ADP 2008 Annual Report Download

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [x] No [ ]
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [x]
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been
subject to the filing requirements for the past 90 days. Yes [x] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein and will not
be contained, to the best of Registrant’ s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer [x] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ ]
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ] Yes [x] No
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of the last business day of
the Registrant’ s most recently completed second fiscal quarter was approximately $23,216,032,643. On August 22, 2008 there were
508,864,299 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5397
AUTOMATIC DATA PROCESSING, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-1467904
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
One ADP Boulevard, Roseland, New Jerse
y
07068
(Address of principal executive offices) (Zip Code)
Registrant’ s telephone number, including area code: 973-974-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $.10 Par Value New York Stock Exchange
(
votin
g)
Chicago Stock Exchange
Portions of the Registrant’ s Proxy Statement for Annual Meeting of Stockholders to be held
on November 11, 2008. Part III

Table of contents

  • Page 1
    ...) One ADP Boulevard, Roseland, New Jersey (Address of principal executive offices) Registrant' s telephone number, including area code: 973-974-5000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $.10 Par Value (voting) Securities registered pursuant...

  • Page 2
    ..., ADP delivers stand-alone services such as payroll tax filing, check printing and distribution, year-end tax statements (i.e., form W-2), wage garnishment services, health and welfare administration and flexible spending account (FSA) administration. In order to address the growing business process...

  • Page 3
    ... year-end tax statements (i.e., form W-2) to its clients' employees and over 40.8 million employer payroll tax returns and deposits, and moved over $1 trillion in client funds to taxing authorities and its clients' employees via electronic transfer, direct deposit and ADPCheck. Retirement Services...

  • Page 4
    ... scheduling, vehicle financing and insurance, sales and service. In addition to its DMS products, Dealer Services offers its clients a full suite of additional integrated applications to address each department and functional area of the dealership, including Customer Relationship Management (CRM...

  • Page 5
    ... demand for ADP' s services. In fiscal 2008, Employer Services continued to grow, primarily due to new business started in the period, an increase in the number of employees on our clients' payrolls, the impact of price increases and an increase in average client funds balances; Dealer Services grew...

  • Page 6
    ... under written price quotations or service agreements having varying terms and conditions. No one price quotation or service agreement is material to ADP. Discounts, rebates and promotions offered by ADP to clients are not material. Systems Development and Programming During the fiscal years ended...

  • Page 7
    ...the applicable taxing authorities or client employees, thus reducing our revenues and income from this source. Security and privacy breaches may hurt our business We store electronically personal information about our clients and employees of our clients. In addition, our retirement services systems...

  • Page 8
    ...of its processing centers, other operational offices and sales offices. All of these leases, which aggregate approximately 6,063,665 square feet in North America, Europe, South America (primarily Brazil), Asia, Australia and South Africa, expire at various times up to the year 2036. ADP believes its...

  • Page 9
    ....81 $49.38 $41.25 $37.74 $44.25 $43.91 $0.290 $0.290 $0.290 $0.230 Dividends Per Share On March 30, 2007, ADP completed the spin-off of its former Brokerage Services Group business. In the table above, market prices include the value of the Brokerage Services Group business through the date of the...

  • Page 10
    Issuer Purchases of Equity Securities (a) (b) (c) Total Number of Shares Purchased as Part of the Publicly Announced Common Stock Repurchase Plan (3) (d) Maximum Number of Shares that may yet be Purchased under the Common Stock Repurchase Plan (3) Period April 1, 2008 to April 30, 2008 May 1, 2008 ...

  • Page 11
    ...completed the spin-off of its former Brokerage Services Group business, comprised of Brokerage Services and Securities Clearing and Outsourcing Services, into an independent publicly traded company called Broadridge Financial Solutions, Inc. The cumulative returns of the Company' s common stock have...

  • Page 12
    ... of adjusted return on equity excludes the average cumulative net earnings from discontinued operations for each of the five years since fiscal 2004 for which such returns are presented, as well as the equity impact of the spin-off of the Brokerage Services Group business, which was classified...

