EXHIBIT 10.1
 
 
 

December 14, 2011

Carlos Rodriguez
29 Colts Glen Lane
Basking Ridge, NJ 07920

Dear Carlos:

This letter agreement outlines our understandings concerning your position as
the President and Chief Executive Officer of Automatic Data Processing, Inc.
(“ADP”).

ADP and you agree as follows:

1.           Employment and Term.

a.           You shall be employed by ADP as its President and Chief Executive
Officer reporting to the Board of Directors of ADP (the “Board”) for a period of
three years from November 8, 2011, and any continuation of your employment
beyond such date will be subject to the approval of the Board.   Any removal of
the term “President” from your title after the date hereof shall not be deemed
to be any way a diminution of your position, duties, responsibilities or
authority.

b.           You shall devote your full business time, energy and skill, on an
exclusive basis, to the business and affairs of ADP and will use your business
time, energy and skill to promote the business and interests of ADP and any and
all of the ADP divisions, subsidiaries and affiliates.   Notwithstanding the
foregoing, you may serve upon the board of directors (or its equivalent) of
other public or private organizations, with the prior approval of the Board.

c.           As a condition of your employment, you agree to abide by and be
bound by the terms, conditions and provisions of the restrictive covenants set
forth on Exhibit A attached hereto, which terms, conditions and provisions are
incorporated by reference into this letter agreement.  This obligation survives
the term of this letter agreement.

2.           Compensation and Benefits.

a.           ADP shall pay you a salary of no less than $800,000 per annum,
which will be considered annually for adjustment by the Compensation Committee
of the Board (the “Compensation Committee”).  Your salary will be paid on a
monthly basis.

b.           Your target bonus for each fiscal year (i.e., July 1 to June 30)
shall be 160% of your salary.   In FY’12, your target bonus will be $1,280,000,
which shall not be prorated.   Your actual FY’12 bonus shall be based upon your
performance against the performance objectives set by the Compensation Committee
in September 2011.  Your bonus for future fiscal years shall be determined by
your performance against the performance objectives pre-established by the
Compensation Committee for each such fiscal year.

 
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c.           You shall continue to participate in all of ADP’s pension, 401(k),
medical and health, life, accident, disability and other insurance programs,
equity plans, the Automatic Data Processing, Inc. Supplemental Officers
Retirement Plan, ADP’s Executive Fleet Program, ADP’s Matching Gift Program, and
other compensation and benefits plans and arrangements that are generally
available to other ADP executives in accordance with their terms as in effect
from time to time.   Subject to applicable law, your participation in any or all
such plans and arrangements may be modified or eliminated from time to time in
the sole discretion of the Compensation Committee, without the requisite payment
of any compensation.

3.           Stock Options.

At the next regularly scheduled meeting of the Compensation Committee in January
2012, you shall receive a stock option grant of 40,000 shares as previously
determined by the Compensation Committee, plus an additional special stock
option grant of 150,000 shares.  If the grants, along with the restrictive
covenants associated with such grants, are accepted, such options will vest
ratably in 25% increments on each of the first four anniversaries of the grant
date, and otherwise in accordance with the terms of the grants.

       4.      Termination and Severance Payments.

If your employment with ADP is terminated, you will receive the following
compensation:

a.           If you are discharged for cause, ADP’s obligation to make payments
to you shall cease on the date of such discharge.  As used herein, the term “for
cause” shall cover circumstances where ADP elects to terminate your employment
because you have (i) been convicted of or pled nolo contendere to a criminal act
for which the punishment under applicable law may be imprisonment for more than
one year, (ii) willfully or recklessly failed or refused to perform your
material obligations as President and Chief Executive Officer, (iii) committed
any act or omission of gross negligence in the performance of your material
duties hereunder, (iv) committed any act of willful or reckless misconduct, (v)
violated your restrictive covenants, or (vi) violated either ADP’s “Code of
Business Conduct and Ethics”, or ADP’s “Code of Ethics for Principal Executive
Officer and Senior Financial Officers”, as each may be updated from time to time
and which can be found at www.adp.com under “About ADP”.

b.           If you become permanently and seriously disabled as defined under
ADP’s long term disability plan then in effect, so that you are absent from your
office due to such disability and otherwise unable substantially to perform your
services hereunder, ADP may terminate your employment, and ADP’s obligation to
make payments to you (beyond previously accrued and unpaid amounts) shall cease
on the date of such termination.
 
