Document:

exv10w23

EXHIBIT 10.23

PAYCHEX, INC.

2002 STOCK INCENTIVE PLAN

(as amended and restated effective October 13, 2010)

FORM OF NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (OFFICER)

LONG TERM INCENTIVE PROGRAM (“LTIP”)

      1. Grant of Option. This Non-qualified Stock Option Award Agreement (the
“Award Agreement”), made as of [grant date], serves to notify you that the Governance and
Compensation Committee (the “Committee”) of the Board of Directors of Paychex, Inc. (the “Company”)
hereby grants to you, under the Company’s 2002 Stock Incentive Plan, as amended and restated
effective October 13, 2010 (the “Plan”), a Non-Qualified Stock Option (the “Option”) to purchase,
on the terms and conditions set forth in this Award Agreement and the Plan, up to the number of
shares of the Company’s $.01 par value common stock (the “Common Stock”) set forth on the attached
statement at the price of [exercise price] per share. The Plan is incorporated herein by reference
and made a part of this Award Agreement. You may obtain a copy of the Plan from the Office of the
Corporate Secretary. You should review the terms of this Award Agreement and the Plan carefully.
The capitalized terms used in this Award Agreement are defined in the Plan.

     2. Term. Unless the Option is previously terminated pursuant to the terms of this
Award Agreement or the Plan, the Option will expire at the close of business on July 6, 2021 (the
“Expiration Date”).

     3. Vesting. Vesting is contingent on your continued employment with the Company or
one of its affiliates through the vesting dates. Subject to the terms set forth in this Award
Agreement and the Plan, the Option will vest and become exercisable as follows:

          (a) Accelerated Vesting. Upon the Committee’s review and certification of the 2014 Service
Revenue and 2014 Operating Income following completion of fiscal year 2014:

               (i) (A) 25% of the Option shall vest and become exercisable if the Service Revenue for the
2014 fiscal year equals or exceeds the 2014 Service Revenue Target set forth on the attached
statement; and

                    (B) if the 2014 Service Revenue Target is not achieved but the Service Revenue for the 2014
fiscal year equals or exceeds 95% of the 2014 Service Revenue Target, then on or between 12.5% of
the Option and 25% of the Option shall vest, determined using straight-line interpolation; and

               (ii) (A) 25% of the Option shall vest and become exercisable if the Operating Income for the
2014 fiscal year equals or exceeds the 2014 Operating Income Target set forth on the attached
statement;

                    (B) if the 2014 Operating Income Target is not achieved but the Operating Income for the 2014
fiscal year equals or exceeds 95% of the 2014 Operating Income

 

 

Target, then on or between 12.5% of the Option and 25% of the Option shall vest, determined using
straight-line interpolation.

          (b) Regular Vesting. Upon the Committee’s review and certification of the 2016 Service
Revenue and 2016 Operating Income following completion of fiscal year 2016:

               (i) (A) 50% of the Option (less any portion of the Option that previously vested pursuant to
Section 3(a)(i)) shall vest and become exercisable if the Service Revenue for the 2016 fiscal year
equals or exceeds the 2016 Service Revenue Target set forth on the attached statement;

                    (B) if the 2016 Service Revenue Target is not achieved but the Service Revenue for the 2016
fiscal year equals or exceeds 95% of the 2016 Service Revenue Target, then on or between 25% of the
Option (less the portion of the Option that previously vested pursuant to Section 3(a)(i)) and 50%
of the Option (less the portion of the Option that previously vested pursuant to Section 3(a)(i))
shall vest, determined using straight-line interpolation; and

               (ii) (A) 50% of the Option (less the portion of the Option that previously vested pursuant to
Section 3(a)(ii)) shall vest and become exercisable if the Operating Income for the 2016 fiscal
year equals or exceeds the 2016 Operating Income Target set forth on the attached statement;

                    (B) if the 2016 Operating Income Target is not achieved but the Operating Income for the 2016
fiscal year equals or exceeds 95% of the 2016 Operating Income Target, then on or between 25% of
the Option (less the portion of the Option that previously vested pursuant to Section 3(a)(ii)) and
50% of the Option (less the portion of the Option that previously vested pursuant to Section
3(a)(ii)) shall vest, determined using straight-line interpolation.

               (c) The portion of the Option, if any, which does not vest pursuant to Section 3(a) or 3(b)
shall be forfeited.

