Document:

Exhibit10.3 Q3FY15

Exhibit 10.3

AUTOMATIC DATA PROCESSING, INC. 
CORPORATE OFFICER SEVERANCE PLAN
(Effective as of May 6, 2015)

The Company hereby adopts the Automatic Data Processing, Inc. Corporate Officer Severance Plan for the benefit of corporate officers of the Company, on the terms and conditions hereinafter stated.  All capitalized terms used herein are defined in Section 1 hereof.  This Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be excluded from the definitions of “employee pension benefit plan” and “pension plan” set forth under Section 3(2) of ERISA and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations §2510.3-2(b).
		
	SECTION 1.
	DEFINITIONS.  As hereinafter used:

1.1    “Accrued Obligations” means any (a) base salary earned but not paid through the Termination Date, (b) pay for any vacation time earned but not used through the Termination Date, in each case of (a) and (b), paid no later than thirty (30) days after the Termination Date, or sooner if required by law, (c) any business expenses incurred by the Participant but unreimbursed as of the Termination Date, provided that such expenses and required substantiation and documentation thereof are submitted no later than thirty (30) days following the Termination Date and that such expenses are reimbursable under the applicable Company policy, and (d) all other vested compensation or benefits under applicable employee benefit plans in accordance with the terms of such plans (but excluding, for the avoidance of doubt, this Plan and any other plan providing for severance payments or incremental benefits upon a termination of a person’s employment with the Company).
1.2    “Action” has the meaning given such term in Section 4 hereof.
1.3     “Affiliate” means (a) any person or entity that directly or indirectly controls, is controlled by, or is under common control with the Company and/or (b) to the extent provided by the Committee, any person or entity in which the Company has a significant interest.  The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.
1.4    “Annual Base Salary” means, with respect to any Participant, such Participant’s annual base salary in effect immediately prior to the Termination Date.
1.5    “Board” means the Board of Directors of the Company.
1.6    “Cause” means (a) the good faith determination by the Committee that the Participant has ceased to perform his or her duties to the Company or an Affiliate (other than as a 

1

result of his or her incapacity due to physical or mental illness or injury), which failure amounts to an intentional and extended neglect of his or her duties to such party, provided that no such failure shall constitute Cause unless the Participant has been given notice of such failure and (if cure is reasonably possible) has not cured such act or omission within 15 days following receipt of such notice, (b) the Participant has engaged in conduct injurious to the Company or any Affiliate, (c) the Participant having been convicted of, or plead guilty or no contest to, a felony or any crime involving as a material element fraud or dishonesty, or (d) the consistent failure of the Participant to follow the lawful instructions of the Board or his or her direct superiors, which failure amounts to an intentional and extended neglect of his or her duties to the Company or any Affiliate thereof.  Any determination of whether Cause exists shall be made by the Committee in its sole discretion, subject to a good faith standard of care with respect to determinations under clause (a) above.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, or based upon the advice of counsel for the Company, shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company.  
1.7    “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto.  Reference in this Plan to any section of the Code shall be deemed to include all regulations and other interpretative guidance under such section, and any amendments and successor provisions to such section, regulations or guidance.
1.8    “Committee” means (x) with respect to any administration, determination, interpretation or action in connection with this Plan that would impact an executive officer of the Company, the Compensation Committee and (y) with respect to any administration, determination, interpretation or action in connection with this Plan that does not impact an executive officer of the Company, a committee as the Compensation Committee may appoint to administer this Plan.  As of the effective date of this Plan, the Compensation Committee has appointed a committee for purposes of clause (y) of the prior sentence that shall consist of (i) the person occupying the position of General Counsel of the Company, and (ii) the person occupying the position of Chief Human Resources Officer of the Company.  In the event of a vacancy in either the position of General Counsel or Chief Human Resources Officer, then unless the Compensation Committee otherwise determines, the Committee shall consist of the remaining person until such vacant position is filled.  Notwithstanding the foregoing, any Participant who is a member of the Committee shall recuse himself or herself from all discussions, considerations, determinations, interpretations, actions of the Committee relating to such Participant’s rights and obligations hereunder.
1.9    “Company” means Automatic Data Processing, Inc., a Delaware corporation, and any successors thereto.
1.10    “Compensation Committee” shall mean the Compensation Committee of the Board.
1.11    “Disability” has the meaning given to such term (or term of similar import) in any then-existing employment, consulting or other similar agreement between the Participant and the Company or an Affiliate or, in the absence of such an employment, consulting 

