PAYCHEX, INC.
2002 STOCK INCENTIVE PLAN
(as amended and restated effective October 12,
2005)
FORM OF RESTRICTED STOCK AWARD
AGREEMENT (OFFICER)
1. Grant
of Restricted Stock . This Restricted Stock Award Agreement
(the “Award Agreement”), sets forth the terms and
conditions of the Restricted Stock (the “Award”)
granted to you by the Governance and Compensation Committee (the
“Committee”) of the Board of Directors of Paychex, Inc.
(the “Company”) under the Company’s 2002 Stock
Incentive Plan, as amended and restated effective October 12,
2005 (the “Plan”), as described on your Award Notice.
The Award is subject to all of the provisions of the Plan, which is
hereby incorporated by reference and made a part of this Award
Agreement. The capitalized terms used in this Award Agreement are
defined in the Plan.
2.
Restriction and Vesting .
(a) Subject
to the terms set forth in this Award Agreement and the Plan, unless
earlier vested under Section 2(b), 2(c) or 2(d) of this Award
Agreement, provided you are still a full-time employee of the
Company at that time, all of the Shares represented by the Award
will vest on the fifth anniversary of the date of grant set forth
on your Award Notice (a “Vesting Date”).
(b) Notwithstanding
Section 2(a) of this Award Agreement, for each of the next four
fiscal years of the Company, if the Company’s operating
income, excluding interest on funds held for clients
(“Operating Income”), for such fiscal year equals or
exceeds the target established for such fiscal year, then, provided
you are still a full-time employee of the Company, one-sixth of the
total number of Shares represented by the Award shall vest upon the
confirmation by the Committee of such fiscal year’s Operating
Income (also a “Vesting Date”), provided however that
not more than 50% of the total Award shall vest pursuant to this
Section 2(b). Operating Income targets established for said
accelerated vesting are determined by the Committee at the time of
grant and are set forth in your Award Notice.
(c) Notwithstanding
Section 2(a) of this Award Agreement, for each of the next four
fiscal years of the Company, if the Company’s service revenue
(“ Service Revenue”), for such fiscal year equals or
exceeds the target established for such fiscal year, then, provided
you are still a full-time employee of the Company, one-sixth of the
total number of Shares represented by the Award shall vest upon the
confirmation by the Committee of such fiscal year’s Service
Revenue (also a “Vesting Date”), provided however that
not more than 50% of the total Award shall vest pursuant to this
Section 2(c). Service Revenue targets established for said
accelerated vesting are determined by the Committee at the time of
grant and are set forth in your Award Notice.
(d) Except
in the event of your death or Disability, if your employment
terminates before a Vesting Date for any reason, including, but not
limited to, Retirement, then the unvested portion of the Award
shall be forfeited and cancelled immediately. If your employment
terminates due to death or Disability, your Award shall immediately
become 100% vested. The term “Disability” means a
condition whereby you are unable to perform the essential functions
of your position with reasonable accommodations by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted for a continuous
period of not less than six months, all as verified by a physician
acceptable to, or selected by, the Company.
3.
Book-Entry Registration . The Award initially will be
evidenced by book-entry registration only, without the issuance of
a certificate representing the Shares underlying the
Award.
4.
Issuance of Shares . The Company shall, when the conditions
to vesting specified in Section 2 of this Award Agreement are
satisfied, issue a certificate or certificates representing the
Shares underlying the Award that have vested as promptly as
practicable following the Vesting Date of such Shares.
5. Rights
as a Stockholder . Except as otherwise provided by this
Section, you will have the rights of a stockholder with respect to
the Shares underlying the Award, including, but not limited to, the
right to receive such cash dividends, if any, as may be declared on
such Shares from time to time and the right to vote (in person or
by proxy) such Shares at any meeting of stockholders of the
Company. Notwithstanding the foregoing, the dividends paid on any
unvested Shares shall be retained by the Company and held in
escrow, trust or similar manner, and shall only be paid to you upon
the vesting of the underlying Shares to which the dividends relate;
upon the forfeiture of any Shares represented by the Award, your
right to the dividends paid
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