  • Page 13
    ..., payroll processing, tax and benefits administration services and products, including traditional and Web-based outsourcing solutions, that assist approximately 560,000 employers in the United States, Canada, Europe, South America (primarily Brazil), Australia and Asia to staff, manage, pay and...

  • Page 14
    ...-penetrated markets. We completed the tax-free spin-off of our former Brokerage Services Group business on March 30, 2007 into an independent publicly traded company called Broadridge Financial Solutions, Inc. We made the decision to spin-off this business for several reasons. First, we determined...

  • Page 15
    ...cash flows from operating activities, have allowed us to continue to focus on the objective of returning excess cash to our stockholders through our share buyback program and our cash dividends to stockholders. Subsequent to the completion of these transactions, the new ADP is a more focused company...

  • Page 16
    ... of software and software licenses in fiscal 2008. Selling, general and administrative expenses increased $164.2 million, or 7%, in fiscal 2008 as compared to fiscal 2007, which was attributable to the increase in salesforce personnel to support our new domestic business sales in Employer Services...

  • Page 17
    ... of the interest liability associated with unrecognized tax benefits as required under Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48"). This increased the effective tax rate by approximately 0.6 percentage points in fiscal 2008. Net Earnings from Continuing Operations...

  • Page 18
    ... to $549.8 million in the prior year. The increase in the consolidated interest earned on funds held for clients resulted from the increase of 8% in our average client funds balances to $14.7 billion, as well as the increase in the average interest rate earned to approximately 4.5% in fiscal 2007 as...

  • Page 19
    ... - such as payroll, HR, and benefits administration. This spending was targeted at expanding our Comprehensive Outsourcing Services ("COS") product for larger employers, our PEO Services business, our ADP Resource® product, which is an integrated, flexible HR and payroll-based service offering, and...

  • Page 20
    ...earnings per share from continuing operations of $1.83 includes a net one-time gain of approximately $20.3 million, net of taxes, from the sale of a Dealer Services non... Years ended June 30, 2008 Employer Services PEO Services Dealer Services Other Reconciling items: Foreign exchange Client funds ...

  • Page 21
    ... of acquisitions and divestitures, was approximately 8% for fiscal 2008. Revenue from our traditional payroll and payroll tax filing business grew 7%. The number of employees on our clients' payrolls, "pays per control," in the United States increased 1.3% in fiscal 2008. This employment metric...

  • Page 22
    ... fiscal 2008, which accounted for 1% growth in Employer Services' revenues. This increase was due to the increase in the average client funds balances as a result of new business started in the period, growth in our existing client base and growth in wages. The average client funds balances were $15...

  • Page 23
    ... the fees for our services that are billed based upon a percentage of wages related to worksite employees, increased $29.4 million, or 17%, due to the increase in the number of average worksite employees and price increases. We credit PEO Services with interest on client funds at a standard rate of...

  • Page 24
    ...ASP") managed services, growth in our Digital Marketing strategic initiatives, increased Credit Check and Computerized Vehicle Registration ("CVR") transaction volume, and new network and hosted IP telephony installations. In addition, revenues increased $39.9 million due to business acquisitions in...

  • Page 25
    ...we completed the tax free spin-off of our former Brokerage Services Group business, comprised of our former Brokerage Services and Securities Clearing and Outsourcing Services segments, into an independent publicly traded company called Broadridge Financial Solutions, Inc ("Broadridge"). As a result...

  • Page 26
    ... on the notification provided by the Company to the syndicated financial institutions prior to borrowing. We are also required to pay facility fees on the credit agreements. The primary uses of the credit facilities are to provide liquidity to the commercial paper program and to provide funding for...

  • Page 27
    ... Compensation and benefits primarily relates to amounts associated with our employee benefit plans and other compensation arrangements. In addition to the obligations quantified in the table above, we had obligations for the remittance of funds relating to our payroll and payroll tax filing services...

