ADP 2015 Annual Report Download

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AUTOMATIC DATA PROCESSING INC
FORM 10-K
(Annual Report)
Filed 08/05/16 for the Period Ending 06/30/16
Address ONE ADP BOULVARD
ROSELAND, NJ 07068
Telephone 9739745000
CIK 0000008670
Symbol ADP
SIC Code
7374 - Computer Processing and Data Preparation and Processing Services
Industry Business Services
Sector Services
Fiscal Year 06/30
http://www.edgar-online.com
© Copyright 2016, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ...FORM 10-K (Annual Report) Filed 08/05/16 for the Period Ending 06/30/16 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year ONE ADP BOULVARD ROSELAND, NJ 07068 9739745000 0000008670 ADP 7374 - Computer Processing and Data Preparation and Processing Services Business Services Services...

  • Page 2
    ...5397 AUTOMATIC DATA PROCESSING, INC. (Exact name of registrant as specified in its charter) [] Delaware (State or other jurisdiction of incorporation or organization) One ADP Boulevard, Roseland, New Jersey (Address of principal executive offices) Registrant's telephone number, including area code...

  • Page 3
    ... Legal Proceedings Mine Safety Disclosures 3 9 14 14 14 14 Part III Item 10. Item 11. Item 12. Item 13. Item 14. Part IV. Item 15. Signatures Exhibits, Financial Statement Schedules 80 85 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain...

  • Page 4
    ... is listed on the NASDAQ Global Select Market® under the symbol "ADP." When we refer to "we," "us," "our," "ADP," or the "Company" in this Annual Report on Form 10-K, we mean Automatic Data Processing, Inc. and its consolidated subsidiaries. Available Information Our corporate website, www.adp.com...

  • Page 5
    ...clients with comprehensive employment administration outsourcing solutions through a relationship in which employees who work at a client's location (referred to as "worksite employees") are co-employed by us and the client. ADP TotalSource is the largest PEO in the United States based on the number...

  • Page 6
    ...to connect their major enterprise resource planning ("ERP") applications with ADP's outsourced payroll services. Employers can choose a variety of payroll payment options ranging from professionally printed checks to ADP's electronic wage payment and, in the United States, payroll card solutions. On...

  • Page 7
    ...client's payroll systems and ERP applications. With ALINE Pay by ADP®, payroll can be disbursed via ALINE Check by ADP®, direct deposit, or the ALINE Card by ADP®, a network-branded payroll card. ALINE Check by ADP provides employees with the ability to receive wages from a self-completed payroll...

  • Page 8
    ... leave administration Employee Benefits . Through the co-employment model, ADP TotalSource provides eligible worksite employees with access to group health, dental and vision coverage a 401(k) retirement savings plan health savings accounts flexible spending accounts group term life and disability...

  • Page 9
    ... to our COBRA, flexible spending account and insurance services businesses, and ADP TotalSource. We are also subject to federal, state and foreign security breach notification laws with respect to both our own employee data and client employee data. Additionally, the changing nature of privacy...

  • Page 10
    ... than 650,000 clients. In fiscal 2016, no single client or group of affiliated clients accounted for revenues in excess of 2% of ADP's annual consolidated revenues. ADP is continuously in the process of performing implementation services for new clients. Depending on the service agreement and/or the...

  • Page 11
    ... records. We have registered our payroll card business with the Treasury Department's Financial Crimes Enforcement Network ("FinCEN") as a provider of prepaid access pursuant to a FinCEN regulation. We have implemented policies and procedures to monitor and address compliance with applicable...

  • Page 12
    ... about our clients, employees of our clients, our vendors and our employees, contractors and temporary staff, including payroll information, health care information, personal and business financial data, social security numbers and their foreign equivalents, bank account numbers, tax information and...

  • Page 13
    ... to date have materially impacted us, a data security incident could have a materially adverse effect on our business, results of operations and financial condition. While ADP maintains insurance coverage that, subject to policy terms and conditions and a significant self-insured retention...

  • Page 14
    ... our short-term funding requirements, which may result in the recognition of losses and adversely impact our results of operations, financial condition and cash flow. We are dependent upon various large banks to execute electronic payments and wire transfers as part of our client payroll, tax and...

  • Page 15
    ... owns 10 of its processing/print centers, and 17 other operational offices, sales offices, and its corporate headquarters in Roseland, New Jersey, which aggregate approximately 3,458,692 square feet. None of ADP's owned facilities is subject to any material encumbrances. ADP leases space for some of...

  • Page 16
    ... Securities Market for Registrant's Common Equity The principal market for the Company's common stock is the NASDAQ Global Select Market under the symbol ADP. The following table sets forth the reported high and low sales prices of the Company's common stock reported on the NASDAQ Global Select...

  • Page 17
    ... under such program to satisfy certain tax withholding requirements through the delivery of shares to the Company instead of cash. The Company received the Board of Directors' approval to repurchase shares of the Company's common stock as follows: Date of Approval August 2014 August 2015 There is...

