EXHIBIT 10.4
AMENDED AND RESTATED
SUPPLEMENTAL OFFICERS RETIREMENT PLAN
The purpose of
this Amended and Restated Supplemental Officers Retirement Plan
(the “Plan”) is to provide an additional means by which
AUTOMATIC DATA PROCESSING, INC. may attract, retain and
encourage the productive efforts of a select group of corporate
vice presidents and more senior corporate officers who provide
valuable services to AUTOMATIC DATA PROCESSING, INC. and its
subsidiaries. The Plan provides supplemental retirement benefits to
qualifying participants. The Plan is hereby amended and restated in
its entirety effective August 14, 2008 to, among other things,
reflect certain design changes and to comply with Section 409A of
the Code.
The Plan reads as
follows:
ARTICLE I
DEFINITIONS
The following
terms when used in this Plan shall have the designated meaning,
unless a different meaning is clearly required by the
context.
1.1 62 nd
Birthday . Means the date which is the
first day of the calendar month coincident with or next following
the Participant’s 62 nd birthday.
1.2 Annual Plan
Benefit . Subject to the limitations set
forth in Section 3.1(c), the Annual Plan Benefit shall be (i) for
Grandfathered Participants, the annual amount of a
Participant’s Plan benefit calculated in accordance with the
provisions of Section 3.1(a) and (ii) for Non-Grandfathered
Participants, the annual amount of a Participant’s Plan
benefit calculated in accordance with the provisions of Section
3.1(b), as applicable.
1.3 Committee
. Three board members or senior
officers of the Corporation appointed from time to time by the
Board of Directors of the Company.
1.4
Board . The Board of Directors of the
Company.
1.5
Code
. The
Internal Revenue Code of 1986, as amended.
1.6 Company
. Automatic Data Processing,
Inc. (“ADP”) and its subsidiaries, and ADP’s
successors.
1.7 Disability
. “Disability” shall
have the same meaning, and shall be determined in the same manner,
as it is determined under the Company’s Long Term Disability
Insurance Program as in effect on the date the Disability begins;
provided , however , that a Participant shall not
have a Disability for purposes of the Plan unless the Participant
is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or the Participant
is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not
less than 3 months under an accident and health plan covering the
Company’s employees.
1.8 Early Retirement
Benefit . Means an amount equal to the
Participant’s Annual Plan Benefit, as reduced in accordance
with the terms of Section 3.3(b).
1.9 Early Retirement
Date . Means the date which is the
first day of the calendar month coincident with or next following
the Participant’s 60 th birthday.
1.10
Final Average Annual
Pay .
(a) For Non-Grandfathered
Participants, Final Average Annual Pay shall mean the average
annual compensation for such Participant for the five full
consecutive calendar years during his Future Service period during
which he received the largest total amount of compensation. For
this purpose, a Non-Grandfathered Participant’s
“compensation” shall mean the total compensation
actually paid or accrued by the Company to or for such
Non-Grandfathered Participant including, without limitation,
bonuses paid or accrued, performance incentive payments and the
like, and excluding relocation pay, severance pay, the value of any
Company- provided fringe benefits (including, without limitation,
car allowances, personal travel allowances and tax gross-ups),
compensation derived from stock options, stock appreciation rights,
stock plans and programs (including, without limitation, restricted
stock plans and programs and grants of restricted stock units), or
any similar plans; provided that, notwithstanding anything to the
contrary set forth herein, amounts deferred at such
Non-Grandfathered Participant’s election under a plan
described in section 401(k) of the Code, and the value (at time of
grant) of any stock option grant made in lieu of a bonus payment,
shall be included in such Participant’s compensation. The
Company’s chief executive officer shall determine the value
of any stock option grant made in lieu of a bonus payment, which
value shall not, in any event, be: (i) greater than the
“target bonus” amount the stock option grant was made
in lieu of (the “Substituted Amount”) or (ii) less than
the amount such Participant would have received had the foregoing
stock option grant not been made and the normal bonus
“scoring” methodology been applied to the Substituted
Amount, provided that such amount shall not exceed the Substituted
Amount. The value of such stock option grant shall be included in a
Non-Grandfathered Participant’s compensation in the calendar
year in which the bonus (which the stock option was granted in lieu
of) would have otherwise been paid or accrued; and
(b) For Grandfathered
Participants,Final Average Annual Pay shall mean the average annual
compensation for such Grandfathered Participant for the five full
consecutive calendar years during his Future Service period during
which he received the largest total amount of compensation. For
this purpose, a Grandfathered Participant’s
“compensation” shall mean the total compensation
actually paid or accrued by the Company to or for such Participant
including, without limitation, bonuses paid or accrued (other than
any bonuses paid or accrued under the Company’s three-year
GIP growth incentive plan), performance incentive payments and the
like and restricted stock plans and programs (other than (A) the
Company’s 2005 fiscal year and 2006 fiscal year broad-based
performance-based restricted stock programs (PBRS) in which all
“letter grade” associates participated and (B) the
Company’s two-year accelerated revenue PBRS programs (i.e.
