 1993, between the Company and Siemens Energy & Automation Inc. (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 2.03 Transfer Agreement between the Company and Control Data Systems, Inc., and Distribution Agreement between Control Data Systems, Inc. and the Company, each dated as of July 15, 1992 (incorporated by reference to Exhibits 10.1 and 10.2 to Amendment No. 1, dated July 10, 1992, to Control Data Systems, Inc.'s Registration Statement on Form 10 (File No. 0-20252)). 3.01 Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.01 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 3.02 Form of Certificate of Designation of 5-1/2% Cumulative Convertible Exchangeable Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). 3.03 Certificate of Elimination of Ceridian Corporation, dated January 7, 1994. 3.04 Bylaws, 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)). 4.01 Form of Deposit Agreement, dated as of December 23, 1993, between The Bank of New York and the Company (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). 4.02 Form of Indenture, with respect to the 5-1/2% Convertible Subordinated Debentures Due 2008, dated as of December 23, 1993, between The Bank of New York and the Company (incorporated by reference to Exhibit 4.7 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). - 26 -

10.01 Executive Employment Agreement between the Company and Lawrence Perlman, dated February 1, 1994. 10.02 Executive Employment Agreement between the Company and Stephen B. Morris, dated June 7, 1993. 10.03 Executive Employment Agreement between the Company and Patrick C. Sommers, dated June 7, 1993. 10.04 Executive Employment Agreement between the Company and Ronald L. Turner, dated June 7, 1993. 10.05 Directors Deferred Compensation Plan - 1993 Restatement (As amended through December 13, 1993). 10.06 1990 Long-Term Incentive Plan (1992 restatement) (incorporated by reference to Exhibit 10.07 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 10.07 1993 Long-Term Incentive Plan (As amended through December 13, 1993). 10.08 Description of Registrant's Annual Executive Incentive Plan (incorporated by reference to Exhibit 10.08 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 10.09 Benefit Equalization Plan and First Declaration of Amendment to the Benefit Equalization Plan, effective as of January 1, 1989 (incorporated by reference to Exhibit 10.09 to the Company's Annual Report on Form 10-K for the year ended December 31, 1990 and to Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 1989 (File No. 1-1969)). 10.10 Benefits Protection Trust (As amended through July 29, 1988) (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1988 (File No. 1-1969)). 10.11 Form of Indemnification Agreement between Registrant and its directors (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the year ended December 31, 1991 (File No. 1-1969)). 10.12 Credit Agreement, dated as of June 30, 1993, among the Company, Bank of America N.T. & S.A. as Agent and the other Financial Institutions parties thereto (the "Credit Agreement") (incorporated by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 (File No. 1-1969)). 10.13 First Amendment to the Credit Agreement (incorporated by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 (File No. 1-1969)). - 27 -

(a) 3. Exhibits (cont.) 10.14 Form of Underwriting Agreement among the Company, Bear, Stearns & Co. Inc., Cowen & Company and Piper Jaffray, Inc., dated December 16, 1993 (incorporated by reference to Exhibit 1.1 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). 10.15 Employee Non-Statutory Stock Option Award Agreement between the Company and Lawrence Perlman, dated February 3, 1993. 11. Statement re computation of earnings (loss) per share 12. Statements re computation of ratios 13. Pages 1 and 20 through 53 of the Company's 1993 Annual Report to Stockholders 22. Subsidiaries of the Company 24. Consent of Independent Auditors 25. Power of Attorney If requested, Ceridian will provide copies of any of the exhibits listed above upon payment of Ceridian's reasonable expenses in furnishing such exhibits. (b) Reports on Form 8-K None during the quarter ended December 31, 1993. - 28 -

INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES THE BOARD OF DIRECTORS AND STOCKHOLDERS CERIDIAN CORPORATION: Under date of January 24, 1994, we reported on the consolidated balance sheets of Ceridian Corporation and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of operations and cash flows for each of the years in the three-year period ended December 31, 1993, as contained in the 1993 Annual Report to Stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the Annual Report on Form 10-K for the year 1993. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules as listed in the accompanying index (see Item 14.(a)2.). These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. As discussed in notes A and I to the consolidated financial statements, the Company changed its method of accounting for postretirement benefits other than pensions in 1992. KPMG Peat Marwick Minneapolis, Minnesota January 24, 1994 - 29 -

SCHEDULE VII CERIDIAN CORPORATION AND SUBSIDIARIES GUARANTEES OF SECURITIES OF OTHER ISSUERS December 31, 1993 (Dollars in millions) <TABLE> <S> <C> <C> <C> Name of Issuer of Securities Guaranteed by Title of Issue Person for of Each Class of Total Amount Which Statement Securities Guaranteed and Nature of is Filed Guaranteed Outstanding Guarantee Seagate Note to Unisys $ 2.4 Guaranteed by Technology Inc. Corporation (Memorex) Ceridian due December 29, 1995 as to principal and interest Other 0.8 Guaranteed by Ceridian as to principal and interest Total $ 3.2 </TABLE> None of the amounts guaranteed and outstanding are (1) owned by the person or persons for which the statement is filed, (2) held in treasury of the issuer of the securities, or (3) in default. - 30 -

SCHEDULE VIII CERIDIAN CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (Dollars in millions) <TABLE> Operations and Investment Restructure Balance at December 31 Charged to Asset Accrued Operations Deductions Total ReservesLiabilities <S> <C> <C> <C> <C> <C> 1990 Total $ 179.2 $ -- $ 179.2 1991 1985 Restructure $ -- $ (13.9) $ 1.6 $ -- $ 1.6 1986 Restructure -- (0.5) 5.3 -- 5.3 1987 Restructure -- (2.2) 14.0 -- 14.0 1989 Restructure -- (48.3) 61.8 -- 61.8 1990 Restructure -- (20.5) 11.1 -- 11.1 1991 Restructure (16.2) 40.5 24.3 -- 24.3 Total $ (16.2) $ (44.9) $ 118.1 $ -- $ 118.1 1992 1985 Restructure $ -- $ (0.1) $ 1.5 $ -- $ 1.5 1986 Restructure -- (0.7) 4.6 -- 4.6 1987 Restructure -- (6.4) 7.6 -- 7.6 1989 Restructure -- (34.2) 27.6 -- 27.6 1990 Restructure -- (9.0) 2.1 -- 2.1 1991 Restructure -- (6.6) 17.7 -- 17.7 1992 Restructure 76.2 3.3 79.5 -- 79.5 Total $ 76.2 $ (53.7) $ 140.6 $ -- $ 140.6 1993 1985 Restructure $ -- $ (1.5) $ -- $ -- $ -- 1986 Restructure -- (2.8) 1.8 -- 1.8 1987 Restructure -- (7.6) -- -- -- 1989 Restructure -- (12.1) 15.5 -- 15.5 1990 Restructure -- (2.1) -- -- -- 1991 Restructure -- (16.3) 1.4 -- 1.4 1992 Restructure -- (47.8) 31.7 -- 31.7 1993 Restructure 67.0 (3.9) 63.1 5.5 57.6 Total $ 67.0 $ (94.1) $ 113.5 $ 5.5 $ 108.0 </TABLE> - 31 -

SCHEDULE VIII (CONT.) CERIDIAN CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (Dollars in millions) <TABLE> Allowance for Doubtful Accounts Receivable Year Ended December 31 <S> <C> <C> <C> 1993 1992 1991 Balance at beginning of year. . . . . . . $ 4.3 $ 3.8 $ 3.5 Additions charged to costs and expenses. . . . . . . . . . . . . . . 1.7 1.1 1.5 Write-offs and other adjustments* . . . (0.6) (0.6) (1.2) Balance at end of year. . . . . . . . . . $ 5.4 $ 4.3 $ 3.8 </TABLE> [FN] (*)Other adjustments include balances removed as a result of sales of businesses. <TABLE> Investments and Advances Year Ended December 31 <S> <C> <C> <C> 1993 1992 1991 Balance of Seagate note at beginning of year $ 10.0 $ 47.9 $ 48.2 Principal payment received (37.9) Discount on Seagate note as initially recorded or at beginning of year (6.2) (6.2) Amortization/Recovery of discount 6.2 Discount at end of year -- -- (6.2) Balance of Seagate note at end of year $ 10.0 $ 10.0 $ 42.0 </TABLE> - 32 -

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 10, 1994. CERIDIAN CORPORATION By: /s/Lawrence Perlman Lawrence Perlman Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 10, 1994. /s/Lawrence Perlman /s/J. R. Eickhoff Lawrence Perlman John R. Eickhoff Chairman, President and Chief Vice President and Chief Executive Officer (Principal Financial Officer Executive Officer) and (Principal Financial Officer) Director /s/Loren Gross */s/Richard G. Lareau Loren D. Gross Richard G. Lareau, Director Vice President and Corporate Controller (Principal Accounting Officer) */s/Charles Marshall Charles Marshall, Director */s/Ruth M. Davis */s/Richard W. Vieser Ruth M. Davis, Director Richard W. Vieser, Director */s/Allen W. Dawson */s/Paul S. Walsh Allen W. Dawson, Director Paul S. Walsh, Director */s/Ronald James *By: /s/John A. Haveman Ronald James, Director John A. Haveman Attorney-in-fact - 33 -

EXHIBIT INDEX Exhibit No. Description Code 2.01 Asset Purchase Agreement, dated as of March 4, 1992, IBR as amended, among the Company as seller, and Video Lottery Technologies, Inc., and Automated Wagering International, Inc. as purchasers (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated June 23, 1992 (File No. 1-1969)). 2.02 Asset Purchase Agreement, dated as of March 14, 1993, IBR between the Company and Siemens Energy & Automation Inc. (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 2.03 Transfer Agreement between the Company and Control Data IBR Systems, Inc., and Distribution Agreement between Control Data Systems, Inc. and the Company, each dated as of July 15, 1992 (incorporated by reference to Exhibits 10.1 and 10.2 to Amendment No. 1, dated July 10, 1992, to Control Data Systems, Inc.'s Registration Statement on Form 10 (File No. 0-20252)). 3.01 Certificate of Incorporation, as amended (incorporated IBR by reference to Exhibit 3.01 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 3.02 Form of Certificate of Designation of 5-1/2% Cumulative IBR Convertible Exchangeable Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). 3.03 Certificate of Elimination of Ceridian Corporation, dated IBR January 7, 1994. 3.04 Bylaws, as amended (incorporated by reference to Exhibit IBR 3.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 (File No. 1-1969)). 4.01 Form of Deposit Agreement, dated as of December 23, 1993, IBR between The Bank of New York and the Company (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). 4.02 Form of Indenture, with respect to the 5-1/2% Convertible IBR Subordinated Debentures Due 2008, dated as of December 23, 1993, between The Bank of New York and the Company (incorporated by reference to Exhibit 4.7 to the Company's Registration Statement on Form S-3 (File No. 33-50959)).

10.01 Executive Employment Agreement between the Company E and Lawrence Perlman, dated February 1, 1994. 10.02 Executive Employment Agreement between the Company E and Stephen B. Morris, dated June 7, 1993. 10.03 Executive Employment Agreement between the Company E and Patrick C. Sommers, dated June 7, 1993. 10.04 Executive Employment Agreement between the Company E and Ronald L. Turner, dated June 7, 1993. 10.05 Directors Deferred Compensation Plan - 1993 E Restatement (As amended through December 13, 1993). 10.06 1990 Long-Term Incentive Plan (1992 restatement) E (incorporated by reference to Exhibit 10.07 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 10.07 1993 Long-Term Incentive Plan (As amended through December 13, 1993). 10.08 Description of Registrant's Annual Executive Incentive IBR Plan (incorporated by reference to Exhibit 10.08 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1969)). 10.09 Benefit Equalization Plan and First Declaration of IBR Amendment to the Benefit Equalization Plan, effective as of January 1, 1989 (incorporated by reference to Exhibit 10.09 to the Company's Annual Report on Form 10-K for the year ended December 31, 1990 and to Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 1989 (File No. 1-1969)). 10.10 Benefits Protection Trust (As amended through IBR July 29, 1988) (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1988 (File No. 1-1969)). 10.11 Form of Indemnification Agreement between Registrant and IBR its directors (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the year ended December 31, 1991 (File No. 1-1969)). 10.12 Credit Agreement, dated as of June 30, 1993, among the IBR Company, Bank of America N.T. & S.A. as Agent and the other Financial Institutions parties thereto (the "Credit Agreement") (incorporated by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 (File No. 1-1969)). 10.13 First Amendment to the Credit Agreement (incorporated by IBR reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 (File No. 1-1969)).

(a) 3. Exhibits (cont.) 10.14 Form of Underwriting Agreement among the Company, Bear, IBR Stearns & Co. Inc., Cowen & Company and Piper Jaffray, Inc., dated December 16, 1993 (incorporated by reference to Exhibit 1.1 to the Company's Registration Statement on Form S-3 (File No. 33-50959)). 10.15 Employee Non-Statutory Stock Option Award Agreement between E the Company and Lawrence Perlman, dated February 3, 1993. 11. Statement re computation of earnings (loss) per share E 12. Statements re computation of ratios E 13. Pages 1 and 20 through 53 of the Company's 1993 Annual E Report to Stockholders 22. Subsidiaries of the Company E 24. Consent of Independent Auditors E 25. Power of Attorney E

CERTIFICATE OF ELIMINATION OF CERIDIAN CORPORATION Ceridian Corporation (formerly named Control Data Corporation), a corporation organized and existing under the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That at a meeting of the Board of Directors of Ceridian Corporation (the "Company") on November 4, 1993, resolutions were duly adopted setting forth the proposed elimination of the Company's Series A Junior Participating Preferred Stock (the "Junior Preferred Stock") as set forth herein: RESOLVED, that the Board of Directors of Ceridian Corporation hereby declares that none of the authorized shares of Series A Junior Participating Preferred Stock which are the subject of the Certificate of Designation, Preferences, and Rights previously filed on October 14, 1986 with the Secretary of State of Delaware is outstanding, and that none of such shares shall be issued. FURTHER RESOLVED, that the elected officers of the Company are hereby authorized and directed to execute, acknowledge and file with the Secretary of State of the State of Delaware a certificate pursuant to Section 151(g) of the Delaware Corporation Law in order to amend the Certificate of Incorporation of Ceridian Corporation to eliminate all matters set forth in the Certificate of Designation, Preferences, and Rights with respect to the Series A Junior Participating Preferred Stock. FURTHER RESOLVED, that when the certificate referred to in the foregoing resolution becomes effective as filed, it shall have the effect of amending the Certificate of Incorporation of Ceridian Corporation to eliminate all matters set forth in the Certificate of Designation, Preferences, and Rights with respect to the Series A Junior Participating Preferred Stock. FURTHER RESOLVED, that the 500,000 shares of Series A Junior Participating Preferred Stock shall resume that status which they had prior to the adoption on September 26, 1986 by the Board of Directors of resolutions designating such series of preferred stock and authorizing the reservation of such shares for issuance in accordance with a Rights Agreement, dated as of October 1, 1986, as amended, between the Company and The Bank of New York as successor Rights Agent. - 1 -

SECOND: None of the authorized shares of the Junior Preferred Stock are outstanding and none will be issued. THIRD: In accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Certificate of Incorporation is hereby amended to eliminate all references to the Junior Preferred Stock. IN WITNESS WHEREOF, said Ceridian Corporation has caused this certificate to be signed by John A. Haveman, its Vice President and Secretary, and attested by Ann M. Curme, its Assistant Secretary, this 7th day of January, 1994. CERIDIAN CORPORATION [CORPORATE SEAL] By: /s/John A. Haveman Vice President and Secretary ATTEST: By: /s/Ann M. Curme Assistant Secretary - 2 -

CERIDIAN CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT PARTIES Ceridian Corporation (a Delaware Corporation) 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 and LAWRENCE PERLMAN ("Executive") Date: December 13, 1993 RECITALS A. Ceridian wishes to obtain the services of Executive for at least the duration of this Agreement, and the Executive wishes to provide his or her services for such period. B. Ceridian desires reasonable protection of Ceridian's Confidential Information (as defined below). C. Ceridian desires assurance that Executive will not compete with Ceridian or engage in recruitment of Ceridian's employees for a reasonable period of time after termination of employment, and Executive is willing to refrain from competition and recruitment. D. Executive desires to be assured of a minimum Base Salary (as defined below) from Ceridian for Executive's services for the term of this Agreement (unless terminated earlier pursuant to the terms of this Agreement). E. It is expressly recognized by the parties that Executive's acceptance of, and continuance in, Executive's position with Ceridian and agreement to be bound by the terms of this Agreement represents a substantial commitment to Ceridian in terms of Executive's personal and professional career and a foregoing of present and future career options by Executive, for all of which Ceridian receives substantial value. F. The parties recognize that a Change of Control (as defined below) may result in material alteration or diminishment of Executive's position and responsibilities and substantially frustrate the purpose of Executive's commitment to Ceridian and forebearance of options. - 1 -

G. The parties recognize that in light of the above-described commitment and forebearance of options, it is essential that, for the benefit of Ceridian and its stockholders, provision be made for a Change in Control Termination in order to enable Executive to accept and effectively continue in Executive's position in the face of inherently disruptive circumstances arising from the possibility of a Change of Control of the Parent Corporation (as defined below), although no such change is now contemplated or foreseen. H. The parties wish to replace any and all prior agreements and undertakings with respect to the Executive's employment and Change of Control occurrences and compensation. NOW, THEREFORE, in consideration of Executive's acceptance of and continuance in Executive's employment for the term of this Agreement and the parties' agreement to be bound by the terms contained herein, the parties agree as follows: ARTICLE I DEFINITIONS 1.01 "Base Salary" shall mean regular cash compensation paid on a periodic basis, before withholding for federal, state and local taxes, exclusive of benefits, bonuses or incentive payments. "Base Salary" shall not be reduced by salary reduction contributions made by Ceridian on behalf of Executive to a cafeteria plan, 401(k) plan or other plan providing for the deferral of compensation. 1.02 "Board" shall mean the Board of Directors of Ceridian Corporation (the "Parent Corporation"). 1.03 "Ceridian" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, (a) any Subsidiary (as that term is defined in Section 1.07); and (b) any successor in interest by way of consolidation, operation of law, merger or otherwise. 1.04 "Confidential Information" shall mean information or material which is not generally available to or used by others, or the utility or value of which is not generally known or recognized as standard practice, whether or not the underlying details are in the public domain, including: (a) information or material relating to Ceridian and its business as conducted or anticipated to be conducted; business plans; operations; past, current or anticipated software, products or services; customers or prospective customers; or research, engineering, development, manufacturing, purchasing, accounting, or marketing activities; - 2 -

(b) information or material relating to Ceridian's inventions, improvements, discoveries, "know-how," technological developments, or unpublished writings or other works of authorship, or to the materials, apparatus, processes, formulae, plans or methods used in the development, manufacture or marketing of Ceridian's software, products or services; (c) information which when received is marked as "proprietary," "private," or "confidential;" (d) trade secrets; (e) software in various stages of development, including computer programs in source code and binary code form, software designs, specifications, programming aids (including "library subroutines" and productivity tools), programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases; and (f) any similar information of the type described above which Ceridian obtained from another party and which Ceridian treats as or designates as being proprietary, private or confidential, whether or not owned or developed by Ceridian. Notwithstanding the foregoing, "Confidential Information" does not include any information which is properly published or in the public domain; provided, however, that information which is published by or with the aid of Executive outside the scope of employment or contrary to the requirements of this Agreement will not be considered to have been properly published, and therefore will not be in the public domain for purposes of this Agreement. 1.05 "Disability" shall mean the inability of Executive to perform his or her duties under this Agreement because of illness or incapacity for a continuous period of five (5) months. 1.06 "Parent Corporation" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, any successor in interest by way of consolidation, operation of law, merger or otherwise. "Parent Corporation" shall not include any Subsidiary. 1.07 "Subsidiary" shall mean: (a) any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the occurrence of a contingency) is at the time owned by Parent Corporation and/or one or more Subsidiaries; and (b) any division or business unit (or portion thereof) of Parent Corporation or a corporation described in clause (a) of this Section 1.07. ARTICLE II - 3 -

EMPLOYMENT, DUTIES AND TERM 2.01 Employment. Upon the terms and conditions set forth in this Agreement, Ceridian hereby employs Executive, and Executive accepts such employment. Except as expressly provided herein, termination of this Agreement by either party shall also terminate Executive's employment by Ceridian. 2.02 Duties. Executive shall devote his or her full-time and best efforts to Ceridian and to fulfilling the duties of his or her position which shall include such duties as may from time to time be assigned him or her by the Board, provided that such duties are reasonably consistent with Executive's education, experience and background. Executive shall comply with Ceridian's policies and procedures to the extent they are not inconsistent with this Agreement in which case the provisions of this Agreement prevail. 2.03 Term. Subject to the provisions of Articles IV, VII, and VIII, Executive's employment shall continue until the later of: (a) December 31, 1998; and (b) two years after a Change of Control which occurs prior to December 31, 1998. In any event, the Agreement shall automatically terminate without notice when Executive reaches 65 years of age. If employment is continued after the age of 65 by mutual agreement, it shall be terminable at will by either party. ARTICLE III COMPENSATION AND EXPENSES 3.01 Base Salary. For all services rendered under this Agreement during the term of Executive's employment, Ceridian shall pay Executive a minimum Base Salary in an amount not less than the annual Base Salary in effect as of the effective date of this Agreement. Executive's Base Salary may be increased (but not decreased) from time to time by the Board, or the Compensation and Human Resources Committee appointed by the Board. In the event of such an increase, the increased Base Salary shall then become Executive's Base Salary until such time as the Board (or the Committee, as the case may be) makes a further increase. 3.02 Bonus and Incentive. Bonus or incentive compensation shall be in the sole discretion of the Board. Except as otherwise provided in Article VII, the Board shall have the right in accordance with their terms to alter, amend or eliminate any bonus or incentive plans, or Executive's participation therein, without compensation to Executive. 3.03 Business Expenses. Ceridian shall, in accordance with, and to the extent of, its policies in effect from time to time, bear all ordinary and necessary business expenses incurred by Executive in performing his or her duties as an employee of Ceridian, provided that Executive accounts promptly for such expenses to Ceridian in the manner prescribed from time to time by Ceridian. - 4 -

ARTICLE IV EARLY TERMINATION 4.01 Early Termination. Subject to the respective continuing obligations of the parties pursuant to Articles V, VI, and IX, this Article sets forth the terms for early termination of this Agreement; provided, however, that this Article shall not apply to a Change of Control Termination which is governed solely by the provisions of Article VII. 4.02 Termination for Cause. The Board may terminate this Agreement immediately for cause by resolution duly adopted by a majority vote of the entire membership of the Board. For the purpose hereof "cause" means (a) fraud, (b) misrepresentation, (c) theft or embezzlement of Ceridian assets, (d) intentional violations of law involving moral turpitude, (e) the continued failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. In the event of termination for cause pursuant to this Section 4.02, Executive shall be paid at the usual rate of Executive's annual Base Salary through the date of termination specified in any notice of termination. 4.03 Termination Without Cause. Either Executive or the Board, by resolution duly adopted by a majority vote of the entire membership of the Board, may terminate this Agreement and Executive's employment without cause on at least seventy-five (75) days' written notice. In the event of termination of this Agreement and of Executive's employment pursuant to this Section 4.03, compensation shall be paid as follows: (a) if the notice of termination is given by Executive at any time Executive shall be paid at the usual rate of his annual Base Salary through the date of termination specified in such notice (but not to exceed seventy-five (75) days); (b) if the notice of termination is given by the Board and effective prior to Executive's 65th birthday, (1) Executive shall be paid at the usual rate of his annual Base Salary through the date of termination specified in the notice provided, however, that the Board shall have the option of making termination of the Agreement and Executive's employment effective immediately upon notice in which case Executive shall be paid through a notice period of seventy-five (75) days; and (2) Executive shall receive, within 15 days following termination, a lump sum payment equivalent to three times the annual Base Salary in effect for Executive immediately prior to the date of such notice of termination. Executive's entitlement to the lump sum payment described in clause (2) of the preceding sentence shall be unaffected by any waiver or limitation by Ceridian of the non- competition obligation contained in Section 6.02. - 5 -

(c) If the notice of termination is given by the Board to be effective on or after Executive's 65th birthday Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in any notice. (d) In the event that termination occurs pursuant to Sections 4.03(b) or 4.03(c), then, in addition to the payments specified in said Sections, Ceridian shall pay to Executive any amount equal to (1) the bonus, if any, to which Executive would otherwise have become entitled under all Ceridian bonus plans in effect at the time of termination of this Agreement had Executive remained continuously employed for the full fiscal year in which termination occurred and continued to perform his duties in the same manner as they were performed immediately prior to termination, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which termination occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.03(d) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. (e) In the event that termination occurs pursuant to Section 4.03(b) or 4.03(c), then in addition to the payments specified in Sections 4.03(b)(c) and (d) Executive's rights and benefits under any restricted stock plan or stock option plan in effect on the date of notice of termination (other than any bonus plan or plan referred to in Section 4.03(d) above) are (with respect to such plans in effect on the date of this Agreement) and shall become (with respect to any plans that hereinafter become effective) fully vested at termination and all restrictions on shares of stock received or to be received under any such plans are or shall immediately lapse and be of no further force and effect and all stock options shall be immediately and fully vested. Certificates for shares of stock to which Executive is entitled under this subparagraph 4.03(e) shall be delivered within fifteen days from the date of termination. 4.04 Termination In The Event of Death or Disability. This Agreement shall terminate in the event of death or disability of Executive. (a) In the event of Executive's death, Ceridian shall pay an amount equal to twelve (12) months of Base Salary at the rate in effect at the time of Executive's death plus the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved. Such amount shall be paid (1) to the beneficiary or beneficiaries designated in writing to Ceridian by Executive, (2) in the absence of such designation to the surviving spouse, or (3) if there is no surviving spouse, or such surviving spouse disclaims all or any part, then the full amount, or such disclaimed portion, shall be paid to the executor, administrator or other - 6 -

personal representative of Executive's estate. The amount shall be paid as a lump sum as soon as practicable following Ceridian's receipt of notice of Executive's death. All such payments shall be in addition to any payments due pursuant to Section 4.04(c) below. (b) In the event of disability, Base Salary shall be terminated as of the end of the month in which the last day of the five-month period of Executive's inability to perform his duties occurs. (c) In the event of termination by reason of Executive's death or disability, Ceridian shall pay to Executive any amount equal to (1) the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which the death or disability occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.04(c) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.05 Pension Supplement. If the Board terminates Executive's employment without cause prior to Executive's 65th birthday, Ceridian shall provide to Executive, out of its general assets, a monthly supplemental retirement benefit in an amount equal to the actuarial equivalent of the difference, if any, between: (a) the monthly benefit to which Executive would have been entitled under the defined benefit pension plan or plans in which he participated immediately prior to his termination of employment if (1) an amount equivalent to three times the Base Salary were taken into account for purposes of determining his "final average pay" or similar term (as then defined under the terms of such plan or plans and determined without regard to the limitation on the total amount of compensation that can be taken into account under such plan or plans) for either (A) the year in which Executive's termination of employment occurred; or (B) the prior full year, whichever provides the highest total final average pay; and (2) Executive received one year of service credit under any such plan for each year of Base Salary to which Executive is entitled under Section 4.03(b)(2); (b) and the amount to which Executive is, in fact, entitled under such plan or plans. The benefit calculated under this Section 4.05 shall be paid at the same time and in the same form as the benefit under the plan with respect to which such calculation is made. 4.06 Entire Termination Payment. The compensation provided for in this Article IV for early termination of this Agreement and termination - 7 -

pursuant to this Article IV shall constitute Executive's sole remedy for such termination. Executive shall not be entitled to any other termination or severance payment which may be payable to Executive under any other agreement between Executive and Ceridian. ARTICLE V CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT 5.01 Confidentiality. Executive will not, during the term or after the termination or expiration of this Agreement, publish, disclose, or utilize in any manner any Confidential Information obtained while employed by Ceridian. If Executive leaves the employ of Ceridian, Executive will not, without its prior written consent, retain or take away any drawing, writing or other record in any form containing any Confidential Information. 5.02 Business Conduct and Ethics. During the term of employment with Ceridian, Executive will engage in no activity or employment which may conflict with the interest of Ceridian, and will comply with Ceridian's policies and guidelines pertaining to business conduct and ethics. 5.03 Disclosure. Executive will disclose promptly in writing to Ceridian all inventions, discoveries, software, writings and other works of authorship which are conceived, made, discovered, or written jointly or singly on Ceridian time or on Executive's own time, providing the invention, improvement, discovery, software, writing or other work of authorship is capable of being used by Ceridian in the normal course of business, and all such inventions, improvements, discoveries, software, writings and other works of authorship shall belong solely to Ceridian. 5.04 Instruments of Assignment. Executive will sign and execute all instruments of assignment and other papers to evidence vestiture of Executive's entire right, title and interest in such inventions, improvements, discoveries, software, writings or other works of authorship in Ceridian, at the request and the expense of Ceridian, and Executive will do all acts and sign all instruments of assignment and other papers Ceridian may reasonably request relating to applications for patents, copyrights, and the enforcement and protection thereof. If Executive is needed, at any time, to give testimony, evidence, or opinions in any litigation or proceeding involving any patents or copyrights or applications for patents or copyrights, both domestic and foreign, relating to inventions, improvements, discoveries, software, writings or other works of authorship conceived, developed or reduced to practice by Executive, Executive agrees to do so, and if Executive leaves the employ of Ceridian, Ceridian shall pay Executive at a rate mutually agreeable to Executive and Ceridian, plus reasonable traveling or other expenses. 5.05 Inventions Developed on Executive's Own Time. The two immediately preceding sections entitled "Disclosure" and "Instruments of - 8 -

Assignment" do not apply to inventions in which a Ceridian claim of any rights will create a violation of Chapter 47 Minnesota Revised Statutes, Section 1-181.78, reproduced below and constituting the written notification of its Subdivision 3. 181.78 Agreements relating to inventions Subdivision 1. Any provision in an employment agreement which provides that an Executive shall assign or offer to assign any of his rights in an invention to his employer shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee's own time, and (1) which does not relate (a) directly to the business of the employer or (b) to the employer's actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the employee for the employer. Any provision which purports to apply to such an invention is to that extent against the public policy of this state and is to that extent void and unenforceable. Subdivision 2. No employer shall require a provision made void and unenforceable by subdivision 1 as a condition of employment or continuing employment. Subdivision 3. IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1, 1977, CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN OR OFFER TO ASSIGN ANY OF HIS RIGHTS IN ANY INVENTION TO HIS EMPLOYER, THE EMPLOYER MUST ALSO, AT THE TIME THE AGREEMENT IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE EMPLOYEE THAT THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S OWN TIME, AND (1) WHICH DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (b) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. 5.06 Executive's Declaration. Executive has no inventions, improvements, discoveries, software, writings or other works of authorship useful to Ceridian in the normal course of business, which were conceived, made or written prior to the date of this Agreement and which are excluded from this Agreement. 5.07 Survival. The obligations of this Article V shall survive the expiration or termination of this Agreement. ARTICLE VI NON-COMPETITION, NON-RECRUITMENT - 9 -

