PAYCHEX, INC.
2002 STOCK INCENTIVE PLAN
(as amended and restated effective October 15, 2020)
PERFORMANCE RESTRICTED STOCK UNIT AWARD NOTICE
Participant: | [ ] |
Type of Award: | Performance Restricted Stock Units |
Target Number of Performance Restricted Stock Units: | [ ] |
Date of Grant: | July 15, 2022 |
Performance Period: | June 1, 2022 through May 31, 2024 |
Vesting Date: | July 15, 2025 |
Retention Multiple: | [Fill-in 6x for CEO, 4x for President; 3x for SVPs; 2x for VPs] |
This Award Notice 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 15, 2020 (the “Plan”), an award (the “Award”) of Performance Restricted Stock Units (the “Units”), on the terms and conditions set forth in the attached Performance Restricted Stock Unit Award Agreement and the Plan, covering the number of shares of the Company’s $.01 par value common stock (the “Common Stock”) at the target level of performance equal to the Target Number of Performance Restricted Stock Units set forth above.
Stock Retention Requirement. For purposes of the Award, during the term of your employment by the Company, the Committee has established a target of ownership of Common Stock with a value of your annual base salary times the Retention Multiple set forth above. Stock that counts toward satisfaction of this target includes, but is not limited to, stock purchased by you on the open market, stock obtained through stock option exercise, restricted shares, restricted stock units, stock obtained through grants of restricted stock or restricted stock units, stock owned (indirectly) through a qualified retirement plan maintained by the Company, stock owned jointly with your spouse, and stock beneficially owned by a trust for the benefit of you, your spouse and/or your children. Notwithstanding the terms of the Performance Restricted Stock Unit Award Agreement, until you reach the established stock ownership target, you will be required to retain the shares of Common Stock that you receive when the shares represented by this Award vest, except that you may sell sufficient shares to satisfy your tax obligations as set forth in Section 11 of the Award Agreement. Once you have achieved the target ownership, the number of shares of Common Stock
associated with your target ownership amount will be determined based on the stock price at that time, and unless otherwise prohibited by agreement, policy, law or otherwise, you may thereafter sell, gift or otherwise transfer any vested shares of Common Stock received under the Award so long as after such sale, gift or other transfer you will continue to own the number of shares of Common Stock associated with your target ownership amount. The Company shall be authorized to add a legend regarding this restriction on transfer to any certificate representing the shares of Common Stock under the Award.
PAYCHEX, INC.
2
PAYCHEX, INC.
2002 STOCK INCENTIVE PLAN
(as amended and restated effective October 15, 2020)
PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT
2
3
4
5
* * *
6
EXHIBIT A
Service Revenue Units Matrix
| Threshold | Target | Maximum |
Service Revenue | $ | $ | $ |
Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Service Revenue Component* | 60% | 100% | 150% |
* If Service Revenue is less than Threshold, the Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Service Revenue Component will be 0%, and if Service Revenue is greater than Maximum, the Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Service Revenue Component will be the Maximum %. If Service Revenue is greater than Threshold and less than Target, or greater than Target and less than Maximum, the Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Service Revenue Component will be determined based on linear interpolation.
Operating Income Units Matrix
| Threshold | Target | Maximum |
Operating Income | $ | $ | $ |
Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Operating Income Component* | 60% | 100% | 150% |
* If Operating Income is less than Threshold, the Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Operating Income Component will be 0%, and if Operating Income is greater than Maximum, the Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Operating Income Component will be the Maximum %. If Operating Income is greater than Threshold and less than Target, or greater than Target and less than Maximum, the Number of Units as a % of the Target Number of Performance Restricted Stock Units under the Operating Income Component will be determined based on linear interpolation.