  • Page 28
    ... U.S. government agencies was invested in senior debt directly issued by the Federal Home Loan Banks, Fannie Mae and Freddie Mac. We have established credit quality, maturity, and exposure limits for our investments. The minimum allowed credit rating for fixed income securities is BBB and for asset...

  • Page 29
    ... millions) Years ended June 30, Average investment balances at cost: Corporate investments Funds held for clients Total Average interest rates earned exclusive of realized gains/ (losses) on: Corporate investments Funds held for clients Total Realized gains on available-for-sale securities Realized...

  • Page 30
    ... awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The FSP is effective for financial statements issued for fiscal years...

  • Page 31
    ...on payroll funds, payroll tax filing funds and other Employer Services' client-related funds. We enter into agreements for a fixed fee per transaction (e.g., number of payees or number of payrolls processed). Fees associated with services are recognized in the period services are rendered and earned...

  • Page 32
    ... the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity' s financial statements or tax returns. Judgment is required in addressing the future tax consequences of events...

  • Page 33
    ... the recognition and disclosure provisions of Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132(R)," effective June 30, 2007 and Staff Accounting Bulletin No...

  • Page 34
    Statements of Consolidated Earnings (In millions, except per share amounts) Years ended June 30, REVENUES: Revenues, other than interest on funds held for clients and PEO revenues Interest on funds held for clients PEO revenues (A) TOTAL REVENUES EXPENSES: Costs of revenues Operating expenses ...

  • Page 35
    ... funds held for clients Funds held for clients Total current assets Long-term marketable securities (A) Long-term receivables, net Property, plant and equipment, net Other assets Goodwill Intangible assets, net Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable...

  • Page 36
    ... 76.4 81.9 (2.3) Stock-based compensation expense Stock plans and related tax benefits Treasury stock acquired (40.2 shares) Adoption of Staff Accounting Bulletin No. 108, net of tax Brokerage Services Group spin-off Brokerage Services Group dividend Debt conversion (1.1 shares) Dividends ($0.8750...

  • Page 37
    ... and cash equivalents and other restricted assets held to satisfy client funds obligations Capital expenditures Additions to intangibles Acquisitions of businesses, net of cash acquired Proceeds from the sale of cost-based investment Dividend received from Broadridge Financial Solutions, Inc., net...

  • Page 38
    ... funds, payroll tax filing funds and other Employer Services' client-related funds. The Company enters into agreements for a fixed fee per transaction (e.g., number of payees or number of payrolls processed). Fees associated with services are recognized in the period services are rendered and earned...

  • Page 39
    ...Investments and Funds Held for Clients. All of the Company' s marketable securities are considered to be "available-for-sale" and, accordingly, are carried on the Consolidated Balance Sheets at fair value. Unrealized gains and losses, net of the related tax effect, are excluded from earnings and are...

  • Page 40
    ...purposes. L. Earnings per Share ("EPS"). The calculations of basic and diluted EPS are as follows: Effect of Zero Coupon Subordinated Notes $ Effect of Employee Stock Option Shares $ 4.3 Effect of Employee Stock Purchase Plan Shares $ 0.3 Effect of Employee Restricted Stock Shares $ 1.1 Years ended...

  • Page 41
    .... The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity' s financial statements or tax returns. The Company...

  • Page 42
    ...Tax Benefits of Dividends on Share-Based Payment Awards." EITF 06-11 requires companies to recognize, as an increase to additional paid-in capital, the income tax benefit realized from dividends or dividend equivalents that are charged to retained earnings and paid to employees for non-vested equity...

  • Page 43
    ... flows or financial condition. NOTE 2. RECLASSIFICATIONS WITHIN CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CONSOLIDATED CASH FLOWS The Company has reclassified funds held for clients and client funds obligations that had been previously presented outside of current assets and current liabilities...

  • Page 44
    ... cash acquired. These acquisitions resulted in approximately $37.7 million of goodwill. Intangible assets acquired, which totaled approximately $11.6 million, consist primarily of software, and customer contracts and lists that are being amortized over a weighted average life of 9 years. In addition...