6.01 General. The parties hereto recognize and agree that (a) Executive is a senior executive of Ceridian and is a key Executive of Ceridian, (b) Executive has received, and will in the future receive, substantial amounts of Confidential Information, (c) Ceridian's business is conducted on a worldwide basis, and (d) provision for non-competition and non-recruitment obligations by Executive is critical to Ceridian's continued economic well-being and protection of Ceridian's Confidential Information. In light of these considerations, this Article VI sets forth the terms and conditions of Executive's obligations of non-competition and non-recruitment subsequent to the termination of this Agreement and/or Executive's employment for any reason. 6.02 Non-Competition. (a) Unless the obligation is waived or limited by Ceridian in accordance with subsection (b) of this Section 6.02, Executive agrees that for a period of two years following termination of employment for any reason, Executive will not directly or indirectly, alone or as a partner, officer, director, shareholder or Executive of any other firm or entity, engage in any commercial activity in competition with any part of Ceridian's business as conducted as of the date of such termination of employment or with any part of Ceridian's contemplated business with respect to which Executive has Confidential Information as governed by Article V of this Agreement. For purposes of this subsection (a), "shareholder" shall not include beneficial ownership of less than five percent (5%) of the combined voting power of all issued and outstanding voting securities of a publicly held corporation whose stock is traded on a major stock exchange. Also for purposes of this subsection (a), "Ceridian's business" shall include business conducted by Ceridian or its affiliates and any partnership or joint venture in which Ceridian or its affiliates is a partner or joint venturer; provided that, "affiliate" as used in this sentence shall not include any corporation in which Ceridian has ownership of less than fifteen percent (15%) of the voting stock. (b) At its sole option Ceridian may, by written notice to Executive within 30 days after the effective date of termination of Executive's employment, waive or limit the time and/or geographic area in which Executive cannot engage in competitive activity. (c) During the term of the non-competition obligation, prior to accepting employment with, or agreeing to provide consulting services to, any firm which offers products or services in the fields of electronics or information processing, Executive shall give 30 days prior written notice to Ceridian. Such written notice shall describe the proposed employment or consulting services and the firm to which they will be rendered. Ceridian's failure to respond or object to such notice shall not in any way - 10 -

constitute acquiescence or waiver of Ceridian's rights under this Article VI. (d) During any period of non-competition pursuant to this Article VI Ceridian shall pay Executive an amount equal to the usual rate of Executive's Base Salary in effect at the time of termination. There shall be credited against Ceridian's obligation to make such payments any other payments made by Ceridian to Executive pursuant to Article IV of this Agreement. In the event that Ceridian elects, pursuant to subsection (b) of this Section 6.02, to waive all or any portion of the non-competition obligation, no payment shall be required by Ceridian with respect to the portion of the non-competition period which has been waived. 6.03 Non-Recruitment. For a period of two years following termination of employment for any reason, Executive will not initiate or actively participate in any other employer's recruitment or hiring of Ceridian executives. This provision shall not preclude an executive from responding to a request (other than by Executive's employer) for a reference with respect to an individual's employment qualifications. 6.04 Survival. The obligations of this Article VI shall survive the expiration or termination of this Agreement. ARTICLE VII CHANGE OF CONTROL 7.01 Definitions. For purposes of this Article VII, the following definitions shall be applied: (a) "Change of Control" shall mean any of the following events: (1) a merger or consolidation to which Parent Corporation is a party if the individuals and entities who were stockholders of Parent Corporation immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power for election of directors of the surviving corporation following the effective date of such merger or consolidation; or (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate of securities of Parent Corporation representing twenty percent (20%) or more of the total combined voting power of Parent Corporation's then issued and outstanding securities by any person or entity, or group of associated persons or entities acting in concert; or - 11 -

(3) the sale of the properties and assets of Parent Corporation, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of Parent Corporation. (4) the stockholders of Parent Corporation approve any plan or proposal for the liquidation of Parent Corporation; or (5) a change in the composition of the Board at any time during any consecutive twenty-four (24) month period such that the "Continuity Directors" cease for any reason to constitute at least a seventy percent (70%) majority of the Board. For purposes of this clause, "Continuity Directors" means those members of the Board who either: (A) were directors at the beginning of such consecutive twenty-four (24) month period; or (B) were elected by, or on the nomination or recommendation of, at least a two-thirds (2/3) majority of the then- existing Board. (b) "Change of Control Actions" shall mean any payment (including any benefit or transfer of property) in the nature of compensation, to or for the benefit of Executive under any arrangement, which is considered contingent on a Change of Control for purposes of Section 280G of the Internal Revenue Code. As used in this definition, the term "arrangement" includes, without limitation, any agreement between Executive and Ceridian and any and all of Ceridian's salary, bonus, incentive, restricted stock, stock option, compensation or benefit plans, programs or arrangements, and shall include this Agreement. (c)"Change of Control Termination" shall mean, with respect to Executive, any of the following events occurring within two (2) years after a Change of Control: (1) Termination of Executive's employment by Ceridian for any reason other than (A) fraud, (B) theft or embezzlement of Ceridian assets, (C) intentional violations of law involving moral turpitude, or (D) the substantial and continuing failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. (2) Termination of employment with Ceridian by Executive pursuant to Section 7.02 of this Article VII. A Change of Control Termination by Executive shall not, however, include termination by reason of death. - 12 -

(d)"Good Reason" shall mean a good faith determination by Executive, in Executive's reasonable judgment, that any one or more of the following events has occurred, without Executive's express written consent, after a Change of Control: (1) A change in Executive's reporting responsibilities, titles or offices as in effect immediately prior to the Change of Control, or any removal of Executive from, or any failure to re-elect Executive to, any of such positions, which has the effect of materially diminishing Executive's responsibility or authority; (2) A reduction by Ceridian in Executive's Base Salary as in effect immediately prior to the Change of Control or as the same may be increased from time to time; (3) Ceridian requiring Executive to be based anywhere other than within twenty-five (25) miles of Executive's job location at the time of the Change of Control; (4) Without replacement by plans, programs, or arrangements which, taken as a whole, provide benefits to Executive at least reasonably comparable to those discontinued or adversely affected, (A) the failure by Ceridian 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 Executive is participating immediately prior to a Change of Control; or (B) the taking of any action by Ceridian that would materially adversely affect Executive's participation or materially reduce Executive's benefits under any of such plans, programs or arrangements; (5) The failure by Ceridian to provide office space, furniture and secretarial support at least comparable to that provided Executive immediately prior to the Change of Control or the taking of any similar action by Ceridian that would materially adversely affect the working conditions in or under which Executive performs his or her employment duties; (6) If Executive's primary employment duties are with a Subsidiary, the sale, merger, contribution, transfer or any other transaction in conjunction with which Parent Corporation's ownership interest in such Subsidiary decreases below the level specified in Section 1.07 of Article I unless (A) this Agreement is assigned to the purchaser/transferee with the provisions of Article VII in full force and effect and operative as if a Change of Control has occurred with respect to the purchaser/transferee as Parent Corporation immediately after - 13 -

the purchase/transfer becomes effective, and (B) such purchaser/transferee has a creditworthiness reasonably equivalent to Parent Corporation's; or (7) Any material breach of this Agreement by Ceridian. (e)"Internal Revenue Code" -- Any reference to a section of the Internal Revenue Code shall mean that section of the Internal Revenue Code of 1986, or to the corresponding section of such Code as from time to time amended. 7.02 Change of Control Termination Right. For a period of two years following a Change of Control, Executive shall have the right, at any time and within Executive's sole discretion, to terminate employment with Ceridian for Good Reason. Such termination shall be accomplished by, and effective upon, Executive giving written notice to Ceridian of Executive's decision to terminate. Except as otherwise expressly provided in this Agreement, upon the exercise of said right, all obligations and duties of Executive under this Agreement shall be of no further force and effect. 7.03 Change of Control Termination Payment. In the event of a Change of Control Termination, and subject to the "Limitation on Change of Control Compensation" contained in Section 7.04, then, and without further action by the Board, Compensation and Human Resources Committee or otherwise, Parent Corporation shall, within five days of such termination, make a lump sum payment to Executive in an amount equal to one dollar ($1.00) less than three times the average annualized compensation as defined by Section 280G of the Internal Revenue Code, received by Executive from Ceridian and includible in Executive's gross income for federal income tax purposes, for the five (5) most recent taxable years of the Executive ending before the date upon which the Change in Control occurred (or such portion of such period during which Executive was an employee of Ceridian). 7.04 Limitation on Change of Control Compensation. Notwithstanding any other provisions of this Agreement or of any other agreement, contract or understanding heretofore or hereafter entered into between Ceridian and Executive, Executive shall not be entitled to receive any Change of Control Action which would, with respect to Executive, constitute a "parachute payment" for purposes of Section 280G of the Internal Revenue Code. In the event any Change of Control Action would, with respect to Executive, constitute a "parachute payment", Executive shall have the right to designate those Change of Control Action(s) which would be reduced or eliminated so that Executive will not receive a "parachute payment". 7.05 Interest. In the event Parent Corporation does not make timely payment in full of the Change of Control Termination payment described in Section 7.03, Executive shall be entitled to receive interest on any unpaid amount at the lower of: (a) prime rate of interest (or such comparable index as may be adopted) established from time to time - 14 -

by the Norwest Bank Minneapolis, N.A., Minneapolis, Minnesota; or (b) the maximum rate permitted under Section 280G(d)(4) of the Internal Revenue Code. 7.06 Attorneys' Fees. In the event Executive incurs any legal expense to enforce or defend his or her rights under this Article VII of this Agreement, or to recover damages for breach thereof, Executive shall be entitled to recover from Ceridian any expenses for attorneys' fees and disbursements incurred. 7.07 Benefits Continuation. In the event of a Change of Control Termination, Executive (and anyone entitled to claim under or through Executive) shall, until age 65, be entitled to receive from Ceridian the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on the day immediately prior to the Change of Control. To the extent that election of continuation of any of such coverages, programs, policies, or arrangements is made available to employees terminating at age 55 with fifteen or more years of service, Executive shall be required to pay no more for continuation than is required of such employees on the day immediately prior to the Change of Control. If no such continuation program is available, Executive shall be required to pay no more than he is paid as an active employee, or if provided by Ceridian at no cost to employees on the day immediately prior to the Change of Control, they shall continue to be made available to Executive on this basis. - 15 -

7.08 Pension Supplement. (a) In the event of a Change of Control Termination, Parent Corporation shall, within five days, make a lump sum payment to Executive in an amount equal to the actuarial equivalent of the difference, if any, between: (1) the monthly benefit to which Executive would have been entitled under the defined benefit pension plan or plans in which he participated immediately prior to his Change of Control Termination if the amount of payment to which Executive is entitled under Section 7.03 were taken into account for purposes of determining his "final average pay" or similar term (as then defined under the terms of such plan or plans and determined without regard to the limitation on the total amount of compensation that can be taken into account under such plan or plans) for either (A) the year in which the Change of Control Termination occurred; or (B) the prior full year, whichever provides the highest total final average pay; and (2) the amount to which Executive is, in fact, entitled under such plan or plans. For purposes of determining actuarial equivalencies for the preceding sentence, the actuarial factors specified in the particular plan or plans with respect to which the determination is being made shall be applied. (b) In the event of a Change of Control occurring after Executive has become entitled to receive a pension supplement under Section 4.05, Parent Corporation shall, within five days of the Change of Control, make a lump sum payment equivalent to the then present value of any such vested future benefits. Said lump sum payment shall constitute full satisfaction of Executive's entitlement under said Section 4.05. ARTICLE VIII CHANGE OF SUBSIDIARY STATUS 8.01 In the event that, prior to a Change of Control: (1) A Subsidiary is sold, merged, contributed, or in any other manner transferred, or if for any reason Parent Corporation's ownership interest in any such Subsidiary falls below the level specified in Section 1.07, (2) Executive's primary employment duties are with the Subsidiary at the time of the occurrence of such event, and (3) Executive does not, in conjunction therewith, transfer employment directly to Parent Corporation or a Subsidiary, then: (a) If Executive gives his or her written consent to the assignment of this Agreement to such Subsidiary, or to the purchaser or new majority interest holder of such Subsidiary, (and such assignment is accepted) this Agreement shall remain in full force and effect - 16 -

between Executive and the assignee, except that the provisions of Article VII of this Agreement shall become null and void; (b) If such assignment is not accepted by the Subsidiary or purchaser, then this Agreement shall be deemed to have been terminated by Ceridian without cause pursuant to Section 4.03 of Article IV; and (c) In all other cases, this Agreement shall be deemed terminated for cause pursuant to Section 4.02 of Article IV. ARTICLE IX GENERAL PROVISIONS 9.01 No Adequate Remedy. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if either party shall institute any action or proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in any such action or proceeding the claim or defense that such party has an adequate remedy at law. 9.02 Successors and Assigns. Except as otherwise provided in Article VIII, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of Parent Corporation and each Subsidiary, whether by way of merger, consolidation, operation of law, assignment, purchase or other acquisition of substantially all of the assets or business of Ceridian, and any such successor or assign shall absolutely and unconditionally assume all of Ceridian's obligations hereunder. 9.03 Notices. All notices, requests and demands given to or made pursuant hereto shall, except as otherwise specified herein, be in writing and be delivered or mailed to any such party at its address: (a) Ceridian Corporation 8100 34th Avenue South Minneapolis, Minnesota 55440 Attention: Office of General Counsel (b) In the case of Executive shall be: At the address listed on the last page of this Agreement. Either party may, by notice hereunder, designate a changed address. Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the second business day thereafter or when it is actually received, whichever is sooner. - 17 -

9.04 Captions. The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. 9.05 Governing Law. The validity, construction and performance of this Agreement shall be governed by the laws of the State of Minnesota and any and every legal proceeding arising out of or in connection with this Agreement shall be brought in the appropriate courts of the State of Minnesota, each of the parties hereby consenting to the exclusive jurisdiction of said courts for this purpose. The parties hereto expressly recognize and agree that the implementation of this Governing Law provision is essential in light of the fact that Parent Corporation's corporate headquarters and its principal executive offices are located within the State of Minnesota, and there is a critical need for uniformity in the interpretation and enforcement of the employment agreements between Ceridian and its senior executives. 9.06 Construction. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. 9.07 Waivers. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law. 9.08 Modification. This Agreement may not be and shall not be modified or amended except by written instrument signed by the parties hereto. 9.09 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior employment agreements or understandings of the parties hereto, and any and all such prior agreements or understandings are hereby rescinded by mutual agreement. IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. LAWRENCE PERLMAN CERIDIAN CORPORATION /s/Lawrence Perlman By: /s/Glenn W. Jeffrey Date: 1 February 1994 Title: Executive Vice President Date: Feb 1 / 94 Address: 8100 34th Avenue South Bloomington, MN 55425-1640 - 18 -

CERIDIAN CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT PARTIES Ceridian Corporation (a Delaware Corporation) 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 and STEPHEN B. MORRIS ("Executive") Date: June 7, 1993 RECITALS A. Ceridian wishes to obtain the services of Executive for at least the duration of this Agreement, and the Executive wishes to provide his or her services for such period. B. Ceridian desires reasonable protection of Ceridian's Confidential Information (as defined below). C. Ceridian desires assurance that Executive will not compete with Ceridian or engage in recruitment of Ceridian's employees for a reasonable period of time after termination of employment, and Executive is willing to refrain from competition and recruitment. D. Executive desires to be assured of a minimum Base Salary (as defined below) from Ceridian for Executive's services for the term of this Agreement (unless terminated earlier pursuant to the terms of this Agreement). E. It is expressly recognized by the parties that Executive's acceptance of, and continuance in, Executive's position with Ceridian and agreement to be bound by the terms of this Agreement represents a substantial commitment to Ceridian in terms of Executive's personal and professional career and a foregoing of present and future career options by Executive, for all of which Ceridian receives substantial value. F. The parties recognize that a Change of Control (as defined below) may result in material alteration or diminishment of Executive's position and responsibilities and substantially frustrate the purpose of Executive's commitment to Ceridian and forebearance of options. G. The parties recognize that in light of the above-described commitment and forebearance of options, it is essential that, for the benefit of - 1 -

Ceridian and its stockholders, provision be made for a Change of Control Termination (as defined below) in order to enable Executive to accept and effectively continue in Executive's position in the face of inherently disruptive circumstances arising from the possibility of a Change of Control of the Parent Corporation (as defined below), although no such change is now contemplated or foreseen. H. The parties wish to replace any and all prior agreements and undertakings with respect to the Executive's employment and Change of Control occurrences and compensation. NOW, THEREFORE, in consideration of Executive's acceptance of and continuance in Executive's employment for the term of this Agreement and the parties' agreement to be bound by the terms contained herein, the parties agree as follows: ARTICLE I DEFINITIONS 1.01 "Base Salary" shall mean regular cash compensation paid on a periodic basis exclusive of benefits, bonuses or incentive payments. 1.02 "Board" shall mean the Board of Directors of Ceridian Corporation (the "Parent Corporation"). 1.03 "Ceridian" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, (a) any Subsidiary (as that term is defined in Section 1.07); and (b) any successor in interest by way of consolidation, operation of law, merger or otherwise. 1.04 "Confidential Information" shall mean information or material which is not generally available to or used by others, or the utility or value of which is not generally known or recognized as standard practice, whether or not the underlying details are in the public domain, including: (a) information or material relating to Ceridian and its business as conducted or anticipated to be conducted; business plans; operations; past, current or anticipated software, products or services; customers or prospective customers; or research, engineering, development, manufacturing, purchasing, accounting, or marketing activities; (b) information or material relating to Ceridian's inventions, improvements, discoveries, "know-how," technological developments, or unpublished writings or other works of authorship, or to the materials, apparatus, processes, formulae, plans or methods used in the development, manufacture or marketing of Ceridian's software, products or services; - 2 -

(c) information which when received is marked as "proprietary," "private," or "confidential;" (d) trade secrets; (e) software in various stages of development, including computer programs in source code and binary code form, software designs, specifications, programming aids (including "library subroutines" and productivity tools), programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases; and (f) any similar information of the type described above which Ceridian obtained from another party and which Ceridian treats as or designates as being proprietary, private or confidential, whether or not owned or developed by Ceridian. Notwithstanding the foregoing, "Confidential Information" does not include any information which is properly published or in the public domain; provided, however, that information which is published by or with the aid of Executive outside the scope of employment or contrary to the requirements of this Agreement will not be considered to have been properly published, and therefore will not be in the public domain for purposes of this Agreement. 1.05 "Disability" shall mean the inability of Executive to perform his or her duties under this Agreement because of illness or incapacity for a continuous period of five months. 1.06 "Parent Corporation" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, any successor in interest by way of consolidation, operation of law, merger or otherwise. "Parent Corporation" shall not include any Subsidiary. 1.07 "Subsidiary" shall mean: (a) any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the occurrence of a contingency) is at the time owned by Parent Corporation and/or one or more Subsidiaries; and (b) any division or business unit (or portion thereof) of Parent Corporation or a corporation described in clause (a) of this Section 1.07. ARTICLE II EMPLOYMENT, DUTIES AND TERM 2.01 Employment. Upon the terms and conditions set forth in this Agreement, Ceridian hereby employs Executive, and Executive accepts such employment. Except as expressly provided herein, termination of this Agreement by either party shall also terminate Executive's employment by Ceridian. - 3 -

2.02 Duties. Executive shall devote his or her full-time and best efforts to Ceridian and to fulfilling the duties of his or her position which shall include such duties as may from time to time be assigned him or her by Ceridian, provided that such duties are reasonably consistent with Executive's education, experience and background. Executive shall comply with Ceridian's policies and procedures to the extent they are not inconsistent with this Agreement in which case the provisions of this Agreement prevail. 2.03 Term. Subject to the provisions of Articles IV, VII, and VIII, Executive's employment shall continue until the later of: (a) June 30, 1995; and (b) two years after a Change of Control which occurs prior to June 30, 1995. In any event, the Agreement shall automatically terminate without notice when Executive reaches 65 years of age. If employment is continued after the age of 65 by mutual agreement, it shall be terminable at will by either party. ARTICLE III COMPENSATION AND EXPENSES 3.01 Base Salary. For all services rendered under this Agreement during the term of Executive's employment, Ceridian shall pay Executive a minimum Base Salary at the annual rate currently being paid or, if Executive is not currently in Ceridian's employ, at the annual rate specified in the written offer of employment. If Executive's salary is increased from time to time during the term of this Agreement, the increased amount shall be the Base Salary for the remainder of the term and any extensions. 3.02 Bonus and Incentive. Bonus or incentive compensation shall be in the sole discretion of Ceridian. Except as otherwise provided in Article VII, Ceridian shall have the right in accordance with their terms to alter, amend or eliminate any bonus or incentive plans, or Executive's participation therein, without compensation to Executive. 3.03 Business Expenses. Ceridian shall, in accordance with, and to the extent of, its policies in effect from time to time, bear all ordinary and necessary business expenses incurred by Executive in performing his or her duties as an employee of Ceridian, provided that Executive accounts promptly for such expenses to Ceridian in the manner prescribed from time to time by Ceridian. ARTICLE IV EARLY TERMINATION 4.01 Early Termination. Subject to the respective continuing obligations of the parties pursuant to Articles V, VI, and IX, this Article sets forth the terms for early termination of this Agreement; provided, however, that this Article shall not apply to a Change of Control Termination which is governed solely by the provisions of Article VII. - 4 -

4.02 Termination for Cause. Ceridian may terminate this Agreement immediately for cause. For the purpose hereof "cause" means (a) fraud, (b) misrepresentation, (c) theft or embezzlement of Ceridian assets, (d) intentional violations of law involving moral turpitude, (e) the continued failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. In the event of termination for cause pursuant to this Section 4.02, Executive shall be paid at the usual rate of Executive's annual Base Salary through the date of termination specified in any notice of termination. 4.03 Termination Without Cause. Either Executive or Ceridian may terminate this Agreement and Executive's employment without cause on at least 75 days' written notice. In the event of termination of this Agreement and of Executive's employment pursuant to this Section 4.03, compensation shall be paid as follows: (a) if the notice of termination is given by Executive at any time Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in such notice (but not to exceed 75 days); (b) if the notice of termination is given by Ceridian and effective prior to Executive's 65th birthday, (1) Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in the notice provided, however, that Ceridian shall have the option of making termination of the Agreement and Executive's employment effective immediately upon notice in which case Executive shall be paid through a notice period of 75 days; and (2) Executive shall receive, within 15 days following termination, a lump sum payment equivalent to two years' Base Salary. (c) If the notice of termination is given by Ceridian to be effective on or after Executive's 65th birthday Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in any notice. (d) In the event that termination occurs pursuant to Sections 4.03(b) or 4.03(c), then, in addition to the payments specified in said Sections, Ceridian shall pay to Executive any amount equal to (1) the bonus, if any, to which Executive would otherwise have become entitled under all Ceridian bonus plans in effect at the time of termination of this Agreement had Executive remained continuously employed for the full fiscal year in which termination occurred and continued to perform his or her duties in the same manner as they were performed immediately prior to termination, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the - 5 -

year in which termination occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.03(d) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.04 Termination In The Event of Death or Disability. This Agreement shall terminate in the event of death or disability of Executive. (a) In the event of Executive's death, Ceridian shall pay an amount equal to 12 months of Base Salary at the rate in effect at the time of Executive's death plus the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved. Such amount shall be paid (1) to the beneficiary or beneficiaries designated in writing to Ceridian by Executive, (2) in the absence of such designation to the surviving spouse, or (3) if there is no surviving spouse, or such surviving spouse disclaims all or any part, then the full amount, or such disclaimed portion, shall be paid to the executor, administrator or other personal representative of Executive's estate. The amount shall be paid as a lump sum as soon as practicable following Ceridian's receipt of notice of Executive's death. All such payments shall be in addition to any payments due pursuant to Section 4.04(c) below. (b) In the event of disability, Base Salary shall be terminated as of the end of the month in which the last day of the five-month period of Executive's inability to perform his or her duties occurs. (c) In the event of termination by reason of Executive's death or disability, Ceridian shall pay to Executive any amount equal to (1) the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which the death or disability occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.04(c) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.05 Entire Termination Payment. The compensation provided for in this Article IV for early termination of this Agreement and termination pursuant to this Article IV shall constitute Executive's sole remedy for such termination. Executive shall not be entitled to any other termination or severance payment which may be payable to Executive under any other agreement between Executive and Ceridian. ARTICLE V CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT - 6 -

5.01 Confidentiality. Executive will not, during the term or after the termination or expiration of this Agreement, publish, disclose, or utilize in any manner any Confidential Information obtained while employed by Ceridian. If Executive leaves the employ of Ceridian, Executive will not, without Ceridian's prior written consent, retain or take away any drawing, writing or other record in any form containing any Confidential Information. 5.02 Business Conduct and Ethics. During the term of employment with Ceridian, Executive will engage in no activity or employment which may conflict with the interest of Ceridian, and will comply with Ceridian's policies and guidelines pertaining to business conduct and ethics. 5.03 Disclosure. Executive will disclose promptly in writing to Ceridian all inventions, discoveries, software, writings and other works of authorship which are conceived, made, discovered, or written jointly or singly on Ceridian time or on Executive's own time, providing the invention, improvement, discovery, software, writing or other work of authorship is capable of being used by Ceridian in the normal course of business, and all such inventions, improvements, discoveries, software, writings and other works of authorship shall belong solely to Ceridian. 5.04 Instruments of Assignment. Executive will sign and execute all instruments of assignment and other papers to evidence vestiture of Executive's entire right, title and interest in such inventions, improvements, discoveries, software, writings or other works of authorship in Ceridian, at the request and the expense of Ceridian, and Executive will do all acts and sign all instruments of assignment and other papers Ceridian may reasonably request relating to applications for patents, patents, copyrights, and the enforcement and protection thereof. If Executive is needed, at any time, to give testimony, evidence, or opinions in any litigation or proceeding involving any patents or copyrights or applications for patents or copyrights, both domestic and foreign, relating to inventions, improvements, discoveries, software, writings or other works of authorship conceived, developed or reduced to practice by Executive, Executive agrees to do so, and if Executive leaves the employ of Ceridian, Ceridian shall pay Executive at a rate mutually agreeable to Executive and Ceridian, plus reasonable traveling or other expenses. 5.05 Inventions Developed on Executive's Own Time. The two immediately preceding sections entitled "Disclosure" and "Instruments of Assignment" do not apply to inventions in which a Ceridian claim of any rights will create a violation of Chapter 47 Minnesota Revised Statutes, Section 1-181.78, reproduced below and constituting the written notification of its Subdivision 3. 181.78 Agreements relating to inventions Subdivision 1. - 7 -

Any provision in an employment agreement which provides that an Executive shall assign or offer to assign any of his rights in an invention to his employer shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee's own time, and (1) which does not relate (a) directly to the business of the employer or (b) to the employer's actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the employee for the employer. Any provision which purports to apply to such an invention is to that extent against the public policy of this state and is to that extent void and unenforceable. Subdivision 2. No employer shall require a provision made void and unenforceable by subdivision 1 as a condition of employment or continuing employment. Subdivision 3. IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1, 1977, CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN OR OFFER TO ASSIGN ANY OF HIS RIGHTS IN ANY INVENTION TO HIS EMPLOYER, THE EMPLOYER MUST ALSO, AT THE TIME THE AGREEMENT IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE EMPLOYEE THAT THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S OWN TIME, AND (1) WHICH DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (b) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. 5.06 Executive's Declaration. Executive has no inventions, improvements, discoveries, software, writings or other works of authorship useful to Ceridian in the normal course of business, which were conceived, made or written prior to the date of this Agreement and which are excluded from this Agreement. 5.07 Survival. The obligations of this Article V shall survive the expiration or termination of this Agreement. ARTICLE VI NON-COMPETITION, NON-RECRUITMENT 6.01 General. The parties hereto recognize and agree that (a) Executive is a senior executive of Ceridian and is a key Executive of Ceridian, (b) Executive has received, and will in the future receive, substantial amounts of Confidential Information, (c) Ceridian's business is conducted on a worldwide basis, and (d) provision for non-competition and non-recruitment obligations by Executive is critical to Ceridian's continued economic well-being and protection of Ceridian's - 8 -

Confidential Information. In light of these considerations, this Article VI sets forth the terms and conditions of Executive's obligations of non-competition and non-recruitment subsequent to the termination of this Agreement and/or Executive's employment for any reason. 6.02 Non-Competition. (a) Unless the obligation is waived or limited by Ceridian in accordance with subsection (b) of this Section 6.02, Executive agrees that for a period of two years following termination of employment for any reason, Executive will not directly or indirectly, alone or as a partner, officer, director, shareholder or employee of any other firm or entity, engage in any commercial activity in competition with any part of Ceridian's business as conducted as of the date of such termination of employment or with any part of Ceridian's contemplated business with respect to which Executive has Confidential Information as governed by Article V of this Agreement. For purposes of this subsection (a), "shareholder" shall not include beneficial ownership of less than five percent (5%) of the combined voting power of all issued and outstanding voting securities of a publicly held corporation whose stock is traded on a major stock exchange. Also for purposes of this subsection (a), "Ceridian's business" shall include business conducted by Ceridian or its affiliates and any partnership or joint venture in which Ceridian or its affiliates is a partner or joint venturer; provided that, "affiliate" as used in this sentence shall not include any corporation in which Ceridian has ownership of less than fifteen percent (15%) of the voting stock. (b) At its sole option Ceridian may, by written notice to Executive within 30 days after the effective date of termination of Executive's employment, waive or limit the time and/or geographic area in which Executive cannot engage in competitive activity. (c) During the term of the non-competition obligation, prior to accepting employment with, or agreeing to provide consulting services to, any firm which offers products or services in the fields of electronics or information processing, Executive shall give 30 days prior written notice to Ceridian. Such written notice shall describe the proposed employment or consulting services and the firm to which they will be rendered. Ceridian's failure to respond or object to such notice shall not in any way constitute acquiescence or waiver of Ceridian's rights under this Article VI. (d) During any period of non-competition pursuant to this Article VI Ceridian shall pay Executive an amount equal to the usual rate of Executive's Base Salary in effect at the time of termination. There shall be credited against Ceridian's obligation to make such payments any other payments made by Ceridian to Executive - 9 -

pursuant to Article IV of this Agreement. In the event that Ceridian elects, pursuant to subsection (b) of this Section 6.02, to waive all or any portion of the non-competition obligation, no payment shall be required by Ceridian with respect to the portion of the non-competition period which has been waived. 6.03 Non-Recruitment. For a period of two years following termination of employment for any reason, Executive will not initiate or actively participate in any other employer's recruitment or hiring of Ceridian employees. This provision shall not preclude Executive from responding to a request (other than by Executive's employer) for a reference with respect to an individual's employment qualifications. 6.04 Survival. The obligations of this Article VI shall survive the expiration or termination of this Agreement. ARTICLE VII CHANGE OF CONTROL 7.01 Definitions. For purposes of this Article VII, the following definitions shall be applied: (a) "Change of Control" shall mean any of the following events: (1) a merger or consolidation to which Parent Corporation is a party if the individuals and entities who were stockholders of Parent Corporation immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power for election of directors of the surviving corporation immediately following the effective date of such merger or consolidation; or (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate of securities of Parent Corporation representing twenty percent (20%) or more of the total combined voting power of Parent Corporation's then issued and outstanding securities by any person or entity, or group of associated persons or entities acting in concert; or (3) the sale of the properties and assets of Parent Corporation, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of Parent Corporation. (4) the stockholders of Parent Corporation approve any plan or proposal for the liquidation of Parent Corporation; or (5) 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 - 10 -

seventy percent (70%) majority of the Board. For purposes of this clause, "Continuity Directors" means those members of the Board who either: (A) were directors at the beginning of such consecutive 24 month period; or (B) were elected by, or on the nomination or recommendation of, at least a two-thirds (2/3) majority of the then- existing Board. (b) "Change of Control Actions" shall mean any payment (including any benefit or transfer of property) in the nature of compensation, to or for the benefit of Executive under any arrangement, which is considered contingent on a Change of Control for purposes of Section 280G of the Internal Revenue Code. As used in this definition, the term "arrangement" includes, without limitation, any agreement between Executive and Ceridian and any and all of Ceridian's salary, bonus, incentive, restricted stock, stock option, compensation or benefit plans, programs or arrangements, and shall include this Agreement. (c) "Change of Control Termination" shall mean, with respect to Executive, any of the following events occurring within two years after a Change of Control: (1) Termination of Executive's employment by Ceridian for any reason other than (A) fraud, (B) theft or embezzlement of Ceridian assets, (C) intentional violations of law involving moral turpitude, or (D) the substantial and continuing failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. (2) Termination of employment with Ceridian by Executive pursuant to Section 7.02 of this Article VII. A Change of Control Termination by Executive shall not, however, include termination by reason of death. (d) "Good Reason" shall mean a good faith determination by Executive, in Executive's reasonable judgment, that any one or more of the following events has occurred, without Executive's express written consent, after a Change of Control: (1) A change in Executive's reporting responsibilities, titles or offices as in effect immediately prior to the Change of Control, or any removal of Executive from, or any failure to re-elect Executive to, any of such positions, which has the - 11 -

effect of materially diminishing Executive's responsibility or authority; (2) A reduction by Ceridian in Executive's Base Salary as in effect immediately prior to the Change of Control or as the same may be increased from time to time; (3) Ceridian requiring Executive to be based anywhere other than within 25 miles of Executive's job location at the time of the Change of Control; (4) Without replacement by plans, programs, or arrangements which, taken as a whole, provide benefits to Executive at least reasonably comparable to those discontinued or adversely affected, (A) the failure by Ceridian 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 Executive is participating immediately prior to a Change of Control; or (B) the taking of any action by Ceridian that would materially adversely affect Executive's participation or materially reduce Executive's benefits under any of such plans, programs or arrangements; (5) The failure by Ceridian to provide office space, furniture, and secretarial support at least comparable to that provided Executive immediately prior to the Change of Control or the taking of any similar action by Ceridian that would materially adversely affect the working conditions in or under which Executive performs his or her employment duties; (6) If Executive's primary employment duties are with a Subsidiary, the sale, merger, contribution, transfer or any other transaction in conjunction with which Parent Corporation's ownership interest in such Subsidiary decreases below the level specified in Section 1.07 of Article I unless (A) this Agreement is assigned to the purchaser/transferee with the provisions of Article VII in full force and effect and operative as if a Change of Control has occurred with respect to the purchaser/transferee as Parent Corporation immediately after the purchase/transfer becomes effective, and (B) such purchaser/transferee has a creditworthiness reasonably equivalent to Parent Corporation's; or (7) Any material breach of this Agreement by Ceridian. (e) "Internal Revenue Code" -- Any reference to a section of the Internal Revenue Code shall mean that section of the Internal Revenue Code of 1986, or to the corresponding section of such Code as from time to time amended. - 12 -

