AUTOMATIC DATA PROCESSING, INC.

 

SUPPLEMENTAL OFFICERS RETIREMENT PLAN

 

(as amended on May 14, 2002, as further amended on January 27, 2005,

 

and as further amended on June 15, 2006)

 

The purpose of this Supplemental Officers Retirement Plan (the “Plan”) is to
provide an additional means by which AUTOMATIC DATA PROCESSING, INC. may
attract, retain and encourage the productive efforts of a select group of
corporate vice presidents and more senior corporate officers who provide
valuable services to AUTOMATIC DATA PROCESSING, INC. and its subsidiaries. The
Plan provides supplemental retirement benefits to qualifying participants.

 

 

The Plan is as follows:

 

ARTICLE I

 

DEFINITIONS

 

The following terms when used in this Plan shall have the designated meaning,
unless a different meaning is clearly required by the context.

 

1.1        Annual Plan Benefit. The Annual Plan Benefit shall be the annual
amount of a Participant’s Plan benefit calculated in accordance with the
provisions of Section 3.1 below.

 

 

1.2

Annual Benefit Multiplier. The Annual Benefit Multiplier shall be 1-1/2%.

 

1.3        Committee. Three board members or senior officers of the Corporation
appointed from time to time by the Board of Directors of the Company.

 

 

1.4

Board. The Board of Directors of the Company.

 

 

1.5

Code. The Internal Revenue Code of 1986, as amended.

 

1.6        Company. Automatic Data Processing, Inc. (“ADP”) and its
subsidiaries, and ADP’s successors.

 

 

1.7

Early Retirement Date. The date on which a Participant attains age sixty (60).

 

1.8        Final Average Annual Pay. The average annual compensation of a
Participant for the five full consecutive calendar years during his Future
Service period during which he received the largest total amount of
compensation. For this purpose, a Participant’s “compensation” shall mean the
total compensation actually paid or accrued by the Company to or for such
Participant including, without limitation, bonuses paid or accrued (other than
any

 

 

bonuses paid or accrued under the Company’s three-year GIP growth incentive
plan) performance incentive payments and the like and restricted stock plans and
programs (other than (A) the Company’s 2005 fiscal year and 2006 fiscal year
broad-based performance-based restricted stock programs (PBRS) in which all
“letter grade” associates participated and (B) the Company’s two-year
accelerated revenue PBRS programs (i.e. the ARPs), the first of which commenced
in the Company’s 2007 fiscal year), and excluding relocation pay, compensation
derived from stock options, stock appreciation rights or any similar plans;
provided that, notwithstanding anything to the contrary set forth herein,
amounts deferred at such Participant’s election under a plan described in
section 401(k) of the Code, and the value (at time of grant) of any stock option
grant made in lieu of a bonus payment, shall be included in such Participant’s
compensation. The Company’s chief executive officer shall determine the value of
any stock option grant made in lieu of a bonus payment, which value shall not,
in any event, be: (i) greater than the “target bonus” amount of the stock option
grant was made in lieu of (the “Substituted Amount”) or (ii) less than the
amount such Participant would have received had the foregoing stock option grant
not been made and the normal bonus “scoring” methodology been applied to the
Substituted Amount, provided that such amount shall not exceed the Substituted
Amount. The value of such stock option grant shall be included in a
Participant’s compensation in the calendar year in which the bonus (which the
stock option was granted in lieu of) would have otherwise been paid or accrued.
The value (on the date that restrictions lapse) of a Participant’s restricted
stock with restrictions lapsing during the Company’s fiscal year that begins
during the applicable calendar year shall be included in the Participant’s
compensation for such calendar year.

 

1.9        Future Service. A Participant’s period of full calendar years of
continuous employment with the Company after his Plan participation has begun.
Leaves of absence of less than six months may be taken into account as Future
Service, to the extent provided by the Committee. The Committee may, in the
applicable Supplement, grant a Participant prior service credit for determining
the length of his Future Service period.

 

1.10      Government Sponsored Plan Benefits. The annual amount of benefits to
which a Participant is entitled on his Normal Retirement Date under all
government sponsored retirement benefit plans (including, without limitation,
Participant’s Social Security benefits). A Participant’s government sponsored
retirement plan benefits shall be expressed as an annual amount in the form of
an actuarially equivalent straight life annuity starting on his Normal
Retirement Date.

 

1.11      Maximum Annual Benefit Limitation. The Maximum Annual Benefit
Limitation shall be 25% of a Participant’s Final Average Annual Pay.