“Service Revenue” and “Operating Income” for a specified period mean the Service Revenue and
Operating Income, respectively, each as determined by the values reported in the Company’s annual
audited financial statements for such period, but in each case excluding the following: interest
on funds held for clients and/or investment income; asset write-downs or impairments; litigation or
claim judgments or settlements; changes in tax law, or other such laws or provisions affecting
reported results; cumulative effect of accounting changes as defined by generally accepted
accounting principles, and as identified in the Company’s audited financial statements;
restructuring charges; severance, contract termination and other costs related to entering or
exiting certain business activities; and gains or losses from the acquisition or disposition of
businesses or assets or from the early extinguishment of debt and related discontinued operations
of such disposition of businesses, or other extraordinary, unusual or non-recurring items.
Notwithstanding the Plan language to the contrary, results of operations from acquired businesses
shall not be excluded.

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4. Exercise.

          (a) Method of Exercise. To the extent exercisable under Section 3 of this Award Agreement,
the Option may be exercised in whole or in part, provided that the Option may not be exercised for
less than one share of Common Stock in any single transaction. The Option may be exercised using a
method specified by the Company.

          (b) Payment of Exercise Price. The exercise of the Option is conditioned upon your payment to
the Company of the Exercise Price for the number of shares of Common Stock that you elect to
purchase. The Exercise Price may be paid in cash or by check or by way of a broker-assisted stock
option exercise program, if such a program is made available by the Company at the time of the
exercise of the Option.

          (c) Withholding. The exercise of the Option 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 the exercise. The payment of such withholding taxes to the
Company may be made (i) by you in cash or by check, (ii) by the Company or any Affiliate
withholding such taxes from any other compensation owed to you by the Company or any Affiliate; or
(iii) by way of a broker-assisted stock exercise program, if such program is made available by the
Company at the time of the exercise of the Option.

          (d) Issuance of Shares. Upon determining that compliance with this Award Agreement has
occurred, including compliance with such reasonable requirements as the Company may impose pursuant
to the Plan, the Company shall issue to you a certificate for the shares of Common Stock purchased
on the earliest practicable date (as determined by the Company) thereafter.

     5. Effect of Death and Disability. In the event of your death or Disability prior to
the complete exercise of the Option, the unvested portion of the Option will be canceled as of your
last day worked, and the vested portion of the Option may be exercised in whole or in part, subject
to all of the conditions on exercise imposed by the Plan and this Award Agreement, within three
years after the date of your death or Disability, but only (i) by you, or in the event of your
death, by your estate or the person or persons to whom the Option passes under your will or the
laws of descent and distribution, (ii) to the extent that the Option was vested and exercisable on
the date of termination, and (iii) prior to the close of business on the Expiration Date of the
Option.

     6. Effect of Retirement. Upon your Retirement prior to the complete exercise of the
Option, the unvested portion of the Option will be canceled as of your last day worked, and the
remaining portion of the Option may be exercised in whole or in part, subject to all of the
conditions on exercise imposed by the Plan and this Award Agreement, within three years after the
date of such termination, but only (i) to the extent that the Option was vested and exercisable on
the date such termination, and (ii) prior to the close of business on the Expiration Date of the
Option. The term “Retirement” means retirement from the Company at age 55 or later with ten or
more years of employment (full-time or part-time) with the Company.

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     7. Effect of Other Termination. Upon your termination for a reason other than death,
Disability or Retirement prior to the complete exercise of the Option, the unvested portion of the
Option will be canceled as of your last day worked, and the remaining portion of the Option may be
exercised in whole or in part, subject to all of the conditions on exercise imposed by the Plan and
this Award Agreement, within one year after the date of such termination, but only (i) to the
extent that the Option was vested and exercisable on the date of such termination, and (ii) prior
to the close of business on the Expiration Date of the Option. Notwithstanding the foregoing, if
your employment is terminated by reason of conduct that is determined by the Company to have been
detrimental to the Company, including violation of the Company’s Code of Business Ethics, or
conduct which is criminal, fraudulent, deliberately dishonest, disloyal or willful misconduct, you
will forfeit all rights under the Option (both unvested and vested) as of your last day worked.

     8. 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 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.

     9. Repayment of Financial Gain.

          (a) If you fail to comply with Section 8 of this Award Agreement, the Company may cancel any
unexercised portion of this Option and recover from you the gross amount, before deduction of
applicable taxes or other amounts, of any gain realized on the exercise of stock options pursuant
to this Option during the 24-month period preceding your breach of any covenant in Section 8 of
this Award Agreement.

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          (b) If you fail to comply with Section 8 of this Award Agreement, upon demand by the Company,
you will repay the Company in accordance with the terms of Section 9(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.

     10. Transfer of Option. Except as otherwise determined by the Committee, the Option
may not be transferred, assigned or pledged (except by will or the laws of descent and
distribution, or pursuant to a domestic relations order).

     11. Limitation of Rights. You will not have any rights as a stockholder with respect
to the shares of Common Stock covered by the Option until you become the holder of record of such
shares by exercising the Option. Neither the Plan, the granting of the Option nor this Award
Agreement gives you any right to remain in the employment of the Company or any Affiliate.