7.02 Change of Control Termination Right. For a period of two years following a Change of Control, Executive shall have the right, at any time and within Executive's sole discretion, to terminate employment with Ceridian for Good Reason. Such termination shall be accomplished by, and effective upon, Executive giving written notice to Ceridian of Executive's decision to terminate. Except as otherwise expressly provided in this Agreement, upon the exercise of said right, all obligations and duties of Executive under this Agreement shall be of no further force and effect. 7.03 Change of Control Termination Payment. In the event of a Change of Control Termination, and subject to the "Limitation on Change of Control Compensation" contained in Section 7.04, then, and without further action by the Board, Compensation Committee or otherwise, Parent Corporation shall, within five days of such termination, make a lump sum payment to Executive in an amount equal to one dollar ($1.00) less than three times the average annualized compensation as defined by Section 280G of the Internal Revenue Code, received by Executive from Ceridian and includible in Executive's gross income for federal income tax purposes, for the five most recent taxable years of the Executive ending before the date upon which the Change in Control occurred (or such portion of such period during which Executive was an employee of Ceridian). 7.04 Limitation on Change of Control Compensation. Notwithstanding any other provisions of this Agreement or of any other agreement, contract or understanding heretofore or hereafter entered into between Ceridian and Executive, Executive shall not be entitled to receive any Change of Control Action which would, with respect to Executive, constitute a "parachute payment" for purposes of Section 280G of the Internal Revenue Code. In the event any Change of Control Action would, with respect to Executive, constitute a "parachute payment", Executive shall have the right to designate those Change of Control Action(s) which would be reduced or eliminated so that Executive will not receive a "parachute payment". 7.05 Interest. In the event Parent Corporation does not make timely payment in full of the Change of Control Termination payment described in Section 7.03, Executive shall be entitled to receive interest on any unpaid amount at the lower of: (a) prime rate of interest (or such comparable index as may be adopted) established from time to time by the Norwest Bank Minneapolis, N.A., Minneapolis, Minnesota; or (b) the maximum rate permitted under Section 280G(d)(4) of the Internal Revenue Code. 7.06 Attorneys' Fees. In the event Executive incurs any legal expense to enforce or defend his or her rights under this Article VII of this Agreement, or to recover damages for breach thereof, Executive shall be entitled to recover from Ceridian any expenses for attorneys' fees and disbursements incurred. - 13 -

7.07 Benefits Continuation. In the event of a Change of Control Termination, Executive (and anyone entitled to claim under or through Executive) shall, until age 65, be entitled to receive from Ceridian the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on the day immediately prior to the Change of Control. To the extent that election of continuation of any of such coverages, programs, policies, or arrangements is made available to employees terminating at age 55 with 15 or more years of service, Executive shall be required to pay no more for continuation than is required of such employees on the day immediately prior to the Change of Control. If no such continuation program is available, Executive shall be required to pay no more than he/she paid as an active employee, or if provided by Ceridian at no cost to employees on the day immediately prior to the Change of Control, they shall continue to be made available to Executive on this basis. ARTICLE VIII CHANGE OF SUBSIDIARY STATUS In the event that, prior to a Change of Control: (a) a Subsidiary is sold, merged, contributed, or in any other manner transferred, or if for any reason Parent Corporation's ownership interest in any such Subsidiary falls below the level specified in Section 1.07, (b) Executive's primary employment duties are with the Subsidiary at the time of the occurrence of such event, and (c) Executive does not, in conjunction therewith, transfer employment directly to Parent Corporation or another Subsidiary, then: (1) If Executive gives his or her written consent to the assignment of this Agreement to such Subsidiary, or to the purchaser or new majority interest holder of such Subsidiary, (and such assignment is accepted) this Agreement shall remain in full force and effect between Executive and the assignee, except that the provisions of Article VII of this Agreement shall become null and void; (2) If such assignment is not accepted by the Subsidiary or purchaser, then this Agreement shall be deemed to have been terminated by Ceridian without cause pursuant to Section 4.03 of Article IV; and (3) In all other cases, this Agreement shall be deemed terminated for cause pursuant to Section 4.02 of Article IV. ARTICLE IX GENERAL PROVISIONS 9.01 No Adequate Remedy. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if either party shall institute any action or - 14 -

proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in any such action or proceeding the claim or defense that such party has an adequate remedy at law. 9.02 Successors and Assigns. Except as otherwise provided in Article VIII, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of Parent Corporation and each Subsidiary, whether by way of merger, consolidation, operation of law, assignment, purchase or other acquisition of substantially all of the assets or business of Ceridian, and any such successor or assign shall absolutely and unconditionally assume all of Ceridian's obligations hereunder. 9.03 Notices. All notices, requests and demands given to or made pursuant hereto shall, except as otherwise specified herein, be in writing and be delivered or mailed to any such party at its address: (a) Ceridian Corporation 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 Attention: Office of General Counsel (b) In the case of Executive shall be: At the address listed on the last page of this Agreement. Either party may, by notice hereunder, designate a changed address. Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the second business day thereafter or when it is actually received, whichever is sooner. 9.04 Captions. The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. 9.05 Governing Law. The validity, construction and performance of this Agreement shall be governed by the laws of the State of Minnesota and any and every legal proceeding arising out of or in connection with this Agreement shall be brought in the appropriate courts of the State of Minnesota, each of the parties hereby consenting to the exclusive jurisdiction of said courts for this purpose. The parties hereto expressly recognize and agree that the implementation of this Governing Law provision is essential in light of the fact that Parent Corporation's corporate headquarters and its principal executive offices are located within the State of Minnesota, and there is a critical need for uniformity in the interpretation and enforcement of the employment agreements between Ceridian and its senior executives. - 15 -

9.06 Construction. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. 9.07 Waivers. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law. 9.08 Modification. This Agreement may not be and shall not be modified or amended except by written instrument signed by the parties hereto. 9.09 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior employment agreements or understandings of the parties hereto, and any and all such prior agreements or understandings are hereby rescinded by mutual agreement. IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. EXECUTIVE CERIDIAN CORPORATION /s/Stephen B. Morris By: /s/Glenn W. Jeffrey Title:Executive Vice President Address: The Arbitron Co 142 N 57th St New York, NY 10019 - 16 -

CERIDIAN CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT PARTIES Ceridian Corporation (a Delaware Corporation) 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 and PATRICK C. SOMMERS ("Executive") Date: June 7, 1993 RECITALS A. Ceridian wishes to obtain the services of Executive for at least the duration of this Agreement, and the Executive wishes to provide his or her services for such period. B. Ceridian desires reasonable protection of Ceridian's Confidential Information (as defined below). C. Ceridian desires assurance that Executive will not compete with Ceridian or engage in recruitment of Ceridian's employees for a reasonable period of time after termination of employment, and Executive is willing to refrain from competition and recruitment. D. Executive desires to be assured of a minimum Base Salary (as defined below) from Ceridian for Executive's services for the term of this Agreement (unless terminated earlier pursuant to the terms of this Agreement). E. It is expressly recognized by the parties that Executive's acceptance of, and continuance in, Executive's position with Ceridian and agreement to be bound by the terms of this Agreement represents a substantial commitment to Ceridian in terms of Executive's personal and professional career and a foregoing of present and future career options by Executive, for all of which Ceridian receives substantial value. F. The parties recognize that a Change of Control (as defined below) may result in material alteration or diminishment of Executive's position and responsibilities and substantially frustrate the purpose of Executive's commitment to Ceridian and forebearance of options. G. The parties recognize that in light of the above-described commitment and forebearance of options, it is essential that, for the benefit of - 1 -

Ceridian and its stockholders, provision be made for a Change of Control Termination (as defined below) in order to enable Executive to accept and effectively continue in Executive's position in the face of inherently disruptive circumstances arising from the possibility of a Change of Control of the Parent Corporation (as defined below), although no such change is now contemplated or foreseen. H. The parties wish to replace any and all prior agreements and undertakings with respect to the Executive's employment and Change of Control occurrences and compensation. NOW, THEREFORE, in consideration of Executive's acceptance of and continuance in Executive's employment for the term of this Agreement and the parties' agreement to be bound by the terms contained herein, the parties agree as follows: ARTICLE I DEFINITIONS 1.01 "Base Salary" shall mean regular cash compensation paid on a periodic basis exclusive of benefits, bonuses or incentive payments. 1.02 "Board" shall mean the Board of Directors of Ceridian Corporation (the "Parent Corporation"). 1.03 "Ceridian" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, (a) any Subsidiary (as that term is defined in Section 1.07); and (b) any successor in interest by way of consolidation, operation of law, merger or otherwise. 1.04 "Confidential Information" shall mean information or material which is not generally available to or used by others, or the utility or value of which is not generally known or recognized as standard practice, whether or not the underlying details are in the public domain, including: (a) information or material relating to Ceridian and its business as conducted or anticipated to be conducted; business plans; operations; past, current or anticipated software, products or services; customers or prospective customers; or research, engineering, development, manufacturing, purchasing, accounting, or marketing activities; (b) information or material relating to Ceridian's inventions, improvements, discoveries, "know-how," technological developments, or unpublished writings or other works of authorship, or to the materials, apparatus, processes, formulae, - 2 -

plans or methods used in the development, manufacture or marketing of Ceridian's software, products or services; (c) information which when received is marked as "proprietary," "private," or "confidential;" (d) trade secrets; (e) software in various stages of development, including computer programs in source code and binary code form, software designs, specifications, programming aids (including "library subroutines" and productivity tools), programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases; and (f) any similar information of the type described above which Ceridian obtained from another party and which Ceridian treats as or designates as being proprietary, private or confidential, whether or not owned or developed by Ceridian. Notwithstanding the foregoing, "Confidential Information" does not include any information which is properly published or in the public domain; provided, however, that information which is published by or with the aid of Executive outside the scope of employment or contrary to the requirements of this Agreement will not be considered to have been properly published, and therefore will not be in the public domain for purposes of this Agreement. 1.05 "Disability" shall mean the inability of Executive to perform his or her duties under this Agreement because of illness or incapacity for a continuous period of five months. 1.06 "Parent Corporation" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, any successor in interest by way of consolidation, operation of law, merger or otherwise. "Parent Corporation" shall not include any Subsidiary. 1.07 "Subsidiary" shall mean: (a) any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the occurrence of a contingency) is at the time owned by Parent Corporation and/or one or more Subsidiaries; and (b) any division or business unit (or portion thereof) of Parent Corporation or a corporation described in clause (a) of this Section 1.07. ARTICLE II EMPLOYMENT, DUTIES AND TERM 2.01 Employment. Upon the terms and conditions set forth in this Agreement, Ceridian hereby employs Executive, and Executive accepts such employment. Except as expressly provided herein, termination of - 3 -

this Agreement by either party shall also terminate Executive's employment by Ceridian. 2.02 Duties. Executive shall devote his or her full-time and best efforts to Ceridian and to fulfilling the duties of his or her position which shall include such duties as may from time to time be assigned him or her by Ceridian, provided that such duties are reasonably consistent with Executive's education, experience and background. Executive shall comply with Ceridian's policies and procedures to the extent they are not inconsistent with this Agreement in which case the provisions of this Agreement prevail. 2.03 Term. Subject to the provisions of Articles IV, VII, and VIII, Executive's employment shall continue until the later of: (a) June 30, 1995; and (b) two years after a Change of Control which occurs prior to June 30, 1995. In any event, the Agreement shall automatically terminate without notice when Executive reaches 65 years of age. If employment is continued after the age of 65 by mutual agreement, it shall be terminable at will by either party. ARTICLE III COMPENSATION AND EXPENSES 3.01 Base Salary. For all services rendered under this Agreement during the term of Executive's employment, Ceridian shall pay Executive a minimum Base Salary at the annual rate currently being paid or, if Executive is not currently in Ceridian's employ, at the annual rate specified in the written offer of employment. If Executive's salary is increased from time to time during the term of this Agreement, the increased amount shall be the Base Salary for the remainder of the term and any extensions. 3.02 Bonus and Incentive. Bonus or incentive compensation shall be in the sole discretion of Ceridian. Except as otherwise provided in Article VII, Ceridian shall have the right in accordance with their terms to alter, amend or eliminate any bonus or incentive plans, or Executive's participation therein, without compensation to Executive. 3.03 Business Expenses. Ceridian shall, in accordance with, and to the extent of, its policies in effect from time to time, bear all ordinary and necessary business expenses incurred by Executive in performing his or her duties as an employee of Ceridian, provided that Executive accounts promptly for such expenses to Ceridian in the manner prescribed from time to time by Ceridian. ARTICLE IV EARLY TERMINATION 4.01 Early Termination. Subject to the respective continuing obligations of the parties pursuant to Articles V, VI, and IX, this Article sets forth the terms for early termination of this Agreement; provided, - 4 -

however, that this Article shall not apply to a Change of Control Termination which is governed solely by the provisions of Article VII. 4.02 Termination for Cause. Ceridian may terminate this Agreement immediately for cause. For the purpose hereof "cause" means (a) fraud, (b) misrepresentation, (c) theft or embezzlement of Ceridian assets, (d) intentional violations of law involving moral turpitude, (e) the continued failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. In the event of termination for cause pursuant to this Section 4.02, Executive shall be paid at the usual rate of Executive's annual Base Salary through the date of termination specified in any notice of termination. 4.03 Termination Without Cause. Either Executive or Ceridian may terminate this Agreement and Executive's employment without cause on at least 75 days' written notice. In the event of termination of this Agreement and of Executive's employment pursuant to this Section 4.03, compensation shall be paid as follows: (a) if the notice of termination is given by Executive at any time Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in such notice (but not to exceed 75 days); (b) if the notice of termination is given by Ceridian and effective prior to Executive's 65th birthday, (1) Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in the notice provided, however, that Ceridian shall have the option of making termination of the Agreement and Executive's employment effective immediately upon notice in which case Executive shall be paid through a notice period of 75 days; and (2) Executive shall receive, within 15 days following termination, a lump sum payment equivalent to two years' Base Salary. (c) If the notice of termination is given by Ceridian to be effective on or after Executive's 65th birthday Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in any notice. (d) In the event that termination occurs pursuant to Sections 4.03(b) or 4.03(c), then, in addition to the payments specified in said Sections, Ceridian shall pay to Executive any amount equal to (1) the bonus, if any, to which Executive would otherwise have become entitled under all Ceridian bonus plans in effect at the time of termination of this Agreement had Executive remained continuously employed for the full fiscal year in which termination occurred and continued to perform his or her duties - 5 -

in the same manner as they were performed immediately prior to termination, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which termination occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.03(d) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.04 Termination In The Event of Death or Disability. This Agreement shall terminate in the event of death or disability of Executive. (a) In the event of Executive's death, Ceridian shall pay an amount equal to 12 months of Base Salary at the rate in effect at the time of Executive's death plus the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved. Such amount shall be paid (1) to the beneficiary or beneficiaries designated in writing to Ceridian by Executive, (2) in the absence of such designation to the surviving spouse, or (3) if there is no surviving spouse, or such surviving spouse disclaims all or any part, then the full amount, or such disclaimed portion, shall be paid to the executor, administrator or other personal representative of Executive's estate. The amount shall be paid as a lump sum as soon as practicable following Ceridian's receipt of notice of Executive's death. All such payments shall be in addition to any payments due pursuant to Section 4.04(c) below. (b) In the event of disability, Base Salary shall be terminated as of the end of the month in which the last day of the five-month period of Executive's inability to perform his or her duties occurs. (c) In the event of termination by reason of Executive's death or disability, Ceridian shall pay to Executive any amount equal to (1) the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which the death or disability occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.04(c) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.05 Entire Termination Payment. The compensation provided for in this Article IV for early termination of this Agreement and termination pursuant to this Article IV shall constitute Executive's sole remedy for such termination. Executive shall not be entitled to any other termination or severance payment which may be payable to Executive under any other agreement between Executive and Ceridian. ARTICLE V - 6 -

CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT 5.01 Confidentiality. Executive will not, during the term or after the termination or expiration of this Agreement, publish, disclose, or utilize in any manner any Confidential Information obtained while employed by Ceridian. If Executive leaves the employ of Ceridian, Executive will not, without Ceridian's prior written consent, retain or take away any drawing, writing or other record in any form containing any Confidential Information. 5.02 Business Conduct and Ethics. During the term of employment with Ceridian, Executive will engage in no activity or employment which may conflict with the interest of Ceridian, and will comply with Ceridian's policies and guidelines pertaining to business conduct and ethics. 5.03 Disclosure. Executive will disclose promptly in writing to Ceridian all inventions, discoveries, software, writings and other works of authorship which are conceived, made, discovered, or written jointly or singly on Ceridian time or on Executive's own time, providing the invention, improvement, discovery, software, writing or other work of authorship is capable of being used by Ceridian in the normal course of business, and all such inventions, improvements, discoveries, software, writings and other works of authorship shall belong solely to Ceridian. 5.04 Instruments of Assignment. Executive will sign and execute all instruments of assignment and other papers to evidence vestiture of Executive's entire right, title and interest in such inventions, improvements, discoveries, software, writings or other works of authorship in Ceridian, at the request and the expense of Ceridian, and Executive will do all acts and sign all instruments of assignment and other papers Ceridian may reasonably request relating to applications for patents, patents, copyrights, and the enforcement and protection thereof. If Executive is needed, at any time, to give testimony, evidence, or opinions in any litigation or proceeding involving any patents or copyrights or applications for patents or copyrights, both domestic and foreign, relating to inventions, improvements, discoveries, software, writings or other works of authorship conceived, developed or reduced to practice by Executive, Executive agrees to do so, and if Executive leaves the employ of Ceridian, Ceridian shall pay Executive at a rate mutually agreeable to Executive and Ceridian, plus reasonable traveling or other expenses. 5.05 Inventions Developed on Executive's Own Time. The two immediately preceding sections entitled "Disclosure" and "Instruments of Assignment" do not apply to inventions in which a Ceridian claim of any rights will create a violation of Chapter 47 Minnesota Revised Statutes, Section 1-181.78, reproduced below and constituting the written notification of its Subdivision 3. 181.78 Agreements relating to inventions - 7 -

Subdivision 1. Any provision in an employment agreement which provides that an Executive shall assign or offer to assign any of his rights in an invention to his employer shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee's own time, and (1) which does not relate (a) directly to the business of the employer or (b) to the employer's actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the employee for the employer. Any provision which purports to apply to such an invention is to that extent against the public policy of this state and is to that extent void and unenforceable. Subdivision 2. No employer shall require a provision made void and unenforceable by subdivision 1 as a condition of employment or continuing employment. Subdivision 3. IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1, 1977, CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN OR OFFER TO ASSIGN ANY OF HIS RIGHTS IN ANY INVENTION TO HIS EMPLOYER, THE EMPLOYER MUST ALSO, AT THE TIME THE AGREEMENT IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE EMPLOYEE THAT THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S OWN TIME, AND (1) WHICH DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (b) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. 5.06 Executive's Declaration. Executive has no inventions, improvements, discoveries, software, writings or other works of authorship useful to Ceridian in the normal course of business, which were conceived, made or written prior to the date of this Agreement and which are excluded from this Agreement. 5.07 Survival. The obligations of this Article V shall survive the expiration or termination of this Agreement. ARTICLE VI NON-COMPETITION, NON-RECRUITMENT 6.01 General. The parties hereto recognize and agree that (a) Executive is a senior executive of Ceridian and is a key Executive of Ceridian, (b) Executive has received, and will in the future receive, substantial amounts of Confidential Information, (c) Ceridian's business is conducted on a worldwide basis, and (d) provision for non-competition - 8 -

and non-recruitment obligations by Executive is critical to Ceridian's continued economic well-being and protection of Ceridian's Confidential Information. In light of these considerations, this Article VI sets forth the terms and conditions of Executive's obligations of non-competition and non-recruitment subsequent to the termination of this Agreement and/or Executive's employment for any reason. 6.02 Non-Competition. (a) Unless the obligation is waived or limited by Ceridian in accordance with subsection (b) of this Section 6.02, Executive agrees that for a period of two years following termination of employment for any reason, Executive will not directly or indirectly, alone or as a partner, officer, director, shareholder or employee of any other firm or entity, engage in any commercial activity in competition with any part of Ceridian's business as conducted as of the date of such termination of employment or with any part of Ceridian's contemplated business with respect to which Executive has Confidential Information as governed by Article V of this Agreement. For purposes of this subsection (a), "shareholder" shall not include beneficial ownership of less than five percent (5%) of the combined voting power of all issued and outstanding voting securities of a publicly held corporation whose stock is traded on a major stock exchange. Also for purposes of this subsection (a), "Ceridian's business" shall include business conducted by Ceridian or its affiliates and any partnership or joint venture in which Ceridian or its affiliates is a partner or joint venturer; provided that, "affiliate" as used in this sentence shall not include any corporation in which Ceridian has ownership of less than fifteen percent (15%) of the voting stock. (b) At its sole option Ceridian may, by written notice to Executive within 30 days after the effective date of termination of Executive's employment, waive or limit the time and/or geographic area in which Executive cannot engage in competitive activity. (c) During the term of the non-competition obligation, prior to accepting employment with, or agreeing to provide consulting services to, any firm which offers products or services in the fields of electronics or information processing, Executive shall give 30 days prior written notice to Ceridian. Such written notice shall describe the proposed employment or consulting services and the firm to which they will be rendered. Ceridian's failure to respond or object to such notice shall not in any way constitute acquiescence or waiver of Ceridian's rights under this Article VI. (d) During any period of non-competition pursuant to this Article VI Ceridian shall pay Executive an amount equal to the usual rate of Executive's Base Salary in effect at the time of termination. - 9 -

There shall be credited against Ceridian's obligation to make such payments any other payments made by Ceridian to Executive pursuant to Article IV of this Agreement. In the event that Ceridian elects, pursuant to subsection (b) of this Section 6.02, to waive all or any portion of the non-competition obligation, no payment shall be required by Ceridian with respect to the portion of the non-competition period which has been waived. 6.03 Non-Recruitment. For a period of two years following termination of employment for any reason, Executive will not initiate or actively participate in any other employer's recruitment or hiring of Ceridian employees. This provision shall not preclude Executive from responding to a request (other than by Executive's employer) for a reference with respect to an individual's employment qualifications. 6.04 Survival. The obligations of this Article VI shall survive the expiration or termination of this Agreement. ARTICLE VII CHANGE OF CONTROL 7.01 Definitions. For purposes of this Article VII, the following definitions shall be applied: (a) "Change of Control" shall mean any of the following events: (1) a merger or consolidation to which Parent Corporation is a party if the individuals and entities who were stockholders of Parent Corporation immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power for election of directors of the surviving corporation immediately following the effective date of such merger or consolidation; or (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate of securities of Parent Corporation representing twenty percent (20%) or more of the total combined voting power of Parent Corporation's then issued and outstanding securities by any person or entity, or group of associated persons or entities acting in concert; or (3) the sale of the properties and assets of Parent Corporation, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of Parent Corporation. (4) the stockholders of Parent Corporation approve any plan or proposal for the liquidation of Parent Corporation; or - 10 -

(5) 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 seventy percent (70%) majority of the Board. For purposes of this clause, "Continuity Directors" means those members of the Board who either: (A) were directors at the beginning of such consecutive 24 month period; or (B) were elected by, or on the nomination or recommendation of, at least a two-thirds (2/3) majority of the then- existing Board. (b) "Change of Control Actions" shall mean any payment (including any benefit or transfer of property) in the nature of compensation, to or for the benefit of Executive under any arrangement, which is considered contingent on a Change of Control for purposes of Section 280G of the Internal Revenue Code. As used in this definition, the term "arrangement" includes, without limitation, any agreement between Executive and Ceridian and any and all of Ceridian's salary, bonus, incentive, restricted stock, stock option, compensation or benefit plans, programs or arrangements, and shall include this Agreement. (c) "Change of Control Termination" shall mean, with respect to Executive, any of the following events occurring within two years after a Change of Control: (1) Termination of Executive's employment by Ceridian for any reason other than (A) fraud, (B) theft or embezzlement of Ceridian assets, (C) intentional violations of law involving moral turpitude, or (D) the substantial and continuing failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. (2) Termination of employment with Ceridian by Executive pursuant to Section 7.02 of this Article VII. A Change of Control Termination by Executive shall not, however, include termination by reason of death. (d) "Good Reason" shall mean a good faith determination by Executive, in Executive's reasonable judgment, that any one or more of the following events has occurred, without Executive's express written consent, after a Change of Control: - 11 -

(1) A change in Executive's reporting responsibilities, titles or offices as in effect immediately prior to the Change of Control, or any removal of Executive from, or any failure to re-elect Executive to, any of such positions, which has the effect of materially diminishing Executive's responsibility or authority; (2) A reduction by Ceridian in Executive's Base Salary as in effect immediately prior to the Change of Control or as the same may be increased from time to time; (3) Ceridian requiring Executive to be based anywhere other than within 25 miles of Executive's job location at the time of the Change of Control; (4) Without replacement by plans, programs, or arrangements which, taken as a whole, provide benefits to Executive at least reasonably comparable to those discontinued or adversely affected, (A) the failure by Ceridian 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 Executive is participating immediately prior to a Change of Control; or (B) the taking of any action by Ceridian that would materially adversely affect Executive's participation or materially reduce Executive's benefits under any of such plans, programs or arrangements; (5) The failure by Ceridian to provide office space, furniture, and secretarial support at least comparable to that provided Executive immediately prior to the Change of Control or the taking of any similar action by Ceridian that would materially adversely affect the working conditions in or under which Executive performs his or her employment duties; (6) If Executive's primary employment duties are with a Subsidiary, the sale, merger, contribution, transfer or any other transaction in conjunction with which Parent Corporation's ownership interest in such Subsidiary decreases below the level specified in Section 1.07 of Article I unless (A) this Agreement is assigned to the purchaser/transferee with the provisions of Article VII in full force and effect and operative as if a Change of Control has occurred with respect to the purchaser/transferee as Parent Corporation immediately after the purchase/transfer becomes effective, and (B) such purchaser/transferee has a creditworthiness reasonably equivalent to Parent Corporation's; or (7) Any material breach of this Agreement by Ceridian. - 12 -

(e) "Internal Revenue Code" -- Any reference to a section of the Internal Revenue Code shall mean that section of the Internal Revenue Code of 1986, or to the corresponding section of such Code as from time to time amended. 7.02 Change of Control Termination Right. For a period of two years following a Change of Control, Executive shall have the right, at any time and within Executive's sole discretion, to terminate employment with Ceridian for Good Reason. Such termination shall be accomplished by, and effective upon, Executive giving written notice to Ceridian of Executive's decision to terminate. Except as otherwise expressly provided in this Agreement, upon the exercise of said right, all obligations and duties of Executive under this Agreement shall be of no further force and effect. 7.03 Change of Control Termination Payment. In the event of a Change of Control Termination, and subject to the "Limitation on Change of Control Compensation" contained in Section 7.04, then, and without further action by the Board, Compensation Committee or otherwise, Parent Corporation shall, within five days of such termination, make a lump sum payment to Executive in an amount equal to one dollar ($1.00) less than three times the average annualized compensation as defined by Section 280G of the Internal Revenue Code, received by Executive from Ceridian and includible in Executive's gross income for federal income tax purposes, for the five most recent taxable years of the Executive ending before the date upon which the Change in Control occurred (or such portion of such period during which Executive was an employee of Ceridian). 7.04 Limitation on Change of Control Compensation. Notwithstanding any other provisions of this Agreement or of any other agreement, contract or understanding heretofore or hereafter entered into between Ceridian and Executive, Executive shall not be entitled to receive any Change of Control Action which would, with respect to Executive, constitute a "parachute payment" for purposes of Section 280G of the Internal Revenue Code. In the event any Change of Control Action would, with respect to Executive, constitute a "parachute payment", Executive shall have the right to designate those Change of Control Action(s) which would be reduced or eliminated so that Executive will not receive a "parachute payment". 7.05 Interest. In the event Parent Corporation does not make timely payment in full of the Change of Control Termination payment described in Section 7.03, Executive shall be entitled to receive interest on any unpaid amount at the lower of: (a) prime rate of interest (or such comparable index as may be adopted) established from time to time by the Norwest Bank Minneapolis, N.A., Minneapolis, Minnesota; or (b) the maximum rate permitted under Section 280G(d)(4) of the Internal Revenue Code. 7.06 Attorneys' Fees. In the event Executive incurs any legal expense to enforce or defend his or her rights under this Article VII of this - 13 -

Agreement, or to recover damages for breach thereof, Executive shall be entitled to recover from Ceridian any expenses for attorneys' fees and disbursements incurred. 7.07 Benefits Continuation. In the event of a Change of Control Termination, Executive (and anyone entitled to claim under or through Executive) shall, until age 65, be entitled to receive from Ceridian the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on the day immediately prior to the Change of Control. To the extent that election of continuation of any of such coverages, programs, policies, or arrangements is made available to employees terminating at age 55 with 15 or more years of service, Executive shall be required to pay no more for continuation than is required of such employees on the day immediately prior to the Change of Control. If no such continuation program is available, Executive shall be required to pay no more than he/she paid as an active employee, or if provided by Ceridian at no cost to employees on the day immediately prior to the Change of Control, they shall continue to be made available to Executive on this basis. ARTICLE VIII CHANGE OF SUBSIDIARY STATUS In the event that, prior to a Change of Control: (a) a Subsidiary is sold, merged, contributed, or in any other manner transferred, or if for any reason Parent Corporation's ownership interest in any such Subsidiary falls below the level specified in Section 1.07, (b) Executive's primary employment duties are with the Subsidiary at the time of the occurrence of such event, and (c) Executive does not, in conjunction therewith, transfer employment directly to Parent Corporation or another Subsidiary, then: (1) If Executive gives his or her written consent to the assignment of this Agreement to such Subsidiary, or to the purchaser or new majority interest holder of such Subsidiary, (and such assignment is accepted) this Agreement shall remain in full force and effect between Executive and the assignee, except that the provisions of Article VII of this Agreement shall become null and void; (2) If such assignment is not accepted by the Subsidiary or purchaser, then this Agreement shall be deemed to have been terminated by Ceridian without cause pursuant to Section 4.03 of Article IV; and (3) In all other cases, this Agreement shall be deemed terminated for cause pursuant to Section 4.02 of Article IV. ARTICLE IX GENERAL PROVISIONS - 14 -

9.01 No Adequate Remedy. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if either party shall institute any action or proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in any such action or proceeding the claim or defense that such party has an adequate remedy at law. 9.02 Successors and Assigns. Except as otherwise provided in Article VIII, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of Parent Corporation and each Subsidiary, whether by way of merger, consolidation, operation of law, assignment, purchase or other acquisition of substantially all of the assets or business of Ceridian, and any such successor or assign shall absolutely and unconditionally assume all of Ceridian's obligations hereunder. 9.03 Notices. All notices, requests and demands given to or made pursuant hereto shall, except as otherwise specified herein, be in writing and be delivered or mailed to any such party at its address: (a) Ceridian Corporation 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 Attention: Office of General Counsel (b) In the case of Executive shall be: At the address listed on the last page of this Agreement. Either party may, by notice hereunder, designate a changed address. Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the second business day thereafter or when it is actually received, whichever is sooner. 9.04 Captions. The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. 9.05 Governing Law. The validity, construction and performance of this Agreement shall be governed by the laws of the State of Minnesota and any and every legal proceeding arising out of or in connection with this Agreement shall be brought in the appropriate courts of the State of Minnesota, each of the parties hereby consenting to the exclusive jurisdiction of said courts for this purpose. The parties hereto expressly recognize and agree that the implementation of this Governing Law provision is essential in light of the fact that Parent - 15 -

