CERIDIAN CORP /DE/
EX-10.38 2001 SAVINGS-RELATED SHARE OPTION PLAN
<DOCUMENT>
<TYPE>EX-10.38
<SEQUENCE>8
<FILENAME>c75263exv10w38.txt
<DESCRIPTION>EX-10.38 2001 SAVINGS-RELATED SHARE OPTION PLAN
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.38













                              CERIDIAN CORPORATION

                     2001 SAVINGS-RELATED SHARE OPTION PLAN

                      INLAND REVENUE REFERENCE: SRS 2589/IA

                   ADOPTED BY THE COMPANY ON 14 FEBRUARY 2001

                  APPROVED BY THE INLAND REVENUE ON 14 MAY 2001















                                      KPMG
                                      1 PUDDLE DOCK
                                      LONDON
                                      EC4V 3PD
                                      REF: CERIDIAN/SS/REPORTS/NEW PLAN.DOC



<PAGE>



                        RULES OF THE CERIDIAN CORPORATION
                     2001 SAVINGS-RELATED SHARE OPTION PLAN

                                      INDEX
<Table>
<Caption>
                                                                             PAGE
                                                                             ----
<S>                                                                          <C>
 1   Definitions ........................................................      2
 2   Invitation to apply for Options ....................................     10
 3   Scaling Down .......................................................     12
 4   Grant of Options ...................................................     13
 5   Limitations on Grant ...............................................     13
 6   Exercise of Options ................................................     13
 7   Take-overs, Reconstructions and Liquidations .......................     15
 8   Variation of Share Capital .........................................     17
 9   Manner of Exercise of Options ......................................     18
10   Administration and Amendment .......................................     19
11   Compliance with Laws and Regulations ...............................     20
12   Cessation of Employment ............................................     21
</Table>



                                       1
<PAGE>



                        RULES OF THE CERIDIAN CORPORATION
                     2001 SAVINGS-RELATED SHARE OPTION PLAN


1        DEFINITIONS

1.1      In these Rules the following words and expressions shall have, where
         the context so admits, the following meanings:

<Table>
<S>                                        <C>        <C>
         "Accounting Period"               -          an accounting reference period of the Company;

         "Act"                             -          the Income and Corporation Taxes Act 1988;

         "Acquiring Company"               -          where the conditions of paragraph 15 of
                                                      Schedule 9 are met, either such company as
                                                      shall be at any time the "Acquiring Company" as
                                                      defined in that paragraph, or some other
                                                      company falling within sub-paragraph (b) or
                                                      sub-paragraph (c) of paragraph 10 of Schedule 9
                                                      in relation to the Acquiring Company over whose
                                                      shares an Option has been granted;

         "Administrator"                              an Administrator appointed by the Committee

         "Adoption Date"                   -          the date on which the Plan is adopted by resolution of
                                                      the Board;

         "Application"                     -          an application for an Option in the form as
                                                      approved by the Committee from time to time;

         "Approval Date"                   -          the date upon which the Board of Inland Revenue approves
                                                      the Plan;

         "Associated Company"              -          has the same meaning as in section 416 of the
                                                      Act;
</Table>


                                       2
<PAGE>

<Table>
<S>                                        <C>        <C>
         "Auditors"                        -          the auditors for the time being of the Company
                                                      (acting as experts and not as arbitrators);

         "Board"                           -          the Board of directors of the Company or a
                                                      committee of the Board;

         "Bonus Date"                      -          where repayments under the relevant Savings
                                                      Contract are taken as including the Maximum
                                                      Bonus, the earliest date on which the Maximum
                                                      Bonus is payable and in any other case the
                                                      earliest date on which a bonus is payable under
                                                      the relevant Savings Contract;

         "Committee"                       -          a duly constituted committee of the Board  or
                                                      such other nominated Group Employees delegated
                                                      with the authority to consider the remuneration
                                                      of Group Employees;

         "Company"                         -          Ceridian Corporation incorporated under the laws of
                                                      Delaware in the United States of America  under
                                                      Certificate of Incorporation dated 11 August
                                                      2000 and subsequently amended or save for Rules
                                                      2, 3, 4, 5 and 10.2 the Acquiring Company;

