EX-10.1







	 	 	 	 	 



EXHIBIT
10.1




PAYCHEX, INC.


2002 STOCK INCENTIVE PLAN


(as amended and restated effective October 12, 2005)




RESTRICTED STOCK AWARD AGREEMENT





     1. Grant of Restricted Stock. This Restricted Stock Award Agreement (the “Award
Agreement”), dated July 10, 2008, sets forth the terms and conditions of the Restricted Stock (the
“Award”) granted to you by the Governance and Compensation Committee (the “Committee”) of the Board
of Directors of Paychex, Inc. (the “Company”) under the Company’s 2002 Stock Incentive Plan, as
amended and restated effective October 12, 2005 (the “Plan”), as described on your Award Notice.
The Award is subject to all of the provisions of the Plan, which is hereby incorporated by
reference and made a part of this Award Agreement. The capitalized terms used in this Award
Agreement are defined in the Plan.



     2. Restriction and Vesting.


          (a) Subject to the terms set forth in this Award Agreement and the Plan, unless earlier vested
under Section 2(b) of this Award Agreement, provided you are still a full-time employee of the
Company at that time, all of the Shares represented by the Award will vest on the fifth anniversary
of the date of grant set forth on your Award Notice (a “Vesting Date”).


          (b) Notwithstanding Section 2(a) of this Award Agreement, for each of the following fiscal
years of the Company, if the Company’s operating income, excluding interest on funds held for
clients (“Operating Income”), for such fiscal year equals or exceeds the following target for such
fiscal year, then, provided you are still a full-time employee of the Company, one-third of the
total number of Shares represented by the Award shall vest upon the confirmation by the Committee
of such fiscal year’s Operating Income (also a “Vesting Date”):



	 	 	 	 	 	 	 
	Fiscal Year	 	Target Operating Income
	 
	2009	 	 	$	787,022,000	 
	 
	2010	 	 	$	905,075,000	 
	 
	2011	 	 	$	1,040,836,000	 
	 
	2012	 	 	$	1,196,961,000	 





          (c) Except in the event of your death or Disability, if your employment terminates before a
Vesting Date for any reason, including, but not limited to, Retirement, then the unvested portion
of the Award shall be forfeited and cancelled immediately. If your employment terminates due to
death or Disability, your Award shall immediately become 100% vested.



     3. Book-Entry Registration. The Award initially will be evidenced by book-entry
registration only, without the issuance of a certificate representing the Shares underlying the
Award.



     4. Issuance of Shares. The Company shall, when the conditions to vesting specified in
Section 2 of this Award Agreement are satisfied, issue a certificate or certificates representing
the
Shares underlying the Award that have vested as promptly as practicable following the Vesting Date of such Shares.



 









 





     5. Rights as a Stockholder. Except as otherwise provided by this Section, you will
have the rights of a stockholder with respect to the Shares underlying the Award, including, but
not limited to, the right to receive such cash dividends, if any, as may be declared on such Shares
from time to time and the right to vote (in person or by proxy) such Shares at any meeting of
stockholders of the Company. Notwithstanding the foregoing, the dividends paid on any unvested
Shares shall be retained by the Company and held in escrow, trust or similar manner, and shall only
be paid to you upon the vesting of the underlying Shares to which the dividends relate; upon the
forfeiture of any Shares represented by the Award, your right to the dividends paid on the
underlying Shares which are forfeited shall also be forfeited.



     6. Restrictions on Transfer of Shares. The Award, and the right to vote the Shares
underlying the Award and to receive dividends thereon, may not, except as otherwise provided in the
Plan, be sold, assigned, transferred, pledged or encumbered in any way prior to the vesting of such
Shares, whether by operation of law or otherwise, except by will or the laws of descent and
distribution. After a Vesting Date, the vested Shares may be issued during your lifetime only to
you, or after your death to your designated beneficiary, or, in the absence of such beneficiary, to
your duly qualified personal representative.