2

or other similar agreement, a condition entitling the Participant to receive benefits under a long-term disability plan of the Company or an Affiliate, or, in the absence of such a plan, the complete and permanent inability by reason of illness or accident to perform the duties of the occupation at which a Participant was employed or served when such disability commenced, as determined by the Committee based upon medical evidence acceptable to it.
1.12    “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor thereto.  Reference in this Plan to any section of ERISA shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations, or guidance.
1.13    “Participant” means an employee who is a corporate officer of the Company as of such person’s Termination Date.  Notwithstanding the foregoing, if an employee who is not a corporate officer as of such person’s Termination Date reasonably demonstrates that, in contemplation of the Qualifying Termination, the Company removed him or her from such office or position, such employee shall also be a Participant.
1.14    “PBRS” has the meaning given such term in Section 2.4(c) hereof.
1.15    “PBRU” has the meaning given such term in Section 2.4(d) hereof.
1.16    “Plan” means this Automatic Data Processing, Inc. Corporate Officer Severance Plan, as set forth herein, as it may be amended from time to time in accordance with the terms hereof.
1.17    “Prorated Bonus” means the product of (a) the annual cash bonus that the Participant would have earned for the fiscal year in which the Termination Date occurs, based on actual performance for the full fiscal year, but assuming that all non-financial and other subjective and qualitative performance criteria are achieved at a level equal to the weighted-average percentage achievement of all applicable financial and other objective and non-qualitative performance criteria, and (b) a fraction, the numerator of which is the number of calendar days completed from the first day of the fiscal year in which the Termination Date occurs through the Termination Date, and the denominator of which is 365.
1.18    “PSU” has the meaning given such term in Section 2.4(c) hereof.
1.19    “Qualifying Termination” means the involuntary termination of a person’s employment by the Company other than (i) for Cause, (ii) due to death or Disability, or (iii) a termination of a person’s employment with the Company that qualifies such person for any severance payments or benefits pursuant to the Company’s Change in Control Severance Plan for Corporate Officers, as amended.
1.20    “Release” has the meaning given such term in Section 3 hereof.
1.21    “Restricted Shares” has the meaning given such term in Section 2.4(b) hereof.

3

1.22    “Restrictive Covenant Agreement” has the meaning given such term in Section 3 hereof.
1.23     “RSUs” has the meaning given such term in Section 2.4(b) hereof.
1.24    “Section 409A” has the meaning given such term in Section 8.9 hereof.
1.25    “Severance Benefits” has the meaning given such term in Section 2.3 hereof.
1.26    “Severance Period” means, with respect to each Participant, the eighteen (18) month (or in the case of the Company’s Chief Executive Officer, the twenty-four (24) month) period following the Participant’s Termination Date.
1.27    “Special Equity Award Treatment” means the treatment of equity awards held by a Participant upon a Qualifying Termination hereunder in accordance with Section 2.4.
1.28    “Stock Options” has the meaning given such term in Section 2.4(a) hereof.
1.29    “Termination Date” means the date of a person’s Qualifying Termination.
		
	SECTION 2.
	PAYMENTS UPON QUALIFYING TERMINATION.

2.1    Generally.  Subject to the terms and conditions set forth in this Plan, a Participant shall be entitled to certain severance payments and benefits hereunder upon a Qualifying Termination.  Except as provided in Section 6 hereof, the Severance Benefits payable or provided under this Plan shall replace and supersede any severance payments or incremental benefits upon a termination of a Participant’s employment with the Company pursuant to the terms of any other plan, program, policy, agreement or arrangement.  This Plan is not intended to alter any disbursements of monies due to such Participant under retirement or similar plans, including the Company’s Amended and Restated Supplemental Officers Retirement Plan, Deferred Compensation Plan, Retirement and Savings Plan, Pension Retirement Plan, Retirement and Savings Restoration Plan, Executive Retirement Plan, or Employees’ Savings-Stock Purchase Plan, in each case, as amended.
2.2    Payment of Accrued Obligations.  The Company shall pay or provide the Accrued Obligations to each Participant who incurs a Qualifying Termination.
2.3    Severance Benefits upon Qualifying Termination.   The Company shall pay or provide to each Participant who incurs a Qualifying Termination the following severance compensation:  (a) continued payment of the Participant’s Annual Base Salary at the rate then in effect during the Severance Period in accordance with the Company’s payroll practices in effect from time to time, (b) the Prorated Bonus, paid at the same time as annual bonuses are paid to other corporate officers of the Company, but in all events during the fiscal year following the fiscal year of the Termination Date, and (c) the Special Equity Award Treatment (the amount contemplated by clauses (a), (b), and (c) collectively, “Severance Benefits”).