         "Control"                         -          has the same meaning as in section 840 of the Act;

         "Date of Grant"                   -          the date on which an Option is, was or is to be
                                                      granted to an Eligible Employee under the Plan,
                                                      pursuant to Rule 4.1, or on which an Option is
                                                      or was treated as being granted pursuant to
                                                      Rule 4.2;
</Table>


                                       3
<PAGE>

<Table>
<S>                                        <C>        <C>
         "Dealing Day"                     -          a day on which the Stock Exchange is open for
                                                               the transaction of business;

         "Eligible Employee"               -          any Group Employee who:

                                                      (a)      (i)      in the case of a director,
                                                                        normally devotes 25 hours or
                                                                        more per week to his duties
                                                                        (exclusive of meal breaks);
                                                                        and

                                                               (ii)     is chargeable to tax in
                                                                        respect of his employment
                                                                        under Case I of Schedule E;
                                                                         and

                                                               (iii)    is employed by any Group
                                                                        Company on the date on which
                                                                        the Grantor grants an Option
                                                                        pursuant to Rule 4.1 below or
                                                                        has been continuously
                                                                        employed with any Group
                                                                        Company for a longer period
                                                                        at such date (such longer
                                                                        period not to exceed 5 years
                                                                        as at such date) as the
                                                                        Committee may stipulate for
                                                                        all Options granted on any
                                                                        one occasion;

                                                      unless, at its discretion, the Committee has
                                                      specifically resolved that for all Options
                                                      granted on any one occasion all or any of the
                                                      above conditions shall be waived; and

                                           (b)        has been nominated by the Committee either
                                                      individually or as a member of a category of
</Table>


                                       4
<PAGE>

<Table>
<S>                                        <C>        <C>
                                                      directors or employees for participation in the
                                                      Plan; and

                                                               (c) is not prohibited from participating
                                                      by the provisions of Paragraph 8 of Schedule 9;

         "Exercise Price"                  -          the price at which an Eligible Employee may
                                                      acquire a Share on the exercise of an Option
                                                      being, subject to Rule 7.2 and Rule 8, not less
                                                      than the greater of:

                                                      (a) the nominal value of a Share; and

                                                      (b) 85 per cent or such higher percentage as
                                                      is for the time being permitted by statute or
                                                      other statutory provision of the Market Value
                                                      of a Share on the day the Invitation was issued
                                                      pursuant to Rule 2 if the Exercise Price is
                                                      specified in the Invitation or, if the Exercise
                                                      Price is notified to the Eligible Employees after
                                                      the Invitations are issued but before the Options
                                                      are granted, on the day the Eligible Employees are
                                                      so notified provided always that the Exercise Price
                                                      may, in respect of Invitations made on a particular
                                                      occasion or occasions, in the Committee's discretion
                                                      be set at a percentage of Market Value which is
                                                      higher than 85% provided that the higher percentage
                                                      applies to all Invitations made on that occasion;

         "Grantor"                         -          the Company;

         "Group"                           -          the Company and any other company which is a Subsidiary
                                                      of the Company and which is for the time being
                                                      nominated by the Board to be a
</Table>



                                       5
<PAGE>

<Table>
<S>                                        <C>        <C>
                                                      participating company under the Plan and the
                                                      phrase "Group Company" shall be construed
                                                      accordingly;

         "Group Employee"                  -          an employee of any Group Company;

         "Injury or Disability"            -          the cessation of employment by reason of injury
                                                      or disability provided the Committee are
                                                      satisfied, on production of such evidence as it
                                                      may reasonably require:

                                                      (i)      that the individual has ceased to
                                                               exercise and, by reason of injury or
                                                               disability, is incapable of exercising
                                                               that employment; and

                                                      (ii)     that the individual is likely to remain
                                                               so incapable for the foreseeable future;