Corporation's corporate headquarters and its principal executive offices are located within the State of Minnesota, and there is a critical need for uniformity in the interpretation and enforcement of the employment agreements between Ceridian and its senior executives. 9.06 Construction. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. 9.07 Waivers. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law. 9.08 Modification. This Agreement may not be and shall not be modified or amended except by written instrument signed by the parties hereto. 9.09 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior employment agreements or understandings of the parties hereto, and any and all such prior agreements or understandings are hereby rescinded by mutual agreement. IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. EXECUTIVE CERIDIAN CORPORATION /s/Patrick C. Sommers By: /s/Lawrence Perlman Title:Chairman & Chief Executive Offical Address: - 16 -

CERIDIAN CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT PARTIES Ceridian Corporation (a Delaware Corporation) 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 and RONALD L. TURNER ("Executive") Date: June 7, 1993 RECITALS A. Ceridian wishes to obtain the services of Executive for at least the duration of this Agreement, and the Executive wishes to provide his or her services for such period. B. Ceridian desires reasonable protection of Ceridian's Confidential Information (as defined below). C. Ceridian desires assurance that Executive will not compete with Ceridian or engage in recruitment of Ceridian's employees for a reasonable period of time after termination of employment, and Executive is willing to refrain from competition and recruitment. D. Executive desires to be assured of a minimum Base Salary (as defined below) from Ceridian for Executive's services for the term of this Agreement (unless terminated earlier pursuant to the terms of this Agreement). E. It is expressly recognized by the parties that Executive's acceptance of, and continuance in, Executive's position with Ceridian and agreement to be bound by the terms of this Agreement represents a substantial commitment to Ceridian in terms of Executive's personal and professional career and a foregoing of present and future career options by Executive, for all of which Ceridian receives substantial value. F. The parties recognize that a Change of Control (as defined below) may result in material alteration or diminishment of Executive's position and responsibilities and substantially frustrate the purpose of Executive's commitment to Ceridian and forebearance of options. G. The parties recognize that in light of the above-described commitment and forebearance of options, it is essential that, for the benefit of - 1 -

Ceridian and its stockholders, provision be made for a Change of Control Termination (as defined below) in order to enable Executive to accept and effectively continue in Executive's position in the face of inherently disruptive circumstances arising from the possibility of a Change of Control of the Parent Corporation (as defined below), although no such change is now contemplated or foreseen. H. The parties wish to replace any and all prior agreements and undertakings with respect to the Executive's employment and Change of Control occurrences and compensation. NOW, THEREFORE, in consideration of Executive's acceptance of and continuance in Executive's employment for the term of this Agreement and the parties' agreement to be bound by the terms contained herein, the parties agree as follows: ARTICLE I DEFINITIONS 1.01 "Base Salary" shall mean regular cash compensation paid on a periodic basis exclusive of benefits, bonuses or incentive payments. 1.02 "Board" shall mean the Board of Directors of Ceridian Corporation (the "Parent Corporation"). 1.03 "Ceridian" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, (a) any Subsidiary (as that term is defined in Section 1.07); and (b) any successor in interest by way of consolidation, operation of law, merger or otherwise. 1.04 "Confidential Information" shall mean information or material which is not generally available to or used by others, or the utility or value of which is not generally known or recognized as standard practice, whether or not the underlying details are in the public domain, including: (a) information or material relating to Ceridian and its business as conducted or anticipated to be conducted; business plans; operations; past, current or anticipated software, products or services; customers or prospective customers; or research, engineering, development, manufacturing, purchasing, accounting, or marketing activities; (b) information or material relating to Ceridian's inventions, improvements, discoveries, "know-how," technological developments, or unpublished writings or other works of authorship, or to the materials, apparatus, processes, formulae, - 2 -

plans or methods used in the development, manufacture or marketing of Ceridian's software, products or services; (c) information which when received is marked as "proprietary," "private," or "confidential;" (d) trade secrets; (e) software in various stages of development, including computer programs in source code and binary code form, software designs, specifications, programming aids (including "library subroutines" and productivity tools), programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases; and (f) any similar information of the type described above which Ceridian obtained from another party and which Ceridian treats as or designates as being proprietary, private or confidential, whether or not owned or developed by Ceridian. Notwithstanding the foregoing, "Confidential Information" does not include any information which is properly published or in the public domain; provided, however, that information which is published by or with the aid of Executive outside the scope of employment or contrary to the requirements of this Agreement will not be considered to have been properly published, and therefore will not be in the public domain for purposes of this Agreement. 1.05 "Disability" shall mean the inability of Executive to perform his or her duties under this Agreement because of illness or incapacity for a continuous period of five months. 1.06 "Parent Corporation" shall mean Ceridian Corporation and, except as otherwise provided in Article VIII and Section 9.02 of Article IX, any successor in interest by way of consolidation, operation of law, merger or otherwise. "Parent Corporation" shall not include any Subsidiary. 1.07 "Subsidiary" shall mean: (a) any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the occurrence of a contingency) is at the time owned by Parent Corporation and/or one or more Subsidiaries; and (b) any division or business unit (or portion thereof) of Parent Corporation or a corporation described in clause (a) of this Section 1.07. ARTICLE II EMPLOYMENT, DUTIES AND TERM 2.01 Employment. Upon the terms and conditions set forth in this Agreement, Ceridian hereby employs Executive, and Executive accepts such employment. Except as expressly provided herein, termination of - 3 -

this Agreement by either party shall also terminate Executive's employment by Ceridian. 2.02 Duties. Executive shall devote his or her full-time and best efforts to Ceridian and to fulfilling the duties of his or her position which shall include such duties as may from time to time be assigned him or her by Ceridian, provided that such duties are reasonably consistent with Executive's education, experience and background. Executive shall comply with Ceridian's policies and procedures to the extent they are not inconsistent with this Agreement in which case the provisions of this Agreement prevail. 2.03 Term. Subject to the provisions of Articles IV, VII, and VIII, Executive's employment shall continue until the later of: (a) June 30, 1995; and (b) two years after a Change of Control which occurs prior to June 30, 1995. In any event, the Agreement shall automatically terminate without notice when Executive reaches 65 years of age. If employment is continued after the age of 65 by mutual agreement, it shall be terminable at will by either party. ARTICLE III COMPENSATION AND EXPENSES 3.01 Base Salary. For all services rendered under this Agreement during the term of Executive's employment, Ceridian shall pay Executive a minimum Base Salary at the annual rate currently being paid or, if Executive is not currently in Ceridian's employ, at the annual rate specified in the written offer of employment. If Executive's salary is increased from time to time during the term of this Agreement, the increased amount shall be the Base Salary for the remainder of the term and any extensions. 3.02 Bonus and Incentive. Bonus or incentive compensation shall be in the sole discretion of Ceridian. Except as otherwise provided in Article VII, Ceridian shall have the right in accordance with their terms to alter, amend or eliminate any bonus or incentive plans, or Executive's participation therein, without compensation to Executive. 3.03 Business Expenses. Ceridian shall, in accordance with, and to the extent of, its policies in effect from time to time, bear all ordinary and necessary business expenses incurred by Executive in performing his or her duties as an employee of Ceridian, provided that Executive accounts promptly for such expenses to Ceridian in the manner prescribed from time to time by Ceridian. ARTICLE IV EARLY TERMINATION 4.01 Early Termination. Subject to the respective continuing obligations of the parties pursuant to Articles V, VI, and IX, this Article sets forth the terms for early termination of this Agreement; provided, - 4 -

however, that this Article shall not apply to a Change of Control Termination which is governed solely by the provisions of Article VII. 4.02 Termination for Cause. Ceridian may terminate this Agreement immediately for cause. For the purpose hereof "cause" means (a) fraud, (b) misrepresentation, (c) theft or embezzlement of Ceridian assets, (d) intentional violations of law involving moral turpitude, (e) the continued failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. In the event of termination for cause pursuant to this Section 4.02, Executive shall be paid at the usual rate of Executive's annual Base Salary through the date of termination specified in any notice of termination. 4.03 Termination Without Cause. Either Executive or Ceridian may terminate this Agreement and Executive's employment without cause on at least 75 days' written notice. In the event of termination of this Agreement and of Executive's employment pursuant to this Section 4.03, compensation shall be paid as follows: (a) if the notice of termination is given by Executive at any time Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in such notice (but not to exceed 75 days); (b) if the notice of termination is given by Ceridian and effective prior to Executive's 65th birthday, (1) Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in the notice provided, however, that Ceridian shall have the option of making termination of the Agreement and Executive's employment effective immediately upon notice in which case Executive shall be paid through a notice period of 75 days; and (2) Executive shall receive, within 15 days following termination, a lump sum payment equivalent to two years' Base Salary. (c) If the notice of termination is given by Ceridian to be effective on or after Executive's 65th birthday Executive shall be paid at the usual rate of his or her annual Base Salary through the date of termination specified in any notice. (d) In the event that termination occurs pursuant to Sections 4.03(b) or 4.03(c), then, in addition to the payments specified in said Sections, Ceridian shall pay to Executive any amount equal to (1) the bonus, if any, to which Executive would otherwise have become entitled under all Ceridian bonus plans in effect at the time of termination of this Agreement had Executive remained continuously employed for the full fiscal year in which termination occurred and continued to perform his or her duties - 5 -

in the same manner as they were performed immediately prior to termination, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which termination occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.03(d) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.04 Termination In The Event of Death or Disability. This Agreement shall terminate in the event of death or disability of Executive. (a) In the event of Executive's death, Ceridian shall pay an amount equal to 12 months of Base Salary at the rate in effect at the time of Executive's death plus the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved. Such amount shall be paid (1) to the beneficiary or beneficiaries designated in writing to Ceridian by Executive, (2) in the absence of such designation to the surviving spouse, or (3) if there is no surviving spouse, or such surviving spouse disclaims all or any part, then the full amount, or such disclaimed portion, shall be paid to the executor, administrator or other personal representative of Executive's estate. The amount shall be paid as a lump sum as soon as practicable following Ceridian's receipt of notice of Executive's death. All such payments shall be in addition to any payments due pursuant to Section 4.04(c) below. (b) In the event of disability, Base Salary shall be terminated as of the end of the month in which the last day of the five-month period of Executive's inability to perform his or her duties occurs. (c) In the event of termination by reason of Executive's death or disability, Ceridian shall pay to Executive any amount equal to (1) the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which the death or disability occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.04(c) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 4.05 Entire Termination Payment. The compensation provided for in this Article IV for early termination of this Agreement and termination pursuant to this Article IV shall constitute Executive's sole remedy for such termination. Executive shall not be entitled to any other termination or severance payment which may be payable to Executive under any other agreement between Executive and Ceridian. ARTICLE V - 6 -

CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT 5.01 Confidentiality. Executive will not, during the term or after the termination or expiration of this Agreement, publish, disclose, or utilize in any manner any Confidential Information obtained while employed by Ceridian. If Executive leaves the employ of Ceridian, Executive will not, without Ceridian's prior written consent, retain or take away any drawing, writing or other record in any form containing any Confidential Information. 5.02 Business Conduct and Ethics. During the term of employment with Ceridian, Executive will engage in no activity or employment which may conflict with the interest of Ceridian, and will comply with Ceridian's policies and guidelines pertaining to business conduct and ethics. 5.03 Disclosure. Executive will disclose promptly in writing to Ceridian all inventions, discoveries, software, writings and other works of authorship which are conceived, made, discovered, or written jointly or singly on Ceridian time or on Executive's own time, providing the invention, improvement, discovery, software, writing or other work of authorship is capable of being used by Ceridian in the normal course of business, and all such inventions, improvements, discoveries, software, writings and other works of authorship shall belong solely to Ceridian. 5.04 Instruments of Assignment. Executive will sign and execute all instruments of assignment and other papers to evidence vestiture of Executive's entire right, title and interest in such inventions, improvements, discoveries, software, writings or other works of authorship in Ceridian, at the request and the expense of Ceridian, and Executive will do all acts and sign all instruments of assignment and other papers Ceridian may reasonably request relating to applications for patents, patents, copyrights, and the enforcement and protection thereof. If Executive is needed, at any time, to give testimony, evidence, or opinions in any litigation or proceeding involving any patents or copyrights or applications for patents or copyrights, both domestic and foreign, relating to inventions, improvements, discoveries, software, writings or other works of authorship conceived, developed or reduced to practice by Executive, Executive agrees to do so, and if Executive leaves the employ of Ceridian, Ceridian shall pay Executive at a rate mutually agreeable to Executive and Ceridian, plus reasonable traveling or other expenses. 5.05 Inventions Developed on Executive's Own Time. The two immediately preceding sections entitled "Disclosure" and "Instruments of Assignment" do not apply to inventions in which a Ceridian claim of any rights will create a violation of Chapter 47 Minnesota Revised Statutes, Section 1-181.78, reproduced below and constituting the written notification of its Subdivision 3. 181.78 Agreements relating to inventions - 7 -

Subdivision 1. Any provision in an employment agreement which provides that an Executive shall assign or offer to assign any of his rights in an invention to his employer shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee's own time, and (1) which does not relate (a) directly to the business of the employer or (b) to the employer's actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the employee for the employer. Any provision which purports to apply to such an invention is to that extent against the public policy of this state and is to that extent void and unenforceable. Subdivision 2. No employer shall require a provision made void and unenforceable by subdivision 1 as a condition of employment or continuing employment. Subdivision 3. IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1, 1977, CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN OR OFFER TO ASSIGN ANY OF HIS RIGHTS IN ANY INVENTION TO HIS EMPLOYER, THE EMPLOYER MUST ALSO, AT THE TIME THE AGREEMENT IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE EMPLOYEE THAT THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S OWN TIME, AND (1) WHICH DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (b) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. 5.06 Executive's Declaration. Executive has no inventions, improvements, discoveries, software, writings or other works of authorship useful to Ceridian in the normal course of business, which were conceived, made or written prior to the date of this Agreement and which are excluded from this Agreement. 5.07 Survival. The obligations of this Article V shall survive the expiration or termination of this Agreement. ARTICLE VI NON-COMPETITION, NON-RECRUITMENT 6.01 General. The parties hereto recognize and agree that (a) Executive is a senior executive of Ceridian and is a key Executive of Ceridian, (b) Executive has received, and will in the future receive, substantial amounts of Confidential Information, (c) Ceridian's business is conducted on a worldwide basis, and (d) provision for non-competition - 8 -

and non-recruitment obligations by Executive is critical to Ceridian's continued economic well-being and protection of Ceridian's Confidential Information. In light of these considerations, this Article VI sets forth the terms and conditions of Executive's obligations of non-competition and non-recruitment subsequent to the termination of this Agreement and/or Executive's employment for any reason. 6.02 Non-Competition. (a) Unless the obligation is waived or limited by Ceridian in accordance with subsection (b) of this Section 6.02, Executive agrees that for a period of two years following termination of employment for any reason, Executive will not directly or indirectly, alone or as a partner, officer, director, shareholder or employee of any other firm or entity, engage in any commercial activity in competition with any part of Ceridian's business as conducted as of the date of such termination of employment or with any part of Ceridian's contemplated business with respect to which Executive has Confidential Information as governed by Article V of this Agreement. For purposes of this subsection (a), "shareholder" shall not include beneficial ownership of less than five percent (5%) of the combined voting power of all issued and outstanding voting securities of a publicly held corporation whose stock is traded on a major stock exchange. Also for purposes of this subsection (a), "Ceridian's business" shall include business conducted by Ceridian or its affiliates and any partnership or joint venture in which Ceridian or its affiliates is a partner or joint venturer; provided that, "affiliate" as used in this sentence shall not include any corporation in which Ceridian has ownership of less than fifteen percent (15%) of the voting stock. (b) At its sole option Ceridian may, by written notice to Executive within 30 days after the effective date of termination of Executive's employment, waive or limit the time and/or geographic area in which Executive cannot engage in competitive activity. (c) During the term of the non-competition obligation, prior to accepting employment with, or agreeing to provide consulting services to, any firm which offers products or services in the fields of electronics or information processing, Executive shall give 30 days prior written notice to Ceridian. Such written notice shall describe the proposed employment or consulting services and the firm to which they will be rendered. Ceridian's failure to respond or object to such notice shall not in any way constitute acquiescence or waiver of Ceridian's rights under this Article VI. (d) During any period of non-competition pursuant to this Article VI Ceridian shall pay Executive an amount equal to the usual rate of Executive's Base Salary in effect at the time of termination. - 9 -

There shall be credited against Ceridian's obligation to make such payments any other payments made by Ceridian to Executive pursuant to Article IV of this Agreement. In the event that Ceridian elects, pursuant to subsection (b) of this Section 6.02, to waive all or any portion of the non-competition obligation, no payment shall be required by Ceridian with respect to the portion of the non-competition period which has been waived. 6.03 Non-Recruitment. For a period of two years following termination of employment for any reason, Executive will not initiate or actively participate in any other employer's recruitment or hiring of Ceridian employees. This provision shall not preclude Executive from responding to a request (other than by Executive's employer) for a reference with respect to an individual's employment qualifications. 6.04 Survival. The obligations of this Article VI shall survive the expiration or termination of this Agreement. ARTICLE VII CHANGE OF CONTROL 7.01 Definitions. For purposes of this Article VII, the following definitions shall be applied: (a) "Change of Control" shall mean any of the following events: (1) a merger or consolidation to which Parent Corporation is a party if the individuals and entities who were stockholders of Parent Corporation immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power for election of directors of the surviving corporation immediately following the effective date of such merger or consolidation; or (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate of securities of Parent Corporation representing twenty percent (20%) or more of the total combined voting power of Parent Corporation's then issued and outstanding securities by any person or entity, or group of associated persons or entities acting in concert; or (3) the sale of the properties and assets of Parent Corporation, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of Parent Corporation. (4) the stockholders of Parent Corporation approve any plan or proposal for the liquidation of Parent Corporation; or - 10 -

(5) 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 seventy percent (70%) majority of the Board. For purposes of this clause, "Continuity Directors" means those members of the Board who either: (A) were directors at the beginning of such consecutive 24 month period; or (B) were elected by, or on the nomination or recommendation of, at least a two-thirds (2/3) majority of the then- existing Board. (b) "Change of Control Actions" shall mean any payment (including any benefit or transfer of property) in the nature of compensation, to or for the benefit of Executive under any arrangement, which is considered contingent on a Change of Control for purposes of Section 280G of the Internal Revenue Code. As used in this definition, the term "arrangement" includes, without limitation, any agreement between Executive and Ceridian and any and all of Ceridian's salary, bonus, incentive, restricted stock, stock option, compensation or benefit plans, programs or arrangements, and shall include this Agreement. (c) "Change of Control Termination" shall mean, with respect to Executive, any of the following events occurring within two years after a Change of Control: (1) Termination of Executive's employment by Ceridian for any reason other than (A) fraud, (B) theft or embezzlement of Ceridian assets, (C) intentional violations of law involving moral turpitude, or (D) the substantial and continuing failure by Executive to satisfactorily perform his or her duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such satisfactory performance which specifically identifies the manner in which it is alleged Executive has not satisfactorily performed such duties. (2) Termination of employment with Ceridian by Executive pursuant to Section 7.02 of this Article VII. A Change of Control Termination by Executive shall not, however, include termination by reason of death. (d) "Good Reason" shall mean a good faith determination by Executive, in Executive's reasonable judgment, that any one or more of the following events has occurred, without Executive's express written consent, after a Change of Control: - 11 -

(1) A change in Executive's reporting responsibilities, titles or offices as in effect immediately prior to the Change of Control, or any removal of Executive from, or any failure to re-elect Executive to, any of such positions, which has the effect of materially diminishing Executive's responsibility or authority; (2) A reduction by Ceridian in Executive's Base Salary as in effect immediately prior to the Change of Control or as the same may be increased from time to time; (3) Ceridian requiring Executive to be based anywhere other than within 25 miles of Executive's job location at the time of the Change of Control; (4) Without replacement by plans, programs, or arrangements which, taken as a whole, provide benefits to Executive at least reasonably comparable to those discontinued or adversely affected, (A) the failure by Ceridian 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 Executive is participating immediately prior to a Change of Control; or (B) the taking of any action by Ceridian that would materially adversely affect Executive's participation or materially reduce Executive's benefits under any of such plans, programs or arrangements; (5) The failure by Ceridian to provide office space, furniture, and secretarial support at least comparable to that provided Executive immediately prior to the Change of Control or the taking of any similar action by Ceridian that would materially adversely affect the working conditions in or under which Executive performs his or her employment duties; (6) If Executive's primary employment duties are with a Subsidiary, the sale, merger, contribution, transfer or any other transaction in conjunction with which Parent Corporation's ownership interest in such Subsidiary decreases below the level specified in Section 1.07 of Article I unless (A) this Agreement is assigned to the purchaser/transferee with the provisions of Article VII in full force and effect and operative as if a Change of Control has occurred with respect to the purchaser/transferee as Parent Corporation immediately after the purchase/transfer becomes effective, and (B) such purchaser/transferee has a creditworthiness reasonably equivalent to Parent Corporation's; or (7) Any material breach of this Agreement by Ceridian. - 12 -

(e) "Internal Revenue Code" -- Any reference to a section of the Internal Revenue Code shall mean that section of the Internal Revenue Code of 1986, or to the corresponding section of such Code as from time to time amended. 7.02 Change of Control Termination Right. For a period of two years following a Change of Control, Executive shall have the right, at any time and within Executive's sole discretion, to terminate employment with Ceridian for Good Reason. Such termination shall be accomplished by, and effective upon, Executive giving written notice to Ceridian of Executive's decision to terminate. Except as otherwise expressly provided in this Agreement, upon the exercise of said right, all obligations and duties of Executive under this Agreement shall be of no further force and effect. 7.03 Change of Control Termination Payment. In the event of a Change of Control Termination, and subject to the "Limitation on Change of Control Compensation" contained in Section 7.04, then, and without further action by the Board, Compensation Committee or otherwise, Parent Corporation shall, within five days of such termination, make a lump sum payment to Executive in an amount equal to one dollar ($1.00) less than three times the average annualized compensation as defined by Section 280G of the Internal Revenue Code, received by Executive from Ceridian and includible in Executive's gross income for federal income tax purposes, for the five most recent taxable years of the Executive ending before the date upon which the Change in Control occurred (or such portion of such period during which Executive was an employee of Ceridian). 7.04 Limitation on Change of Control Compensation. Notwithstanding any other provisions of this Agreement or of any other agreement, contract or understanding heretofore or hereafter entered into between Ceridian and Executive, Executive shall not be entitled to receive any Change of Control Action which would, with respect to Executive, constitute a "parachute payment" for purposes of Section 280G of the Internal Revenue Code. In the event any Change of Control Action would, with respect to Executive, constitute a "parachute payment", Executive shall have the right to designate those Change of Control Action(s) which would be reduced or eliminated so that Executive will not receive a "parachute payment". 7.05 Interest. In the event Parent Corporation does not make timely payment in full of the Change of Control Termination payment described in Section 7.03, Executive shall be entitled to receive interest on any unpaid amount at the lower of: (a) prime rate of interest (or such comparable index as may be adopted) established from time to time by the Norwest Bank Minneapolis, N.A., Minneapolis, Minnesota; or (b) the maximum rate permitted under Section 280G(d)(4) of the Internal Revenue Code. 7.06 Attorneys' Fees. In the event Executive incurs any legal expense to enforce or defend his or her rights under this Article VII of this - 13 -

Agreement, or to recover damages for breach thereof, Executive shall be entitled to recover from Ceridian any expenses for attorneys' fees and disbursements incurred. 7.07 Benefits Continuation. In the event of a Change of Control Termination, Executive (and anyone entitled to claim under or through Executive) shall, until age 65, be entitled to receive from Ceridian the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on the day immediately prior to the Change of Control. To the extent that election of continuation of any of such coverages, programs, policies, or arrangements is made available to employees terminating at age 55 with 15 or more years of service, Executive shall be required to pay no more for continuation than is required of such employees on the day immediately prior to the Change of Control. If no such continuation program is available, Executive shall be required to pay no more than he/she paid as an active employee, or if provided by Ceridian at no cost to employees on the day immediately prior to the Change of Control, they shall continue to be made available to Executive on this basis. ARTICLE VIII CHANGE OF SUBSIDIARY STATUS In the event that, prior to a Change of Control: (a) a Subsidiary is sold, merged, contributed, or in any other manner transferred, or if for any reason Parent Corporation's ownership interest in any such Subsidiary falls below the level specified in Section 1.07, (b) Executive's primary employment duties are with the Subsidiary at the time of the occurrence of such event, and (c) Executive does not, in conjunction therewith, transfer employment directly to Parent Corporation or another Subsidiary, then: (1) If Executive gives his or her written consent to the assignment of this Agreement to such Subsidiary, or to the purchaser or new majority interest holder of such Subsidiary, (and such assignment is accepted) this Agreement shall remain in full force and effect between Executive and the assignee, except that the provisions of Article VII of this Agreement shall become null and void; (2) If such assignment is not accepted by the Subsidiary or purchaser, then this Agreement shall be deemed to have been terminated by Ceridian without cause pursuant to Section 4.03 of Article IV; and (3) In all other cases, this Agreement shall be deemed terminated for cause pursuant to Section 4.02 of Article IV. ARTICLE IX GENERAL PROVISIONS - 14 -

9.01 No Adequate Remedy. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if either party shall institute any action or proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in any such action or proceeding the claim or defense that such party has an adequate remedy at law. 9.02 Successors and Assigns. Except as otherwise provided in Article VIII, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of Parent Corporation and each Subsidiary, whether by way of merger, consolidation, operation of law, assignment, purchase or other acquisition of substantially all of the assets or business of Ceridian, and any such successor or assign shall absolutely and unconditionally assume all of Ceridian's obligations hereunder. 9.03 Notices. All notices, requests and demands given to or made pursuant hereto shall, except as otherwise specified herein, be in writing and be delivered or mailed to any such party at its address: (a) Ceridian Corporation 8100 34th Avenue South Minneapolis, Minnesota 55425-1640 Attention: Office of General Counsel (b) In the case of Executive shall be: At the address listed on the last page of this Agreement. Either party may, by notice hereunder, designate a changed address. Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the second business day thereafter or when it is actually received, whichever is sooner. 9.04 Captions. The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. 9.05 Governing Law. The validity, construction and performance of this Agreement shall be governed by the laws of the State of Minnesota and any and every legal proceeding arising out of or in connection with this Agreement shall be brought in the appropriate courts of the State of Minnesota, each of the parties hereby consenting to the exclusive jurisdiction of said courts for this purpose. The parties hereto expressly recognize and agree that the implementation of this Governing Law provision is essential in light of the fact that Parent - 15 -

Corporation's corporate headquarters and its principal executive offices are located within the State of Minnesota, and there is a critical need for uniformity in the interpretation and enforcement of the employment agreements between Ceridian and its senior executives. 9.06 Construction. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. 9.07 Waivers. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law. 9.08 Modification. This Agreement may not be and shall not be modified or amended except by written instrument signed by the parties hereto. 9.09 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior employment agreements or understandings of the parties hereto, and any and all such prior agreements or understandings are hereby rescinded by mutual agreement. IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. EXECUTIVE CERIDIAN CORPORATION /s/Ronald L. Turner By: /s/Glenn W. Jeffrey Title:Executive Vice President Address: - 16 -

As amended through December 13, 1993 CERIDIAN CORPORATION DIRECTORS DEFERRED COMPENSATION PLAN (1993 RESTATEMENT) ARTICLE I Description and Purpose Section 1.1 Name. The name of the Plan is the "Ceridian Corporation Directors Deferred Compensation Plan 1993 Restatement." Section 1.2 Purposes. The purposes of this Plan are to provide a program of post-termination payments to eligible Directors of the Company, to thereby attract and retain qualified persons to serve as Directors and to promote the availability of the experience, interest and loyalty of former Directors following their termination from the Board of Directors. ARTICLE II Definitions, Construction and Interpretations Section 2.1 Definitions. In this instrument, the definitions, rules of construction and interpretations set forth in this Article II shall be applied unless the context otherwise indicates. (a) "Board of Directors" means, at any particular time, the then duly elected and acting directors of the Company. (b) "Company" means Ceridian Corporation, a Delaware corporation and any successor in interest by way of consolidation, merger, operation of law or otherwise. (c) "Credited Service" means the total number of calendar quarters that a Director has served on the Board of Directors or as a Director on the Board of Directors of Commercial Credit Company; provided, that in no case shall a Director earn more than a single credit for any single quarter during which the Director served on the Board of Directors and/or on the Board of Directors of Commercial Credit Company and full calendar quarters during which the Director was an employee of the Company or of a subsidiary of the Company shall not be credited. For purposes of applying the preceding sentence, Credited Service shall be determined on a cumulative basis in whole calendar quarters, with any partial calendar quarters of service being counted as a full calendar quarter; service as a Director on the Board of Directors both before and after the Effective Date shall be taken into account; and service as a director on the Board of Directors of Commercial Credit Company after the Effective Date shall not be taken into account. Credited Service under this Plan shall be limited to no more than forty-eight calendar quarters. - 1 -

(d) "Director" means a person who is a Director on the Board of Directors. (e) "Director's Fees" means the amount of the annual cash retainer (or the fair market value at issuance of securities received by such Director in lieu of some or all of such cash retainer) for service as a Director as in effect on the date the Director ceases to be a Director. Directors Fees shall not include the amount of any supplemental retainer received for service as chairperson of a committee of the Board of Directors. [As amended effective December 13, 1993.] (f) "Effective Date" means December 12, 1986. (g) "Plan" means the Ceridian Corporation Director Deferred Compensation Plan, as set forth herein, as the same may be from time to time amended. Section 2.2 Number and Gender. Wherever appropriate, the singular number may be read as plural, the plural may be read as the singular, and the masculine gender may be read as the feminine gender. Section 2.3 Headings. The headings of articles and sections are included solely for convenience and, if there exists any conflict between such headings and the text of the Plan, the text shall control. Section 2.4 Governing Law. The place of administration of this Plan shall be conclusively deemed to be within the State of Minnesota, and the validity, construction, interpretation, administration and effect of this Plan and of its rules and regulations and the rights of any and all persons having or claiming to have an interest therein or thereunder shall be governed by, and determined exclusively and solely in accordance with, the laws of the State of Minnesota. ARTICLE III Eligibility A Director who, as of the date on which he ceases to be a Director, has completed at least twelve calendar quarters of Credited Service, shall be eligible to receive deferred compensation payments under this Plan in the amount, at such time and for the period set forth in Article IV and subject to the conditions set forth in Article V. If, as of the date on which the Director ceases to be a Director, he has completed less than twelve calendar quarters of Credited Service, he shall not be entitled to any deferred compensation payments under this Plan. Notwithstanding the foregoing or any other provision to the contrary, in no event shall any Director who had served as a Director while employed with the Company or a subsidiary or affiliate thereof, be entitled to accrue or receive a benefit under this Plan with respect to his service as a Director following his termination of employment which occurs after June 1, 1988. ARTICLE IV - 2 -

Payment of Deferred Compensation Section 4.1 Commencement, Frequency, Duration and Amount of Payments. Deferred compensation payments to a Director who has satisfied the eligibility requirement set forth in Article III shall commence on the first business day of the calendar quarter next following the date on which he ceases to be a Director, and shall continue on the first business day of each calendar quarter thereafter until the total number of payments is equal to the number of calendar quarters of the Director's Credited Service. Each payment to the Director shall be in an amount equal to one- fourth of the amount of the Director's Fee applicable to the Director. Section 4.2 Payment Suspension. If a Director, who is receiving deferred compensation payments under this Plan, again becomes a Director, payments to him under this Plan shall thereupon be suspended during the period of his renewed status as a Director. Such resumption of Director status shall not affect his right to his deferred compensation payments following his subsequent cessation of Director status. During the period of his renewed Director status, the Director shall earn further Credited Service, but in no case shall more than a total of forty-eight calendar quarters of Credited Service be taken into account under this Plan. Such a Director's deferred compensation payments shall be resumed following his subsequent cessation of Director status in an amount based on the amount of Director's Fee in effect for him as of the date of such subsequent Director status cessation, with the number of quarterly payments to which he is thereafter entitled being reduced by the number of payments made to him prior to his resumption of Director status. Section 4.3 Failure to Satisfy Payment Condition. If a Director who is receiving, or is entitled to receive, deferred compensation payments under this Plan fails to satisfy all of the conditions set forth at Article V, he shall forfeit any right to any and all payments that otherwise would have been due from and after the date of his failure to satisfy such condition. Section 4.4 Payment in Event of Death. A Director may designate, in the manner prescribed by the Company, the beneficiary or beneficiaries ("Director's Designated Beneficiary") to whom undistributed payments under this Plan shall be paid in the event of his death. Such designation may be changed from time to time by written notice to the Company in such form as the Company may prescribe. Any such designation shall be effective only if it is received by the Company prior to the Director's death. If, upon the death of the Director, no beneficiary designation has been filed with the Company, or if the Director's Designated Beneficiary has predeceased the Director, the Director shall be deemed to have designated as his beneficiary the first of the following categories that is applicable in his case: (1) The Director's surviving spouse; or, if none, (2) The Director's estate, or (3) According to intestate succession provided by statute in the state of - 3 -