4

2.4    Special Equity Award Treatment.  The Special Equity Award Treatment to which a Participant shall become entitled hereunder is as follows:
(a)    The Participant’s options to purchase Company stock (“Stock Options”) that are not fully vested and exercisable on the Termination Date shall continue to vest and become exercisable in accordance with their terms during the Severance Period as if the Participant had remained employed by the Company through the end of the Severance Period.  Further, (x) the last day of the Severance Period shall be deemed the last day of the Participant’s employment with the Company for purposes of determining the period of time during which Stock Options may be exercised, and (y) to the extent that a Participant satisfies the normal retirement criteria in any Stock Option award agreement (determined as of the last day of the Severance Period), the Participant shall be entitled to the vesting and exercisability associated with that status as set forth in the applicable Stock Option award agreement.
(b)    The Participant’s unvested restricted shares of Company stock (the “Restricted Shares”) and unvested restricted stock units (the “RSUs”) that, in either case, are subject to vesting based solely on the Participant’s continued service to the Company, shall continue to vest in accordance with their terms during the Severance Period as if the Participant had remained employed by the Company through the end of the Severance Period.  RSUs that vest during the Severance Period in accordance with this Section 2.4(b) shall be settled on the later of the vesting date and the regularly scheduled settlement date for such RSU.
(c)    The number of shares of Company stock that the Participant would have been entitled to receive based on the actual achievement of the applicable performance goals in each of the then-ongoing performance-based restricted stock (“PBRS”) programs and performance stock unit (“PSU”) programs, and/or any successor programs to the PBRS and PSU programs, shall be granted by the Company to such Participant on the regular settlement date for such programs; provided, that such number of shares shall be prorated to reflect the portion of the applicable performance period elapsed from the commencement thereof through the last day of the Severance Period.
(d)    The cash amount that the Participant would have been entitled to receive based on the actual achievement of the applicable performance goals in each of the then-ongoing performance-based restricted unit (“PBRU”) programs and PSU programs, and/or any successor programs to the PBRU and PSU programs, shall be paid by the Company to such Participant on the regular settlement date for such programs; provided, that such cash amount shall be prorated to reflect the portion of the applicable performance period elapsed from the commencement thereof through the last day of the Severance Period.
		
	SECTION 3.
	RELEASE OF CLAIMS; RESTRICTIVE COVENANTS.

Except where prohibited by applicable law, all Severance Benefits hereunder shall be delayed until the Participant executes and delivers to the Company within 45 days following his or her Qualifying Termination (x) an irrevocable general release substantially in the form attached hereto as Schedule A (the “Release”), and (y) a Restrictive Covenant Agreement substantially in the form attached hereto as Schedule B (the “Restrictive Covenant Agreement”).  

5

If a Participant fails to timely execute either such Release or such Restrictive Covenant Agreement, then, unless required by applicable law, the Participant shall not be entitled to any Severance Benefits hereunder.
		
	SECTION 4.
	LITIGATION COOPERATION.

By accepting the Severance Benefits hereunder, the Participant agrees that after his or her employment by the Company or any of its Affiliates, the Participant will assist the Company and its Affiliates in the defense of any claims or potential claims that may be made or threatened to be made against the Company or any of its Affiliates in any action, suit, or proceeding, whether civil, criminal, administrative, investigative, or otherwise, that are not adverse to the Participant (an “Action”), and will assist the Company and its Affiliates in the prosecution of any claims that may be made by the Company or any of its Affiliates in any Action, to the extent that such claims may relate to the Participant’s employment or the period of the Participant’s employment by the Company or any of its Affiliates. The Participant agrees, unless precluded by law, to inform the Company promptly if the Participant is asked to participate (or otherwise become involved) in any Action involving such claims or potential claims. The Participant also agrees, unless precluded by law, to inform the Company promptly if the Participant is asked to assist in any investigation (whether governmental or otherwise) of the Company or any of its Affiliates (or their actions) to the extent that such investigation may relate to the Participant’s employment or the period of the Participant’s employment by the Company, regardless of whether a lawsuit has then been filed against the Company or any of its Affiliates with respect to such investigation.  The Company or one of its Affiliates shall reimburse the Participant for all of the Participant’s reasonable out-of-pocket expenses associated with such assistance.  Any reimbursement that is taxable income to the Participant shall be subject to applicable withholding taxes.
		
	SECTION 5.
	PLAN ADMINISTRATION.