         "Invitation"                      -          a letter of invitation to participate in the
                                                      Plan in a form approved by the Committee and
                                                      capable of amendment  by the Committee from
                                                      time to time if Inland Revenue approval is
                                                      obtained for any such amendment;

         "Market Value"                    -          an amount equal to the closing market price per
                                                      Share as reported on the New York Stock
                                                      Exchange Composite Tape on that date (or if no
                                                      shares were traded or quoted on such date the
                                                      next preceding date on which there was such a
                                                      trade or quote) as converted to pounds sterling
                                                      by reference to the Financial Times spot
                                                      exchange rate for the date the Invitation is
                                                      issued or, if later, the date the Eligible
                                                      Employees are notified of the Exercise Price;
</Table>


                                       6
<PAGE>

<Table>
<S>                                        <C>        <C>
         "Maximum Bonus"                   -          the bonus payable to the Option Holder at the
                                                      maturity of a Savings Contract which matures
                                                      after seven years;

         "New Option"                      -          an option over shares in the Acquiring Company
                                                      meeting the requirements of sub-paragraphs
                                                      15(3)(a) to (d) of Schedule 9, granted in
                                                      consideration for the release of a Subsisting
                                                      Option within the "appropriate period" (as
                                                      defined by paragraph 15(2) of Schedule 9);

         "Nominated Savings Authority"     -          the savings authority or the savings
                                                      authorities (as the case may be) nominated by
                                                      the Company for the purposes of the Plan;

         "Option"                          -          a right to acquire Shares granted or to be granted
                                                      pursuant to Rules 4.1 or 4.2;

         "Option Certificate"              -          an option certificate appropriate to the
                                                      Grantor in a form approved by the Committee
                                                      from time to time;

         "Option Holder"                   -          a person who has been granted an Option or
                                                      (where the context admits) his legal personal
                                                      representative(s);

         "Option to Subscribe"             -          an Option to subscribe for Shares granted by
                                                      the Company;

         "Other Plan"                      -          any plan (other than this Plan) being any
                                                      savings-related share option plan approved
                                                      under Schedule 9;
</Table>


                                       7
<PAGE>

<Table>
<S>                                        <C>        <C>
         "Plan"                            -          this Ceridian Corporation 2001 Savings-Related
                                                      Share Option Plan constituted and governed by
                                                      the Rules;

         "Redundancy"                      -          the cessation of employment by reason of
                                                      redundancy within the meaning of the Employment
                                                      Rights Act 1996;

         "Retirement"                      -          the cessation of employment by reason of
                                                      retirement either at the Specified Age or any
                                                      other age at which the individual is bound to
                                                      retire in accordance with the terms of his
                                                      contract of employment;

         "Rules"                           -          the rules of the Plan as the same may be
                                                      amended from time to time;

         "Savings Contract"                -          a 3 or 5 year contract under a certified
                                                      contractual savings scheme (within the meaning
                                                      of section 326 of the Act) entered into by an
                                                      Eligible Employee with a Nominated Savings
                                                      Authority and which has been approved by the
                                                      Board of Inland Revenue for the purposes of
                                                      Schedule 9;

         "Schedule 9"                      -          Schedule 9 to the Act;

         "Share"                           -          the common stock of the Company, par value
                                                      $0.01 per share which is within the meaning of
                                                      ordinary share capital in section 832(1) of the
                                                      Act;

         "Specified Age"                   -          age 60;

</Table>


                                       8
<PAGE>

<Table>
<S>                                        <C>        <C>

         "Standard 3 Year Bonus"           -          the bonus payable to the Option Holder under a Savings
                                                      Contract which matures after three years;

         "Standard 5 Year Bonus"           -          the bonus payable to the Option Holder under a Savings
                                                      Contract which matures after five years;

         "Stock Exchange"                  -          The New York Stock Exchange;

         "Subsidiary"                      -          a company which is under the Control of the
                                                      Company and which is a subsidiary of the
                                                      Company within the meaning of section 736 of
                                                      the Companies Act 1985;

         "Subsisting Option"               -          an Option which has been granted and which has
                                                      not lapsed, been surrendered, renounced or been
                                                      exercised in full;
</Table>