 
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c.           If your death occurs while you are actively employed by ADP, ADP’s
obligation to make payments to you (beyond previously accrued and unpaid
amounts) shall cease on the date of your death.

d.           If you elect to resign from ADP, ADP’s obligation to make payments
to you (beyond previously accrued and unpaid amounts) shall cease on the date
your employment ends.

e.           If during your employment with ADP, ADP terminates your employment
for any reason other than “for cause” as described in paragraph 4(a) or for a
disability as set forth in paragraph 4(b) or upon your death as set forth in
paragraph 4(c) or you elect to resign as set forth in paragraph 4(d), and you
execute and do not revoke a Release, you will be paid an amount (in addition to
any previously accrued but unpaid amounts) equal to 2.6 times your annual salary
for the fiscal year of termination, payable in monthly installments over 12
months.   You will separately receive the bonus for the fiscal year of
termination that you would have otherwise have received if your employment had
not been terminated, based upon your (and to the extent applicable, ADP’s)
actual full-year performance (as determined by the Compensation Committee),
prorated to reflect the portion of the fiscal year worked through the date of
termination. Further, such amount will be paid in the following fiscal year at
the same time that bonuses would have otherwise been paid in the ordinary
course, absent termination of employment.

f.           You will continue to participate in the Change in Control Severance
Plan for Corporate Officers (the “CIC Plan”). In the event of a “change in
control” of ADP and a subsequent “qualifying termination” occurs (as such terms
are defined in the CIC Plan), you will be entitled to the greater of the
benefits and payments under the CIC Plan and this letter agreement.  Further,
for the purposes of the application of the “severance benefit” described in
Section 1.1 of the CIC Plan, you will be entitled to an amount equal to 200% of
“current total annual compensation” (as defined in the CIC plan) under the
circumstances of clause 1.1(a)(i) thereof and 150% of current total annual
compensation under the circumstances of clause 1.1(a)(ii) thereof.

5.            Section 409A.

        (a)        For purposes of this letter agreement, “Section 409A” means
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
the Treasury Regulations promulgated thereunder (and such other Treasury or
Internal Revenue Service guidance) as in effect from time to time.   The parties
intend that any amounts payable hereunder that are not otherwise exempt from the
provisions of Section 409A (including pursuant to the “short term deferral”
exception) and which could constitute “deferred compensation” within the meaning
of Section 409A will be compliant with Section 409A.

        (b)        Notwithstanding anything in this letter agreement to the
contrary, if and to the extent required by Section 409A, in the event you are
deemed to be a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) and you are not “disabled” within the meaning of Section
409A(a)(2)(C), no payments hereunder that are “deferred
 
 
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compensation” subject to Section 409A , and that are due or payable on account
of “separation from service” (as defined in Section 409A), shall be made to you
prior to the date that is six (6) months after the date of your “separation from
service”  or, if earlier, your date of death.  Following any applicable six (6)
month delay, all such delayed payments will be paid in a single lump sum on the
earliest date permitted under Section 409A that is also a business day.  

        (c)        For purposes of this letter agreement, with respect to
payments of any amounts that are considered to be “deferred compensation”
subject to Section 409A, references to “termination of employment” (and
substantially similar phrases) shall be interpreted and applied in a manner that
is consistent with the requirements of Section 409A, and each of the payments
that may be made hereunder are designated as separate payments. Any payment or
benefit due upon a termination of your employment under paragraph 4.e that
represents a “deferral of compensation” within the meaning of Section 409A shall
commence to be paid or provided to you 61 days following a “separation from
service”, provided that you execute a Release within 60 days following your
“separation from service.”

        (d)         Any payment or benefit under this letter agreement or
otherwise that is eligible for exemption from Section 409A pursuant to Treasury
Regulation § 1.409A-1(b)(9)(v)(A) or (C) (relating to certain reimbursements and
in-kind benefits) shall be paid or provided to you only to the extent that the
expenses are not incurred, or the benefits are not provided, beyond the last day
of the second calendar year following the calendar year in which your
“separation from service” occurs; and provided further that such expenses are
reimbursed no later than the last day of the third calendar year following the
calendar year in which your “separation from service” occurs.  To the extent any
indemnification payment, expense reimbursement, or the provision of any in-kind
benefit is determined to be subject to Section 409A (and not exempt pursuant to
the prior sentence or otherwise), the amount of any such indemnification payment
or expenses eligible for reimbursement, or the provision of any in-kind benefit,
in one calendar year shall not affect the indemnification payment or provision
of in-kind benefits or expenses eligible for reimbursement in any other calendar
year (except for any life-time or other aggregate limitation applicable to
medical expenses), and in no event shall any indemnification payment or expenses
be reimbursed after the last day of the calendar year following the calendar
year in which you incurred such indemnification payment or expenses, and in no
event shall any right to indemnification payment or reimbursement or the
provision of any in-kind benefit be subject to liquidation or exchange for
another benefit.