5.1    General.  This Plan will be administrated by the Committee.  The Committee will have full authority to construe and interpret this Plan, to establish, amend, and rescind rules and regulations relating to the administration of this Plan, and to take all such actions and make all such determinations in connection with the administration of this Plan as it may deem necessary or desirable.  All determinations by the Committee will be final and binding on all interested persons, subject to Section 9.7.  
5.2    Delegation.  The Committee may delegate any of its duties hereunder to such person or persons from time to time as it may designate.
5.3    Outside Advisers.  The Committee is empowered, on behalf of this Plan, to engage accountants, legal counsel, and such other personnel as it deems necessary or advisable to assist it in the performance of its duties under this Plan.  The functions of any such persons engaged by the Committee shall be limited to the specified services and duties for which they are engaged, and such persons shall have no other duties, obligations, or responsibilities under this Plan.  Such persons shall exercise no discretionary authority or discretionary control respecting the management of this Plan.  All reasonable expenses thereof shall be borne by the Company.

6

		
	SECTION 6.
	MITIGATION; CLAWBACK; OFFSET.

6.1    Mitigation.  No Participant entitled to receive Severance Benefits shall be required to seek other employment or to attempt in any way to reduce any amounts payable to him or her pursuant to this Plan.  The Severance Benefits payable or provided hereunder shall not be reduced by any compensation earned by the Participant as a result of employment by another employer or otherwise.  
6.2    Clawback.  The Severance Benefits payable or provided hereunder shall be subject to a clawback, recoupment or forfeiture action by the Company pursuant to the terms of any Company clawback policy or underlying award agreement.   
6.3    Offset.  If a Participant is entitled under law to receive severance pay, a termination indemnity, notice pay, or the like, or if a Participant is entitled under law to receive advance notice of separation, then any Severance Benefits payable hereunder shall be offset or reduced by the amount of any such severance pay, termination indemnity, notice pay, or the like, as applicable, and by the amount of any compensation received, or equity that vests, during any such notice period.
		
	SECTION 7.
	PLAN MODIFICATION OR TERMINATION.

This Plan may be amended or terminated by the Compensation Committee at any time; provided that, except for amendments to comply with changes in applicable law or with a Participant’s consent, no such amendment or termination may reduce the benefits and payments due hereunder with respect to a Participant who previously incurred a Qualifying Termination and who has not forfeited such payments and benefits pursuant to the terms of this Plan. 
		
	SECTION 8.
	GENERAL PROVISIONS.

8.1    Transferability of Rights.  Except as otherwise provided herein or by law, no right or interest of any Participant under this Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including, without limitation, by execution, levy, garnishment, attachment, pledge, or in any other manner; no attempted assignment or transfer thereof shall be effective; and no right or interest of any Participant under this Plan shall be subject to any obligation or liability of such Participant.  If a Participant who incurs a Qualifying Termination shall be unable to care for his or her affairs, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to his or her legal guardian or personal representative of the Participant.  If a Participant who incurs a Qualifying Termination shall die thereafter while any amount would still be payable to him or her hereunder if such Participant had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the executor, personal representative, or administrators of the estate of the Participant whose employment was terminated.
8.2    Rights of Participants. Nothing contained herein shall be held or construed to create any liability or obligation on the Company to retain any Participant in its service or in a 

7

corporate officer position.  All Participants shall remain subject to discharge or discipline to the same extent as if this Plan did not exist.
8.3    Severability. Should any provision of this Plan be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions of this Plan unless such determination shall render impossible or impracticable the functioning of this Plan, and in such case, an appropriate provision or provisions shall be adopted so that this Plan may continue to function properly.
8.4    Assignment.  The Company may assign its rights and obligations under this Plan to any hereafter-cited person without the consent of any Participant in the event that the Company hereafter affects a reorganization, consolidation with, or merger into, any person or entity or transfers all or substantially all of its properties or assets to any person or entity, provided that the assignee assumes the obligations hereunder in writing.  This Plan shall inure to the benefit of and be binding upon the heirs, executors, administrators, successors, and assigns of the parties, including, without limitation, each Participant, present and future, and each successor or assignee to the Company pursuant to the first sentence hereof.  
8.5    Headings.  The headings of this Plan are inserted for convenience of reference only and shall have no effect upon the meaning of the provisions hereof.
8.6    Funding.  This Plan shall be funded out of the general assets of the Company as and when benefits are payable under this Plan.  All Participants shall be solely general creditors of the Company.
8.7    Notices.  Any notice or other communication required or permitted pursuant to the terms hereof shall have been duly given when delivered or mailed by United States mail, first class, postage prepaid, addressed to the intended recipient at the addressee’s last known address.
8.8    Withholding. The Company shall have the right to make such provisions as it deems necessary or appropriate to satisfy any obligations it reasonably believes it may have to withhold federal, state or local income or other taxes incurred by reason of payments pursuant to this Plan.
8.9    Section 409A.  For purposes of Section 409A of the Code (“Section 409A”), each of the payments that may be made under this Plan are designated as separate payments.  It is intended that the provisions of this Plan comply with Section 409A, and all provisions of this Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding the foregoing, a Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for such Participant’s account in connection with this Plan (including, without limitation, any taxes and penalties under Section 409A), and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold the Participant (or any beneficiary) harmless from any or all of such taxes or penalties.  Notwithstanding anything in this Plan to the contrary, in the event that a Participant is deemed a 