  • Page 18
    .... The stock price performance shown on this graph may not be indicative of future performance. (a) (b) On September 30, 2014, the Company completed the spinoff of its former Dealer Services business into an independent publicly traded company called CDK Global, Inc. The cumulative returns of the...

  • Page 19
    ... of our Consolidated Financial Statements for additional information). (Dollars and shares in millions, except per share amounts) Years ended June 30, 2016 2015 2014 2013 2012 Total revenues Total costs of revenues Earnings from continuing operations before income taxes Net earnings from continuing...

  • Page 20
    ... calculated in accordance with accounting principles generally accepted in the United States of...companies. (Dollars and shares in millions, except per share amounts) Years ended June 30, 2016 2015 2014 2013 2012 Net earnings from continuing operations Adjustments: Provision for income taxes...

  • Page 21
    ... forward-looking statements contained herein. EXECUTIVE OVERVIEW We are one of the largest providers of cloud-based Human Capital Management ("HCM") solutions - including payroll, talent management, Human Resources and benefits administration, and time and attendance management - to employers around...

  • Page 22
    ... platforms to our new modern cloud-based solutions and focus on improving the client experience. Our revenue growth also benefited from the continued increase in our pays per control metric, which we measure as the number of employees on our clients' payrolls as measured on a same-store-sales basis...

  • Page 23
    ... 2 of our Consolidated Financial Statements for additional information). (In millions, except per share amounts) Years Ended June 30, 2016 2015 2014 2016 As Reported 2015 % Change Constant Dollar Basis 2016 2015 Total revenues from continuing operations Costs of revenues: Operating expenses Systems...

  • Page 24
    ... rates consistent with the prior year. We believe "constant dollar basis" provides information that isolates the actual growth of our operations. Our constant dollar results are not measures of performance calculated in accordance with accounting principles generally accepted in the United States...

  • Page 25
    ....5 $ 2014 1,242.6 2016 8% As Reported 2015 % Change Constant Dollar Basis 2016 10% 2015 12% 11% 10% 11% 12% 9% 8% 11% 9% 8% 11% 11% 10% 12% 11% 12% 10% 13% 12% 14% 12% 14% 14% (a) - The tax on the gain on the sale of the AMD business was calculated based on the marginal rate in...

  • Page 26
    ...payment of state unemployment taxes of $388.8 million . Additionally, operating expenses increase d due to higher costs to implement and service our client base in support of our growing revenue, including products that assist with ACA compliance which contributed to our strong new business bookings...

  • Page 27
    ... in implementation and operational resources to support our revenue growth. Provision for Income Taxes The effective tax rate in fiscal 2016 and 2015 was 33.2% and 33.5% , respectively. The decrease in the effective tax rate was due to the usage of foreign tax credits in a repatriation of foreign...

  • Page 28
    ... 2014 primarily due to increased costs to service our expanding client base and support our growing revenue. Total expenses also increased due to additional investments in product innovation and expenses directly related to the increase in new business bookings. For fiscal 2015 , our total expense...

  • Page 29
    ... in fiscal 2014 , partially offset by the issuance of shares under our stock-based compensation programs. ANALYSIS OF REPORTABLE SEGMENTS Revenues from Continuing Operations (In millions) Years Ended June 30, 2016 Employer Services PEO Services Other Reconciling item: Client fund interest $ (619...

  • Page 30
    ... 2016 Employer Services PEO Services Other Reconciling item: Client fund interest $ (619.1) 2,234.7 $ (593.6) 2,070.7 $ (549.6) 1,879.2 n/m 8% n/m 10% n/m 9% n/m 12% $ 2,867.9 371.7 (385.8) $ 2015 2,693.0 302.8 (331.5) $ 2014 2,521.2 233.6 (326.0) As Reported 2016 6% 23% n/m 2015 7% 30% n/m % Change...

  • Page 31
    ... for fiscal 2015 associated with benefits coverage, workers' compensation coverage, and state unemployment taxes for worksite employees. The increase in revenues was due to a 13% increase in the average number of worksite employees, driven by an increase in the number of new PEO Services clients and...

  • Page 32
    ... consolidated financial statements for a description of our short-term financing including commercial paper. As of June 30, 2016 , cash and short-term marketable securities were $ 3,214.6 million , which were primarily invested in time deposits, money market funds and asset-backed commercial paper...

  • Page 33
    ... per share of $82.88 during fiscal 2016 as compared to purchases of 18.2 million shares at an average price per share of $85.28 during fiscal 2015 . From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase programs. The Company considers several...

  • Page 34
    ... average maturity of the Company's commercial paper during fiscal 2016 was approximately two days . At June 30, 2016 and 2015, we had no outstanding obligations under our short-term commercial paper program. Our U.S. and Canadian short-term funding requirements related to client funds obligations...

  • Page 35
    ... as the licensing of software. The majority of our lease agreements have fixed payment terms based on the passage of time. Certain facility and equipment leases require payment of maintenance and real estate taxes and contain escalation provisions based on future adjustments in price indices. Our...