 

1.12      Normal Retirement Date. The date on which the Participant attains age
sixty-five (65).

 

1.13      Other Retirement Benefits. The sum of the Participant’s Private Sector
Plan Benefits and his Government Sponsored Plan Benefits.

 

 

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1.14      Participant. An individual who has been designated as a Participant by
the Committee pursuant to Article II.

 

1.15      Private Sector Plan Benefits. The annual amount of benefits to which a
Participant is entitled on his Normal Retirement Date under all retirement plans
maintained by the Company (other than this Plan), or by any former or subsequent
employer of Participant (other than a governmental body covered by Section 1.10
above), whether as a periodic payment, as a lump sum, or otherwise. A
Participant’s Private Sector Plan Benefits shall be expressed as an annual
amount in the form of an actuarially equivalent straight life annuity starting
at his Normal Retirement Date.

 

1.16      Supplement. A supplement attached to and made a part of this Plan,
which shall set forth for each Participant any special conditions applicable to
him.

 

1.17      Termination of Employment. References hereunder to a Participant’s
termination of employment, the date a Participant’s employment terminates and
the like, shall refer to the ceasing of the Participant’s employment with the
Company for any reason.

 

1.18      Vested Percentage. Except to the extent set forth in Sections 3.4 and
5.5, until a Participant completes 5 full calendar years of Future Service, such
Participant’s Vested Percentage shall be 0% and he shall not be entitled to any
Plan benefits hereunder. Upon completing 5, 6, 7, 8, 9, and 10 or more full
calendar years of Future Service, a Participant’s Vested Percentage shall be
50%, 60%, 70%, 80%, 90%, and 100%, respectively. The Committee may, in the
applicable Supplement, grant a Participant prior service credit for determining
his Vesting Percentage purposes. Any Participant who has passed the age of 55
and served as a corporate officer for more than 5 years as of the effective date
of this Plan, January 1, 1989, shall be 100% vested in all of his plan benefits
hereunder.

 

ARTICLE II

 

ELIGIBILITY

 

(a)         The Committee may at any time and from time to time (but
prospectively only) designate any corporate vice president or any more senior
corporate officer of the Company as a Participant in the Plan; provided that
such person participates to the maximum extent permissible in the Company’s
other retirement plans (including, without limitation, the Automatic Data
Processing, Inc. Retirement and Savings Plan and the Automatic Data Processing,
Inc. Pension Retirement Plan) during the entire period he is a Participant in
the Plan.

 

(b)        A person shall automatically cease to be a Participant on the earlier
to occur of the date on which: (i) he is no longer a corporate vice president or
a more senior corporate officer of the Company; or (ii) he ceases to participate
to the maximum extent permissible in the Company’s retirement plans (including,
without limitation, the Automatic Data Processing, Inc. Retirement and Savings
Plan and the Automatic Data Processing, Inc. Pension Retirement Plan).

 

 

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ARTICLE III

 

RETIREMENT BENEFITS

 

 

3.1

In General.

 

(a)         A Participant’s Annual Plan Benefit is the product of (i) his Final
Average Annual Pay, (ii) his Future Service period, (iii) the Annual Benefit
Multiplier and (iv) his Vested Percentage; provided that, in no event, may the
Participant’s Annual Plan Benefit exceed the Maximum Annual Benefit Limitation
applicable to him.

 

(b)        In addition, the Annual Plan Benefits otherwise payable to a
Participant under the Plan’s basic benefit formula set forth in Section 3.1(a)
above shall be reduced to the extent necessary to cause the total of (i)
Participant’s Annual Plan Benefits and (ii) Participant’s annual Other
Retirement Benefits not to exceed 60% of Participant’s Final Average Annual Pay.

 

(c)         A Participant’s benefits under this Plan shall be expressed as an
annual amount in the form of a straight life annuity or, at the Committee’s
election, another actuarially equivalent payment option, starting as at the date
the payments to such Participant under this Article III begin.

 

3.2        Normal Retirement Benefit. If a Participant wishes to receive Plan
benefits on and after his Normal Retirement Date, the Company will pay the
Participant a monthly benefit, starting on the first of the month after Normal
Retirement Date and ending with the payment for the month in which his death
occurs; provided that no benefit shall be paid hereunder unless and until such
Participant has ceased to be employed by the Company. Such monthly benefit shall
be one-twelfth of such Participant’s Annual Plan Benefit determined in
accordance with the provisions of Section 3.1 above.