1.2      In these Rules, except insofar as the context otherwise requires:

(i)      words denoting the singular shall include the plural and vice versa;

(ii)     words importing a gender shall include every gender and references to a
         person shall include bodies corporate and unincorporated and vice
         versa;

(iii)    reference to any enactment shall be construed as a reference to that
         enactment as from time to time amended, modified, extended or
         re-enacted and shall include any orders, regulations, instruments or
         other sub-ordinate legislation made under the relevant enactment;

(iv)     words have the same meanings as in Schedule 9 unless the context
         otherwise requires; and

(v)      headings and captions are provided for reference only and shall not be
         considered as part of the Plan.



                                       9
<PAGE>

2.       INVITATION TO APPLY FOR OPTIONS

2.1      At any time after the Approval Date but not later than the tenth
         anniversary of the Adoption Date, the Committee may at any time invite
         every Eligible Employee by issuing an Invitation to apply for the grant
         of an Option providing that at the intended Date of Grant the Shares
         satisfy the conditions of paragraphs 10 to 14 inclusive of Schedule 9.

2.2      Each Invitation shall specify:

         (i)      the date, being not less than 14 days after the issue of the
                  Invitation, by which an application must be made;

         (ii)     whether or not the Eligible Employee may take out a 3 or 5
                  year Savings Contract;

         (iii)    the Exercise Price or the method by which the Exercise Price
                  will be notified to Eligible Employees prior to the proposed
                  Date of Grant and for the avoidance of any doubt any such
                  notification shall be made not less than 5 days before the
                  date on which an application must be made;

         (iv)     whether or not for the purpose of determining the number of
                  Shares over which an Option is to be granted, the repayment
                  under the Savings Contract is to be taken:

                  (a)      as including the Maximum Bonus;

                  (b)      as including only the Standard 5 Year Bonus or the
                           Standard 3 Year Bonus;

                  (c)      as not including a bonus.

         (v)      the maximum permitted aggregate monthly savings contribution
                  being the lesser of the maximum amount specified in Paragraph
                  24 of Schedule 9 and such other maximum as may be determined
                  by the Committee, and be permitted by the Board of the Inland
                  Revenue pursuant to Schedule 9 and by the Nominated Savings
                  Authority;

         and the Committee may determine and include in the Invitations details
         of the maximum number of Shares over which Options may be granted on
         that occasion and a statement that in the event of excess Applications,
         each Application may be scaled down in accordance with the Rules.



                                       10
<PAGE>

2.3      Each Invitation shall be accompanied by an Application which shall
         provide for the applicant to state:

         (i)      the monthly savings contribution being a multiple of L.1 and
                  not less than L.5 which he wishes to make under the related
                  Savings Contract;

         (ii)     whether or not he wishes to take out a 3 or 5 year Savings
                  Contract;

         (iii)    that his proposed monthly savings contribution, when added to
                  any monthly savings contributions then being made under any
                  other Savings Contract linked to an Option granted under the
                  Plan or any Other Plan will not exceed the maximum permitted
                  aggregate monthly savings contribution specified in the
                  Invitation;

         (iv)     his election as to whether for the purpose of determining the
                  number of Shares over which an Option is to be granted, the
                  repayment under the Savings Contract is to be taken as
                  including the Maximum Bonus, the Standard 5 Year Bonus, or the
                  Standard 3 Year Bonus or as not including a bonus;

         and shall authorise the Administrator to enter on the Savings Contract
         such monthly savings contributions, not exceeding the maximum stated on
         the Application, as shall be determined pursuant to Rule 3 below.

2.4      Each Application shall be deemed to be for an Option over the largest
         whole number of Shares which can be bought at the Exercise Price with
         the expected repayment under the related Savings Contract at the Bonus
         Date.