  • Page 45
    ...the Statements of Consolidated Earnings. On March 30, 2007, the Company completed the tax-free spin-off of its former Brokerage Services Group business, comprised of Brokerage Services and Securities Clearing and Outsourcing Services, into an independent publicly traded company called Broadridge. As...

  • Page 46
    ... the financial print business, the Company recorded an impairment charge of $18.6 million in order to reflect the assets of this business at fair value in fiscal 2006 in accordance with SFAS No. 144. This impairment charge is included in the earnings from discontinued operations on the Statements of...

  • Page 47
    ... and direct obligations of U.S. government agencies Corporate bonds Asset-backed securities Canadian government obligations and Canadian government agency obligations Other securities Total available-for-sale securities Total corporate investments and funds held for clients $ 2,012.8 Fair Value...

  • Page 48
    ... yet remitted funds for the Company' s payroll and payroll tax filing and other services varies significantly during the fiscal year, and averaged approximately $15,654.3 million, $14,682.9 million and $13,566.2 million in fiscal 2008, 2007 and 2006, respectively. Client funds obligations represent...

  • Page 49
    ...-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2008 are as follows: Unrealized losses less than 12 months U.S. Treasury and direct obligations of U.S. government agencies Asset backed securities Corporate...

  • Page 50
    ... for the financing of the sale of computer systems, most of which are due from automotive, heavy truck and powersports dealers. These notes receivable are reflected on the Consolidated Balance Sheets as follows: June 30, Receivables Less: Allowance for doubtful accounts Unearned income 2008 Current...

  • Page 51
    ...(acquired directly or through acquisitions). All of the intangible assets have finite lives and, as such, are subject to amortization. The weighted average remaining useful life of the intangible assets is 8 years (3 years for software and software licenses, 11 years for customer contracts and lists...

  • Page 52
    ... the notification provided by the Company to the syndicated financial institutions prior to borrowing. The Company is also required to pay facility fees on the credit agreements. The primary uses of the credit facilities are to provide liquidity to the commercial paper program and to provide funding...

  • Page 53
    ... prices equal to the fair market value of the Company' s common stock on the dates of grant. Stock options are issued under a grade vesting schedule, generally vest ratably over five years and have a term of 10 years. Compensation expense for stock options is recognized over the requisite service...

  • Page 54
    ... an employee stock purchase plan that allows eligible employees to purchase shares of common stock at a price equal to 85% of the market value for the common stock at the date the purchase price for the offering is determined. Compensation expense for the employee stock purchase plan is recognized...

  • Page 55
    ... the spin-off of Broadridge. (b) Options cancelled for the year ended June 30, 2007 includes 7.8 million options held by Brokerage Services Group business employees that were canceled or forfeited on March 30, 2007. Performance-Based Restricted Stock: Number of Shares (a) (in thousands) Years ended...

  • Page 56
    ... plan offerings that vest on December 31, 2008 and 2009, respectively. In addition, in fiscal 2008, the Company issued 481,290 shares of restricted stock. The fair value of each stock option issued prior to January 1, 2005 was estimated on the date of grant using a Black-Scholes option pricing model...

  • Page 57
    ... plans for its non-U.S. employees and maintains a Supplemental Officer Retirement Plan ("SORP"). The SORP is a defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key officers upon retirement based upon the officers' years of service and compensation...

  • Page 58
    ... return on plan assets Employer contributions Benefits paid Fair value of plan assets at end of year Change in benefit obligation: Benefit obligation at beginning of year Service cost Interest cost Actuarial and other gains Benefits paid Projected benefit obligation at end of year Funded status...

  • Page 59
    ... as of June 30, 2007. The components of net pension expense were as follows: Years ended June 30, Service cost - benefits earned during the period Interest cost on projected benefits Expected return on plan assets Net amortization and deferral 2008 $ 46.1 50.7 (67.2) 10.4 $ 40.0 2007 $ 42.2 49.0 (62...

