PAYCHEX, INC.
2002 STOCK INCENTIVE PLAN
(as amended and restated effective October 12,
2005)
2009 NON-QUALIFIED STOCK
OPTION AWARD AGREEMENT (SPECIAL GRANT)
1. Grant
of Option . This Non-qualified Stock Option Award Agreement
(the “Award Agreement”), made as of July 9, 2009,
serves to notify you that the Governance and Compensation Committee
(the “Committee”) of the Board of Directors of Paychex,
Inc. (the “Company”) hereby grants to you, under the
Company’s 2002 Stock Incentive Plan, as amended and restated
effective October 12, 2005 (the “Plan”), a
Non-Qualified Stock Option (the “Option”) to purchase,
on the terms and conditions set forth in this Award Agreement and
the Plan, up to the number of shares of the Company’s $.01
par value common stock (the “Common Stock”) set forth
on the attached statement at the price of $31.95 per share. The
Plan is incorporated herein by reference and made a part of this
Award Agreement. You may obtain a copy of the Plan from the Office
of the Corporate Secretary. You should review the terms of this
Award Agreement and the Plan carefully. The capitalized terms used
in this Award Agreement are defined in the Plan.
2.
Term . Unless the Option is previously terminated pursuant
to the terms of this Award Agreement or the Plan, the Option will
expire at the close of business on July 9, 2018 (the
“Expiration Date”).
3.
Vesting . Subject to the terms set forth in this Award
Agreement and the Plan, the Option will become exercisable with
respect to one-fifth of the shares subject to such Option on each
of July 10, 2009; July 10, 2010; July 10, 2011;
July 10, 2012 and July 10, 2013; with any fractional
share resulting from such pro-ration vesting on July 10, 2013.
Vesting is contingent on your continued employment with the Company
or one of its affiliates through the vesting dates.
(a)
Method of Exercise . To the extent exercisable under
Section 3 of this Award Agreement, the Option may be exercised
in whole or in part, provided that the Option may not be exercised
for less than one share of Common Stock in any single transaction.
The Option may be exercised using a method specified by the
Company.
(b)
Payment of Exercise Price . The exercise of the Option is
conditioned upon your payment to the Company of the Exercise Price
for the number of shares of Common Stock that you elect to
purchase. The Exercise Price may be paid in cash or by check or by
way of a broker-assisted stock option exercise program, if such a
program is made available by the Company at the time of the
exercise of the Option.
(c)
Withholding . The exercise of the Option is conditioned upon
your making arrangements satisfactory to the Company for the
payment to the Company of the amount of all taxes required by any
governmental authority to be withheld and paid over by the Company
or
any Affiliate
to the governmental authority on account of the exercise. The
payment of such withholding taxes to the Company may be made
(i) by you in cash or by check, or (ii) by the Company or
any Affiliate withholding such taxes from any other compensation
owed to you by the Company or any Affiliate. Withholding of shares
of Common Stock for payment of tax withholdings is not permitted
for any reason.
(d)
Issuance of Shares . Upon determining that compliance with
this Award Agreement has occurred, including compliance with such
reasonable requirements as the Company may impose pursuant to the
Plan, the Company shall issue to you a certificate for the shares
of Common Stock purchased on the earliest practicable date (as
determined by the Company) thereafter.
5. Effect
of Death and Disability . In the event of your death or
Disability prior to the complete exercise of the Option, any
unvested portion of the Option will vest in full immediately and
the remaining portion of the Option may be exercised in whole or in
part, subject to all of the conditions on exercise imposed by the
Plan and this Award Agreement, within three years after the date of
your death or Disability, but only (i) by you, or in the event
of your death, by your estate or the person or persons to whom the
Option passes under your will or the laws of descent and
distribution, and (ii) prior to the close of business on the
Expiration Date of the Option. 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.
6. Effect
of Retirement . Upon your Retirement prior to the complete
exercise of the Option, the unvested portion of the Option will be
canceled as of your last day worked, and the remaining portion of
the Option may be exercised in whole or in part, subject to all of
the conditions
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