8

“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments that are “deferred compensation” subject to Section 409A that are made by reason of a “separation from service” within the meaning of Section 409A shall be made to the Participant prior to the date that is six (6) months after the date of such “separation from service” or, if earlier, such Participant’s date of death.  Immediately following such delay period, all such delayed payments will be paid in a single lump sum without interest.  In addition, for purposes of this Plan, with respect to payments of any amounts that constitute “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.  Except as permitted under Section 409A or with respect to a clawback, recoupment or forfeiture action by the Company pursuant to the terms of any Company clawback policy, no deferred compensation that is subject to Section 409A and is payable to or for a Participant’s benefit under any Company-sponsored plan, program, agreement, or arrangement may be reduced by, or offset against, any amount owing by such Participant to the Company or any Affiliate.
		
	SECTION 9.
	CLAIMS, INQUIRIES, APPEALS.

9.1    Applications for Benefits and Inquiries.  Any application for benefits, inquiries about this Plan, or inquiries about present or future rights under this Plan must be submitted to the Committee in writing, as follows:
Automatic Data Processing, Inc. 
One ADP Boulevard 
Roseland, New Jersey   07068 
Attn:  Committee – Corporate Officer Severance Plan
9.2    Denial of Claims.
(a)    In the event that any application for benefits is denied in whole or in part, the Committee must notify the applicant, in writing, of the denial of the application, and of the applicant’s right to review the denial.  The written notice of denial will be set forth in a manner designed to be understood by the Participant and will include specific reasons for the denial, specific references to the pertinent Plan provision upon which the denial is based, if applicable, a description of any additional material or information necessary for the applicant to provide in order to perfect the claim and an explanation as to why such material or such information is necessary and steps for the applicant to submit his or her claim for further review.
(b)    This written notice will be given to the Participant within ninety (90) days after the Committee receives the application, unless special circumstances require an extension of time, in which case, the Committee shall have up to an additional ninety (90) days for processing the application.  If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.

9

(c)    This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Committee is to render its decision on the application.  If written notice of denial of the application for benefits is not furnished within the specified time, the application shall be deemed denied.  The applicant will then be permitted to appeal the denial in accordance with the review procedure described below.
9.3    Request for a Review.  Any person (or that person’s authorized representative) for whom an application for benefits is denied (or deemed denied), in whole or in part, may appeal the denial by submitting a request for a review to the Committee within sixty (60) days after the application is denied (or deemed denied).  The Committee will give the applicant (or that person’s authorized representative) an opportunity to review pertinent documents in preparing a request for a review and submit written comments, documents, records, and other information relating to the claim.  A request for a review shall be in writing and shall be addressed to the address set forth above in Section 9.1.  A request for review must set forth all of the grounds on which it is based, all facts in support of the request, and all other matters that the applicant feels are pertinent.  The Committee may require the applicant to submit additional facts, documents, or other material as it may find necessary or appropriate in making its review.
9.4    Decision on Review.  The Committee will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review.  If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period.  The Committee will give prompt, written notice of its decision to the applicant.  In the event that the Committee confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by the applicant, the specific Plan provisions upon which the decision is based.  If written notice of the Committee’s decision is not given to the applicant within the time prescribed in this Section 9.4, the application will be deemed denied on review.
9.5    Rules and Procedures.  The Committee may establish rules and procedures, consistent with this Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims.  The Committee may require an applicant who wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the applicant’s own expense.
9.6    Exhaustion of Remedies.  No legal action for benefits under this Plan may be brought until the claimant (a) has submitted a written application for benefits in accordance with the procedures described by Section 9.1 above, (b) has been notified by the Committee that the application is denied (or the application is deemed denied due to the Committee’s failure to act on it within the established time period), (c) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 9.3 above, and (d) has been notified in writing that the Committee has denied the appeal (or the appeal is deemed denied due to the Committee’s failure to take any action on the claim within the time prescribed by Section 9.4 above).
9.7    Choice of Law; Venue; Jurisdiction; Waiver of Jury Trial.