6.           Miscellaneous.

a.           All notices shall be sent to the parties by hand delivery or by
certified or registered mail at the addresses set forth above or to any changed
address which may be given in writing hereafter.  All notices to ADP shall
include two copies to ADP at One ADP Boulevard, Roseland, New Jersey 07068 (one
copy to the attention of its General Counsel and the other copy to the attention
of the Chairman of the Board).  Unless hand delivered, notices shall be deemed
given three business days following the date deposited in the
 
 
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U.S. mails or one business day following the date of delivery to a nationally
recognized overnight courier service.

b.           In the event that this letter agreement or any provision hereof is
declared invalid, unenforceable or illegal by any court, agency, commission or
arbitrator(s) having jurisdiction hereof or thereof, neither party shall have
any cause of action or claim against the other by reason of such declaration of
invalidity, unenforceability or illegality; and any such declaration concerning
any provision hereof shall not affect, impair or invalidate the remainder of
this letter agreement, but shall be confined in its operation to that provision
hereof only and the remainder of this letter agreement shall remain in full
force and effect. The parties hereto agree to substitute the invalid,
unenforceable or illegal provision by a valid, enforceable or legal one which
corresponds to the spirit and purpose of the invalid, unenforceable or illegal
provisions to the greatest extent possible.

 c.           This letter agreement may not be changed, modified or amended in
any manner except by an instrument in writing signed by all parties hereto.

d.           This letter agreement is personal to each of the parties hereto and
no party hereto may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party.

e.           The headings contained in this letter agreement are for reference
purposes only and shall not affect the meaning or interpretation of this letter
agreement.

f.           No failure or delay on the part of any party hereto in the exercise
of any right hereunder in enforcing or requiring the compliance or performance
by the other party of any of the terms and conditions of this letter agreement
shall operate as a waiver of any such right, or constitute a waiver of a breach
of any such terms and conditions, nor shall any single or partial exercise of
any such right preclude other or further exercise thereof or of any other right,
nor shall any of the aforementioned failures or delays affect or impair such
rights generally in any way.  The waiver by any party of a breach of any term or
condition of this letter agreement by the other party shall neither operate as
nor be construed as a waiver of any subsequent breach thereof.

g.           This letter agreement and its validity, construction and
performance shall be governed in all respects by the laws of the State of New
Jersey, without giving effect to its conflicts of laws principles.  Any lawsuits
arising out of or in connection with this letter agreement shall be brought in
the Superior Court of New Jersey, Essex County, or the Federal District Court of
the District of New Jersey.  You and ADP hereby consent to the jurisdiction and
venue of such courts.  You and ADP waive any right to a trial by jury of any
such lawsuit.
 
 
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If the foregoing correctly sets forth our understandings, please sign this
letter agreement where indicated, whereupon it will become a binding agreement
between us.

 

 
Automatic Data Processing, Inc.
 
         
 
By:
/s/ Leslie A. Brun       Leslie A. Brun       Chairman of the Board          

      

Accepted and Agreed:
   
 
 
/s/ Carlos A. Rodriguez
   
Carlos A. Rodriguez
   

 
 
 
 
 
 
 
 
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EXHIBIT A
 
Restrictive Covenant
 
I acknowledge that in my position(s) with Automatic Data Processing, Inc., its
subsidiaries and affiliates (collectively “ADP”), I have access to confidential
information and trade secrets of ADP and I enjoy substantial compensation and
benefits from ADP.  In consideration of such benefits and because it is in ADP’s
best interests that all employees in executive positions execute restrictive
covenants, I agree as follows:

 
1.
During the period that I am an ADP employee and ending twenty-four months after
the date I cease to be an ADP employee for any reason whatsoever (the
“Non-Competition Period”), I will not,  directly or indirectly, become or be
interested in, employed by, or associated with in any capacity, any person,
corporation, partnership or other entity whatsoever (a “Person”) engaged in any
aspect of ADP’s businesses, or businesses ADP has formal plans to enter on the
date I cease to be an ADP employee (the “Termination Date”), in a capacity which
is (i) either the same or similar to any capacity in which I was involved during
the last two years of my employment by ADP or (ii) otherwise a senior or
executive position.  After the Termination Date, however, nothing shall prevent
me from owning, as an inactive investor, securities of any competitor of ADP
which is listed on a national securities exchange.  Furthermore, after the
Termination Date, I may become employed in a separate, autonomous division of a
corporation or other entity, provided such division is not a competitor of ADP.

