ADP 2008 Annual Report Download - page 84

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1.9 Early Retirement Date. Means the date which is the first day of the calendar month coincident with or next following the Participant’ s
60th birthday.
1.10 Final Average Annual Pay.
(a) For Non-Grandfathered Participants, Final Average Annual Pay shall mean the average annual compensation for such Participant for
the five full consecutive calendar years during his Future Service period during which he received the largest total amount of compensation.
For this purpose, a Non-Grandfathered Participant’ s “compensation” shall mean the total compensation actually paid or accrued by the
Company to or for such Non-Grandfathered Participant including, without limitation, bonuses paid or accrued, performance incentive payments
and the like, and 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 limitation, restricted stock plans and programs and grants of restricted stock units), or any similar plans;
provided that, notwithstanding anything to the contrary set forth herein, amounts deferred at such Non-Grandfathered 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 Participant’ s compensation. The Company’ s chief executive officer shall determine the value of any stock
option grant made in lieu of a bonus payment, which value shall not, in any event, be: (i) greater than the “target bonus” amount the stock
option grant was made in lieu of (the “Substituted Amount”) or (ii) less than the amount such Participant would have received had the
foregoing stock option grant not been made and the normal bonus “scoring” methodology been applied to the Substituted Amount, provided
that such amount shall not exceed the Substituted Amount. The value of such stock option grant shall be included in a Non-Grandfathered
Participant’ s compensation in the calendar year in which the bonus (which the stock option was granted in lieu of) would have otherwise been
paid or accrued; and
(b) For Grandfathered Participants,Final Average Annual Pay shall mean the average annual compensation for such Grandfathered
Participant for the five full consecutive calendar years during his Future Service period during which he received the largest total amount of
compensation. For this purpose, a Grandfathered Participant’ s “compensation” shall mean the total compensation actually paid or accrued by
the Company to or for such Participant including, without limitation, bonuses paid or accrued (other than any bonuses paid or accrued under
the Company’ s three-year GIP growth incentive plan), performance incentive payments and the like and restricted stock plans and programs
(other than (A) the Company’ s 2005 fiscal year and 2006 fiscal year broad-based performance-based restricted stock programs (PBRS) in
which all “letter grade” associates participated and (B) the Company’ s two-year accelerated revenue PBRS programs (i.e. the ARPs), the first
of which commenced in the Company’ s 2007 fiscal year), and excluding relocation pay, compensation derived from stock options, stock
appreciation rights or any similar plans; provided that, notwithstanding anything to the contrary set forth herein, amounts
2