10

(a)    The construction and administration of this Plan and any dispute, claim or controversy arising under, out of, in connection with or in relation to this Plan, shall be governed by and construed in accordance with the laws of the State of New Jersey, without giving effect to any choice of law principles of such state that would require or permit the application of the laws of another jurisdiction.  The Participant and the Company (on behalf of itself and its Affiliates) each consent to the personal jurisdiction of, and venue in, any state or federal court located in the State of New Jersey in the event of any dispute, claim or controversy arising under, out of, in connection with or in relation to this Plan, and each waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or venue and waives any objection to jurisdiction or venue based on improper venue or improper jurisdiction or venue. 
(b)    EACH OF THE COMPANY AND THE PARTICIPANT HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING ANY DISPUTE ARISING UNDER, OUT OF, IN CONNECTION WITH OR IN RELATION TO THIS PLAN.

11Exhibit10.4 Q3FY15

Exhibit 10.4

AUTOMATIC DATA PROCESSING, INC. 2008 OMNIBUS AWARD PLAN
FORM OF PERFORMANCE STOCK UNIT AWARD AGREEMENT

AUTOMATIC DATA PROCESSING, INC. (the “Company”), pursuant to the 2008 Omnibus Award Plan (the “Plan”), hereby irrevocably grants you (“Participant”), on [DATE] (the “Grant Date”), a Performance Stock Unit Award (the “Award”) of forfeitable performance stock units of the Company (“PSUs”), each PSU representing the right to receive one share of the Company’s common stock, par value $0.10 per share (“Common Stock”), subject to the restrictions, terms and conditions herein.
WHEREAS, Participant has been selected as a participant in the three-year performance stock unit program of the Company covering the Company’s 20[XX], 20[XX] and 20[XX] fiscal years, as described in the letter previously provided to Participant (the “PSU Award Letter”); and
WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors of the Company has determined that it would be in the best interests of the Company and its stockholders to grant the award provided for herein to Participant, on the terms and conditions described in this Performance Stock Unit Award Agreement (this “Agreement”).
NOW, THEREFORE, for and in consideration of the promises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, for themselves, and their permitted successors and assigns, hereby agree as follows:
		
	1.
	Terms and Conditions.

(a)Award.  Subject to the other terms and conditions contained in this Agreement, the actual number of PSUs that are earned, if any, pursuant to the terms and conditions of the Award will be determined by the Company (the “Total Award”) and shall be computed in accordance with Section 3 below, as a percentage of the sum of (i) the Target Number of PSUs set forth in the PSU Award Letter (the “Target Award”) plus (ii) any Dividend Equivalent PSUs (as defined below).  The Total Award shall be a whole number of PSUs only.
(b)Performance Period; Measurement Period.  Subject to the other terms and conditions contained in this Agreement, the performance period for the Award commenced on July 1, 20[XX] and shall terminate on June 30, 20[XX] (the “Performance Period”).  During the Performance Period there will be three (3) separate measurement periods of the Company’s performance based on the Company’s earnings per share (“EPS”) growth for each of the Company’s fiscal years in the Performance Period (each such fiscal year, a “Measurement Period”).  
(c)Dividend Equivalents.  Until shares of Common Stock are delivered to Participant in respect of the settlement of the Award, at no time shall Participant be deemed for any purpose to be the owner of shares of Common Stock in connection with the Award and Participant shall have no right to dividends in respect of the Award; provided, however, that each time the Company pays a dividend with respect to a share of Common Stock during the period from the Grant Date to the Payout Date (as defined below), Participant shall be credited with an additional number of PSUs (the “Dividend Equivalent PSUs”) equal to (i) the quotient obtained by dividing the amount of such dividend by the Fair Market Value (as defined in the Plan) of a share of Common Stock on such date, multiplied by (ii) the Target Award.

1

    

(d)Settlement.  For Participants whose home country is the United States, subject to the other terms and conditions contained in this Agreement, the Company shall settle the Award by causing one share of Common Stock for each PSU in the Total Award that is outstanding (and not previously forfeited) as of the Payout Date to be registered in the name of Participant and held in book-entry form on the Payout Date. For Participants whose home country is not the United States, subject to the other terms and conditions contained in this Agreement, the Company shall settle the Award by the payment to the Participant in cash (without interest) of an amount equal to the Fair Market Value of the PSUs (the U.S. dollar value of your PSUs will be converted into your local currency using the exchange rate determined by the Company) on the Payout Date, in each case, subject to applicable withholding taxes. 
		