  • Page 60
    ...20% 100% United States Fixed Income Securities United States Equity Securities International Equity Securities Total The Company' s pension plans' asset investment strategy is designed to ensure prudent management of assets, consistent with long-term return objectives and the prompt fulfillment of...

  • Page 61
    ... plans' benefit obligation at June 30, 2008 and includes estimated future employee service. C. Retirement and Savings Plan. The Company has a 401(k) retirement and savings plan, which allows eligible employees to contribute up to 35% of their compensation annually and allows highly compensated...

  • Page 62
    ... statutory rate is as follows: Years ended June 30, Provision for taxes at U.S. statutory rate Increase (decrease) in provision from: State taxes, net of federal tax Non-deductible stock-based compensation expense Tax on repatriated earnings Utilization of foreign tax credits Other 2008 $634.2 16...

  • Page 63
    ... earnings accumulated outside the U.S. by allowing the Company to reduce its taxable income by 85 percent of certain eligible dividends received from non-U.S. subsidiaries by the end of the Company' s fiscal year ended June 30, 2006. In connection with the sale of the Claims Services business...

  • Page 64
    ... valuation allowances in the amounts of approximately $4.7 million and $6.6 million at June 30, 2008 and 2007, respectively, relate to net deferred tax assets which were recorded in purchase accounting. Any recognition of net deferred tax assets in future years will be a reduction to goodwill until...

  • Page 65
    ... May 1999 in a stock for stock transaction that was accounted for by the Company as a pooling of interests under Accounting Principles Board Opinion No. 16 "Business Combinations." During fiscal 2008, the Company recorded a tax-basis adjustment to Capital in Excess of Par Value on the Statements of...

  • Page 66
    ... 2008 as follows: Years ending June 30, 2009 2010 2011 2012 2013 Thereafter $252.9 217.9 182.1 156.1 43.5 50.8 $903.3 In addition to fixed rentals, certain leases require payment of maintenance and real estate taxes and contain escalation provisions based on future adjustments in price indices. As...

  • Page 67
    ... of $22.1 million, net of tax, related to professional services, termination of contracts and employee benefits, which arose prior to the fiscal year ended June 30, 2003 Overstated accounts receivable reserves of $11.2 million, net of tax, which arose prior to the fiscal year ended June 30, 2001...

  • Page 68
    ...and goodwill. Reconciling Items Client Cost of Foreign Fund Capital Exchange Interest Charge $ 118.7 15.9 $ (15.0) (15.1) $ Employer PEO Dealer Services Services Services Year ended June 30, 2008 Revenues from continuing operations Earnings from continuing operations before income taxes Assets from...

  • Page 69
    ...ended June 30, 2007 Revenues from continuing operations Assets from continuing operations Year ended June 30, 2006 Revenues from continuing operations Assets from continuing operations 69 $ 7,072.7 $19,813.4 Europe $1,119.9 $1,951.3 Canada $ 388.7 $1,668.7 Other $195.2 $301.0 Total $ 8,776.5 $23...

  • Page 70
    ... Year ended June 30, 2007 Revenues Costs of revenues Gross profit Net earnings from continuing operations Basic earnings per share from continuing operations Diluted earnings per share from continuing operations NOTE 20. SUBSEQUENT EVENT (UNAUDITED) In August 2008, the Company received the Board...

  • Page 71
    ... with Accountants on Accounting and Financial Disclosure None Item 9A. Controls and Procedures Attached as Exhibits 31.1 and 31.2 to this Form 10-K are certifications of ADP' s Chief Executive Officer and Chief Financial Officer, which are required by Rule 13a-14(a) of the Securities Exchange...

  • Page 72
    ... in accordance with authorizations of management and directors of ADP; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of ADP' s assets that could have a material effect on the financial statements of ADP. Because of...

  • Page 73
    ... executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements...