3.       SCALING DOWN

3.1      If the Administrator receives valid Applications over an aggregate
         number of Shares which exceeds the amount stated pursuant to Rule 2.2
         or any limitation determined pursuant to Rule 5 below in respect of
         Invitations issued on any day, then the following steps shall be
         carried out successively to the extent necessary to eliminate the
         excess:

         (i)      each election for a Maximum Bonus to be included in the
                  repayment under the Savings Contract shall be deemed to be an
                  election for the Standard 5 Year Bonus to be included;



                                       11
<PAGE>

         (ii)     each election for a Standard 5 Year Bonus or a Standard 3 Year
                  Bonus to be included in the repayment under the Savings
                  Contract shall be deemed to be an election for the bonus to be
                  excluded;

         (iii)    the excess over L.5 of the monthly savings contribution
                  chosen by each applicant shall be reduced pro rata to the
                  extent necessary;

         (iv)     applications will be selected by lot, each based on a monthly
                  savings contribution of L.5 and the inclusion of no bonus in
                  the repayment under the Savings Contract.

3.2      If after applying the provisions of Rule 3.1(i) to (iii) inclusive the
         number of Shares available is still insufficient to enable an Option
         based on monthly savings contributions of Pound Sterling5 to be granted
         to each Eligible Employee who made a valid Application the Committee
         may, as an alternative to selecting by lot as in (iv) above, determine
         in its absolute discretion that no Options shall be granted.

3.3      If the Committee so determines the provision in Rule 3.1(i) to (iv)
         inclusive may be modified or applied in any manner as may be agreed in
         advance with the Inland Revenue.

3.4      Each Application shall be deemed to have been modified or withdrawn in
         accordance with the application of the foregoing provisions and the
         Administrator shall complete or procure the completion of each Savings
         Contract proposal form to reflect any reduction in monthly savings
         contributions resulting therefrom.


4.       GRANT OF OPTION

4.1      Within 30 days of the first day Invitations are issued (or of the date
         on which Eligible Employees are notified of the Exercise Price where
         such notification is made after Invitations are issued) or within 42
         days of that day when Rule 3 applies and Options cannot be granted
         within the 30 day period, the Grantor shall grant to each applicant who
         is still an Eligible Employee and is not precluded from participation
         in the Plan by virtue of Paragraph 8 of Schedule 9 an Option over the
         number of Shares for which, pursuant to Rule 2.4 and subject to Rule 3,
         he is deemed to have applied.



                                       12
<PAGE>

4.2      Where the circumstances noted in Rule 7.2 apply New Options may be
         granted within the terms of paragraph 15(1) of Schedule 9 in
         consideration for the release of Options previously granted under this
         Plan. Such New Options are deemed to be equivalent to the old Options
         and to have been granted within the terms of this Plan.

4.3      No Option may be transferred, assigned or charged and any purported
         transfer, assignment or charge shall be void ab initio. Each Option
         Certificate shall carry a statement to this effect. For the avoidance
         of doubt, this Rule 4.3 shall not prevent the Option of a deceased
         Option Holder being exercised by his personal representative(s) within
         the terms of these Rules.

4.4      As soon as possible after Options have been granted the Administrator
         shall issue an Option Certificate specifying the Date of Grant, the
         number of Shares subject to Option and the Exercise Price.

5.       LIMITATIONS ON GRANT

         Before Invitations are issued on any occasion, the Committee may
         determine a limit on the number of Shares which are to be available in
         respect of that issue of Invitations.

6.       EXERCISE OF OPTIONS

6.1      Subject to each of the succeeding sections of this Rule 6 and Rule 9
         any Subsisting Option may be exercised by the Option Holder or, if
         deceased, by his personal representatives in whole or in part at the
         time of or at any time following the occurrence of the earliest of the
         following events:

                  (i)     the Bonus Date;

                  (ii)    the death of the Option Holder;

                  (iii)   upon the Option Holder ceasing to be an employee of
                          the Group where that cessation was by reason of Injury
                          or Disability, Redundancy or Retirement;

                  (iv)    an opportunity to exercise the Option pursuant to
                          Rule 7;

                  (v)     upon the Option Holder ceasing to be a Group Employee,
                          where that cessation was by reason only that the
                          Company has ceased to have Control of such



                                       13
<PAGE>

                           company, or that the employment relates to a business
                           or part of a business which is transferred to a
                           person who is neither an associated company (within
                           the meaning of section 416 of the Act) of the Company
                           nor a company of which the Company has Control;

                  (vi)     the relevant Bonus Date, where the Option Holder
                           holds an employment in a company which is not a Group
                           Company but which is:

                           (a)      an Associated Company of the Company; or

                           (b)      a company of which the Company has control.