	2.
	Forfeiture of PSUs.  

(a)    Termination of Employment Generally.  Except as otherwise determined by the Company in its sole discretion or as provided in Section 2(b) or Section 3(d) below, all PSUs and Dividend Equivalent PSUs shall be forfeited without consideration to Participant upon Participant’s termination of employment with the Company or its Affiliates for any reason (and Participant shall forfeit any rights to receive shares of Common Stock or cash in respect of the Award).
(b)    Termination due to Death, Disability or Retirement.  In the event that after completion of the first Measurement Period in the Performance Period but prior to the end of the Performance Period, Participant’s employment with the Company is terminated due to death, Disability (as defined in the Plan) or retirement (defined for purposes of this Agreement as voluntary termination of employment at or after age 65, or age 55 with 10 years of service with the Company or its Affiliates), Participant shall be entitled to receive a pro-rata portion of the Award determined in accordance with Section 3.  For the avoidance of doubt, if a Participant’s employment is terminated prior to June 30, 20[XX] due to death, Disability or retirement, the Award and any rights to receive shares of Common Stock, cash and Dividend Equivalent PSUs with respect thereto, will be forfeited without consideration.
		
	3.
	    Performance Determinations. 

(a)    Subject to the other terms and conditions contained in this Agreement, prior to or during each Measurement Period, the Company will adopt a schedule setting forth for such Measurement Period potential ranges of the Company’s EPS growth relative to the prior fiscal year’s EPS.  If Participant is employed with the Company or its Affiliates at the completion of the Performance Period, then following completion of the Performance Period the Company will determine the Total Award, calculated as the number (rounded down to the nearest whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent PSUs and (ii) the Final Payout Percentage.
(b)    If Participant’s employment with the Company or its Affiliates has terminated after the first Measurement Period within the Performance Period but prior to the end of the Performance Period due to death or Disability, then as soon as administratively feasible (in the Committee’s sole discretion) following such termination the Company will determine the Total Award, calculated as the number (rounded down to the nearest whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent PSUs, (ii) the Final Payout Percentage, and (iii) the Pro-Rata Percentage.  
(c)    If Participant’s employment with the Company and its Affiliates has terminated after the first Measurement Period within the Performance Period but prior to the end of the Performance Period due to retirement, then following completion of the Performance Period the Company will determine the Total Award, calculated as the number (rounded down to the nearest 

2

    

whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent PSUs, (ii) the Final Payout Percentage, and (iii) the Pro-Rata Percentage.
(d)    If Participant’s employment with the Company or its Affiliates (or any successor thereto) is terminated within 24 months following a Change in Control either (x) by the Company or its Affiliates (or any successor thereto) without Cause (as defined in the Company’s Change in Control Severance Plan for Corporate Officers, as amended (the “CIC Plan”)) or (y) by Participant with Good Reason (as defined in the CIC Plan), then as soon as administratively feasible following such termination by the Company or its Affiliates (or any successor thereto), the Company (or any successor thereto) will determine the Total Award, calculated as the number (rounded down to the nearest whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent PSUs and (ii) the Final Payout Percentage.
(e)    If in connection with a Change in Control the successor company, or a parent of the successor company, in the Change in Control does not agree to assume, replace, or substitute the PSUs granted hereunder (as of the consummation of such Change in Control) with PSUs on substantially identical terms, as determined by the Committee, then as of immediately prior to such Change in Control, the Company will determine the Total Award, calculated as the number (rounded down to the nearest whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent PSUs and (ii) the Final Payout Percentage.
(f)    For purposes of this Agreement:
(i)“Final Payout Percentage” is a number, expressed as a percentage, equal to the sum of each Yearly Performance Percentage during the Performance Period, divided by 3; provided, however, that if the Company’s total shareholder return (“TSR”) for the Performance Period is not positive, then the Final Payout Percentage shall not exceed 100% (the “TSR Cap”); provided, further, that the TSR Cap shall not apply to any Participant whose employment terminates due to death or Disability prior to completion of the Performance Period or if a Change of Control occurs prior to the completion of the Performance Period.
(ii)“Payout Date” shall be: 
•September 20[XX] or as soon as administratively feasible (but not later than 60 days) thereafter if Participant remains employed with the Company or its Affiliates until the end of the Performance Period; 
•September 20[XX] or as soon as administratively feasible (but not later than 60 days) thereafter if Participant’s employment with the Company and its Affiliates terminates due to retirement after completion of the first Measurement Period in the Performance Period but prior to the end of the Performance Period; provided that if Participant subsequently dies or becomes Disabled during the Performance Period, the Payout Date shall be as soon as administratively feasible (but not later than 60 days) after Participant’s death or Disability; 
•as soon as administratively feasible (but not later than 60 days) after termination of employment if Participant’s employment with the Company and its Affiliates terminates due to death or Disability after completion of the first Measurement Period in the Performance Period but prior to the end of the Performance Period, or if Section 3(d) applies; and
•immediately prior to the Change in Control if Section 3(e) applies. 