Director's domicile at the time of Director's death. If, upon the death of the Director, the Company commences payment of the undistributed payments to the Director's Designated Beneficiary and such Designated Beneficiary should die, the balance of the undistributed payments shall be paid in a lump sum, discounted to its present value (which value shall be established utilizing the prime rate of interest at Norwest Bank of Minneapolis on the date of the death of the Director's Designated Beneficiary), for distribution to the estate of the deceased Director's Designated Beneficiary. The Company's good faith distribution based on its actual knowledge of the existence of a Director's Designated Beneficiary, as specified above, shall be conclusive and binding on all beneficiaries of a Director. ARTICLE V Conditions of Payment Section 5.1. Noncompetition. As a condition of entitlement to deferred compensation payments under this Plan, the Director shall not, following his cessation of Director status and during the period for which amounts are payable to him under this Plan, serve as a director for any corporation which engages in any commercial activity in competition with the Company or any subsidiary or joint venture thereof. Section 5.2 Confidentiality. As a condition of entitlement to deferred compensation payments under this Plan, the Director shall not, following his cessation of Director status and during the period for which amounts are payable to him under this Plan, use, publish or otherwise disclose any unpublished or proprietary or confidential information or secrets relating to the Company or any subsidiary or joint venture thereof, or any related business, products or services. Section 5.3 Consulting Commitment. As a condition of entitlement to deferred compensation payments under this Plan, the director shall, following his cessation of Director status and during the period for which amounts are payable to him under this Plan, perform such consulting services and special assignments as are reasonably requested by the Chairman of the Board of Directors. In connection with such consulting services and special assignments, the Company shall pay the Director reasonable fees consistent with Company policies and practices for such services in similar circumstances. ARTICLE VI Amendment or Termination Subject to the provisions of Section 8.3, the Board of Directors may, at any time, terminate this Plan or make such amendments thereto as it deems advisable and in the best interests of the Company; provided, however, that no such termination or amendment shall, without the consent of a Director, adversely affect or impair the rights of the Director with - 4 -

respect to benefits that the Director had accrued under this Plan as of the date of such termination or amendment. ARTICLE VII General Section 7.1 Source of Payment. Payments under this Plan shall be made by the Company from its general assets. To the extent a Director or a Director's Beneficiary acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. Section 7.2 Nontransferability. No right or interest of any Director under this Plan shall be assignable or transferable or subject to any lien, directly, by operation of law or otherwise, including execution, levy, garnishment, attachment, pledge and bankruptcy. Section 7.3 Successors and Assigns. This Plan shall be binding upon and inure to the benefit of the successors and assigns of the Company, whether by way of merger, consolidation, operation of law, assignment, purchase or other acquisition of substantially all of the assets or business of the Company, and any such successor or assign shall absolutely and unconditionally assume all of the Company's obligations hereunder. ARTICLE VIII Change of Control Section 8.1 Definitions. For purposes of this Article VIII, the following definitions shall be applied: (a) "Change of Control" shall mean any of the following events: (1) 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 Securities Exchange Act of 1934) of less than fifty percent of the total combined voting power for election of directors of the surviving corporation following the effective date of such merger or consolidation; or (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate of securities of the Company representing twenty percent 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 persons or entities acting in concert; or (3) the sale of all or substantially all of the assets of the Company to any person or entity which is not a wholly-owned subsidiary of the Company; or - 5 -

(4) the stockholders of the Company approve any plan or proposal for the liquidation of the Company; or (5) a change in the composition of the Board of Directors at any time during any consecutive twenty-four month period such that the "Continuity Directors" cease for any reason to constitute at least a seventy percent majority of the Board of Directors. For purposes of this clause, "Continuity Directors" means those members of the Board of Directors who either: (i) were directors at the beginning of such consecutive twenty-four month period; or (ii) 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 Termination" shall mean, with respect to a Director, any of the following events occurring within two years after a Change of Control: (1) Termination of the Director's service as a Director of the Company for any reason, with or without cause, except for conduct by the Director constituting (i) a felony involving moral turpitude under either federal law of the law of the state of the Company's incorporation or (ii) the Director's willful failure to fulfill his duties as a Director of the Company; provided that for purposes of this clause (ii), an act or failure to act by the Director shall not be "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that the Director's action or omission was in the best interests of the Company; or (2) Termination by the Director following a material adverse change in the conditions under which he performs services as a Director. For purposes of this Subsection 8.1(b), a "Change of Control Termination" shall not include termination of a Director's service as a Director of the Company within two years after a Change of Control if such termination occurs pursuant to a policy duly adopted by the Board of Directors prior to such Change of Control. [As amended effective December 13, 1993.] Section 8.2 Full Vesting. In the event of a Change of Control Termination with respect to a Director, the Director shall acquire a fully vested interest in the benefit which he had theretofore accrued under this Plan based on the number of calendar quarters of his Credited Service as of - 6 -

the date of his termination and without regard to the Director's having completed less than twelve calendar quarter of Credited Service, if such be the case. Section 8.3 Limitations on Board of Directors' Actions. Notwithstanding the authority granted to the Board of Directors under Article VI to amend or terminate this Plan, the Board of Directors shall not, following a Change of Control, have the power to exercise such authority or otherwise take any action which is inconsistent with the provisions of this Article VIII. - 7 -

Amended as of December 13, 1993 CERIDIAN CORPORATION 1993 LONG-TERM INCENTIVE PLAN 1. Purpose of Plan. The purpose of the Ceridian Corporation 1993 Long-Term Incentive Plan (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 Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code. - 1 -

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 "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. 2.14 "Option" means an Incentive Stock Option or a Non-Statutory Stock Option. 2.15 "Participant" means an Eligible Recipient who receives one or more Incentive Awards under the Plan. 2.16 "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 goals. 2.17 "Previously Acquired Shares" means shares of Common Stock that are already owned by the Participant. 2.18 "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. 2.19 "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 - 2 -

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). 2.20 "Securities Act" means the Securities Act of 1933, as amended. 2.21 "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. 2.22 "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. 2.23 "Tax Date" means the date any withholding tax obligation arises under the Code for a Participant with respect to an Incentive Award. 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 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 - 3 -

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. (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, including, without limitation, the authority to extend the term of an Incentive Award, accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award, accept the surrender of any outstanding Incentive Award or, to the extent not previously exercised or vested, authorize the grant of new Incentive Awards in substitution for surrendered Incentive Awards; provided, however that the amended or modified terms are permitted by the Plan as then in effect and that 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. (c) In the event of (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 3,000,000 shares. The shares available for issuance under the Plan may, at - 4 -

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"). [Amended as of 12/13/93] 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. [Amended as of 12/13/93] 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 - 5 -

determined by the Committee in its sole discretion. The Committee may designate whether 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 purchase 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 following its date of grant (or, if later, six months following its date of grant with respect to the initial one- third installment). 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. - 6 -

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 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 following its date of grant (or, if later, six months following its date of grant with respect to the initial one-third installment). 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 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 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 goals or criteria; provided, however, that other than as provided in Section 10 of the Plan, no Restricted Stock Award may vest prior to six months from its date of grant. 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. - 7 -

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 goals or 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: - 8 -

(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; (b) All Restricted Stock Awards then held by the Participant will become fully vested; 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 - 9 -

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 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), 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. 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 - 10 -

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. 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 20% 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, - 11 -

incentive, restricted stock, stock option, compensation or benefit plans, programs or arrangements, and will include this Plan. 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, and without further action of the Committee: (a) All Options that have been outstanding at least six months will become immediately exercisable in full and will remain exercisable until the expiration date of such Options. (b) All outstanding Restricted Stock Awards that have been outstanding for at least six months will become immediately fully vested. (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. 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. 13.2 Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no - 12 -

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 Board may deem advisable in order that Incentive Awards under the Plan will - 13 -

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, 1996, 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. - 14 -

CERIDIAN CORPORATION EMPLOYEE NON-STATUTORY STOCK OPTION AWARD AGREEMENT 1993 Long-Term Incentive Plan This Agreement, dated as of February 3, 1993 (the "Date of Grant"), is between Ceridian Corporation (the "Company") and Lawrence Perlman (the "Participant"), pursuant to the 1993 Long-Term Incentive Plan of the Company (the "Plan") to evidence the grant of a Non-Statutory Stock Option (the "Option") to the Participant pursuant to the Plan. Any capitalized term used herein which is defined in the Plan shall have the same meaning as set forth therein. 1. Effective as of the Date of Grant, and subject to the other terms and conditions of this Agreement, the Company has granted to the Participant the option to purchase from the Company, and the Company has agreed to sell to the Participant, 53,315 shares of Common Stock (the "Option Shares") at a price of $14.63 per share (the "Exercise Price"). 2. This Option shall become void and expire if the Participant's employment with the Company and all of its Subsidiaries terminates for any reason other than death or Disability on or before December 31, 1993, and otherwise at midnight (Minneapolis time) on the tenth anniversary of the Date of Grant. This Option is a non-statutory stock option and to the extent it becomes exercisable pursuant to the terms hereof, it shall be exercisable even though there may be outstanding an incentive stock option which is granted to the Participant at an earlier time. 3. Because this Option has been granted as a result of the Participant's election (the "Election") to receive in the form of a non-statutory stock option one-third of the cash bonus he or she would otherwise be entitled to receive pursuant to the Company's 1993 Executive Incentive Plan (the "EIP"), the Option shall become exercisable only if and to the extent that a financial performance goal justifying a payout under the EIP has been attained. The Committee shall, at its February 1994 meeting, certify which, if any, financial performance goal specified in the EIP has been satisfied, the dollar amount of the total bonus payout the Participant is entitled to receive under the EIP as a result of the satisfaction of such financial performance goal, and the dollar amount of such total bonus payout to be received in the form of a stock option as the result of the Election (the "Election Amount"). Subject to the provisions of paragraph 4 hereof, a portion of the Option Shares equal to the quotient obtained by dividing the Election Amount by one-third of the Exercise Price shall thereupon become immediately exercisable, and the balance of the Option Shares shall be forfeited and the portion - 1 -

of the Option relating thereto shall be cancelled and of no further effect. 4. If the Participant's employment with the Company and all Subsidiaries should terminate by reason of death or Disability on or before December 31, 1993, the Committee shall determine, as provided in paragraph 3 hereof, whether the Participant would otherwise have been entitled to the payment of a bonus under the EIP as a result of the Company's attainment of an applicable financial performance goal. If the Committee determines that a bonus would have been payable, then a portion of the Option Shares shall become exercisable upon the Committee's certification of the Election Amount, such portion to be equal to the product of (a) the quotient obtained by dividing the Election Amount by one-third of the Exercise Price, and (b) a fraction, the numerator of which is the number of whole calendar months during 1993 prior to the date of such employment termination and the denominator of which is 12. 5. The timing and extent of the exercisability of this Option as specified in paragraphs 3 and 4 hereof shall not be affected by any intervening Change of Control, notwithstanding the provisions of Section 12 of the Plan as in effect on the date of any such Change of Control. 6. Notwithstanding any other provision of this Agreement, the Option shall not be exercisable prior to the expiration of six months after the Date of Grant, except in the case of death or Disability. 7. Nothing in the Plan or this Agreement shall confer upon the Participant any right with respect to continuance of employment by the Company or any Subsidiary, nor interfere in any way with the right of the Company or a Subsidiary to terminate the Participant's employment at any time. 8. This Option grant, the Option forming a part thereof, and the Participant's rights under this Agreement shall be nontransferable (i.e., may not be sold, pledged, donated or otherwise assigned or transferred) by the Participant, either voluntarily or involuntarily, except by will or by applicable law, and any attempt to do so shall void this Option grant and Agreement. This Option shall be exercisable during Participant's lifetime only by the Participant or by the Participant's guardian or other legal representative. 9. Neither the Participant nor any other person shall have any rights as a stockholder with respect to any Option Shares until the Participant or other person shall have become a holder of record of such shares and, except as otherwise provided in Section 4.3 of the Plan, no adjustments shall be made for dividends or other distributions or rights as to which there is a record date preceding the date the Participant becomes the holder of record of such shares. 10.Except as specifically provided herein, this Agreement is subject to all of the terms and conditions of the Plan. Where any questions or - 2 -

issues of interpretation arise, the Committee administering the Plan shall have sole discretion to decide such matters. 11.Any notice to be given with respect to this Option, including without limitation a notice of exercise, shall be addressed to the Company, Attention: Corporate Treasury at its principal executive office in Minneapolis, Minnesota, and any notice to be given to the Participant shall be addressed to the Participant at the address given beneath the Participant's signature hereto, or at such other address as either party may hereafter designate in writing to the other. 12.Any notice of stock option exercise must specify the number of shares with respect to which the Option is being exercised and be accompanied by either (i) payment in full of the purchase price for the shares exercised or (ii) a Broker Exercise Notice in form and substance satisfactory to the Company. The exercise of the Option shall be deemed effective upon receipt by Corporate Treasury of such notice and payment of the exercise price from the Participant or the broker or dealer named in the Broker Exercise Notice. Any such notice will not be deemed given until actual receipt by Corporate Treasury. IN WITNESS WHEREOF, Ceridian Corporation has executed this Agreement duly authorized signature, and the Participant has signed this Agreement. CERIDIAN CORPORATION PARTICIPANT By: /s/A. Reid Shaw /s/Lawrence Perlman Assistant Secretary (Participant's Signature) PARTICIPANT'S MAILING ADDRESS 8100 34th Avenue South Minneapolis, mn 55425 - 3 -

Exhibit 11 CERIDIAN CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS (LOSS) PER SHARE PRIMARY EARNINGS (LOSS) PER SHARE: Year Ended December 31 1993 1992 1991 (In thousands, except per share data) Net earnings (loss) from continuing operations. . . . $ (22,000) $ (29,100) $ 66,100 Dividends on Preferred Stock. . . . 300 300 500 Earnings (loss) from continuing operations applicable to common stock (22,300) (29,400) 65,600 Loss from discontinued operations . . -- (321,600) (74,700) Extraordinary loss. . . . . . . . . . (8,400) -- (1,200) Cumulative effect of accounting change (FAS 106) -- (41,800) -- Net earnings (loss) applicable to common stock. . . . . . . . . $ (30,700) $(392,800) $ (10,300) Weighted average common shares outstanding . . . . . . 43,131 42,617 42,526 Earnings (loss) per common share: From continuing operations $ (.52) $ (.69) $ 1.54 Discontinued operations -- (7.55) (1.75) Extraordinary loss (.19) -- (.03) Cumulative effect (FAS 106) -- (.98) -- Net earnings (loss) $ (.71) $ (9.22) $ (.24) - 1 -

Exhibit 12 CERIDIAN CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in millions) Year Ended December 31, 1993 1992 1991 1990 1989 Earnings (Loss) before income taxes and other items(1) . . . . . . .$ (18.2) $(186.3) $ 1.9 $ 15.9 $(666.9) Less undistributed earnings and non-guaranteed losses from less than 50% owned affiliates included above -- (0.6) (2.6) 1.3 1.4 Total earnings (loss) before income taxes and other items. . . $ (18.2) (185.7) 4.5 14.6 (668.3) Add: Interest . . . . . . . 16.4 17.7 25.4 43.8 49.1 Interest portion of rentals (2) . . . 12.4 17.2 31.8 31.6 45.0 Adjusted earnings (loss) before income taxes and other items. . . . $ 10.6 $(150.8) $ 61.7 $ 90.0 $(574.2) Preferred stock dividends $ 0.3 $ 0.3 $ 0.5 $ 0.5 $ 0.5 Pre-tax to net income ratio (3) . . . 100% 100% 100% 100% 100% Preferred dividend factor on a pre-tax basis . . 0.3 0.3 0.5 0.5 0.5 Interest . . . . . . . . 16.4 17.7 25.4 43.8 49.1 Interest portion of rentals (2) . . . . 12.4 17.2 31.8 31.6 45.0 Total fixed charges and preferred dividends $ 29.1 $ 35.2 $ 57.7 $ 75.9 $ 94.6 Ratio of earnings to fixed charges and preferred dividends. . . 1.07 1.19 Earnings to combined fixed charges and preferred stock deficiency. . . $ 18.5 $ 186.0 $ 668.8 (1) Results include discontinued operations. (2) Assumed to be one-third of rental expense. (3) A tax gross-up would not have a material effect in any year. - 1 -

<TABLE> <CAPTION> SELECTED FIVE-YEAR DATA (Dollars in millions, except per share data) - ---------------------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> 1993 1992 1991 1990 1989 - ---------------------------------------------------------------------------------------------------------------------------------- REVENUE (1) $ 886.1 $ 830.3 $ 763.0 $ 936.2 $1,845.2 - ---------------------------------------------------------------------------------------------------------------------------------- Earnings (Loss) from continuing operations (1)(2) $ (22.0) $ (29.1) $ 66.1 $ 45.3 $ (521.5) Earnings (Loss) from discontinued operations (3) -- (321.6) (74.7) (42.6) (158.9) Extraordinary loss (4) (8.4) -- (1.2) -- -- Cumulative effect of accounting change (FAS 106) (5) -- (41.8) -- -- -- -------------------------------------------------------------------------- NET EARNINGS (LOSS) $ (30.4) $(392.5) $ (9.8) $ 2.7 $ (680.4) -------------------------------------------------------------------------- -------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) PER COMMON SHARE Continuing operations $ (0.52) $ (0.69) $ 1.54 $ 1.05 $ (12.35) Discontinued operations -- (7.55) (1.75) (1.00) (3.76) Extraordinary loss (0.19) -- (0.03) -- -- Cumulative effect of accounting change (FAS 106) -- (0.98) -- -- -- -------------------------------------------------------------------------- Total $ (0.71) $ (9.22) $ (0.24) $ 0.05 $ (16.11) -------------------------------------------------------------------------- -------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS) 43,131 42,617 42,526 42,517 42,256 - ---------------------------------------------------------------------------------------------------------------------------------- BALANCE SHEET DATA (1) Total assets $ 615.7 $ 551.6 $ 974.7 $1,179.0 $1,377.0 Debt obligations $ 19.4 $ 187.6 $ 184.1 $ 337.9 $ 353.4 Stockholders' equity (deficit) (6) $ 111.3 $(100.9) $ 446.2 $ 448.4 $ 435.4 - ---------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY (DEFICIT) PER COMMON SHARE $ (2.82) $ (2.36) $ 10.24 $ 10.29 $ 10.00 Common shares outstanding at end of year (in thousands) 44,182 42,804 42,530 42,530 42,477 - ---------------------------------------------------------------------------------------------------------------------------------- NUMBER OF EMPLOYEES AT END OF YEAR (7) 7,600 8,800 9,600 10,500 11,100 - ---------------------------------------------------------------------------------------------------------------------------------- </TABLE> [FN] (1) The comparative amounts in this table are significantly affected by the disposition in 1990 and 1989 of a number of the Company's businesses which did not meet the criteria to be treated as discontinued operations. (2) Includes restructuring loss (gain) of $67.0 in 1993, $76.2 in 1992, $(16.2) in 1991, $1.5 in 1990 and $529.0 in 1989. (3) The Company's former Computer Products business, Automated Wagering division and Empros division are treated in this table and the consolidated financial statements as discontinued operations. For additional information, see the item entitled "Discontinued Operations" in note A to the consolidated financial statements. (4) The 1993 extraordinary loss relates to the early retirement of 8-1/2% Convertible Subordinated Debentures as described in note K to the consolidated financial statements. (5) The Company adopted FAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," in 1992. (6) The Company has not declared a cash dividend on common stock since 1985. For information regarding the sale of preferred stock in 1993, see note E to the consolidated financial statements. (7) Includes full-time and part-time personnel for continuing operations. -------------------------------- ------------------------------------- CONTENTS 33 INDEPENDENT AUDITORS' REPORT -------------------------------- ------------------------------------- 1 SELECTED FIVE-YEAR DATA 34 STATEMENTS OF OPERATIONS -------------------------------- ------------------------------------- 2 LETTER TO STOCKHOLDERS, CUSTOMERS AND EMPLOYEES 35 BALANCE SHEETS -------------------------------- ------------------------------------- 7 MARKET TRENDS 36 STATEMENTS OF CASH FLOWS OUTSOURCING ------------------------------------- TARGET MARKETING 38 NOTES TO FINANCIAL STATEMENTS RETROFITTING ------------------------------------- 53 SUPPLEMENTARY QUARTERLY DATA ------------------------------------- -------------------------------- 54 BOARD OF DIRECTORS 20 MANAGEMENT'S DISCUSSION ------------------------------------- AND ANALYSIS 55 MANAGEMENT -------------------------------- ------------------------------------- 32 REPORT OF MANAGEMENT 56 INVESTOR INFORMATION -------------------------------- ------------------------------------- Page 1

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION INTRODUCTION Ceridian's results in years prior to 1993 have been significantly affected by the performance and subsequent sale, spin-off or closing of a number of its businesses. Three significant businesses which Ceridian has disposed of are shown as discontinued operations in Ceridian's consolidated financial statements. These businesses are the Computer Products business, which was separately incorporated as Control Data Systems, Inc. ("Control Data Systems") and whose stock was then distributed to Ceridian's stockholders as of July 31, 1992; the Automated Wagering division, which was sold in June 1992; and the Empros division, which Ceridian sold in March 1993. For further information on the treatment of discontinued operations in the consolidated financial statements, see Note A, ACCOUNTING POLICIES, to the consolidated financial statements. RESULTS OF OPERATIONS The following table sets forth revenue for the last three years for the Company, its two industry segments, and the businesses that comprise those segments. Additional financial information regarding the Company's industry segments is contained in Note G, SEGMENT DATA, to the consolidated financial statements. <TABLE> <CAPTION> - ---------------------------------------------------------- Years Ended December 31, ---------------------------- <S> <C> <C> <C> (Dollars in millions) 1993 1992 1991 - ---------------------------------------------------------- Information Services Segment Arbitron Company $172.2 $178.3 $201.7 Ceridian Employer Services 232.6 209.9 191.3 Other Services(1) 29.1 30.7 29.3 ---------------------------- Total Information Services 433.9 418.9 422.3 Defense Electronics Segment Computing Devices International 452.2 402.2 317.2 Other(2) -- 9.2 23.5 --------------------------- Total Revenue $886.1 $830.3 $763.0 --------------------------- --------------------------- - ---------------------------------------------------------- </TABLE> [FN] (1)Other Services revenue primarily consists of revenue from TeleMoney Services and Business Information Services. (2)Includes revenue from the Benefits Services division of Employer Services, which was sold during 1992, and from Quorum Systems, Credit Union Services and Redinet operations sold during 1991. The following table sets forth the percentage of total revenue by industry segment, the gross profit of each industry segment as a percentage of that segment's revenue, and certain items in the consolidated statements of operations as a percentage of total revenue, for the periods indicated. <TABLE> <CAPTION> - ---------------------------------------------------------------------------------------- Years Ended December 31, --------------------------------------------- <S> <C> <C> <C> 1993 1992 1991 - ---------------------------------------------------------------------------------------- Revenue: Information Services 49.0% 50.5% 55.3% Defense Electronics 51.0% 48.4% 41.6% Other -- 1.1% 3.1% --------------------------------------------- Total revenue 100.0% 100.0% 100.0% Gross profit: Information Services 46.3% 43.7% 47.5% Defense Electronics 17.5% 17.5% 21.6% Other -- 18.2% 22.7% Total gross profit 31.6% 30.7% 36.0% Operating expenses Selling, general & administrative 20.1% 19.8% 22.7% Technical 5.5% 5.6% 6.1% Other expense (income) (0.4%) (0.8%) 0.4% Restructure loss (gain) 7.6% 9.2% (2.1%) --------------------------------------------- Total operating expenses 32.8% 33.8% 27.1% --------------------------------------------- Earnings (loss) before interest & taxes (1.2%) (3.1%) 8.9% Interest income (expense) (0.9%) 0.2% 0.2% --------------------------------------------- Earnings (loss) before income taxes (2.1%) (2.9%) 9.1% Income tax provision 0.4% 0.6% 0.6% --------------------------------------------- Earnings (loss) from continuing operations (2.5%) (3.5%) 8.5% - ---------------------------------------------------------------------------------------- </TABLE> Page 20

1993 COMPARED WITH 1992 For the year ended December 31, 1993, the Company reported a loss from continuing operations of $22.0 million, or $.52 percommon share, on revenue of $886.1 million, compared to a loss from continuing operations in 1992 of $29.1 million, or $.69 per common share, on revenue of $830.3 million. Including an $8.4 million extraordinary loss in 1993 resulting from the redemption of the Company's 8-1/2% Convertible Subordinated Debentures Due June 15, 2011 (the "8-1/2% Debentures"), the Company reported a net loss for 1993 of $30.4 million, or $.71 per common share. Including the results of businesses that are now reported as discontinued and a $41.8 million charge for a change in accounting for postretirement healthcare benefits, the Company reported a net loss for 1992 of $392.5 million, or $9.22 per common share. Results from continuing operations for 1993 included a fourth quarter net restructuring loss of $67.0 million, which included $75.9 million in restructuring charges for Information Services, $5.5 million in charges for Computing Devices, and a net restructure gain of $14.4 million not attributable to either industry segment. Information Services' charges included $57.0 million resulting from the October 1993 decision to discontinue Arbitron's syndicated television and cable ratings service. The principal components of this charge involved the write-off of metering and other assets, severance and other costs related to the termination of approximately 700 employees, and lease and other obligations related to facilities and equipment. The discontinuance of the television and cable ratings service is expected to benefit Arbitron's future operating profitability by eliminating what had become an increasingly unprofitable service and the need for additional spending to meet competition. Also included in Information Services' restructuring charges were fourth quarter 1993 charges totalling $18.9 million recorded by Employer Services, relating principally to actions to consolidate Employer Services' payroll processing activities into a smaller number of regional processing centers, expected to begin in late 1994, and to consolidate significant portions of its customer service operations into a single national center during 1994. The operational efficiencies which are the objective in establishing the regional processing centers are expected to be realized beginning in 1996, after completion of the redesign of the payroll processing system. Similarly, the centralization of Employer Services' customer service operations is intended to improve responsiveness to customer inquiries while also increasing operational efficiencies beginning in 1995. The restructuring charges recorded by Computing Devices in the fourth quarter 1993 relate to actions taken to reduce employment levels in its U.S. and U.K. operations consistent with its objectives to reduce overhead. Such employment reductions generally relate to programs that have been completed or which have been terminated, deferred or scaled back by the applicable government agency, and are considered necessary to enable Computing Devices to maintain competitive cost and expense levels. The net restructuring gain not attributable to either industry segment principally consisted of a gain of $14.7 million resulting from the Company's October 1993 receipt of a $35.5 million refund of taxes and related interest from the Internal Revenue Page 21

Service. The refund relates to restructure losses recorded by the Company during the 1980's. Further details are provided in Note D, INCOME TAXES, to the consolidated financial statements. Results from continuing operations for 1992 included a net restructuring loss of $76.2 million, which included a $30.9 million net restructure loss for Information Services, $1.1 million in severance costs for Computing Devices and $44.2 million in charges not attributable to either business segment. Information Services' net restructuring charge for 1992 was primarily composed of $29.9 million in asset write-offs related to the discontinuance of Arbitron's ScanAmerica service (which electronically measured and correlated household television viewing and product purchases through the use of people meters and product scanning wands), $8.8 million of charges for the consolidation of certain Employer Services' operations, and a gain of $7.6 million associated with the formation of the Competitive Media Reporting ("CMR") joint venture between Arbitron and VNU Business Information Services, Inc. ("VNU"). As noted below under "Gross Margin," the reduced amortization resulting from the ScanAmerica discontinuance and operating efficiencies achieved through consolidating the Employer Services operations benefitted Information Services' operating results during 1993. The restructure loss not attributable to either industry segment included facilities, litigation and other costs related to past restructuring actions, severance costs, a provision for postemployment welfare benefits provided to employees of businesses sold or discontinued and a loss from the sale of the Benefits Services division. These charges would not be expected to measurably benefit the Company's future results of operations. REVENUE. The revenue growth in Computing Devices from 1992 to 1993 was primarily due to three factors: increased business activity under the Iris contract to provide a communications system to the Canadian defense department, the September 1992 acquisition of the remaining 56% equity interest in a U.K. defense electronics systems provider, and sales of equipment to Control Data Systems which began in August 1992. Revenue from such sales of equipment has been steadily decreasing as expected, and little such revenue is expected during 1994. This trend, coupled with the July 1993 sale of a 90% interest in the Company's Barrios Technology, Inc. subsidiary, a provider of systems integration services and applications to NASA and associated contractors ("Barrios"), to the management of that business, tempered revenue growth during 1993. The dollar value of orders received by Computing Devices during 1993 was 28% greater than during 1992, reflecting increases in its U.S. and Canadian operations and the U.K. acquisition noted above. In Information Services, the revenue growth in Employer Services during 1993 was due to increased business volume in its payroll processing and tax filing operations, the acquisition of the software applications division of Revelation Technologies, Inc. ("RTI") in late 1992, the purchase of Systems Tax Service, Inc. ("STS") and increased interest income due to larger average balances of payroll tax filing deposits during 1993. Employer Services' revenue and profitability tend to be the greatest in the first and fourth quarters of each year because of customers' year-end reporting requirements Page 22

and greater tax filing deposit balances in the first quarter. As described in Note N, COMMITMENTS AND CONTINGENCIES, to the consolidated financial statements, the Company has in place interest rate swap agreements with respect to a portion of these tax filing balances which effectively convert the interest earned from a floating rate to a fixed rate basis. The Company purchased STS, a California-based payroll tax filing processor, in late October 1993 for 1,005,908 shares of the Company's Common Stock. STS had 1993 revenue of $18.5 million, of which $3.0 million was recorded after its purchase by the Company and is included in Employer Services' 1993 results. The acquisition of STS is expected to benefit Employer Services' revenue and profitability in 1994, since all of Employer Services' 1994 payroll tax filing processing will be conducted on STS' more highly automated payroll tax filing system. Arbitron's 1993 revenue decrease was almost entirely due to reduced revenue from local market television and cable ratings, reflecting the trend among local stations to contract with only one ratings provider, a decline in Arbitron's share of that market, intense price competition and the Company's decision in October 1993 to discontinue the television and cable ratings service. This revenue decrease was only partially offset by an increase in Arbitron's revenue from radio ratings. The discontinuance of the television and cable ratings service and the year-end 1993 transfer of most of Arbitron's commercial monitoring revenue to the CMR joint venture, as described below under "Operating Expenses," will substantially decrease Arbitron's revenue in 1994, as these operations provided approximately 34% of Arbitron's revenue in 1993. GROSS MARGIN. The Company's gross margin increased from 30.7% in 1992 to 31.6% in 1993. Overall margin improvement for the Company in 1993 was restrained in part by the revenue growth in Computing Devices. Computing Devices has historically had lower gross profits, but also lower operating expenses as a percentage of revenue, than the Information Services businesses. The gross margin for Information Services increased from 43.7% in 1992 to 46.3% in 1993. Arbitron's gross margin improvement from 1992 to 1993 primarily reflected the discontinuance of the television and cable ratings service, decreased amortization and other costs resulting from its 1992 discontinuance of the ScanAmerica service, and a provision established in the fourth quarter of 1992 for guaranteed minimum royalties to be paid to VNU for Arbitron's right to market the Scarborough qualitative audience research report (the "Scarborough Report"). The gross margin increase in Employer Services from 1992 to 1993 primarily resulted from its increased revenue, benefits from consolidation of certain aspects of its operations and increased interest income from tax filing deposits. The benefits of these factors were partially offset by $4.3 million in anticipated costs relating to the phaseout of Employer Services' tax filing operations in Baltimore as a result of the STS acquisition. Partially offsetting these margin improvements in Information Services were increased costs in the Company's Other Services businesses due largely to costs associated with equipment upgrades in the TeleMoney business, low margins on telecommunications services provided to businesses divested or spun-off by the Company in 1992, and costs associated with the discontinuance of the Company's Network Services organization and two small businesses within that organization. Page 23