     12. 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 of Common Stock or other securities,
including preferred stock, or options therefore, dissolve or liquidate, or sell or transfer any
part of its assets or business.

     13. Restrictions on Issuance of Shares. If at any time the Company determines that
the listing, registration or qualification of the shares covered by the Option upon any securities
exchange or under any state or federal law, or the approval of any governmental agency, is
necessary or advisable as a condition to the exercise of the Option, the Option may not be
exercised in whole or in part unless and until such listing, registration, qualification or
approval shall have been effected or obtained free of any conditions not acceptable to the Company.

     14. Plan Controls. The Option is subject to all of the provisions of the Plan, which
is hereby incorporated by reference, and is further subject to all the interpretations, amendments,
rules and regulations that may from time to time be promulgated and adopted by the Committee
pursuant to the Plan. 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.

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

     16. 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.

     17. Section 409A. The Option is intended to qualify for an exemption from the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the

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treasury regulations promulgated and other official guidance issued thereunder, and the Plan and
this Award Agreement shall be administered and interpreted consistent with such intention.

* * * * *

6exv10w24

EXHIBIT
10.24

PAYCHEX, INC.

CHANGE IN CONTROL PLAN

ARTICLE 1

PURPOSE & EFFECTIVE DATE

     1.1 Purpose. The purpose of the Paychex, Inc. Change in Control Plan is to secure the
continued services of key members of management and ensure maximization of shareholder value in the
event of a Change in Control.

     1.2 Effective Date. The Plan shall become effective upon the approval thereof by the Board of
Directors.

ARTICLE 2

DEFINITIONS

     2.1 Definitions. As used in the Plan, the following terms shall have the respective meanings
set forth below:

          (a) “Annual Cash Compensation” means the Participant’s Base Salary and Bonus Amount.

          (b) “Base Salary” means the Participant’s annual gross salary (on the date of the
Change in Control, or if higher, on the date of termination) before any deductions, exclusions or
any deferrals or contributions under any Company plan or program.

          (c) “Benefits” means the benefits provided under Article 4.

          (d) “Board” means the Board of Directors of Paychex.

          (e) “Bonus Amount” means the Participant’s annual cash incentive as established by the
Board at target for the applicable performance period. If annual cash incentive has not been
established, the Bonus Amount will mean the prior year’s target annual cash incentive.

          (f) “Cause” means the Participant’s (a) dereliction of duty to the Company; (b)
conviction for a felony; or (c) willful misconduct that has a substantial adverse effect on the
Company.

          (g) “Change in Control” means the acquisition by any person or entity of voting shares
of Paychex if upon such acquisition such person is the beneficial owner (as defined under Section
13(d) of the Securities Exchange Act of 1934) of at least 50% of the voting shares of the Paychex;
consummation of a consolidation or merger involving Paychex in which Paychex is not the surviving
entity (unless the stockholders of Paychex immediately prior to such transaction beneficially own
voting securities in the surviving parent entity representing at least 50% of the voting shares in
substantially the same ownership proportions as immediately before

 

 

such transaction); the sale, lease or exchange of all or substantially all of Paychex’s
assets; or the shareholder approval of a plan of liquidation or dissolution of Paychex followed by
a substantial event representing commencement of such liquidation or dissolution.

          (h) “Change in Control Protection Period” means the period commencing upon one of the
following events: (1) the Company enters into an agreement, the consummation of which would result
in a Change in Control or (2) the public announcement of an intent by Company or a third-party to
take action which, if consummated, would result in a Change in Control; and ending 12 months
following a Change in Control.

          (i) “Code” means the Internal Revenue Code of 1986, as amended.

          (j) “Company” means Paychex, Inc.

          (k) “Continuation Period” means, for a given Participant, the number of years equal to
that Participant’s multiplier under Section 4.1(a).

          (l) “Employment Termination Date” means the date on which the employment relationship
between the Participant and the Company is terminated due to an Involuntary Termination (subject to
Section 10.8).

          (m) “Good Reason” means:

               (i) the Company removes the Participant from, or fails to re-elect or appoint the Participant
to, any material duties or position with the Company that were assigned or held by the Participant
immediately before the Change in Control Protection Period, except that a nominal change in the
Participant’s title that is merely descriptive and does not affect rank, duties, or position shall
not constitute such an event;

               (ii) the Company assigns to the Participant any duties inconsistent with the Participant’s
position (including offices, titles and reporting requirements), authority, duties or
responsibilities with the Company in effect immediately before the occurrence of the Change in
Control Protection Period and materially adverse to Participant;