 

3.3        Early Retirement Benefit. If a Participant wishes to receive Plan
benefits commencing on or after his Early Retirement Date and before his Normal
Retirement Date, the Company will, at Participant’s request, pay the Participant
a monthly benefit starting on the first of the month after his Early Retirement
Date after which he requested that he begin receiving benefits under the Plan
and ending with the payment for the month in which his death occurs; provided
that no benefit shall be paid hereunder unless and until such Participant has
ceased to be employed by the Company. Such monthly benefit shall be in an amount
equal to the product of the monthly benefit the Participant would have received
under Section 3.2 if the Participant had elected to commence receiving payments
under the Plan on his Normal Retirement Date, actuarially reduced to reflect the
commencement of the payment of Plan benefits before his Normal Retirement Date.
The Committee may, in its discretion, reduce a Participant’s Plan benefits by
less than a straight actuarially reduced amount if Participant begins to receive
Plan benefits after his Early Retirement Date and before his Normal Retirement
Date.

 

3.4        Disability Retirement Benefit. If a Participant shall incur a
Disability while employed by the Company, the Company shall pay such Participant
a monthly benefit starting on the first day of the calendar month after the date
his Disability begins and ending with the

 

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payment for the calendar month in which his death occurs or his disability ends,
whichever occurs first. Such monthly benefit (which shall not be reduced by, and
shall not reduce, the benefits, if any, payable to a Participant under the
Company’s Long Term Disability Insurance Program) shall be calculated in the
same way as an Early Retirement benefit under Section 3.3, based on his Final
Average Annual Pay when his Disability begins (which will, for purposes of this
Section 3.4 only, be determined over less than five full consecutive calendar
years to the extent that his Future Service period is less than five years),
except that (i) the Vested Percentage shall always be 100%, (ii) there shall not
be any actuarial reduction to reflect the commencement of the payment of
benefits before his Normal Retirement Date, and (iii) there shall not be any
Future Service period accrual during his Disability. For purposes of this
Section 3.4, “Disability” shall have the same meaning, and shall be determined
in the same manner, as it is determined under the Company’s Long Term Disability
Insurance Program as in effect on the date the Disability begins.

 

3.5        No Duplication. In no event shall benefits become payable to any
Participant under more than one Section of this Article III.

 

ARTICLE IV

 

FORFEITURES

 

4.1        Forfeiture for Competitive Employment. If a Participant violates the
non-competition provisions of any agreement he has entered into with the Company
after his employment terminates, or if his employment with the Company is
terminated on account of his dishonesty or gross negligence, such Participant
shall forever and irrevocably forfeit all benefits otherwise due him under the
terms of the Plan.

 

4.2        Limitation. If any provision of this Article IV shall be
unenforceable as a matter of law, it shall be construed to apply to the greatest
extent permitted by law so as to give effect to its intended purposes.

 

ARTICLE V

 

CONDITIONS RELATED TO BENEFITS

 

5.1        Administration of Plan. The Committee shall administer the Plan and
shall have the sole and exclusive authority to interpret, construe and apply its
provisions. The Committee shall have the power to establish, adopt and revise
such rules and regulations as it may deem necessary or advisable for the
administration of the Plan and the operation of the Committee’s activities in
connection therewith. All decisions of the Committee shall be by vote or written
consent of the majority of its members and shall be final and binding. Members
of the Committee shall be eligible to participate in the Plan while serving as a
member of the Committee, but a member of the Committee shall not vote or act
upon any matter which relates solely to such member in his capacity as a
Participant.

 

 

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5.2        Grantor Trust. The Committee may, at its discretion, have the Company
create a grantor trust (within the meaning of section 671 of the Code) in
connection with the adoption of this Plan to which it may from time to time
contribute amounts to accumulate an appropriate reserve against its obligations
hereunder. Notwithstanding the creation of such trust, the benefits hereunder
shall be a general obligation of the Company. Except to the extent that the
benefit amounts payable hereunder have been specifically transferred for an
identified Participant into the Automatic Data Processing, Inc. Retirement and
Savings Plan (the “Pension Plan”) pursuant to the terms and conditions of the
Pension Plan and are payable thereunder, a Participant shall have only a
contractual right as a general creditor of the Company to the amounts, if any,
payable hereunder and such right shall not be secured by any assets of the
Company or the trust.

