PAYCHEX, INC.
BOARD DEFERRED COMPENSATION PLAN
As Amended and Restated Effective
July 8, 2009
Article 1
Purpose & Effective Date
1.01
Purpose . The purpose of the Plan is to provide non-employee
directors of the Company with an opportunity to elect to defer the
receipt of a portion of their Eligible Compensation.
1.02 Effective
Date . The Plan was adopted by the Board effective as of
January 1, 2005 (the “Effective Date”), and was
amended and restated by the Board effective as of July 8,
2009.
For purposes of
the Plan, unless otherwise clearly apparent from the context, the
following terms shall have the meanings indicated in this
Article 2:
2.01 “
Account Balance ” means, with respect to the Account
of a Participant as of a given date, the balance of the
Participant’s Account as of such date, as adjusted through
the most recent valuation date practicable before such given date
to reflect all applicable Investment Adjustments and all prior
withdrawals and distributions from such Account, in accordance with
Article 5 and the Plan.
2.02 “
Affiliate ” means any person other than Paychex with
whom Paychex would be considered a single employer under Section
414(b) or 414(c) of the Code; provided, however, that for
determining whether a Separation from Service has occurred, the
language “at least 50 percent” shall be used
instead of “at least 80 percent” each place it
appears in such Code Sections.
2.03 “
Amended Distribution Election Form ” means the written
form required by the Committee to be submitted by a Participant to
effect a permitted change in the Distribution Election previously
made by the Participant with respect to his or her
Account.
2.04 “
Annual Deferral Account ” means a notional,
bookkeeping account established under the Plan to reflect the
Participant’s Annual Participant Deferral for a Plan Year, as
adjusted to reflect all applicable Investment Adjustments and all
prior withdrawals and distributions from such account, in
accordance with Article 5, the provisions of the applicable
Annual Enrollment Materials and the Plan.
2.05 “
Annual Election Form ” means the written form required
by the Committee to be submitted by a Participant in connection
with the Participant’s Deferral Election and Distribution
Election with respect to a given Plan Year.
2.06 “
Annual Enrollment Materials ” means, for a given Plan
Year, the Annual Election Form and any other written forms,
documents or materials concerning the terms of Participant Deferral
Elections for such Plan Year.
2.07 “
Annual Participant Deferral ” means the aggregate
amount of Eligible Compensation deferred by a Participant with
respect to a particular Plan Year under
Section 4.01.
2.08 “
Annual Retainer ” means the compensation paid by the
Company to a Director as an annual retainer for services to be
rendered by the Director as a member of the Board during any Plan
Year.
2.09 “
Beneficiary ” means, with respect to a Participant,
the person or persons designated in accordance with the provisions
of Article 7 as a beneficiary of such Participant
hereunder.
2.10 “
Board ” means the board of directors of
Paychex.
2.11 “
Change in Control ” means: (a) one or more
changes in the ownership of stock of Paychex if after the change or
changes, at least 50 percent of the total combined voting
power of all classes of stock of Paychex is actually or
constructively owned by one person, corporate or otherwise; or
(b) the transfer by Paychex, in one or more transactions, of
all or substantially all of its assets to another person, corporate
or otherwise, or group of related persons, whether by sale, merger,
consolidation, or other arrangement. The Board shall make the final
determination of whether a Change in Control has
occurred.
2.12 “
Code ” means the Internal Revenue Code of 1986, as it
may be amended from time to time.
2.13 “
Committee ” means the Deferred Compensation Plan
Committee of Paychex or such other committee designated by the
Board to administer the Plan. Any reference herein to the Committee
shall be deemed to include any person to whom any duty of the
Committee has been delegated pursuant to
Section 9.02.
2.14 “
Company ” means Paychex and its Affiliates,
collectively.
2.15 “
Deferral Election ” means a deferral election made in
accordance with Section 4.01.
2.16 “
Deferred Compensation Account ” or “
Account ” means, with respect to a Participant, the
Annual Deferral Accounts and the Pre-2010 Deferral Account
established for such Participant pursuant to
Section 4.01(a).
2.17 “
Designated Fund ” means a hypothetical investment made
available under the Plan from time to time by the Committee for
purposes of valuing Accounts. In the event that a Designated Fund
ceases to exist or is no longer to be a Designated Fund, the
Committee may designate a substitute Designated Fund for the
discontinued hypothetical investment.
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2.18 “
Designation Date ” means the date or dates as of which
a designation of investment directions by a Participant pursuant to
Article 5, or any change in a prior designation of investment
directions by a Participant pursuant to Article 5, shall
become effective. The Designation Date in any Plan Year shall be
determined by the Committee; provided, however, that each trading
day of the New York Stock Exchange shall be available as a
Designation Date unless the Committee selects different Designation
Dates.
2.19 “
Director ” means any non-employee member of the
Board.
2.20 “
Disability ” means any medically determinable physical
or mental impairment, certified by a physician selected by or
satisfactory to the Employer, resulting in the Participant’s
inability to perform the duties of his or her position or any
substantially similar position, where such impairment can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months.