               (iii) the Company takes any action that results in a material diminution of the Participant’s
position, authority, duties or responsibilities with the Company in effect immediately before the
Change in Control Protection Period, or otherwise takes any action that materially interferes
therewith (for this purpose, if Participant has significant duties relating to the status of the
Company as a publicly held corporation, and the Participant ceases to have such duties for a
publicly held corporation during the Change in Control Protection Period, such event will
constitute a material diminution of duties);

               (iv) the Company reduces the Participant’s Base Salary, Bonus opportunity or other elements of
Total Compensation (performance-based elements being measured based on the value of the award
opportunity), as in effect immediately prior to such reduction, other than a reduction that is
immaterial (for this purpose, reductions aggregating $10,000 will be deemed to be material);

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               (v) the Company relocates the Participant’s principal workplace to an area that is located
outside of a radius of 50 miles from the location of the Participant’s principal workplace
immediately prior to the Change in Control Protection Period; or

               (vi) the failure of any successor to the Company to assume or to adopt this Plan.

Upon the occurrence of an event that would constitute Good Reason, the Participant shall notify the
Company of the occurrence of such event within 90 days after the Participant obtains actual
knowledge thereof. If the Company has taken action within 30 days after receipt of such notice to
fully cure such event so that it would no longer constitute Good Reason, then Good Reason will be
deemed to not have arisen based on the cured event. If Good Reason arises and is not cured, the
Good Reason will be deemed to exist for a period of one year after the last day of the cure period,
but in no event longer than the Change in Control Protection Period.

          (n) “Involuntary Termination” means an involuntary termination by the Company without
Cause or a voluntary termination by the Participant for Good Reason.

          (o) “Participant” means a participant in the plan pursuant to Article 3.

          (p) “Paychex” means Paychex, Inc.

          (q) “Plan” means this Paychex, Inc. Change in Control Plan, as amended from time to
time.

          (r) “Total Compensation” means a Participant’s Base Salary, Bonus Amount, equity
compensation and all other items of the Participant’s compensation.

ARTICLE 3

ELIGIBILITY

     The Participants in the Plan shall be (a) the Chief Executive Officer, (b) the Senior Vice
Presidents of the Company and (c) Vice Presidents who are officers of the Company. Participants
shall only be eligible to receive benefits hereunder if they have executed (and do not subsequently
revoke) a general release of all claims in favor of the Company, its subsidiaries, affiliates,
officers, directors, successors and assigns in the form attached hereto as Exhibit A within
twenty-one (21) days following Participant’s receipt of notice that such release shall be required
subsequent to the Employment Termination Date or the date of the Change in Control, whichever is
later. The Company will provide such notice not later than five business days after the Employment
Termination Date or the Change in Control.

ARTICLE 4

SEVERANCE BENEFITS

     4.1 Severance Benefits. In the event of an Involuntary Termination of a Participant during
the Change in Control Protection Period, the Participant shall be entitled to the benefits set
forth below upon a Change in Control, subject to Article 5:

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          (a) Cash Payment. Subject to Section 10.8, a single lump-sum cash payment to be paid
within ten (10) business days of the Participant’s Employment Termination Date or the Change in
Control date, whichever is later, equal to a multiple of the Participant’s Annual Cash
Compensation. The multiples are determined by the Participant’s position at the Company as
follows:

	 	 	 	 	 

	Chief Executive Officer

	 	 	2.0	 
	Senior Vice President

	 	 	1.5	 
	Vice President

	 	 	1.0	 

          (b) Current Year Performance Incentive Payment. Subject to Section 10.8, the
Participant shall also be entitled to receive a lump-sum cash payment within ten (10) business days
of the Participant’s Employment Termination Date or the Change in Control date, whichever is later,
representing a prorated amount of the Participant’s current-year annual cash performance incentive
award. The prorated amount shall be determined by multiplying the target Bonus Amount for such
year by a fraction, the numerator of which is the number of days from the start of such performance
period, and the denominator of which is 365.

          (c) Equity Acceleration. All outstanding time-based equity awards (e.g., stock
options, restricted stock and restricted stock units) held by the Participant at any time during
the Change in Control Protection Period shall immediately vest and become exercisable following the
Participant’s Employment Termination Date or the Change in Control date, which ever is later.
Exercisable stock options shall remain exercisable for the period set forth in the applicable Award
Agreement(s). Any equity award that constitutes a “deferral of compensation” under Code Section
409A shall be settled as provided in the applicable Award Agreement(s). Performance-based equity
awards shall vest at target performance levels on a prorated basis. The prorated portion will be
determined using a fraction, the numerator of which is the number of days from the start of the
applicable performance period through the Participant’s Employment Termination Date, and the
denominator of which is the total number of days in the performance period.

