EXHIBIT 10.2
PAYCHEX, INC.
2002 STOCK INCENTIVE PLAN
(as amended and restated effective October 12, 2005)
FORM OF NON-QUALIFIED STOCK OPTION AWARD
AGREEMENT
1. Grant of Option .
This Non-qualified Stock Option Award Agreement (the “Award
Agreement”), made as of [date of grant] , 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 [exercise price]
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 [expiration date] (the “Expiration
Date”).
3. Vesting . Subject to
the terms set forth in this Award Agreement and the Plan, the
Option will vest and become exercisable pro rata with respect to
one-fifth of the shares subject to such Option on the first,
second, third, fourth, and fifth anniversaries of the Date of
Grant, with any fractional share resulting from such pro-ration
vesting on the fifth anniversary. Vesting is contingent on your
continued employment with the Company or one of its affiliates
through the vesting dates.
4. Exercise .
(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