Computing Devices' gross margin was 17.5% in both 1992 and 1993. Its gross margin did, however, improve during the second half of 1993 as compared to the first half of 1993 and the second half of 1992, due primarily to increased gross margins on the Iris contract, as Computing Devices achieved certain developmental milestones, and to reduced revenue from equipment sales to former Company operations, which had lower gross margins than most other aspects of Computing Devices' business. Margins on the Iris contract are expected to further improve as developmental work phases out and production work phases in. Nevertheless, the Company anticipates that Computing Devices will continue to experience margin pressures as its revenue mix is expected to continue to shift toward development contracts, which tend to have lower gross margins than production contracts. This largely reflects a trend on the part of the U.S. Department of Defense to maintain the level of its research and development spending as it scales back procurement spending due to budgetary constraints. This trend toward development contracts and away from production work has also resulted in work force reductions and over-capacity in certain Computing Devices facilities. OPERATING EXPENSES. The Company's selling, general and administrative ("SG&A") expenses increased from 19.8% of revenue in 1992 to 20.1% of revenue in 1993. In Information Services, SG&A expenses increased as a percentage of revenue from 30.1% in 1992 to 31.5% in 1993. The increase was due to increased expense levels in Employer Services, primarily selling expense, as Employer Services expanded its sales force and marketing programs, particularly in the second half of 1993. Investments in expanding the sales force tend to have a relatively long lead time in terms of appreciably increasing revenue, due primarily to the length of the sale/installation cycle and the fact that revenue from each new contract is spread over a multi-year period. Partially offsetting this increase were reduced SG&A expenses, in dollars and as a percentage of revenue, in Arbitron in 1993, in large measure reflecting the elimination of certain amortization expense as a result of the contribution of Arbitron's commercial monitoring operations to the CMR joint venture in 1992. Computing Devices' SG&A expenses decreased from 7.7% of revenue in 1992 to 7.3% in 1993. Technical expense for the Company, which includes research and development, product improvement and bid and proposal costs, decreased from 5.6% of revenue in 1992 to 5.5% in 1993. Technical expense increased in dollars and as a percentage of revenue in Information Services in 1993 due to increases in Employer Services related to future product and system improvements and to maintaining and upgrading existing system software. Technical expense decreased as a percentage of revenue in Computing Devices from 1992 to 1993, due in part to a shift in revenue mix toward more developmental and systems integration contracts, which require less Company-funded research and development. The decrease in other income from 1992 to 1993 primarily reflected decreased earnings from the CMR joint venture and foreign currency translation gains during the first half of 1992 in Canada. CMR's performance in 1993 was adversely affected by Arbitron's decreased revenue from commercial monitoring services, for which it pays a royalty to CMR. Arbitron and its partner in the CMR joint venture have agreed to consolidate within CMR marketing and sales responsibility for certain product and service offerings that had been retained by the respective partners at the time the CMR joint venture was established. This consolidation, effective at the end of 1993, has shifted Page 24

marketing and sales responsibility for commercial monitoring services provided to larger advertising agencies (and the related revenue) from Arbitron to CMR, and eliminated Arbitron's related costs of services. EARNINGS (LOSS) BEFORE INTEREST AND TAXES. If the previously mentioned net restructuring losses and the extraordinary loss are excluded from the Company's results for 1992 and 1993, earnings before interest and taxes for the Company increased from 6.1% of revenue in 1992 to 6.4% in 1993. Computed on the same basis, earnings before interest and taxes increased from 8.6% to 9.0% of revenue in Information Services, and from 4.5% to 5.5% of revenue in Computing Devices. Also apart from restructuring gains and losses, the Company's loss not attributable to either industry segment increased due in part to certain unusual gains in 1992 related to reshaping activities. INTEREST INCOME AND EXPENSE. Interest expense was little changed from 1992 to 1993, but interest income decreased from $17.8 million to $8.3 million. The decrease in interest income was primarily due to lower average cash balances as a result of the Company's 1992 reshaping efforts, generally lower interest rates, and the third quarter 1992 prepayment of certain notes receivable held by the Company with above market interest rates. The redemption of the Company's 8-1/2% Debentures at the end of 1993 will eliminate $13.9 million in annual interest expense, although the Company's annual dividend obligation in connection with the preferred stock issued to effect the redemption will be $13.0 million. See "Financial Condition" below. TAXES AND NET OPERATING LOSS CARRYFORWARDS. The provisions for income taxes for 1992 and 1993 primarily represent tax charges related to the Company's international operations. The Company's U.S. operations have net operating loss carryforwards for financial statement purposes of approximately $1.34 billion, which if unused will begin to expire in 1997 and which may be used, to the extent available, to offset earnings from U.S. operations during the carryforward period. Section 382 of the Internal Revenue Code of 1986, as amended, contains complex rules that place an annual limit on the amount of net operating loss carryforwards that a company may utilize after an 'ownership change' occurs. An ownership change would occur if stockholders who own or are deemed to own, directly or indirectly, 5% or more of the Company's stock increase their aggregate percentage ownership in the Company by more than 50 percentage points over the lowest percentage owned by those shareholders during the previous three years. The annual limit is computed by multiplying the market value of the stock of the Company immediately before the ownership change by the long-term tax-exempt interest rate. Given this formulation, the higher the market value of the Company's stock at the time of an ownership change, the less stringent the resulting annual limit. The Company does not believe that an ownership change has occurred in the past within the meaning of Section 382. However, it is possible that a combination of stock transfers and issuances in the past, and future transfers and issuances of the Company's stock could result in an ownership change in the future. If an ownership change were to occur, the amount of net operating loss carryforwards that would be available to the Company for each year starting with the year of the ownership change could be reduced. Page 25

1992 COMPARED WITH 1991 For the year ended December 31, 1992, Ceridian reported a net loss from continuing operations of $29.1 million, or $.69 per common share, on revenue of $830.3 million. This compares with 1991 net earnings from continuing operations of $66.1 million, or $1.54 per common share, on revenue of $763.0 million. Included in the 1992 results is the previously discussed net pre-tax restructuring loss of $76.2 million, while earnings from continuing operations for 1991 included a net restructuring gain of $16.2 million. Taking into account losses from discontinued operations of $321.6 million and a $41.8 million charge for a change in accounting for postretirement healthcare benefits, Ceridian reported a net loss for 1992 of $392.5 million, or $9.22 per common share. By comparison, after including in 1991 results losses from discontinued operations of $74.7 million and an extraordinary loss of $1.2 million related to the early retirement of debt, Ceridian reported a net loss for 1992 of $9.8 million, or $.24 per common share. REVENUE. The Company's revenue increased from $763.0 million in 1991 to $830.3 million in 1992, primarily due to increased revenue in Computing Devices. Partially offsetting that revenue growth was lost revenue associated with the sale of certain operations during 1991 and the first half of 1992. The largest single factor in the revenue growth in Computing Devices was the increased billings under the Iris contract obtained in April 1991. Also contributing to the revenue growth were the fourth quarter 1991 acquisition of Barrios and the September 1992 acquisition of the remaining 56% equity interest in the Company's U.K. subsidiary. A final factor in the revenue increase was revenue received in the second half of 1992 from providing equipment to former Company operations, primarily Control Data Systems. Partially offsetting these gains was reduced revenue from advanced systems operations in the U.S., and from ground systems and contract manufacturing operations in Canada. Information Services' revenue declined slightly from 1991 to 1992, as revenue growth in Employer Services was more than offset by a decrease in Arbitron's revenue. About half of the revenue growth in Employer Services was due to the acquisition of a payroll processing business and an employee assistance business in the fourth quarter of 1991. The balance of the revenue growth was attributable to increased business volume, reflecting a continuing trend toward the outsourcing of functions such as payroll processing. Lessening the revenue growth in Employer Services was a decline in interest income from tax filing deposits temporarily held on behalf of customers, due to lower interest rates, and pricing pressure on payroll processing and tax filing fees. The majority of Arbitron's revenue decrease from 1991 to 1992 was due to the contribution of the Company's Radio-TV Reports, Inc. ("RTV") subsidiary to the CMR joint venture. The balance of Arbitron's revenue decrease was primarily due to lower revenue from local market television ratings services, reflecting both the continuing trend among local stations toward contracting with only one ratings provider and intensifying price competition. GROSS MARGIN. The Company's gross margin decreased from 36.0% in 1991 to 30.7% in 1992, as both industry segments reported lower margins. An additional factor in the gross margin decrease from 1991 to 1992 was an increase in the relative revenue contribution of Computing Devices, as discussed in the 1993 comparison. Page 26

Computing Devices' gross margin decrease from 21.6% to 17.5% was primarily due to revenue mix, as the principal sources of Computing Devices' increased 1992 revenue identified above tend to have lower gross margins than other aspects of Computing Devices' operations. In addition, an increasing portion of Computing Devices' revenue in 1992 was derived from development contracts, which generally have lower gross margins than production contracts. The gross margin for Information Services decreased from 47.5% in 1991 to 43.7% in 1992. Part of the margin decrease in Arbitron was due to the contribution of its MediaWatch commercial monitoring operations to the CMR joint venture and the retention by Arbitron of the right to distribute this service for which it pays a royalty that is equal to 90% of applicable revenue and charged to cost of services. Other factors contributing to Arbitron's gross margin decrease included lower television ratings revenue and a fourth quarter 1992 provision for guaranteed minimum royalties in connection with the Scarborough Report. The gross margin decrease in Employer Services was primarily due to added costs associated with the installation of and conversion to laser printers in its payroll processing system, lower gross margins associated with the businesses acquired in late 1991 and lower interest income from payroll tax filing deposits. Additional factors contributing to the gross margin decrease in Information Services were costs associated with TeleMoney's introduction of a debit card service and associated upgrades in TeleMoney's electronic payment authorization service, low margins on telecommunications services provided to former Company operations that have been divested, and costs associated with the start-up of a network integration and management service and a remote computing service for computer-aided software engineering. OPERATING EXPENSES. The Company's operating expenses expressed as a percentage of revenue increased from 27.1% in 1991 to 33.8% in 1992. Apart from the restructure loss in 1992 and the restructure gain in 1991 which significantly affected this comparison, expenses decreased from 29.2% of revenue in 1991 to 24.6% of revenue in 1992. The shift in the relative revenue contributions of the industry segments contributed to this decrease as Computing Devices has historically had lower operating expenses (particularly SG&A expenses) as a percentage of revenue than the Information Services segment. SG&A expenses for Information Services decreased from 31.4% of revenue in 1991 to 30.1% of revenue in 1992. Contributing to this decrease was the fact that selling expense in Employer Services changed little from year to year, despite its revenue increase. Also contributing to the decrease in the SG&A expense ratio was Arbitron's contribution of the RTV subsidiary and the commercial monitoring operations to the CMR joint venture. SG&A expenses for Computing Devices decreased from 8.4% of revenue in 1991 to 7.7% of revenue in 1992, due in part to the fact that there is little such expense associated with providing products to former Company operations. The revenue shift in Computing Devices toward developmental and systems integration contracts has also contributed to this decrease, as such contracts generally entail a lesser amount of SG&A expense. Page 27

Technical expense decreased in Computing Devices from 6.2% of revenue in 1991 to 5.4% of revenue in 1992. The revenue shift toward developmental and systems integration contracts has contributed to this decrease, as such contracts typically entail less Company-funded research and development. Technical expense in Information Services changed little from 1991 to 1992 in dollars or as a percentage of revenue, as a decrease in such expense in Arbitron was substantially offset by increases in Employer Services and TeleMoney. In late 1992, the Company acquired the software applications division of RTI to enhance Employer Services' human resources software development capabilities. The Company's $6.9 million of other income in 1992 primarily consisted of Arbitron's $3.8 million share of the earnings of the CMR joint venture and $2.3 million of foreign currency translation income. The $2.1 million of other expense for the Company in 1991 was primarily due to Computing Devices' $1.7 million share of the 1991 loss of its U.K. affiliate and $1.3 million of foreign currency translation expense. As described earlier, the Company's $76.2 million restructure loss in 1992 included a $30.9 million net restructure loss for Information Services, $1.1 million in severance costs for Computing Devices and $44.2 million in charges not attributable to either industry segment. The Company's 1991 net restructure gain of $16.2 million primarily related to operations outside of the two industry segments. The actions which gave rise to the restructure gains and losses reflected in this net gain are described in Note B, RESTRUCTURE LOSS (GAIN), to the consolidated financial statements, and benefitted the Company's future results of operations only in the sense that several unprofitable businesses were sold and provision was made for future lease obligations related to excess facilities. EARNINGS (LOSS) BEFORE INTEREST AND TAXES. Primarily as a result of restructuring activity, the Company's continuing operations reported a loss before interest and taxes of $25.5 million in 1992, as compared to earnings before interest and taxes of $68.9 million in 1991. If the previously mentioned net restructuring gains and losses are excluded from the Company's results for 1991 and 1992, earnings before interest and taxes for the Company decreased from 6.8% of revenue in 1991 to 6.1% in 1992. Computed on the same basis, earnings before interest and taxes for Information Services decreased from 10.0% of revenue in 1991 to 8.6% of revenue in 1992, and in Computing Devices from 6.5% of revenue in 1991 to 4.5% of revenue in 1992. INTEREST EXPENSE AND INCOME. Interest expense and interest income each decreased from 1991 to 1992. The decrease in interest expense was primarily due to reduced levels of debt, while the decrease in interest income was due to generally decreasing interest rates. TAXES. The provisions for income taxes for the years 1991 and 1992 primarily represent tax charges related to the Company's international operations. Page 28

FINANCIAL CONDITION The Company's cash and equivalents increased from $152.8 million at December 31, 1992 to $215.8 million at December 31, 1993. The portion of the December 31, 1992 balance that represented amounts subject to restrictions was $6.5 million, while the comparable December 31, 1993 figure was $22.7 million. The majority of the restricted cash at each date represented the remaining portion of a customer advance received in connection with the Iris contract. During 1993, operating cash flows, consisting for the most part of net earnings (loss) adjusted to a cash basis, restructuring payments and the net change in working capital items (current assets minus current liabilities), provided $44.0 million of cash compared to $12.0 million in 1992 and $36.1 million in 1991. Net earnings (loss) adjusted to a cash basis provided cash of $46.2 million in 1993, $69.8 million in 1992 and $95.0 million in 1991. Reducing these cash flows in 1993 was the Company's $20 million voluntary contribution to its primary U.S. defined benefit retirement plan, intended to improve the funded status of that plan. Reductions in working capital provided additional operating cash flows of $57.5 million in 1993, $29.1 million in 1992 and $35.9 million in 1991. Included in the 1993 cash received from working capital items were two significant fourth quarter items, the previously mentioned payment of $35.5 million from the Internal Revenue Service, of which $10.0 million benefitted working capital and $14.7 million reduced restructure reserves utilized, and another in a series of semiannual customer advances in connection with the Iris contract. Payments of restructure liabilities were $59.7 million in 1993, $86.9 million in 1992 and $94.8 million in 1991. At December 31, 1993, the Company reported accrued restructure liabilities of $108.0 million. The portion of these liabilities estimated to require cash outlays during 1994 is approximately $45 million. Investing activities utilized cash of $22.7 million during 1993, but provided $77.7 million of cash during 1992 and $109.8 million in 1991. The net use of cash during 1993 included expenditures of $27.8 million for capital assets and $6.5 million for capitalized software and proceeds of $11.4 million from sales of investments. The net cash received from investing activities in 1992 reflected capital expenditures of $19.3 million, expenditures for the purchase of businesses of $21.8 million (most notably the Company's U.K. subsidiary, the software applications division of RTI and Barrios), the receipt of $76.6 million from sales of businesses and assets (most notably Automated Wagering), and the collection of $43.9 million from notes related to prior year business sales (most notably Imprimis Technology Incorporated). The increase in capital expenditures from 1992 to 1993 was primarily due to the acquisition of additional equipment to upgrade Employer Services' service delivery capabilities, while the expenditures for capitalized software related primarily to efforts commenced in Employer Services to develop new payroll processing software and human resource software applications. Net cash received from investing activities in 1991 included proceeds of $143.1 million from the sale of common stock of Seagate Technology, Inc. received in 1989 when the Company sold Imprimis to Seagate. Capital expenditures during 1991 were $37.8 million. The Company's capital expenditures presently planned for 1994 total approximately $41 million, with most of the expected increase over 1993's level of spending to involve additional equipment to further upgrade Employer Services' communications and service delivery capabilities and level of automation. Employer Services also intends to capitalize approximately $12 Page 29

million of software development costs in 1994. Also included in planned capital expenditures for 1994 are expenditures for equipment to further automate Computing Devices' production facilities and an imaging system in Arbitron to facilitate the process of converting data recorded in diaries into a machine readable format. Cash flows from financing activities produced $42.6 million in cash during 1993, primarily from the sale by the Company through an underwritten public offering of 4,720,000 Depositary Shares, each representing a one one-hundredth interest in a share of the Company's 5-1/2% Cumulative Convertible Exchangeable Preferred Stock. Net cash proceeds of $213.0 million from the sale of 4,400,000 Depositary Shares were received by the Company during December 1993, $168.1 million of which was used to redeem at a premium the remaining $163.5 million principal amount of the Company's 8-1/2% Debentures. Also during December 1993, the underwriters committed to purchase an additional 320,000 Depositary Shares through the exercise of their overallotment option, a transaction which closed in early January 1993 at which time the Company received an additional $15.5 million in net cash proceeds. The repayment of other debt during 1993 related primarily to a mortgage involving Computing Devices'Canadian operations. During 1992, financing activities used $124.6 million of cash. The largest portion of this expenditure related to the spin-off of Control Data Systems, and included $102 million to capitalize Control Data Systems and $10.9 million to redeem the Company's 4-1/2% cumulative preferred stock. The use of $13.6 million in 1992 to repay debt relates principally to the parent company-funded payment of outstanding short-term debt of the Company's U.K. subsidiary. Under the Iris contract, Computing Devices has received semiannual advance payments from the Canadian Government, generally in April and October of each year, each such payment covering a substantial portion of the expected contract billings prior to the next scheduled advance payment. The last of these advance payments will be received in April 1994. Thereafter, Computing Devices will begin receiving monthly progress payments, each of which will be subject to a percentage holdback. On the achievement of each quarterly milestone, 50% of the cumulative holdback will be released. This change in the contractual payment mechanism during 1994 will substantially increase the working capital requirements of Computing Devices in 1994 and future years as compared to 1993. Although 24.4% of the Company's revenue during 1993 was attributable to Computing Devices' operations in Canada and the U.K., the Company believes that its foreign currency exposure is relatively small. Approximately 85% of the Company's non-U.S. revenue is from the Canadian operations, and approximately 60% of the revenue of the Canadian operations is generated by the Iris contract, which is denominated in Canadian dollars and contains a provision which protects the Company from any currency exposure on non- Canadian dollar costs. Approximately half of the remaining revenue of the Canadian operations is U.S. dollar denominated, which is balanced by a sizeable amount of U.S. dollar-denominated costs. In the case of the U.K. subsidiary, which provides about 15% of non-U.S. revenue, nearly all of its revenue and costs are based in pound sterling. Since the net assets and earnings of this subsidiary are relatively small, the economic currency risk is also small. Page 30

The Company expects to meet its operating cash needs (including accrued restructure liabilities), capital expenditures and dividend obligations with respect to the Depositary Shares from its existing cash balances and cash flow from operations. In addition, net proceeds from the offering of Depositary Shares in excess of the amount used to redeem the 8-1/2% Debentures will be used for working capital and general corporate purposes, including investments in the Company's businesses and possible strategic acquisitions. Effective June 30, 1993, the Company entered into an agreement (the "Credit Agreement") with five commercial banks to establish a new revolving credit facility designed to meet the needs of the Company's U.S. operations and to replace the Company's previous credit facility. The Credit Agreement provides the Company with credit availability until May 31, 1994 equal to the lesser of $35 million or 80% of the amount of its eligible accounts receivable, all of which may be used to obtain revolving loans and up to $25 million of which may be used for standby letters of credit. Letters of credit obtained under the Credit Agreement may not have a final expiration date later than May 31, 1995. The new facility is secured by the Company's domestic trade accounts receivable, and the Company's obligations under the facility are guaranteed by Arbitron. At January 31, 1994, there were $6.7 million in letters of credit and no revolving loans outstanding under the facility. Under the Credit Agreement, the Company must maintain a minimum consolidated net worth which is subject to increase based on the Company's net earnings after December 31, 1992 and certain equity contributions to the Company after the same date (including the difference between the net proceeds received by the Company from the offering of Depositary Shares and the amount required to redeem the 8-1/2% Debentures). In anticipation of the decision to discontinue Arbitron's syndicated television and cable ratings service, the Company obtained an amendment to this covenant sufficient to accommodate the $57.0 million fourth quarter Arbitron restructuring charge. At December 31, 1993, the required minimum consolidated net worth was $83.7 million, and the Company was in compliance with this covenant by $33.7 million. The Company is also required to achieve $45.0 million of pre-tax operating earnings (defined so as to exclude restructuring and extraordinary losses and gains) on a rolling four quarter basis, and was in compliance with this covenant at December 31, 1993 by $12.1 million. The Credit Agreement also limits the amount of cash the Company may expend to pay dividends on its common stock or to repurchase shares of its common stock or preferred stock to 25% of the amount of the Company's net income in fiscal quarters after the first quarter of 1993. The Company and its subsidiaries are also subject to a number of additional covenants in the Credit Agreement, including those limiting debt to $230 million (of which no more than $50 million may be debt of the Company's subsidiaries), limiting liens to certain enumerated types in addition to a $50 million 'basket,' limiting contingent obligations (as defined) to $40 million, and limiting operating leases, investments, acquisitions and divestitures. In addition, the Credit Agreement provides that the beneficial ownership by a person or group of 30% or more of the voting power of the Company for 30 days or more constitutes an event of default. The Company continues to be in compliance with all covenants under the Credit Agreement. Page 31

REPORT OF MANAGEMENT AND INDEPENDENT AUDITORS' REPORT REPORT OF MANAGEMENT The consolidated financial state-ments and other related financial information of Ceridian published in this Annual Report were prepared by Company management, which acknowledges its responsibility therefor. Such statements andinformation were prepared in accordance with generally accepted accounting principles and were necessarily based in part on reasonable estimates, giving due consideration to materiality. Ceridian maintains a system of internal controls which, in the opinion of management, provides reasonable assurance that assets are adequately safeguarded, that financial records accurately reflect all transactions and can be relied upon in all material respects in the preparation of financial statements, and that the Company's business isconducted in compliance with its policy on business ethics. The control system is supported by written policies and procedures, and its effectiveness is monitored by a regular program of internal auditing. Our independent auditors, KPMG Peat Marwick, in their audit of Ceridian's consolidated financial statements, considered the internal control structure of the Company to gain a basic understanding of the accounting system in order to design an effective and efficient audit approach, not for the purpose of providing assurance on the system of internal control. The Audit Committee, consisting of outside directors, is responsible to the Board of Directors for reviewing the financial controls and reporting practices and for recommending appointment of the independent auditors. The committee meets periodically with representatives of the internal audit department and the independent auditors, both with and without Ceridian management being present. Lawrence Perlman Chairman, President and Chief Executive Officer John R. Eickhoff Chief Financial Officer Page 32

INDEPENDENT AUDITORS' REPORT THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CERIDIAN CORPORATION: We have audited the accompanying consolidated balance sheets of Ceridian Corporation and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of operations and cash flows for each of the years in the three year period ended December 31, 1993. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ceridian Corporation and subsidiaries as of December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 1993, in conformity with generally accepted accounting principles. As discussed in notes A and I to the consolidated financial statements, the Company changed its method of accounting for post-retirement benefits other than pensions in 1992. KPMG Peat Marwick Minneapolis, Minnesota January 24, 1994 Page 33

<TABLE> <CAPTION> CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in millions, except per share data) - ------------------------------------------------------------------------------------------------------------------ Years Ended December 31, --------------------------------------------- <S> <C> <C> <C> 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------ REVENUE Product sales $ 442.0 $ 392.7 $ 303.4 Services 444.1 437.6 459.6 --------------------------------------------- Total 886.1 830.3 763.0 --------------------------------------------- COST OF REVENUE Product sales 353.1 316.4 231.0 Services 252.9 258.7 257.5 --------------------------------------------- Total 606.0 575.1 488.5 --------------------------------------------- Gross profit 280.1 255.2 274.5 - ------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Selling, general and administrative 178.1 164.5 173.5 Technical expense 48.6 46.9 46.2 Other expense (income) (3.5) (6.9) 2.1 Restructure loss (gain) 67.0 76.2 (16.2) --------------------------------------------- EARNINGS (LOSS) BEFORE INTEREST AND TAXES (10.1) (25.5) 68.9 - ------------------------------------------------------------------------------------------------------------------ Interest income 8.3 17.8 22.1 Interest expense (16.4) (16.3) (20.8) --------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES (18.2) (24.0) 70.2 Income tax provision 3.8 5.1 4.1 --------------------------------------------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS (22.0) (29.1) 66.1 - ------------------------------------------------------------------------------------------------------------------ Discontinued operations: Loss from operations -- 164.8 74.7 Loss from disposition -- 156.8 -- Extraordinary loss 8.4 -- 1.2 --------------------------------------------- Cumulative effect of accounting change (FAS 106) -- 41.8 -- --------------------------------------------- NET EARNINGS (LOSS) $ (30.4) $ (392.5) $ (9.8) --------------------------------------------- --------------------------------------------- - ------------------------------------------------------------------------------------------------------------------ EARNINGS (LOSS) PER SHARE: Continuing operations $ (0.52) $ (0.69) $ 1.54 Discontinued operations -- (7.55) (1.75) Extraordinary loss (0.19) -- (0.03) Cumulative effect of accounting change (FAS 106) -- (0.98) -- --------------------------------------------- NET EARNINGS (LOSS) $ (0.71) $ (9.22) $ (0.24) --------------------------------------------- --------------------------------------------- Weighted average common shares outstanding (in thousands) 43,131 42,617 42,526 - ------------------------------------------------------------------------------------------------------------------ </TABLE> [FN] See notes to consolidated financial statements. Page 34

<TABLE> <CAPTION> CONSOLIDATED BALANCE SHEETS (Dollars in millions, except per share data) - ---------------------------------------------------------------------------------------------------------- December 31, ------------------------------- <S> <C> <C> 1993 1992 ------------------------------- ASSETS CURRENT ASSETS Cash and equivalents $ 215.8 $ 152.8 Trade and other receivables Trade, less allowance of $5.4 and $4.3 69.2 84.5 Unbilled 45.5 42.3 Other 18.3 9.0 ------------------------------- Total 133.0 135.8 ------------------------------- Inventories 30.9 42.8 Other current assets 7.5 6.6 ------------------------------- Total current assets 387.2 338.0 - ---------------------------------------------------------------------------------------------------------- Investments and advances 28.2 30.3 Property, plant and equipment, net 88.7 110.8 Other noncurrent assets 111.6 72.5 ------------------------------- Total assets $ 615.7 $ 551.6 ------------------------------- ------------------------------- - ---------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Short-term debt and current portion of long-term obligations $ 3.1 $ 0.9 Accounts payable 40.0 29.2 Customer advances 47.6 23.7 Deferred income 22.9 32.1 Accrued taxes 54.2 42.7 Employee compensation and benefits 44.4 46.5 Restructure reserves, current portion 44.8 72.0 Other accrued expenses 59.4 54.0 ------------------------------- Total current liabilities 316.4 301.1 - ---------------------------------------------------------------------------------------------------------- Long-term obligations, less current portion 16.3 186.7 Deferred income taxes 6.4 6.2 Restructure reserves, less current portion 63.2 68.6 Other noncurrent liabilities 102.1 89.9 - ---------------------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY (DEFICIT) 5-1/2% Cumulative Convertible Exchangeable Preferred Stock, $100 par value (liquidation preference of $236.0 million), authorized 50,600 shares, issued and outstanding 47,200 4.7 -- Common Stock, $.50 par, authorized 100,000,000 shares, issued 44,263,369 and 43,004,610 22.1 21.5 Additional paid-in capital 824.2 585.0 Accumulated deficit (729.8) (699.1) Other stockholders' equity items (9.9) (8.3) ------------------------------- Total stockholders' equity (deficit) 111.3 (100.9) ------------------------------- - ---------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity (deficit) $ 615.7 $ 551.6 ------------------------------- ------------------------------- - ---------------------------------------------------------------------------------------------------------- </TABLE> [FN] See notes to consolidated financial statements. Page 35

<TABLE> <CAPTION> CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in millions, except per share data) - ------------------------------------------------------------------------------------------------------------------ Years Ended December 31, --------------------------------------------- <S> <C> <C> <C> 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ (30.4) $ (392.5) $ (9.8) Adjustments to reconcile net earnings (loss) to net cash provided by (used for) operating activities: Loss from discontinued operations -- 164.8 74.7 Loss from disposition of discontinued operations -- 156.8 -- Extraordinary loss 8.4 -- 1.2 Cumulative effect of accounting change (FAS 106) -- 41.8 -- Restructure reserves: Reserves established (recovered), net 67.0 76.2 (16.2) Reserves utilized (59.7) (86.9) (94.8) Depreciation 25.5 22.9 22.1 Amortization of deferred assets 3.4 6.5 14.0 Net change in working capital items 57.5 29.1 35.9 Other (27.7) (6.7) 9.0 --------------------------------------------- Net cash provided by (used for) operating activities 44.0 12.0 36.1 - ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES Expended for capital assets (27.8) (19.3) (37.8) Capitalized software (6.5) (1.7) (0.1) Proceeds from sales of investments 11.4 -- 144.7 Expended for business acquisitions -- (21.8) (5.4) Proceeds from business and capital asset sales -- 76.6 8.4 Collection of notes from asset sales 0.2 43.9 -- --------------------------------------------- Net cash provided by (used for) investing activities (22.7) 77.7 109.8 - ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES Short-term debt 1.6 -- -- Retirement of public debt (168.1) -- (153.9) Repayment of other debt (5.8) (13.6) (5.9) Redemption of preferred stock -- (10.9) -- Payment to capitalize Control Data Systems -- (102.0) -- Sale of 5 1/2% Preferred Stock 213.0 -- -- Other 1.9 1.9 (0.5) --------------------------------------------- Net cash provided by (used for) financing activities 42.6 (124.6) (160.3) - ------------------------------------------------------------------------------------------------------------------ EFFECT OF EXCHANGE RATE CHANGES ON CASH (0.9) (5.8) 1.0 - ------------------------------------------------------------------------------------------------------------------ NET CASH FLOWS PROVIDED (USED) 63.0 (40.7) (13.4) Cash and equivalents at beginning of year 152.8 193.5 206.9 --------------------------------------------- Cash and equivalents at end of year $ 215.8 $ 152.8 $ 193.5 --------------------------------------------- --------------------------------------------- - ------------------------------------------------------------------------------------------------------------------ </TABLE> [FN] See notes to consolidated financial statements. Page 36

<TABLE> <CAPTION> CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in millions, except per share data) - ------------------------------------------------------------------------------------------------------------------ Years Ended December 31, --------------------------------------------- <S> <C> <C> <C> NET CHANGE IN WORKING CAPITAL ITEMS 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------ Decrease (Increase) in trade and other receivables $ 9.8 $ 5.4 $ 3.2 Decrease (Increase) in inventories 12.1 21.4 (12.9) Decrease (Increase) in net assets of discontinued operations -- (14.9) 38.7 Decrease (Increase) in other current assets (1.0) 3.5 (3.7) Increase (Decrease) in accounts payable 13.0 1.3 (7.5) Increase (Decrease) in customer advances 24.7 (14.2) 16.8 Increase (Decrease) in deferred income (9.2) 21.9 1.7 Increase (Decrease) in other current liabilities 8.1 4.7 (0.4) --------------------------------------------- Net change in working capital items $ 57.5 $ 29.1 $ 35.9 --------------------------------------------- --------------------------------------------- - ------------------------------------------------------------------------------------------------------------------ </TABLE> NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS Working capital cash flows from customer advances are largely related to advance funding of the Iris contract to provide a communications system to the Canadian Armed Forces. Amounts related to Iris advances which were included in cash and equivalents at December 31, 1993, 1992 and 1991 were $21.4, $5.6, and $13.9, respectively. The cash outflow from other operating activities in 1993 includes the excess of cash contributions over pension expense as determined under FAS 87, as further described in note I, "Retirement Plans." Noncash transactions eliminated from these statements: The 1993 purchase of Systems Tax Service, Inc., as described in note L, "Investments and Advances." The receivable due from the exercise of the underwriters' overallotment option at the end of 1993 and the related increase in stockholders' equity, as described in note E, "Stockholders' Equity." The write-off of deferred debt issue costs related to the early retirement of debt in 1993 and 1991, and the 1992 addition of $6.7 in mortgage debt and the equivalent amount of capital expenditures financed, as described in note K, "Financing Arrangements." The effects of foreign currency translation (except on cash balances). Amounts charged to earnings for restructuring losses or discontinued operations. Payments of the underlying obligations are shown as restructure reserves utilized. <TABLE> - ------------------------------------------------------------------------------------------------ Years Ended December 31, -------------------------------------------- <S> <C> <C> <C> <C> INTEREST AND INCOME TAXES PAID (REFUNDED) 1993 1992 1991 - ------------------------------------------------------------------------------------------------ Interest paid $ 17.0 $ 17.4 $ 20.7 Income taxes paid $ 8.6 $ 3.6 $ 8.1 Income taxes refunded $(36.2) $ (0.2) $ (5.8) - ------------------------------------------------------------------------------------------------ </TABLE> Page 37