  • Page 74
    ... Operating Officer Chief Financial Officer President, Employer Services-Small Business Services Division Corporate Controller and Principal Accounting Officer President, Added Value Services Messrs. Benson, Butler, Colotti and Martone have each been employed by ADP in senior executive positions...

  • Page 75
    ...Sheiness joined ADP in 1984. Prior to his promotion to Corporate Controller and Principal Accounting Officer, he served as President, Small Business Services, Employer Services, from 2006 to 2007, as Chief Financial Officer, Employer Services, from 2004 to 2005, as General Manager of Tax, Retirement...

  • Page 76
    ... of Executive Officers" and "Election of Directors - Compensation of Non-Employee Directors" in the Proxy Statement for the Company' s 2008 Annual Meeting of Stockholders, which information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management...

  • Page 77
    ...Balance Sheets - June 30, 2008 and 2007 Statements of Consolidated Stockholders' Equity - years ended June 30, 2008, 2007 and 2006 Statements of Consolidated Cash Flows - years ended June 30, 2008, 2007 and 2006 Notes to Consolidated Financial Statements 2. Financial Statement Schedules Page in Form...

  • Page 78
    ... Contract) - Key Employees' Restricted Stock Plan - incorporated by reference to Company' s Registration Statement No. 33-25290 on Form S-8 (Management Compensatory Plan) - Supplemental Officers Retirement Plan, as amended (Management Compensatory Plan) - 1989 Non-Employee Director Stock Option Plan...

  • Page 79
    ...(Form for French Associates) used prior to August 14, 2008 - incorporated by reference to Exhibit 10.2 to Company' s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (Management Compensatory Plan) 10.19 - 2000 Stock Option Grant Agreement (Form for Non-Employee Directors...

  • Page 80
    ... dated June 24, 2008 (Management Contract) 10.25 - 2000 Stock Option Grant Agreement (Form for Employees) for use beginning August 14, 2008 - incorporated by reference to Exhibit 10.25 to Company' s Current Report on Form 8-K, dated August 13, 2008 (Management Compensatory Plan) 21 23 - Subsidiaries...

  • Page 81
    ...Column E Balance at beginning of period Year ended June 30, 2008: Allowance for doubtful accounts: Current Long-term Deferred tax valuation allowance Year ended June 30, 2007: Allowance for doubtful accounts: Current Long-term Deferred tax valuation allowance Year ended June 30, 2006: Allowance for...

  • Page 82
    ...the following persons on behalf of the Registrant in the capacities and on the dates indicated. Signature /s/ Gary C. Butler (Gary C. Butler) Title President and Chief Executive Officer, Director (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer) Corporate Controller...

  • Page 83
    ...s Plan benefit calculated in accordance with the provisions of Section 3.1(b), as applicable. 1.3 Committee. Three board members or senior officers of the Corporation appointed from time to time by the Board of Directors of the Company. 1.4 Board. The Board of Directors of the Company. 1.5 Code. The...

  • Page 84
    ... excluding relocation pay, severance pay, the value of any Company- provided fringe benefits (including, without limitation, car allowances, personal travel allowances and tax gross-ups), compensation derived from stock options, stock appreciation rights, stock plans and programs (including, without...

  • Page 85
    deferred at such Participant' s election under a plan described in section 401(k) of the Code, and the value (at time of grant) of any stock option grant made in lieu of a bonus payment, shall be included in such Grandfathered Participant' s compensation. The Company' s chief executive officer shall...

  • Page 86
    ...s employment with the Company for any reason. 1.24 Spin-off. The tax-free spin-off of the Company' s Brokerage Services Group business. 1.25 Supplement. A supplement attached to and made a part of this Plan, which shall set forth for specific designated Participants any special conditions applicable...

  • Page 87
    ...Maximum Annual Benefit Limitation applicable to him (including any amount transferred to the Pension Plan). (b) Non-Grandfathered Participants. A Non-Grandfathered Participant' s Annual Plan Benefit is the sum of (A) the product of (i) his Final Average Annual Pay, (ii) his Future Service period (up...

