PAYCHEX, INC.
EMPLOYEE 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 certain
members of management and highly compensated employees 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 “
Base Pay ” means taxable wages relating to services
performed by a Participant during any Plan Year, including amounts
contributed by the Participant to the Paychex, Inc. 401(k)
Incentive Retirement Plan, but excluding Fiscal-Quarter Bonus Pay,
Performance-Based Bonus Pay, other bonuses, the value of any
non-cash awards (including related taxes), income from equity
compensation, the imputed value of group-term life insurance and
any reimbursements of moving expenses.
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 “
Claimant ” has the meaning set forth in
Section 10.01.
2.13 “
Code ” means the Internal Revenue Code of 1986, as it
may be amended from time to time.
2.14 “
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.
2.15 “
Company ” means Paychex and its Affiliates,
collectively.
2.16 “
Deferral Election ” means a deferral election made in
accordance with Section 4.01.
2.17 “
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
2.18 “
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.
2.19 “
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.
2.20 “
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 Base Pay for such Plan Year, (b) the
Fiscal-Quarter Bonus Pay for such Plan Year, (c) any
Performance-Based Bonus Pay the performance period for which ends
during such Plan Year and after the six-month anniversary of the
deadline for submitting an Annual Election Form for such Plan Year,
and which the Committee allows to be deferred pursuant to the
Annual Enrollment Materials for such Plan Year, and (d) 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 “
Employee ” means a person who is a member of a select
group of management or a highly compensated employee of the
Company, as determined by the Committee in its sole discretion and
to the extent permissible under ERISA.
2.25 “
ERISA ” means the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.
2.26 “
Fiscal-Quarter Bonus Pay ” means the cash compensation
under any bonus plan or arrangement of the Company related to
services performed by a Participant during a specified fiscal
quarter of the Company. The “Fiscal-Quarter Bonus Pay”
for a given Plan Year means the Fiscal-Quarter Bonus Pay for each
fiscal quarter that begins during such Plan Year.
2.27 “
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.
3
2.28 “
Investment Agent ” means the person appointed by the
Committee to invest the Accounts of Participants, or if no person
is so designated, the Committee.
2.29 “
Newly Eligible Employee ” means an Employee 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.
2.30 “
Participant ” means any Employee (a) who is in a
classification of employees designated by the Committee as eligible
to participate in the Plan or who is otherwise selected by the
Committee to participate in the Plan, (b) who elects to
participate in the Plan, and (c) who commences participation
in the Plan. Once a person is a Participant in the Plan, he or she
shall remain a Participant for Plan purposes until his or her
entire Account Balance has been paid.
2.31 “
Paychex ” means Paychex, Inc., a Delaware
corporation.
2.32 “
Performance-Based Bonus Pay ” means any cash
compensation, other than Base Pay or Fiscal-Quarter Bonus Pay,
under any bonus plan or arrangement of the Company, the amount of
which or entitlement to is based on services to be performed by a
Participant over a period of at least 12 consecutive months, which
is contingent on the satisfaction or pre-established organizational
or individual performance criteria, and which qualifies as
“performance-based compensation” under
Section 409A.
2.33 “
Plan ” means the Paychex, Inc. Employee 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.
2.34 “
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.
2.35 “
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.
2.36 “
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.
2.37 “
Separation from Service ” means a Participant’s
termination of employment with the Company, whether voluntary or
involuntary, within the meaning of Section 409A.
2.38 “
Specified Employee ” as of a given date means a
“specified employee” as of such date for purposes of
Section 409A.
4
2.39 “
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 Employees who shall be eligible to make a
Deferral Election with respect to that Plan Year. The
Committee’s selection of an Employee to make a Deferral
Election with respect to a particular Plan Year will not entitle
that Employee to make a Deferral Election with respect to any
subsequent Plan Year, unless the Employee 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
Employee 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 Employee to
complete and return to the Committee an Annual Election Form no
later than 30 days following the date on which such Employee
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 an Employee
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 Employee’s designated deferrals shall commence as
of the first day of the particular Plan Year. In the case of a
Newly Eligible Employee, the Newly Eligible Employee’s
designated deferrals shall commence as of the date such Newly
Eligible Employee’s Annual Election Form is received by the
Committee, but no later than 30 days following the date on
which such Employee 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 an Employee fails to meet all such requirements within the
specified time period with respect to any Plan Year, the Employee
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 an Employee 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 Employee’s
Deferral Election is suspended pursuant to Section 4.01(e) in
the immediately preceding Plan Year.
5
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 an
Employee 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.
(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., salary and bonuses), 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., salary)
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., bonuses) 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.
6
(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 or a hardship
distribution pursuant to Section 1.401(k)-1(d)(3) of the
treasury regulations (or any successor thereto), 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.
(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 may be eligible to make deferrals
for a subsequent Plan Year provided the Participant is an Employee
selected to make deferrals for such subsequent Plan Year and the
Participant complies with the election requirements under the Plan
for such subsequent Plan Year.
(f)
Paid Leave of Absence. If a Participant is authorized by the
Company for any reason to take a paid leave of absence, so long as
the Participant has not had a Separation from Service, the
Participant shall continue to be considered employed by the Company
and the appropriate amounts shall continue to be withheld from the
Participant’s compensation pursuant to the
Participant’s then current Deferral Election.
(g)
Unpaid Leave of Absence. If a Participant is authorized by
the Company for any reason to take an unpaid leave of absence, so
long as the Participant has not had a Separation from Service, the
Participant shall continue to be considered employed by the Company
and, to the extent permitted by Section 409A, the Participant
shall be excused from making deferrals until the earlier of the
date the leave of absence expires or the Participant returns to a
paid employment status. Upon such expiration or return, deferrals
shall resume for the remaining portion of the Plan Year in which
the expiration or return occurs, based on the Deferral Election, if
any, made for that Plan Year. If no election was made for that Plan
Year, no deferral shall be withheld.
7
4.02
Vesting . A Participant shall be vested in all amounts
cred
|