6.2      No Option may be exercised by an Option Holder at any time when he is,
         or by the personal representatives of an individual who at the date of
         his death was, precluded by paragraph 8 of Schedule 9 from
         participating in the Plan.

6.3      An Option shall lapse and become thereafter incapable of exercise on
         the earliest of the following events:

                  (i)      except where the Option Holder has died, the expiry
                           of six months following the Bonus Date;

                  (ii)     where the Option Holder died within six months
                           following the Bonus Date, the first anniversary of
                           the Bonus Date;

                  (iii)    where the Option Holder has died before the Bonus
                           Date, the first anniversary of his death;

                  (iv)     unless the Option Holder has died, on the expiry of
                           six months after the Option has become exercisable by
                           virtue of Rule 6.1(iii) and (v);

                  (v)      save in the circumstances in Rule 6.1 (ii), (iii),
                           (iv) and (v) above, and subject to Rule 6.5,
                           immediately following the Option Holder ceasing to be
                           a Group Employee;

                  (vi)     the expiry of six months after
                           the Option has first become exercisable in accordance
                           with Rule 7;



                                       14
<PAGE>

                  (vii)    the Option Holder being adjudicated bankrupt;

                  (viii)   upon the Option Holder giving notice, (or under the
                           terms of his Savings Contract being deemed to have
                           given notice), to the Nominated Savings Authority
                           that he intends to stop paying monthly contributions
                           under his Savings Contract prior to the date upon
                           which a right to exercise the Option shall arise; and

                  (ix)     on the winding up other than a voluntary winding up
                           of the Company.

6.4      If an Option Holder continues to be employed by a Group Company after
         the date on which he reaches the Specified Age he may exercise any
         Subsisting Option within six months following that date.

6.5      No person shall be treated for the purposes of this Rule 6 as ceasing
         to be a Group Employee until he is no longer a director or employee of
         the Company, any Associated Company or a company of which the Company
         has Control.

7.       TAKE-OVERS, RECONSTRUCTIONS AND LIQUIDATIONS

7.1      If any person obtains Control of the Company as a result of making:

         (i)      a general offer to acquire the whole of the issued share
                  capital of the Company (other than that which is already owned
                  by him) which is unconditional or which is made on a condition
                  such that if it is satisfied the person making the offer will
                  have Control of the Company; or

         (ii)     a general offer to acquire all the shares (other than shares
                  which are already owned by him) in the Company which are of
                  the same class as Shares subject to a Subsisting Option

         then the Committee shall notify all Option Holders as soon as is
         practicable of the offer in accordance with Rule 10.4. Any Subsisting
         Option may be exercised from the date of the receipt of that
         notification up to the expiry of a period ending six months from the
         time when the person making the offer has obtained Control of the
         Company and any condition subject to which the offer is made has been
         satisfied.



                                       15
<PAGE>

7.2      If as a result of the events specified in Rule 7.1 an Acquiring Company
         has obtained Control of the Company, the Option Holder may, if the
         Acquiring Company so agrees, release any Subsisting Option he holds in
         consideration for the grant of a New Option.

         A New Option issued in consideration of the release of an Option shall
         be evidenced by an Option Certificate which shall import the relevant
         provisions of these Rules.

         A New Option shall, for all other purposes of this Plan, be treated as
         having been acquired at the same time as the corresponding released
         Option and the definition of Date of Grant shall be construed
         accordingly.

7.3      If the Company passes a resolution for voluntary winding up, any
         Subsisting Option may be exercised within 6 months of the passing of
         the resolution.