the ARPs), the first of which commenced in the Company’s 2007
fiscal year), and excluding relocation pay, compensation derived
from stock options, stock appreciation rights or any similar plans;
provided that, notwithstanding anything to the contrary set forth
herein, amounts
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deferred at
such Participant’s election under a plan described in section
401(k) of the Code, and the value (at time of grant) of any stock
option grant made in lieu of a bonus payment, shall be included in
such Grandfathered Participant’s compensation. The
Company’s chief executive officer shall determine the value
of any stock option grant made in lieu of a bonus payment, which
value shall not, in any event, be: (i) greater than the Substituted
Amount or (ii) less than the amount such Participant would have
received had the foregoing stock option grant not been made and the
normal bonus “scoring” methodology been applied to the
Substituted Amount, provided that such amount shall not exceed the
Substituted Amount. The value of such stock option grant shall be
included in a Grandfathered Participant’s compensation in the
calendar year in which the bonus (which the stock option was
granted in lieu of) would have otherwise been paid or accrued. The
value (on the date that restrictions lapse) of a Grandfathered
Participant’s restricted stock with restrictions lapsing
during the Company’s fiscal year that begins during the
applicable calendar year shall be included in the
Participant’s compensation for such calendar year; provided
that, in the case of restricted stock that is includable in a
Participant’s compensation for calendar year 2007, the value
of such restricted stock will be determined by multiplying (a) the
price of a share of the Company’s common stock on the date
the restrictions thereon lapse (determined consistently with past
practice), by (b) the number resulting from multiplying the
aggregate number of includable restricted shares by a fraction, the
numerator of which is the “last trade” price of a share
of the Company’s common stock on the trading date immediately
prior to the date the Spin-off occurs and the denominator of which
is the “first trade” price of the Company’s
common stock on the trading date on which the Spin-off has
occurred.
1.11 Former
Participant . Means any person who (i) was a
Participant in the Plan, (ii) stopped accruing benefits under the
Plan pursuant to Article II(b), (iii) continued to be employed by
the Company until after age 65 and (iv) has a Separation from
Service more than one month after the Participant’s accruals
under the Plan cease pursuant to the clause (ii) of this
definition.
1.12 Future
Service . A Participant’s period
of full calendar years of continuous employment with the Company
after his Plan participation has begun and only includes the period
of employment during which the Participant is accruing a benefit
under the Plan. Leaves of absence of less than six months may be
taken into account as Future Service, to the extent provided by the
Committee. The Committee may, in a Supplement, grant a Participant
prior service credit for determining the length of his Future
Service period. In addition, at the discretion of the
Company’s Chief Executive Officer, for the calendar year in
which a Participant incurs either an involuntary severance or
severance which entitles the Participant to severance pay under the
Company’s severance policy, the Participant shall be credited
with one full calendar year without regard to when such severance
pay terminates. Such service shall in no event be duplicative of
service otherwise credited under the Plan and shall not be extended
under this provision beyond the calendar year in which the
severance pay commences.
1.13 Grandfathered
Participant . A Participant participating in
the Plan on January 1, 2008 and who attained age 50 by January 1,
2009.
1.14 Government Sponsored Plan
Benefits . The annual amount of benefits
to which a Participant is entitled on his Normal Retirement Date
under all government sponsored retirement benefit plans (including,
without limitation, Participant’s Social Security benefits).
A Participant’s government sponsored retirement plan benefits
shall be expressed as an annual amount in the form of an
actuarially equivalent straight life annuity starting on his Normal
Retirement Date.
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1.15 Late Retirement
Benefit . Means an amount equal to a
Participant’s Annual Plan Benefit, as actuarially adjusted
using the Late Retirement Factors set forth in Exhibit A hereto
based on the number of complete months elapsed between a
Participant’s 65 th birthday and the date as of
which benefits commence under the Plan.
1.16 Maximum Annual Benefit
Limitation . The Maximum Annual Benefit
Limitation shall be (i) for Grandfathered Participants, 25% of a
Participant’s Final Average Annual Pay, and (ii) for
Non-Grandfathered Participants, 45% of a Participant’s Final
Average Annual Pay.
1.17 Non-Grandfathered
Participant . A Participant who was not
participating in the Plan on January 1, 2008 or who had not
attained age 50 by January 1, 2009.
1.18 Normal Retirement
Date . Means the date which is the
first day of the calendar month coincident with or next following
the Participant’s or Former Participant’s 65
th birthday.
1.19 Other Retirement
Benefits . The sum of the
Participant’s Private Sector Plan Benefits and his Government
Sponsored Plan Benefits.
1.20 Participant
. An individual who has been
designated as a Participant by the Committee pursuant to Article
II.
1.21
Pension
Plan . Automatic Data Processing,
Inc. Pension Retirement Plan.
1.22 Private Sector Plan
Benefits . The annual amount of benefits
to which a Participant is entitled on his Normal Retirement Date
under all retirement plans maintained by the Company (other than
this Plan), or by any former or subsequent employer of Participant
(other than a governmental body covered by Section 1.14 above),
whether as a periodic payment, as a lump sum, or otherwise;
provided, however, that benefits under retirement plans shall
exclude any amounts payable under a bonus deferral plan and any
amounts payable in respect of deferrals made by the Participant
under a cash or deferred arrangement. A Participant’s Private
Sector Plan Benefits shall be expressed as an annual amount in the
form of an actuarially equivalent straight life annuity starting at
his Normal Retirement Date.