          (d) Benefits. Subject to Section 10.8, the Company shall pay to Participant within
ten (10) business days of the Participant’s Termination Date or the Change in Control date,
whichever is later, a lump-sum payment in an amount as necessary to reimburse the Participant for
the cost to continue on behalf of the Participant and his or her dependents and beneficiaries basic
life insurance, medical, dental, vision and hospitalization benefits for the applicable
Continuation Period. Participant shall remain eligible to elect applicable coverage(s) for the
period(s) provided by COBRA, but shall be responsible for payment of the COBRA premiums.

     4.2 Benefit Exclusions. No benefits shall be payable under the Plan due to separation from
service on account of (a) death, (b) disability, (c) voluntary termination not for Good Reason, and
(d) any other termination of employment not considered to be an Involuntary Termination during the
Change in Control Protection Period.

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     4.3 Benefits Excludable. Benefits under the Plan shall not be taken into account as
compensation for purposes of determining contributions or benefits under any other employee benefit
plan of the Company.

ARTICLE 5

LIMITATION ON PAYMENT OF BENEFITS

     Notwithstanding any provision of the Plan to the contrary, if any amount or benefit to be paid
or provided, together with other compensation to the Participant, would result in the Participant
being subject to the excise tax under Section 4999 of the Code but for the application of this
sentence, then the payments and benefits to be paid or provided under the Plan will be reduced to
the minimum extent necessary (but in no event to less than zero) so that Participant will not be
subject to such excise tax; provided, however, that (i) the amounts reduced shall be those amounts
and benefits which have the highest value as “parachute payments” in relation to the actual value
of such amounts and benefits to the Participant; and (ii) the reduction provided for in this
sentence will be made only if and to the extent that such reduction would result in the Participant
receiving an increased amount in the aggregate of payments and benefits, determined on an after-tax
basis (taking into account, for the Participant, the excise tax potentially imposed pursuant to
Section 4999 of the Code, any tax imposed by any comparable provision of state law, and any
applicable federal, state and local income and employment taxes). The determination of whether any
reduction in such payments or benefits to be provided under the Plan or otherwise is required
pursuant to the preceding sentence will be made at the expense of the Company by the Company’s
independent accountants in effect prior to the Change in Control. The fact that the Participant’s
right to payments or benefits may be reduced by reason of the limitations contained in this Article
will not of itself limit or otherwise affect any other rights of the Participant under the Plan.
In the event that any payment or benefit intended to be provided under the Plan or otherwise is
required to be reduced pursuant to this Article, the Company will effect such reduction by first
reducing the benefits described in Section 4.1(a), then, to the extent necessary, by reducing the
benefits described in Section 4.1(d).

ARTICLE 6

PARTICIPANTS’ FEES AND EXPENSES

     In the event of a Change in Control, the Company shall pay to each Participant all legal fees
and expenses incurred by the Participant in disputing in good faith any issue hereunder relating to
an Involuntary Termination of the Participant’s employment, in seeking in good faith to obtain or
enforce any benefit or right provided by this Plan, or in connection with any tax audit or
proceeding to the extent attributable to the application of Section 4999 of the Code to any payment
or benefit hereunder. Such payments shall be made within five business days after delivery of the
Participant’s written requests for payment accompanied with such evidence of fees and expenses
incurred as the Company may reasonably require, provided that in order for a Participant to be
entitled to reimbursement hereunder for disputes against the Company or its successor, the
Participant must have been the prevailing party in such action or proceeding.

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ARTICLE 7

UNFUNDED ARRANGEMENT

     Participants and their beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the Company by virtue of
participation hereunder. For purposes of the payment of Benefits under the Plan, any and all of
the Company’s assets, shall be, and remain, the general, unpledged unrestricted assets of the
Company. The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured
promise to pay money in the future.

ARTICLE 8

AMENDMENT AND TERMINATION

     The Board reserves the right to amend or terminate the Plan at any time and in any manner
without the consent of any affected individual, which right includes, without limitation, the right
to change the individuals who are eligible to participate in the Plan from time to time.
Notwithstanding the foregoing, (a) during the Change in Control Protection Period, the Plan may not
be terminated or amended in any manner materially adverse to any Participant without the written
consent of each affected Participant and (b) any amendment to or termination of the Plan will not
adversely affect the benefits otherwise payable to a Participant whose Employment Termination Date
occurred prior to the date of such amendment or termination.

ARTICLE 9

NONCOMPETITION, ETC.