7.4      The periods of exercisability under Rule 6.1(iv) and the date of lapse
         under Rule 6.3 (vi) are those of whichever of the pre-conditions of
         Rules 7.1 or 7.3 are first achieved. The subsequent achievement of any
         other pre-conditions will not cause a period of exercisability to begin
         nor a date of lapse to arise.

7.5      For the purpose of this Rule 7 other than Rule 7.2 a person shall be
         deemed to have obtained Control of a Company if he and others acting in
         concert with him have together obtained Control of it.

7.6      The exercise of an Option pursuant to the preceding provisions of this
         Rule 7 shall be subject to the provisions of Rule 9.

7.7      A New Option shall not be exercisable by virtue of the event pursuant
         to which it was granted.

8.       VARIATION OF SHARE CAPITAL

8.1      In the event of any variation of the share capital of the Company,
         including, but without prejudice to the generality of the preceding
         words, any capitalisation or rights issue or any consolidation,
         sub-division or reduction of capital by the Company, the number and
         nominal amount of Shares subject to any Option and the Exercise Price
         may be adjusted (including retrospective adjustments) by the Committee
         in such manner as is fair and reasonable provided that:



                                       16
<PAGE>

         (i)      the aggregate amount payable on the exercise of an Option in
                  full is neither materially changed nor increased beyond the
                  expected repayment under the Savings Contract at the Bonus
                  Date;

         (ii)     the Exercise Price for a Share subject to an Option to
                  Subscribe is not reduced below its nominal value unless (and
                  to the extent that) the Company is authorised to capitalise
                  from its undistributed profits or reserves upon the exercise
                  of such Option an amount equal to the difference between the
                  aggregate Exercise Price and the aggregate nominal value of
                  the Shares to be issued upon such exercise and to apply such
                  sum in paying up the difference;

         (iii)    at any time when the Plan remains approved by the Inland
                  Revenue no adjustment shall take effect without the prior
                  approval of the Board of Inland Revenue; and

         (iv)     at any time when the Plan remains approved by the Inland
                  Revenue following the adjustment the Shares continue to
                  satisfy the conditions specified in paragraphs 10 to 14
                  inclusive of Schedule 9.

                  Such variation shall be deemed to be effective, once Inland
                  Revenue approval has been given, from the record date at which
                  the respective variation applied to other shares of the same
                  class as the Shares. Any Options exercised within that period
                  shall be treated as exercised with the benefit of the
                  variation confirmed by the Auditors.

8.2      If an adjustment is made pursuant to Rule 8.1 above with the intention
         that the Plan shall cease to be approved by the Inland Revenue, the
         Company shall immediately notify the Inland Revenue.

8.3      The Administrator shall take such steps as he considers necessary to
         notify Option Holders of any adjustment made under Rule 8.1 and may
         call in, cancel, endorse, issue or reissue any Option Certificate
         consequent upon such adjustment.

9.       MANNER OF EXERCISE OF OPTIONS

9.1      No Option may be exercised whilst the Plan is and is intended to remain
         approved by the Inland Revenue unless the Shares satisfy the conditions
         specified in paragraphs 10 to 14 inclusive of Schedule 9.



                                       17
<PAGE>

9.2      An Option may only be exercised over the number of Shares which may be
         acquired with the sum obtained by way of payment under the related
         Savings Contract.

9.3      An Option shall be exercised by the Option Holder, or as the case may
         be by his personal representatives, delivering a notice in writing to
         the Treasurer of the Company, detailing the number of Shares in respect
         of which he wishes to exercise the Option accompanied by the
         appropriate payment (which shall not exceed the sum obtained by way of
         repayment under the related Savings Contract) or authority to the
         Company to withdraw and apply monies from the Savings Contract to
         acquire the Shares over which the Option is to be exercised and the
         relevant Option Certificate and shall be effective on the date of its
         receipt by the Treasurer of the Company.