1.23 Separation from
Service . Shall mean that employment
with the Company and its subsidiaries and affiliates terminates
such that it is reasonably anticipated that no further services
will be performed. Separation from Service shall be interpreted in
a manner consistent with Section 409A of the Code and any
applicable regulatory guidance promulgated thereunder. References
hereunder to a Participant’s termination of employment, the
date a Participant’s employment terminates and the like,
shall refer to the ceasing of the Participant’s employment
with the Company for any reason.
1.24
Spin-off
. The
tax-free spin-off of the Company’s Brokerage Services Group
business.
1.25 Supplement
. A supplement attached to and
made a part of this Plan, which shall set forth for specific
designated Participants any special conditions applicable to such
Participants. The Supplements to the Plan as of August 13, 2008 are
Supplements A and B.
1.26 Vested Percentage
. Except
to the extent set forth in Sections 3.4 and 5.5, until a
Participant completes 5 full calendar years of Future Service, such
Participant’s Vested Percentage shall be 0% and he shall not
be entitled to any Plan benefits hereunder. Upon completing 5, 6,
7, 8, 9, and 10 or more full calendar years of Future Service, a
Participant’s Vested Percentage shall be 50%, 60%, 70%, 80%,
90%, and 100%, respectively. The Committee may, in a Supplement,
grant a Participant prior service credit for purposes of
determining his Vested Percentage.
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ARTICLE
II
ELIGIBILITY
(a) The Committee may at any time
and from time to time (but prospectively only) designate any
corporate vice president or any more senior corporate officer of
the Company as a Participant in the Plan; provided that such person
participates to the maximum extent permissible in the
Company’s other retirement plans (including, without
limitation, the Automatic Data Processing, Inc. Retirement and
Savings Plan and the Automatic Data Processing, Inc. Pension
Retirement Plan) during the entire period he is a Participant in
the Plan.
(b) A person shall
automatically cease to be a Participant on the earlier to
occur of the date on which: (i) he is no longer a corporate vice
president or a more senior corporate officer of the Company; or
(ii) he ceases to participate to the maximum extent permissible in
the Company’s retirement plans (including, without
limitation, the Automatic Data Processing, Inc. Retirement and
Savings Plan and the Automatic Data Processing, Inc. Pension
Retirement Plan).
ARTICLE
III
RETIREMENT
BENEFITS
3.1
In
General .
(a) Grandfathered
Participants . A Grandfathered
Participant’s Annual Plan Benefit is the product of (i) his
Final Average Annual Pay, (ii) his Future Service period, (iii)
1½% and (iv) his Vested Percentage, less the amount payable
under the Pension Plan pursuant to a transfer from the Plan to the
Pension Plan; provided
that , in
no event, may the Participant’s Annual Plan Benefit exceed
the Maximum Annual Benefit Limitation applicable to him (including
any amount transferred to the Pension Plan).
(b) Non-Grandfathered
Participants . A Non-Grandfathered
Participant’s Annual Plan Benefit is the sum of (A) the
product of (i) his Final Average Annual Pay, (ii) his Future
Service period (up to a maximum of 20 years), (iii) 2% and (iv) his
Vested Percentage and (B) the product of (i) his Final Average
Annual Pay, (ii) any additional years of Future Service credited to
the Participant after an initial 20 years of Future Service have
been credited, but in any event no more than 5 additional years,
(iii) 1% and (iv) his Vested Percentage, less the amount payable
under the Pension Plan pursuant to a transfer from the Plan to the
Pension Plan; provided that, in no event, may the
Participant’s Annual Plan Benefit exceed the Maximum Annual
Benefit Limitation applicable to him (including any amount
transferred to the Pension Plan). Notwithstanding the foregoing, in
no event shall a Non-Grandfathered Participant’s Annual Plan
Benefit finally determined hereunder be less than the value of such
Participant’s Annual Plan Benefit determined as of December
31, 2008 (calculated for this purpose only as if such Participant
was a Grandfathered Participant).
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(c) In addition, the Annual Plan
Benefits otherwise payable to a Participant under the Plan’s
basic benefit formula set forth in Section 3.1(a) and 3.1(b) above,
as applicable, shall be reduced to the extent necessary to cause
the total of the (i) Participant’s Annual Plan Benefits and
(ii) Participant’s annual Other Retirement Benefits not to
exceed 60% of Participant’s Final Average Annual
Pay.
(d) A Participant’s
benefits under this Plan shall be expressed as an annual amount in
the form of a straight life annuity or, at the Committee’s
election, another actuarially equivalent payment option.
3.2 Time of Commencement of
Benefits . A Participant’s Annual
Plan Benefit shall be payable only upon Separation from Service,
Disability, or Death as detailed in this Article III. Annual Plan
Benefits for any given Participant shall commence on the earliest
to occur of:
(a) The later
of:
(i) Attainment of
age 60;
(ii) The