     9.1 Non-competition, Non-solicitation, and Confidentiality. In consideration for the benefits
under the Plan, each Participant agrees that during his or her employment and for a period of
twelve (12) months following termination of employment for any reason, he or she 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 Participant during the last 24 months of employment. In addition, each Participant
agrees that for a period of eighteen (18) months following the termination of employment for any
reason, he or she will not directly or indirectly by assisting others, solicit Company clients,
prospects or referral resources; nor will he or she 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. Each Participant also agrees and acknowledges that
during the course of his or her employment with the Company, the Participant 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 the Participant hereby acknowledges and agrees to
be confidential (“Confidential Information”). Each Participant agrees that during and after
employment, he or she 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 in any
way which causes a material adverse impact on the Company. These covenants are not intended to,
and do not, limit in any way the rights and

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remedies provided to the Company under the Plan, other agreements with the Participant, or
under common or statutory law.

     9.2 Repayment of Benefits. If a Participant fails to comply with Section 9.1, upon demand by
the Company, he or she will be obligated to repay to the Company the benefits received by such
Participant pursuant to the Plan, including, but not limited to, the severance pay and benefits
under Section 4.1, and the Company shall be entitled to offset the amount of any such repayment
obligation against any amount owed to Participant by the Company to the extent permissible under
Section 409A. The remedies set forth in this Section are in addition to any other remedies the
Company may have, at law or equity, for violation of the terms of this Plan.

ARTICLE 10

MISCELLANEOUS

     10.1 Tax Withholding. The Company will calculate the deductions from the amount of the
benefit otherwise payable under the Plan for any taxes required to be withheld by federal, state or
local government and shall cause them to be withheld.

     10.2 Plan Not an Employment Contract. The adoption and maintenance of the Plan is not a
contract between the Company and its employees, which gives any employee the right to be retained
in its employment. Likewise, it is not intended to interfere with the rights of the Company to
discharge any employee at any time or to interfere with the employee’s right to terminate his or
her employment at any time.

     10.3 Alienation Prohibited. No benefits hereunder shall be subject to anticipation or
assignment by a Participant, to attachment by, interference with, or control of any creditor of a
Participant, or to being taken or reached by any legal or equitable process in satisfaction of any
debt or liability of a Participant prior to its actual receipt by the Participant. Any attempted
conveyance, transfer, assignment, mortgage, pledge, or encumbrance of the benefits hereunder prior
to payment thereof shall be void.

     10.4 Gender and Number. If the context requires it, words of one gender when used in the Plan
shall include the other genders, and words used in the singular or plural shall include the other.

     10.5 Severability. If any provision of the Plan is determined to be invalid or unenforceable,
that determination shall not affect the validity or enforceability of any other provision.

     10.6 Successors. The Plan shall be binding upon and inure to the benefit of the Company and
any of its successors or assigns. The Company shall require any successor to or assignee of
(whether direct or indirect, by purchase, merger, consolidation or otherwise) all or substantially
all of the assets or businesses of the Company (a) to assume unconditionally and expressly the Plan
and (b) to agree to perform or to cause to be performed all of the obligations under the Plan in
the same manner and to the same extent as would have been required of the Company had no assignment
or succession occurred.

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     10.7 Assignment; Binding Effect. The Company shall not assign any of its obligations under
the Plan unless (a) such assignment is to a successor, and (b) the requirements of Section 10.6 are
fulfilled.

     10.8 Section 409A. It is intended that the Plan (including all amendments thereto) comply
with provisions of Section 409A of the Code and the treasury regulations promulgated and other
official guidance issued thereunder (collectively, “Section 409A”), so as to prevent the inclusion
in gross income of any benefits accrued hereunder in a taxable year prior to the taxable year or
years in which such amount would otherwise be actually distributed or made available to the
Participants. The Plan shall be administered and interpreted to the extent possible in a manner
consistent with that intent. For purposes of any Plan payment or benefit that would constitute a
“deferral of compensation” under Section 409A, termination of employment (and related concepts,
including under the definition of “Employment Termination Date”) shall mean “separation from
service” within the meaning given such term by Section 409A. In the event that the Company is
publicly traded, any payment (unless otherwise exempt from Section 409A) hereunder to a participant
who is a “specified employee” for purposes of Section 409A shall be made no earlier that the six
month anniversary of the Participant’s separation from service.

     10.9 Governing Law and Venue. THE PROVISIONS OF THE PLAN SHALL BE CONSTRUED AND INTERPRETED
ACCORDING TO THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAWS
PRINCIPLES. The parties agree that exclusive jurisdiction and venue for any claim hereunder shall
rest with the courts of the State of New York, Monroe County.

* * * * *

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EXHIBIT A

___________, 20___

[Employee Name]

[Employee Home Address]

[Employee Home Address]

     Re: RELEASE OF ALL CLAIMS

Dear [Employee Name]:

     In order to receive benefits under the Paychex, Inc. Change in Control Plan (the “Plan”), you
are required to sign a release of all claims. If you sign this letter and do not revoke it as set
forth in Paragraph 14, then this letter will constitute the required Release of All Claims (the
“Agreement”) between you and Paychex, Inc. (the “Company”).