3

    

(iii)“Pro-Rata Percentage” is a number, expressed as a percentage, equal to the quotient of (i) the number of completed months from July 1, 20[XX] until the date of Participant’s termination of employment, divided by (ii) 36.
(iv)“Yearly Performance Percentage” is a number, expressed as a percentage, determined by the Company using straight line interpolation between the low and high of the EPS growth range for each Measurement Period based upon the Company’s actual EPS growth for such Measurement Period; provided, that if Participant’s employment with the Company and its Affiliates terminates due to death or Disability after completion of the first Measurement Period in the Performance Period but prior to the end of the Performance Period, the Yearly Performance Percentage will be deemed to be 100% for each Measurement Period in the Performance Period not completed prior to Participant’s termination of employment; provided, further, that if Participant’s employment with the Company and its Affiliates terminates due to retirement after completion of the first Measurement Period in the Performance Period and Participant subsequently dies or becomes Disabled prior to completion of the Performance Period, the Yearly Performance Percentage will be deemed to be 100% for each Measurement Period in the Performance Period not completed prior to Participant’s death or Disability; provided, further, that in the event of a Change in Control, then the Yearly Performance Percentage will be deemed to be 100% for each Measurement Period in the Performance Period not completed prior to such Change in Control.
(g)    All determinations with respect to the Award or this Agreement by the Company or Committee, including, without limitation, determinations of EPS, EPS growth, TSR, Yearly Performance Percentage and Pro-Rata Percentage, and timing of settlements, shall be within the Company’s absolute discretion and shall be final, binding and conclusive on Participant. 
		
	4.
	Restrictive Covenant; Clawback; Incorporation by Reference. 

(a)    Restrictive Covenant.  The effectiveness of the Award granted hereunder is conditioned upon the execution and delivery by Participant within ninety (90) days from the date of the Award of the restrictive covenant furnished herewith.  If the Company does not receive the signed (whether electronically or otherwise) restrictive covenant within such ninety (90) day period, the Award shall be terminable by the Company.
(b)    Clawback/Forfeiture.  Notwithstanding anything to the contrary contained herein, the PSUs may be forfeited without consideration if Participant, as determined by the Committee in its sole discretion (i) engages in an activity that is in conflict with or adverse to the interests of the Company or any Affiliate, including but not limited to fraud or conduct contributing to any financial restatements or irregularities, or (ii) without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement between Participant and the Company or any Affiliate.  If Participant engages in any activity referred to in the preceding sentence, Participant shall, at the sole discretion of the Committee, forfeit any gain realized in respect of the PSUs (which gain shall be deemed to be an amount equal to the Fair Market Value, on the applicable Payout Date, of the shares of Common Stock or cash delivered to Participant under this Award), and repay such gain to the Company.
(c)    Incorporation by Reference, Etc.  The provisions of the Plan are hereby incorporated herein by reference.  Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan.  In the event of any inconsistency between this Agreement and the terms of the CIC Plan that would otherwise apply to the PSUs herein granted, the terms of this Agreement shall control. For the avoidance of doubt: (1) the terms of Section 1.2 of the CIC Plan shall not apply to the PSUs granted under this Agreement, and (2) any acceleration 

4

    

of vesting of the PSUs herein granted shall be deemed to be accelerated under the terms of the CIC Plan for purposes of Section 1.3 of the CIC Plan.
		
	5.
	Compliance with Legal Requirements.  The granting and delivery of the Award, and any other obligations of the Company under this Agreement, shall be subject to all applicable federal, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required.  

		
	6.
	Transferability.  No PSUs may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate.

		
	7.
	Miscellaneous.

(a)    Waiver.  Any right of the Company contained in this Agreement may be waived in writing by the Committee.  No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages.  No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach. 
(b)    Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. 
(c)    No Right to Employment.  Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge Participant with or without cause at any time for any reason whatsoever.  Although over the course of employment terms and conditions of employment may change, the at-will term of employment will not change.
(d)    Successors.  The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, Participant and Participant’s beneficiaries, executors, administrators, heirs and successors.  
(e)    Entire Agreement.  This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto.  No change or modification of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent of Participant under the Plan.
(f)    Governing Law.  This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware. 
(g)    Headings.  The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement. 

5

    

AUTOMATIC DATA PROCESSING, INC.

________________________________________

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]