<TABLE> <CAPTION> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the three years ended December 31, 1992 INDEX TO NOTES <S> <C><C> 38 A. Accounting Policies 40 B. Restructure Loss (Gain) 40 C. Other Noncurrent Assets and Liabilities 41 D. Income Taxes 42 E. Stockholders' Equity 43 F. Supplementary Data to Statements of Operations 44 G. Segment Data 45 H. Property, Plant andEquipment 46 I. Retirement Plans 48 J. Stock Plans 49 K. Financing Arrangements 50 L. Investments and Advances 51 M. Leasing Arrangements as Lessee 51 N. Commitments and Contingencies 52 O. Legal Matters </TABLE> A. ACCOUNTING POLICIES BASIS OF CONSOLIDATION The consolidated financial statements of Ceridian Corporation ("Ceridian" or the "Company") include the accounts of all majority-owned subsidiaries. Investments in other affiliated companies where Ceridian has significant influence, principally its 50% ownership interest in the Competitive Media Reporting ("CMR") joint venture with VNU Business Information Services, Inc., are accounted for by the equity method. The remaining investments are accounted for by the cost method. Marketable equity securities are carried at the lower of aggregate cost or market. All material intercompany transactions have been eliminated from the consolidated financial statements. DISCONTINUED OPERATIONS In second quarter 1992, the Com-pany sold its Automated Wagering division, adopted a plan of disposal for its Empros energy management division (sold in March 1993), and substantially completed preparations to separately incorporate its Computer Products business as Control Data Systems, Inc. ("Control Data Systems") and make a dividend distribution of its stock as of July 31, 1992. In light of the dependence of these businesses on a common proprietary technology and their dissimilarity to the continuing operations of the Company, these operations have been separately reported as discontinued operations in the accompanying financial statements. The sale of Automated Wagering resulted in cash proceeds of $42.3 and the recording of a loss of $55.0 in June 1992. The sale of Empros in March 1993 required a payment of $8.0 to the buyer at the date of sale, which had been provided for by the recording of a loss of $45.0 in June 1992. The spin-off of Control Data Systems involved cash payments by Ceridian to Control Data Systems of $50.0 on July 31, 1992, and $52.0 on December 31, 1992, along with the contribution on July 31, 1992, of net assets valued at $34.3, resulting in a dividend valued at $136.3 to Ceridian stockholders in the form of the common stock of Control Data Systems. Ceridian recorded a loss of $25.2 related to the spin-off of Control Data Systems and an additional loss of $31.6 related to its headquarters building, a major portion of which the Company decided to sublet. The total Company loss arising from disposition of the discontinued businesses amounted to $156.8, or $3.68 per share. Operating losses of the three businesses for 1992, including restructuring charges of $130.5, totaled $164.8, or $3.87 per share, on revenue of $380.4. CHANGE IN ACCOUNTING FOR POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS Effective January 1, 1992, Ceridian adopted Financial Accounting Standard No. 106 ("FAS 106") with respect to its postretirement health care and life benefit plans. FAS 106 requires that the expected cost of these benefits be charged to expense during the periods in which the employees render service. Under the previous accounting rules, the expense for these benefits was generally recorded upon receipt of health care claims or premium invoices. Page 38

Effective January 1, 1993, the Company adopted FAS 112, "Employers' Accounting for Postemployment Benefits," which establishes accounting standards for employers who provide benefits to former or inactive employees and their dependents after employment but before retirement. FAS 112 requires accrual accounting for these benefits. After consideration of restructuring provisions of $12.0 in June 1992 and $4.3 in September 1989 primarily related to the continuation of such benefits to former employees of disposed businesses, the adoption of FAS 112 did not have a material effect on the Company's financial position or results of operations. CHANGES IN PRESENTATION Effective in first quarter 1993, the Company reassigned certain costs between product sales and services to better reflect the relationship of revenue and cost for each of these elements. Prior year amounts have been reclassified to conform to the current year's presentation. CASH AND EQUIVALENTS Cash and equivalents include short-term cash investments carried at cost, which approximates market value. PROPERTY Capital assets are carried at cost and depreciated for financial statement purposes using straight-line and accelerated methods at rates based on the estimated lives of the assets, which are generally as follows: <TABLE> - ------------------------------------------- <S> <C> Buildings 40-50 years Building improvements 5-20 years Machinery and equipment 3-8 years Computer equipment 3-6 years - ------------------------------------------- </TABLE> Repairs and maintenance are expensed as incurred. Gains or losses on dispositions are included in results of operations. EARNINGS (LOSS) PER SHARE Earnings (Loss) per share has been computed by dividing net earnings (loss), after reduction for preferred stock dividends, by the weighted average number of common shares outstanding. For the periods presented, outstanding stock options and convertible securities did not have a material dilutive effect on earnings per share. INCOME TAXES The provision for income taxes is based on income recognized for financial statement purposes and includes the effects of temporary differences between such income and that recognized for tax return purposes. The adoption of FAS 109, "Accounting for Income Taxes," effective January 1, 1993, did not have a material effect on the Company's financial position or results of operations. The Company and its eligible subsidiaries file a consolidated U.S. federal income tax return. Certain subsidiaries which are consolidated for financial reporting are not eligible to be included in the consolidated U.S. federal income tax return and separate provisions for income taxes have been determined for these entities. The losses from U.S. operations during the past three years have not provided a tax benefit. Except for selective dividends, Ceridian intends to reinvest the unremitted earnings of its non-U.S. subsidiaries and postpone their remittance indefinitely. Accordingly, no provision for U.S. income taxes was required on such earnings during the three years ended December 31, 1993. REVENUE RECOGNITION Revenue from product sales is related primarily to fixed price, long-term contracts with government customers and is recognized on a percentage of completion basis. Percentage of completion is determined by reference to the extent of contract performance, future performance risk and cost incurrence. Costs and estimated earnings in excess of billings on uncompleted contracts are reported as unbilled receivables, a portion of which represents a holdback reserve which is billable as allowed under the contract terms. Contracts in progress are reviewed quarterly, and sales and earnings are adjusted in current accounting periods based on revisions in contract value and estimated costs at completion. Provisions for estimated losses on contracts are recorded when identified. Revenue from sales of services is recognized when the services are performed and billable, except for the portion of Employer Services tax filing revenue which is recognized as earned from the investment of customer deposits. INVENTORIES Inventories consist primarily of electronic components which are purchased in anticipation of funding for specific contracts and programs and are stated at the lower of first in, first out or average cost or net realizable value. Although inventories include costs related to long-term contracts, most of the inventoried costs are expected to be charged to cost of sales within one year. Payments received in advance of billings on long-term contracts, principally the Iris contract to provide a communications system to the Canadian Armed Forces, are recorded as a liability for customer advances until contract milestones are accomplished. Page 39

B. RESTRUCTURE LOSS (GAIN) The Company recorded a net restructure loss (gain) of $67.0 for 1993, $76.2 for 1992 and $(16.2) for 1991. In 1993, the net restructure loss included charges of $75.9 for Information Services and $5.5 for Computing Devices. These charges were offset in part by a gain of $14.4, not attributable to either industry segment, which includes the receipt of a $14.7 refund of taxes and related interest as further described in note D and a net adjustment of prior years' restructuring provisions. The $75.9 Information Services charges include a charge of $57.0 related to the discontinuance of Arbitron's syndicated television and cable ratings service, which primarily involves the write-off of metering and other equipment, severance and other costs related to the termination of employees, and lease and other obligations related to facilities and equipment. Also included is a charge of $18.9 for Employer Services, primarily to consolidate its payroll processing activities into a smaller number of regional processing centers and its customer services operations into a single national center, beginning in 1994. The $5.5 charge relates to actions taken by Computing Devices to reduce employment levels in its U.S. and U.K. operations in relation to the completion, deferral or termination of certain government contract programs. In 1992, the net restructure loss of $76.2 included a write-off of $29.9 from the discontinuance of Arbitron's ScanAmerica service, $8.8 for the consolidation of certain Employer Services operations, litigation and other costs largely related to past restructuring actions of $20.9, severance costs of $8.5, a $12.0 provision for postemployment benefit obligations to employees of businesses sold or discontinued by the Company, a gain of $7.6 from the formation of the CMR joint venture, and a loss of $3.7 from the sale of the Benefits Services division. In 1991, the net restructure gain of $16.2 included losses of $39.5 and gains of $55.7. Restructure losses included $18.5 for lease and other obligations related to excess facilities, $15.5 related to sales of businesses, principally Quorum Systems and Credit Union Services, and $5.5 primarily related to the liquidation of a venture capital investment portfolio. Restructure gains included $42.8 from the sale of Seagate common stock received from the 1989 sale of the Company's Imprimis subsidiary, $9.2 from lump sum settlements of retirement obligations to former employees and $3.7 from the sale of Redinet operations. C. OTHER NONCURRENT ASSETS AND LIABILITIES In 1993, the Company began incurring capitalizable costs, incremental to normal operations, of internally developed software which will become an integral part of its revenue producing payroll processing system. Amortization of these costs will begin when the particular product is put into service. No amortization of these costs was recorded in 1993. Capitalized costs of internally developed and purchased software are carried at the lower of cost or recoverable value and are amortized over a four-year period. The excess of purchase cost over fair value of net assets of acquired businesses ("goodwill") is being amortized over periods not exceeding 20 years. Amounts amortized during the three years ended December 31, 1993, are shown in note F. Prepaid Pension Cost Includes the net pension asset related to funded plans for U.S. and Canadian employees and the intangible asset related to the Company's unfunded supplemental plan, as further described in note I. The liability for employee benefit plans includes postretirement and postemployment plans and the unfunded supplemental pension plan as further described in note I. <TABLE> <CAPTION> - ----------------------------------------------------------------------------------------------- OTHER NONCURRENT ASSETS AND LIABILITIES December 31, -------------------------------- <S> <C> <C> 1993 1992 - ----------------------------------------------------------------------------------------------- OTHER NONCURRENT ASSETS Goodwill $ 35.4 $ 20.6 Purchased software products 4.1 1.9 Internally developed software 4.1 -- Prepaid pension cost 64.0 40.3 Deferred debt issue costs -- 3.9 Other 4.0 5.8 ------------------------------ Total $ 111.6 $ 72.5 ------------------------------ ------------------------------ OTHER NONCURRENT LIABILITIES Deferred income $ 13.1 $ 15.6 Employee benefit plans 83.2 71.9 Other 5.8 2.4 ------------------------------ Total $102.1 $ 89.9 ------------------------------ ------------------------------ - ---------------------------------------------------------------------------------------------- </TABLE> Page 40

D. INCOME TAXES The cumulative amount of undistributed earnings of international subsidiaries for which U.S. income taxes have not been provided was approximately $15.6 at December 31, 1993. It is not practical to estimate the amount of unrecognized deferred U.S. taxes on these undistributed earnings. In October 1993, Ceridian received $35.5 from the Internal Revenue Service representing a refund of taxes and related interest determined to be owed to the Company as a result of the audit of Ceridian's U.S. income tax returns for the years 1978-1987. Of that amount, $10.8 was paid by Ceridian to or on behalf of third parties in accordance with the tax sharing agreements relating to past restructuring actions, $10.0 was recorded in accrued taxes and the remaining $14.7 was recorded as a restructuring gain. Under tax sharing agreements existing at the time of the disposition of certain former operations of the Company, Ceridian remains subject to income tax audits in various jurisdictions for the years 1985-1992. Ceridian considers its tax accruals adequate to cover any U.S. and international tax deficiencies not recoverable through deductions in future years. The Company has U.S. net operating loss carryforwards, future tax deductions and general business tax credits of $1,006.9, $337.8 and $26.0, respectively, which will be available to offset substantially all of its earnings during the carryforward period. The tax benefits of these items are reflected in the accompanying table of deferred tax assets and liabilities. If not used, these carryforwards begin to expire in 1997. U.S. tax rules impose limitations on the use of net operating losses following certain changes in ownership. If such a change were to occur, the limitation could reduce the amount of these benefits that would be available to offset future taxable income each year, starting with the year of ownership change. <TABLE> <CAPTION> (Dollars in millions, except per share data) - ---------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> COMPONENTS OF EARNINGS AND TAXES 1993 1992 1991 - ---------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES U.S. $(27.3) $(39.3) $ 63.0 International 9.1 15.3 7.2 -------------------------------------------- Total $(18.2) $(24.0) $ 70.2 -------------------------------------------- -------------------------------------------- INCOME TAX PROVISION (BENEFIT) Current U.S. $ -- $ -- $ -- International 2.6 2.7 0.9 State and other 0.6 0.5 0.6 -------------------------------------------- 3.2 3.2 1.5 Deferred International 0.6 1.9 2.6 -------------------------------------------- Total $ 3.8 $ 5.1 $ 4.1 -------------------------------------------- -------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- </TABLE> <TABLE> <CAPTION> - ---------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> EFFECTIVE RATE RECONCILIATION 1993 1992 1991 - ---------------------------------------------------------------------------------------------------------------- U.S. statutory rate 35% 34% 34% -------------------------------------------- Income tax provision (benefit) at U.S. statutory rate $ (6.4) $ (8.2) $ 23.9 International rate differences (0.8) (0.6) 0.5 State income taxes, net 0.6 0.5 0.6 Losses for which no tax benefit was provided 10.4 13.4 0.1 Utilization of loss carryforwards -- -- (21.0) - ---------------------------------------------------------------------------------------------------------------- Income tax provision $ 3.8 $ 5.1 $ 4.1 -------------------------------------------- -------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- </TABLE> <TABLE> <CAPTION> - ---------------------------------------------------------------------------------------------------------------- TAX EFFECT OF ITEMS THAT COMPRISE A SIGNIFICANT PORTION OF DEFERRED TAX ASSETS AND LIABILITIES AT DECEMBER 31, 1993 - ---------------------------------------------------------------------------------------------------------------- <S> <C> <C> DEFERRED TAX DEFERRED TAX ITEM DESCRIPTION ASSET LIABILITY - ---------------------------------------------------------------------------------------------------------------- Net operating loss carryforwards $ 392.4 $ -- Restructuring and other accruals 95.9 International (6.4) Other 35.7 -------------------------------------------- Total 524.0 (6.4) Less valuation allowance (524.0) -------------------------------------------- Deferred income taxes $ -- $ (6.4) -------------------------------------------- -------------------------------------------- The net deferred tax asset at December 31, 1993, is fully offset by a valuation allowance. The amount of the valuation allowance will be reviewed annually. - ---------------------------------------------------------------------------------------------------------------- </TABLE> Page 41

E. STOCKHOLDERS' EQUITY PREFERRED STOCK From a class of preferred stock with 750,000 authorized shares (the "Preferred Stock"), the Company's Board of Directors designated a series consisting of 50,600 such shares as 5-1/2% Cumulative Convertible Exchangeable Preferred Stock, par value $100 per share (the "5-1/2% Preferred Stock"). In December 1993, the Company completed the sale in an underwritten public offering of 4,400,000 depositary shares, each representing a one one-hundredth interest in a share of 5-1/2% Preferred Stock, for $50 per share, or net cash proceeds of $213.0, and received a commitment from the underwriters to purchase an additional 320,000 depositary shares, at $50 per share. The underwriters' commitment is reported as an other receivable of $15.5 at December 31, 1993, which was collected in early January 1994. The proceeds were used primarily to retire the Company's 8-1/2% Convertible Subordinated Debentures Due June 15, 2011 (the "8-1/2% Debentures") with the remainder to be used for working capital and other general corporate purposes. Dividends on the 5-1/2% Preferred Stock and depositary shares are cumulative from the date of issuance and payable on a quarterly basis commencing on March 31, 1994. The depositary shares are convertible at the option of the holder into common stock of the Company at a conversion price of $22.72 per common share, subject to adjustment under certain conditions. The depositary shares are redeemable, in whole or in part, at the option of the Company, at any time on or after December 31, 1996, initially at a redemption price per share of $51.10 and thereafter at prices declining to $50.00, in all cases plus accrued and unpaid dividends to the redemption date. The depositary shares are exchangeable, in whole but not in part, at the option of the Company, on any quarterly dividend payment date on or after December 31, 1995, for the Company's 5-1/2% Convertible Subordinated Debentures due 2008 at a rate of $50.00 principal amount of such Debentures for each depositary share. The depositary shares are non-voting except that holders will be entitled to vote as a separate class to elect two directors if the equivalent of six or more quarterly dividends shall be in arrears, until the dividends in arrears are paid in full. In May 1993, the stockholders of Ceridian voted to approve the acceleration of the expiration date of the Company's Stockholder Rights Plan (the "Rights Plan") to June 1, 1993. As a result, the preferred stock purchase rights issued under the Rights Plan and relating to a series of 500,000 shares of Preferred Stock expired on June 1, 1993. The reservation of the 500,000 shares of Preferred Stock in connection with the Rights Plan was eliminated in January 1994. The 108,591 shares of 4-1/2% Cumulative Preferred Stock issued and outstanding at December 31, 1991, were redeemed at par value of $100 per share in July 1992 in connection with the spin-off of Control Data Systems. Page 42

<TABLE> <CAPTION> Shares ------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> COMMON STOCK, Additional ADDITIONAL PAID-IN CAPITAL Treasury Common Paid-In Accumulated AND ACCUMULATED DEFICIT Outstanding Stock Issued Stock Capital Deficit - ----------------------------------------------------------------------------------------------------------------------------------- Balance December 31, 1990 42,529,652 197,172 42,726,824 $21.4 $582.8 $(159.7) - ------------------------------------------------------------------------------------------------------------------------------------ Conversion of debentures 36 36 -- -- Restricted stock awards 5,000 (5,000) -- Forfeitures of restricted stock (4,566) 4,566 Net earnings (loss) (9.8) Preferred stock dividends (0.5) - ----------------------------------------------------------------------------------------------------------------------------------- Balance December 31, 1991 42,530,122 196,738 42,726,860 21.4 582.8 (170.0) - ----------------------------------------------------------------------------------------------------------------------------------- Exercises of stock options 277,750 277,750 0.1 2.2 Forfeitures of restricted stock (4,000) 4,000 Net earnings (loss) (392.5) Preferred stock dividends (0.3) Dividend of Control Data Systems stock (136.3) - ----------------------------------------------------------------------------------------------------------------------------------- Balance December 31, 1992 42,803,872 200,738 43,004,610 21.5 585.0 (699.1) - ----------------------------------------------------------------------------------------------------------------------------------- EXERCISES OF STOCK OPTIONS 252,851 252,851 0.1 2.3 RESTRICTED STOCK AWARDS 119,000 (119,000) -- (0.2) NET EARNINGS (LOSS) (30.4) SALE OF 5-1/2% PREFERRED STOCK 223.8 PREFERRED STOCK DIVIDENDS (0.3) ISSUED FOR PURCHASE OF SYSTEMS TAX SERVICE 1,005,908 1,005,908 0.5 13.3 - ----------------------------------------------------------------------------------------------------------------------------------- BALANCE DECEMBER 31, 1993 44,181,631 81,738 44,263,369 $22.1 $824.2 $(729.8) - ----------------------------------------------------------------------------------------------------------------------------------- </TABLE> [FN] Authorized but unissued or treasury common shares reserved for future issuance as of December 31, 1993, included 5,566,477 shares for exercise of stock options and awards of restricted stock and 10,384,000 shares for conversion of 5-1/2% Preferred Stock depositary shares. <TABLE> <CAPTION> - --------------------------------------------------------------------------------------------------------- December 31, ------------------------------------------ <S> <C> <C> <C> OTHER STOCKHOLDERS' EQUITY ITEMS 1993 1992 1991 - --------------------------------------------------------------------------------------------------------- Foreign currency translation adjustment $ (2.0) $ (1.0) $ 7.8 Restricted stock awards (2.2) (0.5) (1.6) Pension liability adjustment (4.1) (2.9) (1.2) Treasury stock, at cost (1.6) (3.9) (3.9) - --------------------------------------------------------------------------------------------------------- Total $ (9.9) $ (8.3) $ 1.1 ------------------------------------------ ------------------------------------------ - --------------------------------------------------------------------------------------------------------- </TABLE> F. SUPPLEMENTARY DATA TO STATEMENTS OF OPERATIONS <TABLE> <CAPTION> - --------------------------------------------------------------------------------------------------------- Years Ended December 31, ------------------------------------------ <S> <C> <C> <C> OTHER EXPENSE (INCOME) 1993 1992 1991 - --------------------------------------------------------------------------------------------------------- Foreign currency translation expense (income) $ (0.4) $ (2.3) $ 1.3 Loss (Gain) on sale of assets (0.9) 0.2 (0.5) Other expense (income) (1.0) (1.6) (0.4) Equity in loss (earnings) of affiliates -- 0.6 1.7 Share of CMR joint venture loss (earnings) (1.2) (3.8) -- ------------------------------------------ Total $ (3.5) $ (6.9) $ 2.1 ------------------------------------------ ------------------------------------------ - --------------------------------------------------------------------------------------------------------- OTHER DATA - --------------------------------------------------------------------------------------------------------- Provision for doubtful accounts $ 1.7 $ 1.0 $ 1.5 Research and development $ 33.4 $ 30.5 $ 34.6 Amortization of goodwill $ 1.5 $ 0.6 $ 0.7 Maintenance and repairs $ 15.8 $ 14.3 $ 16.3 Taxes, other than income and payroll $ 6.3 $ 8.7 $ 9.3 Royalty costs (primarily CMR joint venture) $ 28.4 $ 30.8 $ 4.3 - --------------------------------------------------------------------------------------------------------- </TABLE> Page 43

G. SEGMENT DATA INDUSTRY SEGMENTS Information concerning the continuing operations of Ceridian appears in the accompanying Industry Segment Data table. The two industry segments are information services and defense electronics. The information services segment consists of Employer Services and Arbitron, along with two small services businesses. The information services businesses collect, manage and analyze data on behalf of customers, and report information resulting from that process to customers. The products and services provided by the information services businesses address specific information management needs of other businesses to enable them to operate more efficiently and effectively. The technology-based products and services of the information services businesses are typically provided through long-term customer relationships that result in a high level of recurring revenue. Employer Services offers a broad range of services designed to help employers manage their work forces more effectively, including payroll processing, payroll tax filing, human resource information services, consulting services and employee assistance programs. Arbitron is the leading provider of radio audience measurement information in terms of revenue and market share, and also provides media and marketing information to broadcasters, cablecasters, advertising agencies and advertisers. Arbitron's proprietary data regarding radio audience size and demographics is provided to customers through multi-year subscription agreements. In addition, through various joint ventures and licensing arrangements, Arbitron has access to services that monitor television and other commercials and provide data regarding product purchasing decisions. The defense electronics segment, consisting of Computing Devices International, develops, manufactures and markets electronic systems, subsystems and components, and provides systems integration and other services, primarily to government defense agencies. The "other" category includes corporate center operations, businesses disposed of but reported as continuing operations, and net assets of discontinued operations. Intersegment sales are not material. MAJOR CUSTOMERS Revenue in 1993, 1992 and 1991, respectively, included sales under prime contracts or subcontracts to the U.S. government of $232, $239 and $249 and the Canadian government of $137, $95 and $51, substantially all of which are reported in the defense electronics segment. Of the sales to the Canadian government, $105 in 1993, $69 in 1992 and $19 in 1991 were from the Iris contract. <TABLE> <CAPTION> - ------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Defense Information INDUSTRY SEGMENT DATA Electronics Services Other Consolidated - ------------------------------------------------------------------------------------------------------- 1993 REVENUE $ 452.2 $433.9 $ -- $886.1 ---------------------------------------------------------------------- EARNINGS (LOSS) BEFORE RESTRUCTURE, INTEREST AND TAXES $ 24.8 $ 39.1 $ (7.0) $ 56.9 RESTRUCTURE GAIN (LOSS) (5.5) (75.9) 14.4 (67.0) ---------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ 19.3 $(36.8) $ 7.4 $(10.1) ---------------------------------------------------------------------- ---------------------------------------------------------------------- IDENTIFIABLE ASSETS $ 208.7 $134.8 $ 272.2 $615.7 CAPITAL EXPENDITURES $ 10.6 $ 16.3 $ 0.9 $ 27.8 DEPRECIATION $ 8.7 $ 15.7 $ 1.1 $ 25.5 - ------------------------------------------------------------------------------------------------------- 1992 Revenue $ 402.2 $418.9 $ 9.2 $830.3 ---------------------------------------------------------------------- Earnings (Loss) before restructure, interest and taxes $ 18.2 $ 36.0 $ (3.5) $ 50.7 Restructure gain (loss) (1.1) (30.9) (44.2) (76.2) ---------------------------------------------------------------------- Earnings (Loss) before interest and taxes $ 17.1 $ 5.1 $ (47.7) $(25.5) ---------------------------------------------------------------------- ---------------------------------------------------------------------- Identifiable assets $ 230.7 $130.1 $ 190.8 $551.6 Capital expenditures $ 8.6 $ 10.3 $ 0.4 $ 19.3 Depreciation $ 7.9 $ 13.5 $ 1.5 $ 22.9 - ------------------------------------------------------------------------------------------------------- 1991 Revenue $ 317.2 $422.3 $ 23.5 $763.0 ---------------------------------------------------------------------- Earnings (Loss) before restructure, interest and taxes $ 20.7 $ 42.1 $ (10.1) $ 52.7 Restructure gain (loss) (1.3) (1.5) 19.0 16.2 ---------------------------------------------------------------------- Earnings (Loss) before interest and taxes $ 19.4 $ 40.6 $ 8.9 $ 68.9 ---------------------------------------------------------------------- ---------------------------------------------------------------------- Identifiable assets $ 210.0 $180.8 $ 583.9 $974.7 Capital expenditures $ 10.9 $ 24.2 $ 2.7 $ 37.8 Depreciation $ 8.9 $ 11.6 $ 1.6 $ 22.1 - ------------------------------------------------------------------------------------------------------- </TABLE> Page 44

GEOGRAPHIC SEGMENTS The Company's international operations consist of defense electronics operations primarily in Canada and, to a much lesser extent, in the United Kingdom. The United Kingdom operations are included in the consolidated financial statements from September 1992, the date of the acquisition of the 56% interest not previously held by the Company. Intersegment and export sales are not material. Geographic information concerning the Company's continuing operations appears in the accompanying Geographic Segment Data table. The amounts of the parent company's equity in net assets of and advances to international subsidiaries and branches were $37.0 and $40.5 at December 31, 1993 and 1992, respectively. Local currencies have been determined to be functional currencies for these operations. Foreign currency balance sheets are translated at the end-of-period exchange rates, and earnings statements at the average exchange rates for each period. The resulting translation gains or losses are recorded as "foreign currency translation adjustment" in the stockholders' equity section of the balance sheet. Gains and losses from translation of assets and liabilities denominated in other than the functional currency of the operation are recorded in results of operations as "other expense (income)." Canadian operations include a significant number of contracts which either provide for exchange rate adjustments or are denominated in the U.S. dollar, which benefits the management of exchange rate risk. <TABLE> <CAPTION> - --------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> GEOGRAPHIC SEGMENT DATA United States International Consolidated - --------------------------------------------------------------------------------------------------------- 1993 REVENUE $ 670.2 $ 215.9 $ 886.1 ------------------------------------------------------------------- EARNINGS (LOSS) BEFORE RESTRUCTURE, INTEREST AND TAXES $ 44.8 $ 12.1 $ 56.9 RESTRUCTURE GAIN (LOSS) (65.5) (1.5) (67.0) ------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (20.7) $ 10.6 $ (10.1) ------------------------------------------------------------------- ------------------------------------------------------------------- IDENTIFIABLE ASSETS $ 482.6 $ 133.1 $ 615.7 - --------------------------------------------------------------------------------------------------------- 1992 Revenue $ 663.5 $ 166.8 $ 830.3 ------------------------------------------------------------------- Earnings (Loss) before restructure, interest and taxes $ 42.6 $ 8.1 $ 50.7 Restructure gain (loss) (76.0) (0.2) (76.2) ------------------------------------------------------------------- Earnings (Loss) before interest and taxes $ (33.4) $ 7.9 $ (25.5) ------------------------------------------------------------------- ------------------------------------------------------------------- Identifiable assets $ 423.5 $ 128.1 $ 551.6 - --------------------------------------------------------------------------------------------------------- 1991 Revenue $ 647.1 $ 115.9 $ 763.0 ------------------------------------------------------------------- Earnings (Loss) before restructure, interest and taxes $ 48.4 $ 4.3 $ 52.7 Restructure gain (loss) 16.2 -- 16.2 ------------------------------------------------------------------- Earnings (Loss) before interest and taxes $ 64.6 $ 4.3 $ 68.9 ------------------------------------------------------------------- ------------------------------------------------------------------- Identifiable assets $ 874.9 $ 99.8 $ 974.7 - --------------------------------------------------------------------------------------------------------- </TABLE> H. PROPERTY, PLANT AND EQUIPMENT <TABLE> <CAPTION> - --------------------------------------------------------------------------------------------------------- December 31, ------------------------------- <S> <C> <C> 1993 1992 - --------------------------------------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT At cost Land $ 3.4 $ 4.2 Buildings and improvements 75.3 74.3 Machinery and equipment 162.7 201.6 ------------------------------ Total 241.4 280.1 Accumulated depreciation 152.7 169.3 ------------------------------ Property, plant and equipment, net $ 88.7 $110.8 ------------------------------ ------------------------------ - --------------------------------------------------------------------------------------------------------- </TABLE> <TABLE> <CAPTION> Years ended December 31, ------------------------------------------------------- <S> <C> <C> <C> CHANGES IN PROPERTY, PLANT AND EQUIPMENT 1993 1992 1991 - --------------------------------------------------------------------------------------------------------- Additions $ 27.8 $ 26.0 $ 37.8 Retirements, net of accumulated depreciation(1) (24.4) (13.7) (9.0) ------------------------------------------------------- Net additions $ 3.4 $ 12.3 $ 28.8 ------------------------------------------------------- ------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- </TABLE> [FN] (1)Retirements include reductions in carrying values due to the disposition of businesses and other restructuring actions. Page 45