     1. RELEASE OF ALL CLAIMS

          (a) By signing this Agreement you agree that you are releasing and waiving your right to bring
any legal claim of any nature against the Company, its predecessors, successors and their past,
current and future parents, subsidiaries, affiliates, related entities, and all of their members,
shareholders, officers, directors, agents, attorneys, employees, and assigns (together referred to
as “Releasees”). The claims you are giving up include, but are not limited to, claims related,
directly or indirectly, to your employment relationship with the Company, and/or its subsidiaries,
affiliates and related entities including your separation from employment. This Agreement is
intended to be interpreted in the broadest possible manner to include all actual or potential legal
claims you may have against the Releasees, except as expressly provided otherwise in Paragraph
1(d).

          (b) Specifically, you agree that you are fully and forever giving up all of your legal rights
and claims against the Releasees, whether or not presently known to you, that are based on events
occurring before you sign this Agreement. You agree that the legal rights and claims you are
waiving include all rights and claims under, as amended, Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act of 1967 (the “ADEA”), the Older Workers Benefit
Protection Act of 1990 (the “OWBPA”), the Rehabilitation Act of 1973, the Civil Rights Acts of 1866
and 1991, the Americans With Disabilities Act of 1990, the Genetic Information Nondiscrimination
Act of 2008, the Equal Pay Act of 1963, the Sarbanes-Oxley Act of 2002, the New York Human Rights
Law and any similar federal, state or local statute, regulation, order or common law, all as
amended. You specifically agree that you are releasing claims of discrimination based upon age,
race, color, sex, sexual orientation or preference, marital status, religion, national origin,
citizenship, veteran status, disability, genetic predisposition or carrier status, retaliation,
whistleblower status, and other legally protected categories.

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          (c) You also agree that the legal rights and claims you are giving up include your rights
under, as amended, the Family and Medical Leave Act of 1993, the Employee Retirement Income
Security Act of 1974 (“ERISA”), the federal Worker Adjustment and Retraining Notification Act of
1989 (“WARN”), the New York Worker Adjustment and Retraining Notification Act (“NY WARN”), the New
York Labor Law and any similar federal, state or local statute, regulation, order or common law.
You agree that the legal rights and claims you are giving up include all common law rights and
claims, such as a breach of express or implied contract, tort (whether negligent or intentional),
wrongful discharge, constructive discharge, infliction of emotional distress, defamation,
promissory estoppel, and any claim for fraud, omission or misrepresentation. You also agree that
you are giving up and forever releasing any right you may have to attorneys’ fees for any of the
rights and claims described in this Paragraph 1.

          (d) The claims you are giving up and releasing do not include your vested rights, if
any, under any qualified retirement plan or deferred compensation plan in which you participate,
and your COBRA, unemployment insurance and workers’ compensation rights, if any, as well as any
vested equity under the Paychex Stock Incentive Plan. Nothing in this Agreement shall be construed
to constitute a waiver of: (i) any claims you may have against the Releasees that arise from
events that occur after the date that you sign this Agreement; (ii) your right to file an
administrative charge with any governmental agency alleging employment discrimination or
challenging the validity of this release of all claims; (iii) your right to participate in any
administrative or court investigation, hearing or proceeding; or (iv) any other right that you
cannot waive as a matter of law. You agree, however, to waive and release any right to receive any
individual remedy or to recover any individual monetary or non-monetary damages as a result of any
administrative charge, complaint or lawsuit filed by you or anyone on your behalf.

     2. No Pending Action. You represent that, as of the date that you sign this
Agreement, you have not filed any charge, complaint or action against the Releasees in any forum.
This Agreement may be used as a complete defense in the future if you bring a lawsuit based on any
claim that you have released.

     3. Future Cooperation. You agree that after you depart you will continue to cooperate
with the Company on business and transition issues, litigation and other key matters that remain
outstanding, with the understanding that the Company will reimburse you for any reasonable
out-of-pocket expenses which have been pre-approved by the Company.

     4. No Derogatory Statements. You agree that you will not directly or indirectly make,
or cause to be made, written or oral statements or other communication that is derogatory or
disparaging to the Company or the Company’s predecessors, successors or their past, current or
future parents, subsidiaries, related entities, or any of their members, shareholders, officers,
directors, agents, attorneys, employees, or assigns.

     5. Confidentiality. You agree to keep the existence and terms and conditions of this
Agreement confidential, except, of course, that you may review it with your family, your attorney
and your financial advisor. In addition, you can make any legally required disclosures, including
disclosures about any tax issues arising from this arrangement.

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     6. Remedies. In the event that you breach any of your obligations under this
Agreement or as otherwise imposed by law, the Company may, at its option, engage in set-off or
other self-help measures, and may obtain monetary damages, a court order requiring you to comply
with this Agreement, or other remedies as appropriate.