 

5.3        No Right to Company Assets. Except to the extent that benefit amounts
have been specifically transferred for an identified Participant into the
Pension Plan pursuant to the terms and conditions of the Pension Plan and are
payable thereunder, neither a Participant nor any other person shall acquire by
reason of the Plan any right in or title to any assets, funds or property of the
Company whatsoever including, without limiting the generality of the foregoing,
any specific funds or assets which the Company may set aside in anticipation of
a liability hereunder, nor in any policy or policies of insurance on the life of
a Participant owned by the Company.

 

5.4        No Employment Rights. Nothing herein shall constitute a contract of
continuing employment or in any manner obligate the Company to continue the
service of a Participant, or obligate a Participant to continue in the service
of the Company, and nothing herein shall be construed as fixing or regulating
the compensation paid to a Participant.

 

5.5        Company’s Right to Terminate and Amend. The Company reserves the
right in its sole discretion at any time to amend the Plan in any respect or
terminate the Plan. Notwithstanding the foregoing, no such amendment or
termination shall reduce the amount of the benefit theretofore vested by any
Participant or change the conditions required to be satisfied to receive payment
of such past accrued benefit based on the provisions of the Plan as theretofore
in effect. For this purpose, the amount of a Participant’s accrued benefit as of
the date of any plan amendment or termination shall be determined as if the
Participant was then retiring in accordance with Section 3.3 with his actual
Vested Percentage accrued as at such date; provided that if the Company is
terminating the Plan and if a Participant has not completed at least 5 years of
Future Service, Participant’s Vested Percentage shall be (i) 40% if he has
completed 4 years of Future Service, (ii) 30% if he has completed 3 years of
Future Service, (iii) 20% if he has completed 2 years of Future Service, (iv)
10% if he has completed 1 year of Future Service, and (v) 0% if he has not
completed 1 year of Future Service.

 

5.6        Protective Provisions. The Participant shall cooperate with the
Company by furnishing any and all information requested by the Company in order
to facilitate the payment of benefits hereunder.

 

5.7        Right of Offset. If at the time any payment is to be made hereunder a
Participant is indebted to the Company or otherwise subject to a monetary claim
by the Company, the

 

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payments remaining to be paid to the Participant under the Plan may, at the
Company’s discretion, be reduced by setoff against the amount of such
indebtedness or claim.

 

5.8        No Third Party Rights. Nothing in this Plan or any trust established
pursuant to Section 5.2 hereof shall be construed to create any rights hereunder
in favor of any person (other than the Company and any Participant) or to limit
the Company’s right to amend or terminate the Plan in any manner subject to
Section 5.5 hereof.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1        Nonassignability. No rights or payments to any Participant shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, whether voluntary or involuntary, and no attempt
so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
the same shall be valid, nor shall any such benefit or payment be in any way
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any Participant or subject to levy, garnishment, attachment, execution or
other legal or equitable process. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant, nor be
transferable by operation of law in the event of a Participant’s bankruptcy or
insolvency.

 

6.2        Withholding. To the extent required by law the Company shall be
entitled to withhold from any payments due hereunder any federal, state and
local taxes required to be withheld in connection with such payment.

 

6.3        Gender and Number. Wherever appropriate herein, the masculine shall
mean the feminine and the singular shall mean the plural or vice versa.

 

6.4        Notice. Any notice required or permitted to be made under the Plan
shall be sufficient if in writing and hand delivered, or sent by registered or
certified mail, to (a) in the case of notice to the Company or the Committee,
the principal office of the Company, directed to the attention of the Secretary
of the Committee, and (b) in the case of a Participant, such Participant’s home
or business address maintained in the Company’s personnel records. Such notice
shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark or on the receipt for registration or
certification.

 

6.5        Validity. In the event any provision of this Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of this Plan.

 

6.6        Applicable Law. This Plan shall be governed and construed in
accordance with the laws of the State of New Jersey.

 

 

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ARTICLE VII

 

SPOUSAL BENEFITS

 

In the event of the death of a participant who is at least 35 years of age at
the time of his death and who is vested in accordance with the provisions of
Paragraph 1.18, the surviving spouse is entitled to receive 50% of the death
benefit which the participant would have been entitled to receive at the time of
his death. Such benefit shall be payable monthly as a straight life annuity
benefit and shall be calculated in accordance with the benefit which the
participant would have been entitled to at the normal retirement age of 65 or,
at the election of the spouse, in accordance with the early retirement provision
actuarily reduced.

 

 

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