     7. Withholding. The grant and the vesting of the Award 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 such grant or vesting. The payment of such
withholding taxes to the Company may be made (i) by you in cash or by check, (ii) subject to the
consent of the Company and in accordance with any guidelines established by the Committee, by the
Company retaining the number of the Shares that would otherwise be delivered to you upon vesting
that have an aggregate Fair Market Value (at the time retained by the Company) equal to the amount
of withholding taxes (using your minimum required tax withholding rate or such other rate that the
Company determines will not trigger a negative accounting impact to the Company) required to be
paid, or (ii) by the Company or any Affiliate withholding such taxes from any other compensation
owed to you by the Company or any Affiliate. Unless you make arrangements prior to vesting to pay
withholdings taxes in cash or by check, or to have such withholding taxes withheld from other
compensation owed to you by the Company or any Affiliate, then at the time of vesting, the Company
shall have the right to retain the number of the Shares that would otherwise be delivered to you
upon vesting that have an aggregate Fair Market Value (at the time retained by the Company) equal
to the amount of withholding taxes (using your minimum required tax withholding rate or such other
rate that the Company determines will not trigger a negative accounting impact to the Company)
required to be paid.



     8. Limitation of Rights. Neither the Plan, the granting of the Award, the Award
Notice nor this Award Agreement gives you any right to remain in the employment of the Company or
any Affiliate.



     9. Non-competition, Non-solicitation, Confidentiality, and Detrimental Conduct.
In
 consideration for the Award, you agree that during your employment and for a period of twelve (12)
months following termination of employment for any reason,  you will not, directly or indirectly, either
as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, board
member, director, or in any other individual or representative capacity, engage or attempt to engage in
any activity that is competitive to the business of the Company within the geographic and substantive
area or areas of responsibility assigned to the you during the last 24 months of employment.  In
addition, you agree that for a period of eighteen (18) months following the termination of employment



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for any reason, you will not directly or indirectly by assisting others, solicit Company clients, prospects
 or referral resources; nor will you recruit or hire, or attempt to recruit or hire any other employee of
Company or its affiliates, or induce or attempt to induce any employee of Company to terminate
 employment with Company. You also agree and acknowledge that during the course of your
employment with the Company, you will obtain, have access and be privy to nonpublic information
important to the Company’s business solely as a result of employment with the Company, which
information you hereby acknowledge and agree to be confidential (“Confidential Information”).  You
agree that during and after employment, you shall not divulge or make use of any Confidential
 Information, directly or indirectly, personally or on behalf of any other person, business, corporation,
or entity without prior written consent of the Company.  You further agree that you will not, during
your employment, engage in conduct which is detrimental to the Company, including violation of the
Company’s Code of Business Ethics and Conduct, criminal conduct, fraud, or willful misconduct.
 These covenants are not intended to, and do not, limit in any way the rights and remedies provided to
the Company under the Plan, other agreements with you, or under common or statutory law.



10. Repayment of Financial Gain.


          (a) If you fail to comply with Section 9 of this Award Agreement, the Company may cancel any
unvested portion of this Award and recover from you the total number or Vesting Date value of
Shares whose Vesting Date occurred pursuant to this Award during the 24-month period preceding your
breach of any covenant in Section 9 of this Award Agreement. The total number or value of the
vested Shares shall include the amount of any dividends paid to you during the 24-month period
specified above and shall not be reduced for the payment of applicable taxes or other amounts.


          (b) If you fail to comply with Section 9 of this Award Agreement, upon demand by the Company,
you will repay the Company in accordance with the terms of Section 10(a), and the Company shall be
entitled to offset the amount of any such repayment obligation against any amount owed to you by
the Company. The remedies set forth in this Section are in addition to any other remedies the
Company may have, at law or equity, for your violation of the terms of this Award Agreement.



     11. Rights of Company and Affiliates. This Award Agreement does not affect the right
of the Company or any Affiliate to take any corporate action whatsoever, including without
limitation its right to recapitalize, reorganize or make other changes in its capital structure or
business, merge or consolidate, issue bonds, notes, Shares or other securities, including preferred
stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or
business.



     12. Plan Controls. In the event of any conflict among the provisions of the Plan and
this Award Agreement, the provisions of the Plan will be controlling and determinative.



     13. Amendment. Except as otherwise provided by the Plan, the Company may only alter,
amend or terminate the Award with your consent.



     14. Governing Law. This Award Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except as superseded by applicable federal law,
without giving effect to its conflicts of law provisions. All parties consent to exclusive
personal jurisdiction in New York courts and agree that venue shall be New York State Supreme
Court, Monroe County.



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