     7. No Admission of Liability. You agree that neither any payment under the Plan, nor
any term or condition of it or this Agreement, shall be construed by you, at any time, as an
admission of liability or wrongdoing by the Company.

     8. Binding Nature. The rights and benefits of the Company under this Agreement shall
be transferable to, or enforceable by or against, the Company’s successors and assigns. You agree
that this Agreement also binds all persons who might assert a legal right or claim on your behalf,
such as your heirs, personal representatives and assigns, now and in the future.

     9. Entire Agreement. The Change in Control Plan and this Agreement contains the
entire agreement between the Company and you regarding your termination and supersedes and renders
null and void any and all prior or contemporaneous oral or written understandings, statements,
representations or promises. However, this Agreement does not supersede the portions of any
agreement between you and the Company or its subsidiaries, affiliates and related entities
regarding confidentiality of trade secret and proprietary information or containing post-employment
restrictive covenants. Such agreements remain in full force and effect in accordance with their
terms. Further, by your signature on this Release and your acceptance of the benefits of the
Change in Control Plan, you hereby acknowledge your agreement to the terms and conditions of the
Plan, including but not limited to the restrictive covenants set forth in Article 9.

     10. Legal Proceedings and Governing Law. This Agreement shall be construed and
governed by the laws of the State of New York. Disputes arising under it shall be heard
exclusively by the state or federal courts located in Monroe County, New York. Neither party
waives any right it may have to remove such an action to the United States District Court located
in Monroe County, New York. If any provision of this Agreement, including the waiver of claims
under any particular statute, should be deemed unenforceable, the remaining provisions shall, to
the extent possible, be carried into effect, taking into account the general purpose and spirit of
this Agreement. Also, if a court finds that the release of claims is illegal, void or
unenforceable, you agree, promptly upon request, to execute a second release that is legal and
enforceable, without further consideration, payments or compensation.

     11. Voluntary Agreement. You agree that you are voluntarily signing this Agreement,
that you have not been pressured into agreeing to its terms and that you have enough information to
decide whether to sign it. If, for any reason, you believe that this Agreement is not entirely
voluntary, or if you believe that you do not have enough information, then you should not sign this
Agreement.

     12. Attorney Consultation. You are advised to consult with an attorney of your choice
before signing this Agreement. By signing this Agreement, you acknowledge that you have had an
opportunity to do so.

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     13. Period to Consider Agreement. You have up to 21 calendar days from the date you
receive this offer or until ________, 20___ to accept the terms of this Agreement by signing and
dating it in the space designated below, and returning it to me (an extra copy of the Agreement is
enclosed for your files). You may sign and return the Agreement before the end of the 21-day
period, but you are not required to do so and you may take the entire 21-day period to consider
whether you wish to accept the Agreement. However, under no circumstances may you sign and return
this Agreement before the Separation Date.

     14. Revocation Period; Effective Date. After you have accepted this Agreement by
dating, executing and returning it to the Company, you will have an additional 7 calendar days in
which to revoke your acceptance. If you do not revoke your acceptance, then the 8th day
after the date of your signature will be the “Effective Date” of the Agreement, and you may not
thereafter revoke it. To revoke this Agreement, you agree to send written notice to: Paychex,
Inc., 911 Panorama Trail S., Rochester, NY 14625-0397, Attention: Vice President of Human
Resources, with a copy Attention: Vice President, Chief Legal Officer. You acknowledge and agree
that if you exercise your right to revoke this Agreement, your termination of employment will
nevertheless have occurred effective on your separation date, you will not be entitled to the
benefits under the Plan, and you will immediately return to the Company any of such benefits you
have already received.

	 	 	 	 	 	 	 

	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	Paychex, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:  
	 	 
	 
	 

	 	Name (print):	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:  
	 	 

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     BY SIGNING THIS LETTER, I ACKNOWLEDGE THAT I HAVE HAD THE OPPORTUNITY TO REVIEW THIS AGREEMENT
CAREFULLY WITH AN ATTORNEY OF MY CHOICE. I HAVE READ THIS AGREEMENT, I UNDERSTAND ITS TERMS AND I
VOLUNTARILY AGREE TO THEM.

Dated: _____________, 20___

	 	 	 	 	 

	 

	 	 

[Employee Name]
	 	 
	 
	 	 	 	 
	State of New York )
	 	 	 	 
	County of _______) SS:
	 	 	 	 

     On this ______ day of                     , 20___, before me personally came [Employee
Name], to me known and known to me to be the individual described in and who executed the
foregoing instrument, and the above-named person acknowledged to me that said person executed the
same.

	 	 	 	 	 
	 	 

Notary Public

 	 
	 	 	 
	 	 	 

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