  • Page 88
    ... an annual amount in the form of a straight life annuity or, at the Committee' s election, another actuarially equivalent payment option. 3.2 Time of Commencement of Benefits. A Participant' s Annual Plan Benefit shall be payable only upon Separation from Service, Disability, or Death as detailed in...

  • Page 89
    ... annuity, each payment shall be equal to one-twelfth of such Participant' s Late Retirement Benefit, actuarially adjusted for the form of payment selected by the Participant, as applicable. This subsection 3.3(c) shall only apply to Former Participants. (d) No Interest for Delayed Payments. Payments...

  • Page 90
    ..., and shall not reduce, the benefits, if any, payable to a Participant under the Company' s Long Term Disability Insurance Program) shall be calculated in the same way as an Early Retirement Benefit under Section 3.3, based on his Final Average Annual Pay when his Disability begins (which will, for...

  • Page 91
    ... forfeit all benefits otherwise due to him under the terms of the Plan if within 24 months after his employment terminates (including if his employment with the Company is terminated on account of his dishonesty or gross negligence) he violates the non-competition provisions of any agreement he has...

  • Page 92
    ...the amounts, if any, payable hereunder and such right shall not be secured by any assets of the Company or the trust. 5.3 No Right to Company Assets. Except to the extent that benefit amounts have been specifically transferred for an identified Participant into the Pension Plan pursuant to the terms...

  • Page 93
    ... levy, garnishment, attachment, execution or other legal or equitable process. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant, nor be transferable by...

  • Page 94
    ..., such Participant' s home or business address maintained in the Company' s personnel records. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification. 6.5 Validity. In...

  • Page 95
    ... the Participant survived until such age or (ii) the date of the Participant' s death. For purposes of this Section 7.3, a Participant may designate his spouse, children, domestic partner, or a trust for the benefit of the Participant' s spouse, children, or domestic partner, whichever the case may...

  • Page 96
    ... As of the Spin-off date, Participants transferring to Broadridge Financial Solutions, Inc. ("Broadridge") are no longer eligible to participate in the Plan, except executive with employee identification number 100600 ("Executive"). (b) As of the Spin-off date, Executive' s accrued benefit under the...

  • Page 97
    Appendix A to Supplement A Agreed Upon Assumptions to Project the Benefits to Age 65 1. 2. 3. Projected base pay increase of 4% to age 65 Target bonus percent increase of 4% to age 65 Average of the high & low of the ADP stock price on the day of the spin projected at 8% to age 65 15

  • Page 98
    Supplement B Notwithstanding anything in this Plan to the contrary, each Participant with an employee identification number listed below, shall receive a distribution from this Plan commencing as of the first day of the month following the attainment of age 65. Employee Identification Number (i) (ii...

  • Page 99
    Exhibit A Late Retirement Factors Months Years 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 0 1.0000 1.1188 1....

  • Page 100
    ... ADP Commercial Leasing, LLC ADP Dealer Services Denmark ApS ADP Dealer Services Deutschland GmbH ADP Dealer Services France SAS ADP Dealer Services Italia s.r.l. ADP Dealer Services UK Limited ADP Employer Services GmbH ADP Europe SARL ADP Europe S.A. ADP France SAS ADP GlobalView B.V. ADP Group UK...

  • Page 101
    ... Standards Board Interpretation No. 48, "Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109," effective July 1, 2007, the recognition and disclosure provisions of Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit...

  • Page 102
    ... registrant' s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant' s auditors and the audit committee of the registrant' s board of directors (or persons performing the equivalent functions): (a) All...

  • Page 103
    ... registrant' s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant' s auditors and the audit committee of the registrant' s board of directors (or persons performing the equivalent functions): (a) All...

  • Page 104
    ... Data Processing, Inc. (the "Company") on Form 10-K for the fiscal year ending June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gary C. Butler, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as...

  • Page 105
    ... Data Processing, Inc. (the "Company") on Form 10-K for the fiscal year ending June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Christopher R. Reidy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted...