SEPARATION
AGREEMENT AND RELEASE
THIS
SEPARATION AGREEMENT AND RELEASE (“ Agreement
”), by and between Walter Turek (“ Employee
” or “ you ”) and PAYCHEX, INC. (the
“ Company ”) and its parents, subsidiaries,
divisions, affiliates, and/or related business entities, and with
respect to each of them, their predecessors, successors and
assigns, employee benefit plans or funds, and with respect to each
such entity, all of its or their past and/or present shareholders,
directors, officers, attorneys, fiduciaries, agents, trustees,
administrators, employees and assigns, whether acting on behalf of
the Company or in their individual capacities (collectively the
“ Company Entities ”) is made on August 18,
2009.
a.
You acknowledge that your retirement date, which shall be your last
day of employment with the Company, will be May 31, 2009 (the
“ Separation Date ”). From the date hereof
through the Separation Date (the “ Notice Period
”), you shall continue to be an at-will employee of the
Company and conditioned on your continued satisfactory performance,
the Company will, during the Notice Period, continue to pay you
your regular base salary and continue to provide you with those
benefits that you were eligible to receive prior to the date
hereof; provided that (i) you comply with your obligations as
an employee of the Company, including, but not limited to, your
duty of undivided loyalty and those duties enumerated herein and
(ii) you do not engage in any conduct that is determined by
the Company to have been detrimental. During the Notice Period the
Company may, at its sole discretion, choose to discontinue or
otherwise limit your access to confidential information and/or
elect to: (i) require you to continue to perform your regular
and/or alternative duties; (ii) require you to discontinue
your duties, in whole or in part; and/or (iii) require you to
aid and assist in the transition process associated with your
departure.
b.
After the Separation Date, you shall not represent yourself as
being an employee, officer, agent or representative of the Company
for any purpose and you shall have no authority or power to act on
behalf of the Company or to hold yourself out as an officer or
agent of the Company. The Separation Date shall be the termination
date of your employment for purposes of participation in and
coverage under all benefit/pension plans and programs sponsored by
or through the Company Entities. You agree to submit all requests
for reimbursable business expenses incurred prior to the Separation
Date for reimbursement no later than one week following the
Separation Date (all such reimbursement requests shall otherwise be
in accordance with Company’s usual guidelines and
practices).
c.
The Company will compensate you for accrued but unused paid time
off benefits (totaling $48,350.40, representing your 240 unused
paid time off hours), less applicable tax withholdings and ordinary
payroll deductions, through the Separation Date, and Employee will
receive such payment within thirty (30) days of the Separation
Date.
d.
Except as otherwise expressly provided for herein, you affirm that
you have been paid and/or have received all compensation, bonuses,
severance and/or benefits to which you may have been entitled
during the period of employment with the Company Entities,
including any payments or benefits you may have been entitled to
and you shall not be entitled to
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any other
compensation, severance, equity or option payments, incentives,
bonuses, awards or any other form of payment or benefits from any
of the Company Entities, either with respect to prior years or
service or your employment in 2009. Notwithstanding the foregoing,
you shall remain entitled to (i) any bonus for which you may
eligible and that is otherwise earned by you for fiscal 2009,
subject to the terms of the bonus plan and the discretion of the
Governance and Compensation Committee; (ii) your restricted
stock and option awards to the extent vested as of the Separation
Date (or any earlier termination date) and (iii) your accrued
and vested balance in the Company’s non-qualified and
unfunded deferred compensation plan (the “Deferral
Plan”). Your rights with respect to the exercise of any
vested stock options shall be governed by the terms of the
applicable option grant and plan. Amounts payable to you under the
Deferral Plan shall be paid to you in accordance with your prior
election and otherwise subject to the terms of such plan.
Furthermore, for purposes of the Paychex, Inc. 401(k) Retirement
Plan (referred to as the “Plan”), Employee will be
considered a terminated employee as of June 1, 2009. As such,
contributions, vesting, matches and other service based benefits,
rights and features accorded to employees will terminate as of end
of business on May 31, 2009. All the terms and conditions of
the Plan will be governed by the controlling plan documents. The
Plan has not been modified in any way by this Agreement. Nothing in
the Agreement is intended to waive or release Employee’s
ability to receive benefits in accordance with the Plan.