2.21 “
Distribution Election ” means an election made in
accordance with Section 6.01.
2.22 “
Effective Date ” has the meaning set forth in
Section 1.02.
2.23 “
Eligible Compensation ” means, for any Plan Year,
(a) the Annual Retainer for such Plan Year, (b) the
Meeting Fees for meetings during such Plan Year, and (c) any
other items of compensation designated by the Committee in the
Annual Enrollment Materials for such Plan Year as eligible for
deferral under the Plan for that Plan Year, subject to any maximum
or minimum deferral amounts or percentages imposed by the Committee
for that Plan Year pursuant to Section 4.01(b).
2.24 “
ERISA ” means the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.
2.25 “
Investment Adjustment ” means an adjustment made to
the balance of any Account in accordance with Section 5.03 to
reflect the performance of a Designated Fund pursuant to which the
value of the Account or portion thereof is measured.
2.26 “
Investment Agent ” means the person appointed by the
Committee to invest the Accounts of Participants, or if no person
is so designated, the Committee.
2.27 “
Meeting Fees ” means the compensation paid by the
Company to Directors for attendance at Board and committee
meetings, as well as fees paid for a telephonic Board or committee
meeting.
2.28 “
Newly Eligible Director ” means a Director who becomes
eligible to participate in the Plan during a Plan Year and who has
not previously participated in the Plan or an elective
account-balance deferred compensation arrangement (as defined for
purposes of Section 409A) of the Company, as determined by the
Committee and to the extent permissible under
Section 409A.
2.29 “
Participant ” means any Director (a) who elects
to participate in the Plan and (b) who commences participation
in the Plan. Once a person is a Participant in the Plan, he
or
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she shall
remain a Participant for Plan purposes until his or her entire
Account Balance has been paid.
2.30 “
Paychex ” means Paychex, Inc., a Delaware
corporation.
2.31 “
Plan ” means the Paychex, Inc. Board Deferred
Compensation Plan, which shall be evidenced by this document and by
the applicable Annual Enrollment Materials, as they may be amended
from time to time.
2.32 “
Plan Year ” means the 12-month period beginning on
January 1 of each calendar year and ending on December 31 of
such calendar year. The first Plan Year shall be the 2005 calendar
year.
2.33 “
Pre-2010 Deferral Account ” means a notional,
bookkeeping account established under the Plan to reflect the
Participant’s Annual Participant Deferral for all Plan Years
prior to the 2010 Plan Year, as adjusted to reflect all applicable
Investment Adjustments and all prior withdrawals and distributions
from such account, in accordance with Article 5 and the
provisions of the Plan.
2.34 “
Section 409A ” means Section 409A of the
Code, the treasury regulations promulgated thereunder and other
applicable guidance issued by the Treasury Department or the
Internal Revenue Service with respect thereto.
2.35 “
Separation from Service ” means the good-faith and
complete termination of the arrangements under which the
Participant performs services for the Company within the meaning of
Section 409A.
2.36 “
Unforeseeable Emergency ” means, with respect to a
Participant, a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the
Participant’s spouse, or a dependent (as defined in Section
152(a) of the Code) of the Participant, loss of the
Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.
Article 3
Eligibility, Selection and Enrollment
3.01 Selection
by Committee . For each Plan Year, the Committee may select, in
its sole discretion, the Directors who shall be eligible to make a
Deferral Election with respect to that Plan Year. The
Committee’s selection of a Director to make a Deferral
Election with respect to a particular Plan Year will not entitle
that Director to make a Deferral Election with respect to any
subsequent Plan Year, unless the Director is again selected by the
Committee to make a Deferral Election with respect to such
subsequent Plan Year.
3.02 Enrollment
Requirements . As a condition to being eligible to make a
Deferral Election with respect to a Plan Year, each selected
Director shall complete and return to the Committee an Annual
Election Form at the time, and in accordance with the terms and
conditions, that the Committee may establish from time to time, and
in accordance with the requirements of Section 409A. The
Committee may in its discretion permit a Newly Eligible
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Director to
complete and return to the Committee an Annual Election Form no
later than 30 days following the date on which such Director
first becomes eligible to participate in the Plan, or such earlier
date as the Committee may establish from time to time.
3.03
Commencement of Participation . Provided a Director selected
to make a Deferral Election with respect to a particular Plan Year
has met all enrollment requirements set forth in the Plan and any
other requirements imposed by the Committee, including submitting
an Annual Election Form within the specified time period, the
Director’s designated deferrals shall commence as of the
first day of the particular Plan Year. In the case of a Newly
Eligible Director, the Newly Eligible Director’s designated
deferrals shall commence as of the date such Newly Eligible
Director’s Annual Election Form is received by the Committee,
but no later than 30 days following the date on which such
Director first became eligible to participate in the Plan, and such
Deferral Election shall apply only with respect to the Eligible
Compensation earned for services performed subsequent to the time
such Annual Election Form is received by the Committee. If a
Director fails to meet all such requirements within the specified
time period with respect to any Plan Year, the Director shall not
be eligible to make a Deferral Election for that Plan
Year.