9.4      The number of Shares specified in the notice of exercise given in
         accordance with Rule 9.3 shall be allotted and issued to the
         participant or at his discretion (if such participant shall have given
         notice that he wishes to sell some or all of the Shares so acquired)
         immediately following such acquisition within 30 days of the date of
         exercise and the Company shall arrange for the delivery of a definitive
         share certificate in respect thereof or, as the case may be, the
         appropriate changes to the books of the Company to reflect such
         allotment and issue of Shares. Save for any rights determined by
         reference to a record date preceding the date of allotment or transfer,
         such Shares shall rank pari passu with the other Shares of the same
         class in issue at the date of allotment or transfer.

9.5      When an Option is exercised only in part, it shall lapse to the extent
         of the unexercised balance.

9.6      For the purpose of Rules 9.2 and 9.3 above, any repayment under the
         Savings Contract shall exclude the repayment of any contribution the
         due date for payment of which falls after the date on which repayment
         is made unless provided for in the terms of the Savings Contract.

10.      ADMINISTRATION AND AMENDMENT

10.1     The Plan shall be administered by the Committee in conjunction with the
         Administrator and the Committee's decision on all disputes shall be
         final save where the Rules require the concurrence of the Auditors.

10.2     The Board may from time to time amend these Rules provided that:



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         (i)      no amendment may materially affect an Option Holder as regards
                  an Option granted prior to the amendment being made unless 75%
                  of such Option Holders consent in writing to such amendment;

         (ii)     no amendment may be made which would make the terms on which
                  Options may be granted materially more generous or would
                  increase the limits specified in Rule 5 without the prior
                  approval of the Board;

         (iii)    no amendment may be made to the advantage of participants
                  without the prior approval of the Board (except for minor
                  amendments to benefit the administration of the Plan or to
                  take account of a change in legislation and amendments to
                  obtain or maintain favourable tax, exchange control or
                  regulatory treatment for participants in the Plan, the Company
                  or for Group Companies);

         (iv)     no amendment shall have effect until approved by the Board of
                  Inland Revenue whilst the Plan is and is intended to remain
                  approved by the Inland Revenue pursuant to Schedule 9; and

         (v)      no amendment made with the intention that the Plan shall cease
                  to be approved by the Inland Revenue shall take effect unless
                  at the same time the Inland Revenue is notified of such
                  amendment.

10.3     The cost of establishing and operating the Plan shall be borne by the
         Group Companies in such proportions as the Board shall determine.

10.4     Any notice or other communication under or in connection with the Plan
         may be given by the Company either personally or by post, and to the
         Company either personally or by post for the attention of : Corporate
         Treasury, Ceridian Corporation, 3311 East, Old Shakopee Road,
         Minneapolis, Minnesota 55425; items sent by airmail post shall be
         pre-paid and shall be deemed to have been received 7 days after posting
         and items sent by pre-paid Federal Express or similar shall be deemed
         to have been received 5 days after posting.

10.5     The Company shall at all times keep available sufficient authorised and
         unissued Shares to satisfy the exercise to the full extent of all
         Subsisting Options, taking account of any other obligations of the
         Company to issue unissued shares of the same class as Shares.



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11.      COMPLIANCE WITH LAWS AND REGULATIONS

11.1     The exercise of any Subsisting Option and the issuance or transfer of
         Shares pursuant to Rule 9 shall be subject to compliance by the Company
         and by the Option Holder with all applicable requirements of law
         relating thereto and with all applicable regulations of any stock
         exchange on which the Shares of the Company may be listed at the time
         of such exercise by the Option Holder.

11.2     Prior to exercise of an Option, the Company may request the Option
         Holder to execute and deliver to the Company such representations in
         writing in order that the Company and the Option Holder comply with the
         applicable requirements of federal and state securities law.

12.      CESSATION OF EMPLOYMENT

         The rights and obligations of any individual under the terms of his
         office or employment with any Group Company shall not be affected by
         his participation in the Plan or any right which he may have to
         participate therein, and an individual who participates therein shall
         waive any and all rights to compensation or damages in consequence of
         the termination of his office or employment for any reason whatsoever
         insofar as those rights arise or may arise from his ceasing to have
         rights under or be entitled to exercise any Option under the Plan as a
         result of such termination.





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