Paychex 2015 Annual Report Download - page 81

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PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note K — Supplemental Cash Flow Information
Income taxes paid were $372.8 million, $317.8 million, and $371.0 million for fiscal years 2015, 2014, and
2013, respectively.
Lease incentives received in the form of tenant allowances and free rent were $8.5 million, $6.7 million, and
$6.4 million for fiscal years 2015, 2014, and 2013, respectively.
Note L — Employee Benefit Plans
401(k) plan: The Company maintains a contributory savings plan that qualifies under section 401(k) of
the Internal Revenue Code. The Paychex, Inc. 401(k) Incentive Retirement Plan (the “Plan”) allows all
employees to immediately participate in the salary deferral portion of the Plan, contributing up to a maximum of
50% of their salary, subject to Internal Revenue Service limitations. Employees who have completed one year of
service are eligible to receive a company matching contribution, when such contribution is in effect. The
Company provided matching contributions of 50% of up to 8% of eligible pay that an employee contributed to
the Plan, effective for pay dates on or after November 15, 2013 and 50% of up to 6% of eligible pay that an
employee contributed to the Plan between February 2012 and November 2013. Company contributions to the
Plan for fiscal years 2015, 2014, and 2013 were $19.6 million, $16.4 million, and $13.1 million, respectively.
The Plan is 100% participant directed. Plan participants can fully diversify their portfolios by choosing from
any or all investment fund choices in the Plan. Transfers in and out of investment funds, including the Paychex,
Inc. Employee Stock Ownership Plan (“ESOP”) Stock Fund, are not restricted, with the exception of certain
restricted trading periods for individuals designated as insiders as specified in the Company’s Insider Trading
Policy. The Company match contribution, when in effect, follows the same fund elections as the employee
compensation deferrals.
Deferred compensation plans: The Company offers non-qualified and unfunded deferred compensation
plans to a select group of key employees, executive officers, and outside directors. Eligible employees are
provided with the opportunity to defer up to 50% of their annual base salary and bonus and outside directors may
defer 100% of their Board cash compensation. Gains and losses are credited based on the participant’s election of
a variety of investment choices. The Company does not match any participant deferral or guarantee its return.
Distributions are paid at one of the following dates selected by the participant: the participant’s termination date,
the date the participant retires from any active employment, or a designated specific date. The amounts accrued
under these plans were $14.2 million and $12.3 million as of May 31, 2015 and May 31, 2014, respectively, and
are reflected in other long-term liabilities on the accompanying Consolidated Balance Sheets.
Note M — Commitments and Contingencies
Lines of credit: As of May 31, 2015, the Company had unused borrowing capacity available under
uncommitted, secured, short-term lines of credit at market rates of interest with financial institutions as follows:
Financial institution Amount available Expiration date
JP Morgan Chase Bank, N.A. ........................... $350 million February 28, 2016
Bank of America, N.A. ................................ $250 million February 28, 2016
PNC Bank, National Association ........................ $150 million February 28, 2016
Wells Fargo Bank, National Association .................. $150 million February 28, 2016
The credit facilities are evidenced by promissory notes and are secured by separate pledge security
agreements by and between Paychex and each of the financial institutions (the “Lenders”), pursuant to which the
Company has granted each of the Lenders a security interest in certain investment securities accounts. The
collateral is maintained in a pooled custody account pursuant to the terms of a control agreement and is to be
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