3.04 Subsequent
Plan Year Elections . The Annual Election Form submitted by a
Participant in respect of a particular Plan Year will remain
effective with respect to and apply to each subsequent Plan Year
unless: (a) the Participant is not a Director selected to
participate in the Plan for such subsequent Plan Year; (b) the
Participant files a new Annual Election Form for such subsequent
Plan Year; (c) the Participant revokes his or her prior Annual
Election Form in accordance with the procedures established by the
Committee for such action; or (d) the Director’s
Deferral Election is suspended pursuant to Section 4.01(d) in
the immediately preceding Plan Year.
Article 4
Participant Deferrals, Taxes and Vesting
4.01
Participant Deferrals .
(a)
Deferral Election . The Committee shall have sole discretion
to determine in respect of each Plan Year: (i) whether a
Director shall be allowed to participate in the Plan with respect
to such Plan Year; (ii) the items of Eligible Compensation
which may be deferred with respect to that Plan Year; and
(iii) any other terms and conditions applicable to the
Deferral Elections for that Plan Year. A Participant’s
Deferral Election shall be evidenced by an Annual Election Form
completed and submitted to the Committee in accordance with the
procedures and time frames as may be established by the Committee
in its sole discretion. The amounts deferred by a Participant in
respect of services rendered during a Plan Year shall be referred
to collectively as an Annual Participant Deferral and shall be
credited to an Annual Deferral Account established in the name of
the Participant for such Plan Year. A separate Annual Deferral
Account shall be established and maintained for each Annual
Participant Deferral for the 2010 Plan Year and each Plan Year
thereafter. A Pre-2010 Deferral Account shall be established and
maintained for the Annual Participant Deferrals for Plan Years
prior to the 2010 Plan Year.
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(b)
Minimum and Maximum Deferrals . The Committee may from time
to time designate in the Annual Enrollment Materials for a given
Plan Year a minimum or maximum deferral amount or percentage,
either in the aggregate or per item of Eligible Compensation,
applicable with respect to that Plan Year.
(c)
Deferral Designations . A Participant may designate the
amount of the Annual Participant Deferral to be deducted from his
or her Eligible Compensation as specified in the applicable Annual
Enrollment Materials for a given Plan Year, which may provide for
deferrals to be expressed as either a percentage or a fixed dollar
amount of a specified item of Eligible Compensation expected by the
Participant, as determined by the Committee. If a Participant
designates the Annual Participant Deferral to be deducted from any
item of Eligible Compensation as a fixed dollar amount and such
fixed dollar amount exceeds the amount of such item of Eligible
Compensation actually payable to the Participant, the entire amount
of such item of Eligible Compensation shall be withheld.
(d)
Deferral Deductions . Unless the Annual Enrollment Materials
provide otherwise, Annual Participant Deferral shall be deducted
from the items of Eligible Compensation as follows: (i) for
Annual Participant Deferral designated as a percentage of any type
of Eligible Compensation (e.g., Annual Retainers and Meeting Fees),
in the specified percentage at the time the Eligible Compensation
would otherwise have been paid to the Participant; (ii) for
substantially equivalent periodic payments (e.g., Meeting Fees)
designated as a fixed dollar amount, in substantially equivalent
amounts from each periodic payment during the Plan Year; and
(iii) for one-time payments (e.g., Annual Retainers)
designated as a fixed dollar amount, 100 percent of the
Eligible Compensation shall be deducted from each payment until the
fixed dollar amount of Annual Participant Deferral has been
deferred.
(e)
Suspension of Deferral Elections . Except as otherwise
provided by Section 3.04, this Section 4.01(e) or
elsewhere in the Plan, once made, a Deferral Election with respect
to a particular Plan Year shall become irrevocable with respect to
that Plan Year as of the deadline for Deferral Elections for that
Plan Year, as set forth in the applicable Annual Enrollment
Materials.
(i) From
and after the date that a Participant is deemed to have suffered a
Disability, any standing Deferral Election of the Participant shall
automatically be cancelled and no further deferrals shall be made
with respect to the Participant.
(ii) If
a Participant experiences an Unforeseeable Emergency, the
Participant may petition the Committee to cancel his or her
Deferral Election. A petition shall be made on the written form
required by the Committee to be used for such request and shall
include all information requested by the Committee in order to make
a determination on such petition, as determined by the Committee in
its sole discretion. The Committee shall determine, in its sole
discretion, whether to approve the Participant’s petition. If
the petition for a cancellation is approved, cancellation shall
take effect upon the date of approval, and such Deferral Election
must be cancelled and not merely postponed or delayed.
Notwithstanding the foregoing, the Committee shall not have any
right to approve a request for cancellation of a Deferral Election
if such approval (or right to approve) would cause the Plan to fail
to comply with, or cause a Participant to be subject to a tax
under, Section 409A.
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(iii) If
a Participant’s Deferral Election has been cancelled during a
Plan Year pursuant to this Section 4.01(e), the Participant
will not be eligible to make any further deferrals in respect of
that Plan Year. The Participant
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