 
2.
During and after my employment by ADP, I will not use, or disclose to any Person
any confidential information, trade secrets or proprietary information of ADP,
its vendors, licensors, marketing partners or clients, learned by me during my
employment and/or any of the names and addresses of clients of ADP.  I
acknowledge that I am prohibited from taking any confidential, proprietary or
other materials or property of ADP with me upon termination of my
employment.  Upon termination of my employment, I shall return all ADP materials
(including, without limitation, all memoranda and notes containing the names,
addresses and/or needs of ADP clients and bona fide prospective clients) in my
possession or over which I exercise control, regardless of whether such
materials were prepared by ADP, me or a third party.

 
3.
During the Non-Competition Period, I shall not, on my behalf or on behalf of any
other Person, directly or indirectly, solicit, contact, call upon, communicate
with or attempt to communicate with any Person which was a client or a bona fide
prospective client of ADP before the Termination Date to sell, market, license,
lease or provide any software, product or service competitive or potentially
competitive with any software, product or services sold, marketed, licensed,
leased, provided or under development by ADP during the two-year period prior to
the Termination Date.

 
 
 

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4.
During the Non-Competition Period, I will not, directly or indirectly (i) hire,
contract with, solicit, or encourage to leave ADP’s employ any ADP employee, or
(ii) hire or contract with any former ADP employee within one year after the
date such person ceases to be an ADP employee.

 
5.
During my employment by ADP, I shall not accept any position (unless such
position is to commence after my employment ceases), compensation, reimbursement
or funds, or their equivalent, from any Person engaged in any business in which
ADP is engaged.

 
6.
A violation of the foregoing covenants not to compete, not to disclose, not to
solicit and not to hire will cause irreparable injury to ADP.  ADP shall be
entitled, in addition to any other rights and remedies it may have at law or in
equity, to an injunction enjoining and restraining me from performing, and
continuing in the performance of, any such violation.

 
7.
I understand and acknowledge that ADP shall have the sole and exclusive rights
to anything relating to its actual or prospective business which I conceive or
work on, either in whole or in part, while employed by ADP and that all such
work product may be property of ADP as “works for hire” under federal copyright
law and may also constitute ADP confidential and proprietary
information.  Accordingly, I:

 
(a)
will promptly and fully disclose all such items to ADP and will not disclose
such items to any other Person without ADP’s prior consent;

 
(b)
will maintain on ADP’s behalf and surrender to ADP upon termination of my
employment appropriate written records regarding all such items;

 
(c)
will, but without personal expense, fully cooperate with ADP, execute all papers
and perform all acts requested by ADP to establish, confirm or protect its
exclusive rights in such items or to enable it to transfer legal title to such
items, together with any patents that may be issued;

 
(d)
will, but without personal expense, provide such information and true testimony
as ADP may request regarding such items including, without limitation, items
which I neither conceived nor worked on but regarding which I have knowledge
because of my employment with ADP; and

 
(e)
hereby assign to ADP, it successors and assigns, exclusive right, title and
interest in and to all such items, including any patents which have been or may
be issued.

 
 
 

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8.
My obligations under this Agreement shall be binding upon me regardless of which
office(s) of ADP I am employed at or position(s) I hold and shall inure to the
benefit of any successors or assigns of ADP.  This Agreement supplements and
does not supersede any prior agreement(s) on the subject matter addressed
herein.

 
9.
If any provision of this Agreement is invalid or unenforceable, the balance of
this Agreement shall remain in effect.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New Jersey. Any waiver of
any provision of this Agreement shall be valid only if set forth in an
instrument in writing signed by ADP.  Any waiver of any provision shall not be
construed as a subsequent waiver of the same provision, or a waiver of any other
provision, of this Agreement.  I acknowledge that the terms of this Agreement
are reasonable and that I have had a reasonable opportunity to consult with an
attorney before agreeing to the terms of this Agreement.

 

 

       
/s/ Carlos A. Rodriguez
   
Carlos A. Rodriguez
         
December 14, 2011
 

 
 
 

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