I. RETIREMENT PLANS PENSION BENEFITS Ceridian and its subsidiaries have defined benefit pension plans available to substantially all employees. The plans' assets consist principally of equity securities, U.S. government securities, and other fixed income obligations and do not include securities of the Company. Benefits under these plans are calculated on maximum or career average earnings and years of participation in the plans. Most U.S. employees are eligible to participate in these plans by means of salary reductions. Certain former employees are inactive participants in the plans. Employer cash contributions to U.S. plans, during the respective plan years, amounted to $24.9 in 1993, $2.3 in 1992 and $1.8 in 1991. Plans covering employees of the Company's Canadian and U.K. subsidiaries constitute a minor portion of the amounts reported in the accompanying tables. Table amounts do not report results for plans of international subsidiaries included in the spin-off of Control Data Systems. Retirement plan funding amounts are based on independent consulting actuaries' determination of the Employee Retirement Income Security Act of 1974 ("ERISA") funding requirements in the U.S. and local statutory requirements in other countries. Vested U.S. plan participants who have terminated employment after 1989 can elect to immediately receive a lump sum distribution as an alternative to receiving monthly benefits. These distributions totalled $36.0, $49.0 and $126.1 in the 1993, 1992 and 1991 plan years, respectively, and resulted in the recognition by the Company of a restructure gain of $9.2 in 1991. The Company also sponsors a nonqualified unfunded supplemental retirement plan for certain current and former U.S. employees which is not subject to ERISA benefit limitations, nor does it qualify for the benefit protection provided by ERISA. The projected benefit obligation at September 30, 1993 and 1992 for this plan was $19.7 and $19.6, respectively, and the net periodic pension cost was $2.2 for 1993, $2.2 for 1992 and $2.3 for 1991. The Company recorded a reduction in stockholder's equity of $1.2 in 1993, $1.7 in 1992 and $1.2 in 1991 which represents the increase in the excess of its minimum liability under this plan over the allowed carrying amount of the related intangible asset. A defined contribution plan, to which the Company may make contributions, is available to most U.S. employees. The cost recognized by the Company with respect to this plan was $1.9 in 1993 and $1.8 in 1992. <TABLE> <CAPTION> - ----------------------------------------------------------------------------------- September 30, FUNDED STATUS OF DEFINED BENEFIT ------------------------------------ <S> <C> <C> RETIREMENT PLANS AT MEASUREMENT DATE 1993 1992 - ----------------------------------------------------------------------------------- Actuarial present value of obligation: Vested benefit obligation $ 641.5 $ 584.5 ------------------------------------ ------------------------------------ Accumulated benefit obligation 645.2 588.1 ------------------------------------ ------------------------------------ Projected benefit obligation $ 703.7 $ 651.6 Plan assets at fair value 698.4 627.1 ------------------------------------ Plan assets in excess of (less than) projected benefit obligation (5.3) (24.5) Unrecognized net (gain) or loss 39.6 31.9 Prior service cost 39.7 44.2 Unrecognized net asset (15.3) (17.5) ------------------------------------ Net pension asset or (liability) recognized in the consolidated balance sheet $ 58.7 $ 34.1 ------------------------------------ ------------------------------------ - ----------------------------------------------------------------------------------- </TABLE> <TABLE> <CAPTION> The assumptions used in determining the funded status information are as follows: - -------------------------------------------------------------------------------------------------------- Rate of Long-term Rate Discount Rate Salary Progression of Return on Assets ------------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> U.S. International U.S. International U.S. International - -------------------------------------------------------------------------------------------------------- 1993 7.25% 7.5% - 8.0% 4.0% 6.0 - 7.0% 9.0% 8.0 - 9.0% 1992 8.0% 8.0% - 9.0% 4.5% 6.0 - 8.0% 9.5% 8.0 - 9.0% 1991 8.5% 9.0% 4.5% 6.0% 9.5% 9.0% - -------------------------------------------------------------------------------------------------------- </TABLE> <TABLE> <CAPTION> <S> <C> <C> <C> NET PERIODIC PENSION COST (CREDIT) 1993 1992 1991 - -------------------------------------------------------------------------------------------------------- Service cost $ 6.0 $ 6.2 $ 7.2 Interest cost on projected benefit obligation 52.2 54.3 62.3 Actual return on plan assets (103.0) (45.2) (144.0) Net amortization and deferral 47.5 (12.8) 76.2 --------------------------------------------------------- Total $ 2.7 $ 2.5 $ 1.7 --------------------------------------------------------- --------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- </TABLE> Page 46

POSTRETIREMENT BENEFITS Ceridian provides health care and life insurance benefits for eligible retired employees, including individuals who retired from operations of the Company that were subsequently sold or discontinued. Life insurance benefits in the form of a paid-up policy are provided only for employees who retired before January 1, 1992. The Company sponsors several health care plans for both pre- and post-65 retirees. Plans offered include a managed care option, HMOs where available, and a catastrophic plan for pre-65 retirees. Post-65 retirees have the choice of a company-sponsored Medicare supplement plan or HMO Medicare plans. Company contributions to these plans differ for various groups of retirees and future retirees. Employees hired on or after January 1, 1992, will be allowed to enroll in company-sponsored plans at retirement, but receive no company subsidy. For employees hired before January 1, 1992, and retiring in 1992 or later, the Company subsidizes pre-65 coverage only. The Company's subsidy is a fixed dollar contribution determined at retirement equal to 2.5% of the catastrophic plan cost for each year of service. Employees who retired prior to 1992 are subject to various cost-sharing policies depending on when retirement began and eligibility for Medicare. This is a closed group of retirees. Most retirees outside the United States are covered by governmental health care programs, and the Company's cost is not significant. As described in note A, Ceridian adopted FAS 106, effective January 1, 1992, with respect to retiree health care and life benefits. The cumulative effect of this change in accounting was a charge of $41.8, which, combined with $14.0 previously accrued in connection with the disposition of businesses, provided an accrued benefit obligation of $55.8. The following tables present the funded status of the plan, reconciled to the accrued postretirement benefit cost recognized in the Company's balance sheet at December 31, 1993 and 1992, and the components of the net periodic postretirement benefit cost for 1993 and 1992. The costs of these benefits, as recorded under the previous accounting policy, were $6.0 in 1991. The Company does not prefund these costs. There were no settlements or curtailments during the reported years. <TABLE> <CAPTION> - ------------------------------------------------------------------ FUNDED STATUS OF POSTRETIREMENT HEALTH CARE AND LIFE PLANS - ------------------------------------------------------------------ December 31, --------------------------- <S> <C> <C> 1993 1992 - ------------------------------------------------------------------ Accumulated postretirement benefit obligation: Retirees $47.3 $42.1 Fully eligible active participants 5.0 3.6 Other active participants 11.2 10.6 -------------------------- 63.5 56.3 Unrecognized net loss 7.6 1.6 -------------------------- Accrued benefits cost $55.9 $54.7 -------------------------- -------------------------- Current portion $ 6.0 $ 6.0 Noncurrent portion 49.9 48.7 -------------------------- Total $55.9 $54.7 -------------------------- -------------------------- - ------------------------------------------------------------------ </TABLE> <TABLE> <CAPTION> NET PERIODIC POSTRETIREMENT BENEFIT COST - ------------------------------------------------------------------ <S> <C> <C> 1993 1992 - ------------------------------------------------------------------ Service cost of benefits earned $ 0.4 $ 0.4 Interest cost on benefit obligation 4.4 4.0 Other -- (2.0) -------------------------- Net periodic benefit cost $ 4.8 $ 2.4 -------------------------- -------------------------- - ------------------------------------------------------------------ </TABLE> The assumed health care cost trend rate used in measuring the benefit obligation is 15% pre-65 and 11% post-65 in 1993, declining at a rate of 1% per year to an ultimate rate of 5.75% in 2002 pre-65 and 1998 post-65. A one percent increase in this rate in each year would increase the benefit obligation at December 31, 1993 by $3.8 and the aggregate service and interest cost for 1993 by $0.3. The weighted average discount rate used in determining the benefit obligation at December 31, 1993 is 7.25%. Page 47

J. STOCK PLANS In February 1993, the Company's Board of Directors adopted, and in May 1993 the Company's stockholders approved, the 1993 Long-Term Incentive Plan ("1993 LTIP") to succeed a similar plan adopted in 1990 and under which very few common shares remained available for award. The 1993 LTIP authorizes the issuance until February 1996 of up to 3,000,000 common shares in connection with awards of stock options, restricted stock, stock appreciation rights and performance units to key executive and managerial employees. The exercise price of stock options issued under the 1993 LTIP, which is the type of award most commonly made under that plan, may not be less than the fair market value of the underlying stock at the date of grant. An option generally becomes exercisable as to one-third of the shares subject to the grant each January 1 falling at least six months after the date of grant, and expires not later than ten years after grant. Restricted stock awards involve temporary restrictions on the transferability of the shares awarded, which restrictions generally lapse as to 25% of the shares subject to the award on each January 1 falling at least six months after the date of award. The 1993 LTIP provides for the accelerated exercisability of options and the accelerated lapse of transfer restrictions on restricted stock upon a change of control of the Company. At the same time as the 1993 LTIP was adopted and approved, the Company established the 1993 Non-Employee Director Stock Plan (the "Director Plan"). The Director Plan provides for the issuance of up to 50,000 common shares in connection with awards of stock options and restricted stock to non-employee directors of the Company. Pursuant to the Director Plan, each such director receives a one-time grant of 1,000 shares of restricted stock upon election to the Board, and receives an annual stock option grant for 1,000 shares upon election or reelection to the Board. Options are granted with an exercise price equal to the fair market value of the underlying stock at the date of grant, become fully exercisable six months after the date of grant, and expire ten years after the date of grant. Shares of restricted stock are forfeited to the Company if a director's service on the Board ceases for reasons other than death or disability within six months of the date of grant, and remain subject to restrictions on transfer until the director's service on the Board ceases. Accounting for restricted stock awards generally involves recording the reissuance of treasury common shares at market value at the date of the award, offset by a reserve representing the unearned equity. This unearned equity is charged to operations as compensation expense over the total lapse period for the award at a rate sufficient to provide for the shares which become unrestricted at each lapse date. Restricted shares which are forfeited are reported as treasury stock and are available for reissuance under existing plans. Accounting for stock options involves crediting stockholders' equity for the amount of the option price when the option is exercised. In August 1992, as a result of the spin-off of Control Data Systems, the number of shares subject to each option outstanding under plans predating the 1993 LTIP was adjusted upward, and the exercise price adjusted downward, to the extent necessary to preserve the economic value of the option to the holder. In November 1991, active employees holding options outstanding under plans predating the 1993 LTIP were given the opportunity to exchange those options for replacement nonqualified options covering half as many shares with a reduced exercise price. As a result of the offer, holders of options for 1,674,388 shares returned their options for cancellation, and options for 837,213 were granted in exchange. <TABLE> <CAPTION> - ----------------------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Option Price Available STOCK OPTIONS Per Share Outstanding Exercisable for Grant - ----------------------------------------------------------------------------------------------------------------------------------- At December 31, 1990 $ 8.25-$52.81 2,404,409 1,112,784 1,376,533 - ----------------------------------------------------------------------------------------------------------------------------------- Exchanged, net 9.00- 37.56 (837,175) (778,324) (837,213) Granted 8.37- 12.50 1,039,050 (1,039,050) Became exercisable 8.25- 36.94 687,749 Exercised -- -- Canceled 8.49- 39.94 (377,755) (240,668) 1,048,361 Expired 30.97- 39.94 (18,075) (18,075) Awards of restricted stock under the 1990 Plan (5,000) - ----------------------------------------------------------------------------------------------------------------------------------- At December 31, 1991 $ 8.25-$52.81 2,210,454 763,466 543,631 - ----------------------------------------------------------------------------------------------------------------------------------- Spin-off adjustment 7.09- 40.24 309,067 104,904 -- Granted 8.75- 15.88 1,002,272 (1,002,272) Became exercisable 7.09- 18.57 729,377 Exercised 7.52- 12.38 (277,750) (277,750) Canceled 8.38- 52.81 (462,264) (370,625) 462,043 Expired 26.00- 30.81 (4,320) (4,320) Awards of restricted stock under the 1990 Plan -- - ----------------------------------------------------------------------------------------------------------------------------------- At December 31, 1992 $ 7.09-$40.24 2,777,459 945,052 3,402 - ----------------------------------------------------------------------------------------------------------------------------------- AUTHORIZED 3,157,000 GRANTED 14.25- 19.13 1,069,965 (1,069,965) BECAME EXERCISABLE 7.09- 15.96 401,174 EXERCISED 7.30- 16.27 (252,851) (252,851) CANCELED 7.52- 14.75 (40,557) (93) 40,557 EXPIRED 7.30- 32.29 467 467 AWARDS OF RESTRICTED STOCK UNDER THE 1993 PLAN (119,000) - ----------------------------------------------------------------------------------------------------------------------------------- AT DECEMBER 31, 1993 $ 7.09-$40.24 3,554,483 1,093,749 2,011,994 AVERAGE OPTION PRICE $13.49 - ----------------------------------------------------------------------------------------------------------------------------------- </TABLE> Page 48

K. FINANCING ARRANGEMENTS In December 1993, the Company redeemed at 102.55% of principal amount its 8-1/2% Debentures resulting in a cash expenditure of $168.1 and an extraordinary loss from early retirement of debt of $8.4, including $3.8 of unamortized debt issuance costs. Other debt activity in 1993 primarily involved prepayment of $4.4 on a mortgage on the headquarters of the Company's Canadian subsidiary and utilization of credit lines maintained by the Company's U.K. subsidiary with a balance at year-end of $8.6, which is secured by a lien on the subsidiary's assets carried at $37.4. The primary changes in debt during 1992 included the payment of $7.4 of secured notes of a windpower partnership, the establishment of a $6.7 mortgage obligation on a new facility in Canada, the addition of $15.5 of revolving and medium-term debt through the acquisition of a U.K. subsidiary, and the payment of $6.9 of such revolving debt before the end of 1992. The primary changes in debt during 1991 included open market purchases and the defeasance in March of the 12-3/4% Senior Notes due June 15, 1991, resulting in a cash expenditure of $144.9 and an extraordinary loss of $2.8; open market purchases of $9.0 of 8-1/2% Debentures for an extraordinary gain of $1.6; and the assumption of $7.4 of secured notes of a windpower partnership. Effective June 30, 1993, Ceridian entered into an agreement (the "Credit Agreement") with five commercial banks to establish a new revolving credit facility for its U.S. operations to replace the previous credit facility. The Credit Agreement provides for credit availability equal to the lesser of $35.0 or 80% of the amount of Ceridian's eligible accounts receivable until May 31, 1994, all of which may be used to obtain revolving loans and up to $25.0 of which may be used for standby letters of credit. Letters of credit may not have a final expiration date later than May 31, 1995. The new facility is secured by Ceridian's domestic trade accounts receivable, and obligations under the facility are guaranteed by Arbitron. At December 31, 1993, there were $13.2 in letters of credit and no revolving loans outstanding under the facility. Under the Credit Agreement, the Company must maintain a minimum consolidated net worth which is subject to increase based on net earnings after December 31, 1992, and certain equity contributions after the same date. An amendment to this covenant sufficient to accommodate the $57.0 fourth quarter 1993 Arbitron restructuring charge was obtained. At December 31, 1993, the required minimum consolidated net worth was $83.7, and the Company was in compliance with this covenant by $33.7. The Company is also required to achieve $45.0 of operating earnings (defined so as to exclude restructuring and extraordinary losses and gains) on a rolling four quarter basis, and was in compliance with this covenant at December 31, 1993, by $12.1. The Company is also subject to a number of additional covenants in the Credit Agreement, including those limiting debt, liens, contingent obligations, dividends, repurchases of securities, operating leases, investments, acquisitions and divestitures. In addition, the Credit Agreement provides that the beneficial ownership by a person or group of 30% or more of the voting power of the Company for 30 days or more constitutes an event of default. The Company continues to be in compliance with all covenants under the Credit Agreement. Letter of credit fees are generally equal to 0.625% per annum of the amount of each letter of credit, unless the letter of credit involves a payment guarantee, in which case the rate is 1.35% per annum. The commitment fee on the unused portion of the facility is 0.375% per annum. Borrowings under the Credit Agreement are available at Bank of America's reference rate plus .25% per annum. <TABLE> <CAPTION> - ------------------------------------------------------------------------------------------ December 31, ---------------------------- <S> <C> <C> DEBT OBLIGATIONS 1993 1992 - ------------------------------------------------------------------------------------------ Short-term debt $ 1.6 $ -- Convertible Subordinated Debentures, 8-1/2%, Due 2011 -- 163.5 Mortgages payable 10.1 15.1 Other long-term debt obligations 7.7 9.0 ---------------------------- Total debt obligations 19.4 187.6 Less short-term debt and current portions of long-term debt 3.1 0.9 ---------------------------- Long-term obligations, less current portions $16.3 $186.7 ---------------------------- ---------------------------- - ------------------------------------------------------------------------------------------ </TABLE> <TABLE> <CAPTION> AGGREGATE AMOUNTS OF MATURITIES AT DECEMBER 31, 1993 - ------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> <C> 1994 1995 1996 1997 1998 Thereafter Total - ------------------------------------------------------------------------------------------ Mortgages payable $0.1 $0.2 $0.2 $0.2 $6.1 $3.3 $10.1 Other 3.0 0.9 0.8 4.6 -- -- 9.3 ------------------------------------------------------------------ Total $3.1 $1.1 $1.0 $4.8 $6.1 $3.3 $19.4 ------------------------------------------------------------------ ------------------------------------------------------------------ - ----------------------------------------------------------------------------------------- </TABLE> Page 49

L. INVESTMENTS AND ADVANCES In October 1993, the Company purchased Systems Tax Service, Inc. ("STS"), a California-based payroll tax filing processor, for 1,005,908 shares of Ceridian common stock. After consideration of restrictions on resale of the shares and other direct acquisition costs, the transaction was valued at $18.8 and resulted in the recording of assets of $6.6, liabilities of $8.9 and goodwill of $21.1 to be amortized over a 15-year period. In June 1993, the Company sold a 90% interest in its Barrios Technology, Inc. subsidiary ("Barrios") to the management of that business and received a $5.2 promissory note, payable monthly for 96 months with interest at 8%. There was no material gain or loss from the sale and goodwill of $3.5 was eliminated. Effective January 1, 1992, Ceridian contributed capital assets and deferred assets of Arbitron to the CMR joint venture formed with VNU Business Information Services, Inc. in return for $32.5 in cash and a half interest in the venture valued at $9.8. As a result of this transaction, the Company recognized a restructure gain of $7.6, representing the excess of the cash received over the carrying amount of the assets contributed to the venture. During third quarter 1992, the Company received a prepayment of $37.9 on its 12% note receivable, due October 1, 1995, from Seagate Technology, Inc. ("Seagate") and agreed to reduce the interest rate on the remaining balance of $10.0 to 7.7%. The Company also received a prepayment of the $6.0 remaining balance on a 12% long-term note receivable from Information Resources, Inc. At the end of third quarter 1992, Ceridian purchased the remaining 56 percent equity interest in an affiliated U.K. company, Computing Devices Company Limited, for $10.8, of which $5.4 was recorded as goodwill to be amortized over a 20-year period. The investment in Computing Devices Company Limited, previously reported on an equity basis, was eliminated, and this subsidiary is fully consolidated into the Company's financial statements for all periods after the acquisition date. In December 1992, Ceridian purchased the software applications division of Revelation Technologies, Inc. and an 8% interest in Revelation Technologies, Inc., carried at $1.0, for a cash payment of $6.9. Goodwill of $5.1 is being amortized over a 15-year period. During first quarter 1991, the Company sold its remaining common shares of Seagate for cash proceeds of $143.1 and recorded a restructure gain of $42.8. During fourth quarter 1991, Ceridian acquired Minidata Services, Inc., Hazelden Employee Assistance Services, and Barrios for an aggregate purchase price of $11.5, of which $4.1 was paid in January 1992. These acquisitions did not have a material effect on the Company's results of operations in 1991. <TABLE> <CAPTION> - -------------------------------------------------------------------------------------------------- December 31, ------------------------------------------------ <S> <C> <C> <C> INVESTMENTS AND ADVANCES 1993 1992 1991 - -------------------------------------------------------------------------------------------------- Beginning balance $ 30.3 $ 57.3 $ 65.6 Formation of the CMR joint venture 9.8 Partial payment of note from Seagate (37.9) Adjustment for consolidation of Computing Devices Company Limited (4.3) Seagate note adjustment (1.8) Share of CMR joint venture earnings (loss) 1.2 3.8 Equity in earnings (loss) of affiliates (0.6) (1.7) Other activity, net (3.3) 2.2 (4.8) ------------------------------------------------ Ending balance $ 28.2 $ 30.3 $ 57.3 ------------------------------------------------ ------------------------------------------------ - -------------------------------------------------------------------------------------------------- </TABLE> [FN] At December 31, 1993, the Company's investment in the CMR joint venture was accounted for by the equity method and all others were accounted for by the cost method. Page 50

M. LEASING ARRANGEMENTS AS LESSEE Ceridian conducts a substantial portion of its operations in leased facilities. Most such leases contain renewal options and require payments for taxes, insurance, and maintenance. Although in most cases management expects that leases will be renewed or replaced by other leases in the normal course of business, downsizing activities in recent years have resulted in a diminished need for such renewals and replacements, and increased subletting of leased facilities. Virtually all these leasing arrangements for equipment and facilities are operating leases and are not included in the consolidated balance sheets. The rental payments under these leases are charged to operations as incurred. The amounts in the accompanying tables do not include obligations which have been recorded as liabilities in the consolidated balance sheet as the result of restructuring actions. The amounts of rental expense and sublease income for each of the three years ended December 31, 1993 appear in the following table: <TABLE> <CAPTION> - ---------------------------------------------------------------- <S> <C> <C> <C> RENTAL EXPENSE 1993 1992 1991 - ---------------------------------------------------------------- Rental expense $41.2 $49.3 $57.7 Sublease rental income (2.4) (4.0) (4.5) ---------------------------------------- Net rental expense $38.8 $45.3 $53.2 ---------------------------------------- ---------------------------------------- - ---------------------------------------------------------------- </TABLE> [FN] Minimum noncancelable lease payments and related sublease income, on operating leases existing at December 31, 1993 which have an initial term of more than one year, are described in the following table: <TABLE> <CAPTION> - ---------------------------------------------------------------- MINIMUM FUTURE LEASE PAYMENTS - ---------------------------------------------------------------- <S> <C> <C> <C> Sublease Lease Rental Payments Income Net - ---------------------------------------------------------------- 1994 $37.1 $ 2.9 $34.2 1995 30.7 2.4 28.3 1996 23.0 2.1 20.9 1997 16.3 2.1 14.2 1998 12.6 2.1 10.5 Thereafter 21.1 11.6 9.5 - ---------------------------------------------------------------- </TABLE> N. COMMITMENTS AND CONTINGENCIES Largely as a result of divestitures and the formation of certain cooperative ventures in recent years, the Company has agreed to incur or retain a variety of contingent liabilities. Most significantly, in connection with the spin-off of Control Data Systems, Ceridian agreed to indemnify the U.S. Pension Benefit Guaranty Corporation ("PBGC") if the Control Data Systems defined benefit pension plan is terminated in a distress termination and the PBGC is unable to recover the full amount of any unfunded benefit liabilities. The maximum amount of this contingent liability, included in the total below, is $16.0, which will decrease by $4.0 each July 31 beginning in 1996. At December 31, 1993, Ceridian holds intermediate-term interest rate swap agreements with two financial institutions for an aggregate notional amount of $150.0. The purpose of these agreements is to effectively convert a portion of the interest which the Company earns from deposits held by Employer Services on behalf of payroll tax filing customers from a floating to a fixed rate basis. In connection with these agreements, the Company has pledged its cash in the amount of $1.3 at December 31, 1993. The Company considers the risk of accounting loss through non-performance under these agreements to be negligible. The Company monitors all such contingent liabilities and has established restructure or other reserves for those which it believes are probable of payment. Of the remaining contingent obligations, the Company believes that there is a reasonable possibility that it may be exposed to additional estimated losses totalling $29.4 as of December 31, 1993, if third parties fail to meet certain performance requirements. The Company does not anticipate such nonperformance. Page 51

O. LEGAL MATTERS AGE DISCRIMINATION LITIGATION. Certain former employees, purporting to act on behalf of a class of all individuals who were employed by the Company and subsequently terminated when they were over the age of 40, have sued the Company in U.S. District Court in Minnesota alleging violations of the Age Discrimination in Employment Act. An earlier administrative proceeding before the Equal Employment Opportunity Commission which involved some of the named plaintiffs was dismissed in October 1988. With the court's permission, plaintiffs sent a notice to all individuals falling within the alleged class inviting them to join as additional plaintiffs. Approximately 1,100 recipients of the notice indicated a desire to do so. In addition, certain of the plaintiffs in this action, along with other individuals, filed two parallel age discrimination class action lawsuits in state court in Minnesota, which have been stayed pending resolution of the federal court action. In December 1992, the federal district court denied plaintiffs' motion for certification of the class of former employees requested by plaintiffs. The court did, however, order that putative class members would be allowed to file individual age discrimination claims against the Company. In response, eight complaints covering 419 of the putative class members were filed against the Company in early 1993. Later that year the Company made individual settlement offers to these plaintiffs, 92 of whom accepted offers in an aggregate amount which was not material. Meetings by the parties with a special master appointed by the court have led to the establishment of a 'test case' process whereby a series of three six-week test trials, each involving twelve randomly selected plaintiffs, will begin in the summer of 1994. Such trials will be determinative as to issues of liability, but not damage amounts, if any, with respect to the plaintiffs involved, and may provide the parties with further information as to resolution of all remaining cases. The Company has agreed to the test case process, and may explore other opportunities to settle the claims of some or all of the approximately 320 remaining plaintiffs, principally because of the costs to the Company of defending these actions. Should the test trials fail to lead to a settlement of all claims, however, discovery would conclude in December 1996 and further trials would be expected to begin in the spring of 1997. SEAGATE SECURITIES LITIGATION. The Company and Lawrence Perlman, its chairman, president and CEO, have been named as co-defendants in a lawsuit filed in U.S. District Court for the Northern District of California against Seagate Technology, Inc., eight of its present or former officers, and three investment banking firms. The plaintiffs purport to act on behalf of a class consisting of all purchasers of the common stock of Seagate during the period October 11, 1990 through June 26, 1991 (the "Class Period"). During the Class Period, the Company sold 10.7 million shares of Seagate common stock in a registered public offering. The plaintiffs allege that during the Class Period, the defendants acted in concert with and conspired with one another to issue false and misleading public statements regarding Seagate's earings, products and future business prospects which operated to artificially inflate the price of Seagate common stock during the Class Period and to permit the Company and certain Seagate present and former officers to profit from stock sales during the Class Period. The plaintiffs allege that such conduct violated federal securities laws and also allege "controlling person" liability under those laws against, among others, the Company and Mr. Perlman. The Company has notified Seagate that this matter and any costs or expenses the Company may incur in connection therewith are subject to an indemnification obligation undertaken by Seagate at the time Seagate issued the 10.7 million shares of stock to the Company as partial payment for Seagate's purchase of the Company's Imprimis subsidiary. OTHER MATTERS. The Company is also involved in a number of other judicial and administrative proceedings considered normal in the nature of its current and past operations, including employment-related disputes, contract disputes, tort claims and environmental matters. It is anticipated that final disposition of some of these proceedings may not occur for several years. In the opinion of management, the final disposition of all current judicial and administrative proceedings will not, considering the merits of the claims and available insurance, indemnification arrangements and reserves, have a material adverse effect on the Company's financial position or results of operations. Page 52

<TABLE> <CAPTION> SUPPLEMENTARY QUARTERLY DATA (UNAUDITED) - ----------------------------------------------------------------------------------------------------------------------------------- 1993 1992 --------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> 4th 3rd 2nd 1st 4th 3rd 2nd 1st Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter - ----------------------------------------------------------------------------------------------------------------------------------- Revenue $226.9 $208.9 $225.9 $224.4 $225.2 $203.2 $195.7 $206.2 Cost of revenue 155.1 138.7 159.9 152.3 158.9 142.2 136.0 138.0 - ----------------------------------------------------------------------------------------------------------------------------------- GROSS PROFIT 71.8 70.2 66.0 72.1 66.3 61.0 59.7 68.2 Selling, general and administrative 47.9 44.4 42.8 43.0 43.4 42.7 37.3 41.1 Technical expense 11.4 12.6 12.4 12.2 12.0 10.8 12.1 12.0 Other expense (income) (2.3) (0.6) (0.6) -- (1.0) (1.0) (1.7) (3.2) Restructure loss (gain) (1) 67.0 -- -- -- -- -- 81.4 (5.2) - ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INTEREST AND TAXES (52.2) 13.8 11.4 16.9 11.9 8.5 (69.4) 23.5 Interest income 2.6 2.0 2.1 1.6 3.4 4.9 5.3 4.2 Interest expense (4.2) (4.1) (4.1) (4.0) (4.4) (3.8) (4.1) (4.0) - ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES (53.8) 11.7 9.4 14.5 10.9 9.6 (68.2) 23.7 Income tax provision 0.2 1.0 1.0 1.6 0.3 0.3 1.7 2.8 EARNINGS (LOSS) FROM CONTINUING OPERATIONS (54.0) 10.7 8.4 12.9 10.6 9.3 (69.9) 20.9 Discontinued operations (2) -- -- -- -- -- -- 308.4 13.2 Extraordinary loss (3) 8.4 -- -- -- -- -- -- -- Cumulative effect (FAS 106) (4) -- -- -- -- -- -- -- 41.8 - ----------------------------------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) $(62.4) $ 10.7 $ 8.4 $ 12.9 $ 10.6 $ 9.3 $(378.3) $ (34.1) -------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) PER SHARE: CONTINUING OPERATIONS $(1.24) $ 0.25 $ 0.20 $ 0.30 $ 0.25 $ 0.22 $ (1.65) $ 0.49 Discontinued operations -- -- -- -- -- -- (7.25) (0.31) Extraordinary loss (0.19) -- -- -- -- -- -- -- Cumulative effect (FAS 106) -- -- -- -- -- -- -- (0.98) ------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) $(1.43) $ 0.25 $ 0.20 $ 0.30 $ 0.25 $ 0.22 $ (8.90) $ (0.80) -------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------- Average common shares outstanding (in thousands) 43,844 42,957 42,883 42,833 42,763 42,677 42,548 42,534 - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK-PER SHARE Market price ranges (5)(6) High 19-7/8 18-1/2 16-1/8 16-1/8 17-1/4 16 14-1/8 12-3/4 Low 17-1/2 14-3/8 13 14-3/8 13-3/4 13-1/8 11 9-1/8 - ----------------------------------------------------------------------------------------------------------------------------------- </TABLE> [FN] No cash dividends have been declared on common stock during the past two years. (1) For details on fourth quarter 1993 and second quarter 1992 restructure losses, see note B, "Restructure Loss (Gain)." (2) For details on second quarter 1992 loss from discontinued operations, see "Discontinued Operations" in note A, 'Accounting Policies.' (3) For details on the early retirement of 8 1/2% Debentures, see note K, "Financing Arrangements." (4) For details on the cumulative effect of accounting change (FAS 106) in first quarter 1992, see note I, "Retirement Plans." (5) Source: New York Stock Exchange-Composite Transactions. (6) Market price ranges of Ceridian common stock have not been adjusted for any effect of the distribution of the stock of Control Data Systems as a dividend, effective July 31, 1992. Page 53

Exhibit 22 CERIDIAN CORPORATION SUBSIDIARIES At December 31, 1993 State or Other Jurisdiction Name of Incorporation Arbitron Company, The Maryland Arbitron Venture Corp. Delaware ScanAmerica, L.P. (Limited Partnership) Delaware Adtel Products, Inc. Delaware CD Plus France Ceridian Properties, Inc. Delaware Computing Devices Canada Ltd. Canada Computing Devices Company Limited (Hastings) United Kingdom (formerly Computing Devices Holdings Limited) Computing Devices Hastings Limited United Kingdom Computing Devices Eastborne Limited United Kingdom Computing Devices Company Limited United Kingdom (formerly Computing Devices Holdings Limited) Computing Devices International Employment, Inc. Delaware Computing Devices International, Inc. Delaware Control Data Energy Management Systems, Inc. New York Control Data Middle East Egypt, Inc. Delaware Earth Energy Systems, Inc. Delaware Renewable Energy Ventures Incorporated District of Columbia Financial Information Services International, Inc. Delaware Minidata Services, Inc. New Jersey REV Wind Power Partners 1984-1 California (Limited Partnership) SAMI Incorporated Delaware VTC C-MOS Incorporated Delaware - 1 -

Exhibit 24 CONSENT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS CERIDIAN CORPORATION: We consent to incorporation by reference in the Registration Statements on Form S-8 (File No. 33-49601), Form S-8 (File No. 2-67753), Form S-8 (File No. 2-97570), Form S-8 (File No. 2-81865), Form S-8 (File No. 2-93345), Form S-8 (File No. 33-15920), Form S-8 (File No. 33-26839) and Form S-8 (File No. 33-34045) of Ceridian Corporation of our reports dated January 24, 1994. Such reports relate to the consolidated financial statements and related financial statement schedules of Ceridian Corporation and subsidiaries as of December 31, 1993 and 1992 and for each of the years in the three-year period ended December 31, 1993 and are included or incorporated by reference in the 1993 Annual Report on Form 10-K of Ceridian Corporation. KPMG Peat Marwick Minneapolis, Minnesota March 10, 1994 - 1 -

Exhibit 25 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, a Director of Ceridian Corporation (the "Company"), a Delaware corporation, do hereby make, nominate and appoint JOHN R. EICKHOFF and JOHN A. HAVEMAN, and each of them, to be my attorney in fact for three months from the date hereof, with full power and authority to sign his name on the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; provided that such Form 10-K is first reviewed by the Audit Committee of the Board of Directors of the Company and by my attorney in fact; and his name, when thus signed, shall have the same force and effect as though I had manually signed such Form 10-K. IN WITNESS WHEREOF, I have signed this Power of Attorney as of February 3, 1994. /s/Lawrence Perlman /s/Richard G. Lareau Lawrence Perlman Richard G. Lareau /s/Ruth M. Davis /s/Charles Marshall Ruth M. Davis Charles Marshall /s/Allen W. Dawson /s/Richard W. Vieser Allen W. Dawson Richard W. Vieser /s/Ronald James /s/Paul S. Walsh Ronald James Paul S. Walsh - 1 -