2.
CONSIDERATION . In consideration of and exchange for your
release and waiver of all claims against the Company Entities and
your compliance with all other terms and conditions of this
Agreement and conditioned on your satisfactory completion of
service during the Notice Period, the Company agrees to provide you
with the following “Consideration”:
a.
The Company shall pay you two-hundred ten thousand four-hundred
seventy dollars ($210,470.00) (less applicable taxes and
withholdings), payable in bi-weekly installments over six
(6) months in accordance with the Company’s payroll
policy (the “ Payment ”). The Payment will be
payable, minus applicable tax withholdings, beginning not later
than ten (10) business days following the Effective Date of
the annexed General Release following your Separation Date.
Notwithstanding anything herein to the contrary, the Company may
withhold any further payments to you hereunder in the event the
Company determines that you have breached the material terms of the
General Release or have violated any of your other continuing
obligations hereunder, including the post termination obligations
set forth in section 7 and the cooperation provisions set forth in
section 9. The Payment shall not constitute compensation for any
purpose under any retirement plan maintained by the Company
Entities. In the event of your death or incapacity, the Payment
shall be made to your estate or personal representative, as
applicable, subject to the delivery and effectiveness of the
General Release signed by your estate or personal representative,
as applicable.
b.
If you timely elect COBRA coverage for yourself and/or your
eligible dependents, the Company will pay the premiums for such
coverage for six (6) months following the Effective Date of
the annexed General Release following your Separation Date (or
until you secure health coverage through employment with another
entity or you are no longer eligible for COBRA coverage, if
earlier). In addition, following the six (6) months coverage
period, you may be eligible to elect to continue health coverage on
a self-pay basis in accordance with your rights and obligations
under COBRA. Information regarding your rights under COBRA will be
provided to you under separate cover.
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c.
You acknowledge and agree that the Consideration provided to you
under this Agreement exceeds any payment, benefit, or other thing
of value to which you might otherwise be entitled under any policy,
plan or procedure of the Company and/or any agreement between you
and the Company.
3.
GENERAL RELEASE OF ALL CLAIMS .
a.
No later than twenty-one (21) days from the date hereof, you
agree to execute and not revoke the General Release attached as
Annex A .
b.
In order to be entitled to the payments and benefits set forth in
section 2 hereof, you must re-execute and not revoke the General
Release attached as Annex A on or after the Separation Date.
You will again have the opportunity to consider for twenty-one
(21) days whether to re-execute this Agreement. If the General
Release is not re-executed on or within twenty-one (21) days
after the Separation Date, the Company shall have no further
obligations under this Agreement and all further payment
obligations shall terminate. This in no way affects your prior
General Release. By your re-execution of the General Release, the
release set forth therein shall be deemed to cover any claims which
you have, may have had, or thereafter may have existing or
occurring at any time on or before the date on which you re-execute
the General Release.
4.
RESIGNATIONS . Effective as of the Separation Date (or
earlier if your employment is terminated), you agree to resign from
all board seats and any other positions that you hold in connection
with your employment by or service in connection with any of the
Company Entities and to execute the omnibus resignation letter
attached as Annex B and any implementing documentation that
the Company may request in connection with such
resignations.
5.
RESPONSE TO LEGAL PROCESS . Nothing in this Agreement shall
preclude you from providing truthful information to a government
agency, or in response to a valid subpoena, or as otherwise
required by law.
6.
NON-ADMISSION OF WRONGDOING . This Agreement is not
intended, and shall not be construed, as an admission that any of
the Company Entities have violated any law (statutory or
decisional), ordinance or regulation, breached any contract or
policy, or committed any wrong whatsoever against you.
7.
POST TERMINATION OBLIGATIONS .
a.
Your Existing Confidential Information and Non-So
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