  • Page 36
    ... investment-grade marketable securities, with a maximum maturity of 10 years at the time of purchase, and money market securities and other cash equivalents. We utilize a strategy by which we extend the maturities of our investment portfolio for funds held for clients and employ short-term financing...

  • Page 37
    ...terms of the securities. We limit credit risk by investing in investment-grade securities, primarily AAA and AA rated securities, as rated by Moody's, Standard & Poor's, and for Canadian securities, DBRS. Approximately 80% of our available-for-sale securities held a AAA or AA rating at June 30, 2016...

  • Page 38
    ... state unemployment insurance, among other human resources functions. Amounts collected from PEO worksite employers include payroll, fees for benefits, and an administrative fee that also includes payroll taxes, fees for workers' compensation and state unemployment taxes. The payroll and payroll...

  • Page 39
    ...or interpretations thereof). In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service ("IRS") and other tax authorities. A change in the assessment of the outcomes of such matters could materially impact our consolidated financial statements...

  • Page 40
    Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Automatic Data Processing, Inc. Roseland, New Jersey We have audited the accompanying consolidated balance sheets of Automatic Data Processing, ...

  • Page 41
    Statements of Consolidated Earnings (In millions, except per share amounts) Years ended June 30, 2016 2015 2014 REVENUES: Revenues, other than interest on funds held for clients and PEO revenues Interest on funds held for clients PEO revenues (A) TOTAL REVENUES $ 8,234.0 377.3 3,056.5 11,667.8 $...

  • Page 42
    ...securities Tax effect Reclassification of net losses/(gains) on available-for-sale securities to net earnings Tax effect Pension net (losses)/gains arising during the period Tax....7 (5.8) 162.8 1,678.7 $ 2016 1,492.5 $ 2015 1,452.5 $ 2014 1,515.9 See notes to the consolidated financial statements. 41

  • Page 43
    ...33,110.5 2016 2015 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued expenses and other current liabilities Accrued payroll and payroll-related expenses Dividends payable Short-term deferred revenues Income taxes payable Total current liabilities before client funds...

  • Page 44
    ... at June 30, 2014 Net earnings Other comprehensive (loss) Stock-based compensation expense Issuances relating to stock compensation plans Tax benefits from stock compensation plans Treasury stock acquired (18.2 shares) Spin-off of CDK Global, Inc. Dividend from CDK Global, Inc. Dividends ($1.95...

  • Page 45
    ... discounts on available-for-sale securities Gain on sale of building Gain on sale of divested businesses, net of tax Other Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses: Increase in accounts receivable Increase in other assets (Decrease...

  • Page 46
    Net change in cash and cash equivalents Cash and cash equivalents, ..., end of period Supplemental disclosures of cash flow information: Cash paid for interest Cash paid for income taxes, net of income tax refunds See notes to the consolidated financial statements. $ $ $ 1,551.8 1,639.3 3,191...

  • Page 47
    ... state unemployment insurance, among other human resources functions. Amounts collected from PEO worksite employers include payroll, fees for benefits, and an administrative fee that also includes payroll taxes, fees for workers' compensation and state unemployment taxes. The payroll and payroll...

  • Page 48
    ...services have begun and are then amortized over the longer of the contractual term or the expected client life, including estimated renewals of client contracts. The Company assesses the collectability of revenues based primarily on the creditworthiness of the customer as determined by credit checks...

  • Page 49
    ..., the independent pricing service includes Municipal Market Data benchmark yield curves as additional inputs to the model. While the Company is not provided access to the proprietary models of the third party pricing service, each quarterly reporting period, the Company reviews the inputs utilized...

  • Page 50
    ...both absolute and relative to peers) in market-dependent multiples or metrics, any changes in the market for the Company's products and services, and regulatory and political developments. Additionally, the Company assessed financial performance by reporting unit and considered cost factors, such as...

  • Page 51
    ... in cash and are marked-to-market based on changes in the Company's stock price. Refer to Note 9 for additional information on the Company's stock-based compensation programs. O. Internal Use Software. Expenditures for major software purchases and software developed or obtained for internal use...

  • Page 52
    ... to workers' compensation and employer's liability coverage for PEO Services worksite employees. In estimating ultimate loss rates, we utilize historical loss experience, exposure data, and actuarial judgment, together with a range of inputs which are primarily based upon the worksite employee's job...

  • Page 53
    ...these changes is dependent upon new or materially modified software licenses entered into after July 1, 2016. In April 2015, the FASB issued ASU 2015-04, "Compensation - Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan...

  • Page 54
    ... the tax free spin-off of its former Dealer Services business, which was a separate reportable segment, into an independent publicly traded company called CDK Global, Inc. ("CDK"). As a result of the spin-off, ADP stockholders of record on September 24, 2014 (the "record date") received one share of...

  • Page 55
    ... was recorded within Other income, net on the Statements of Consolidated Earnings. NOTE 4 . CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS Corporate investments and funds held for clients at June 30, 2016 and 2015 were as follows: June 30, 2016 Amortized Cost Type of issue: Money market securities...

  • Page 56
    ... independent third-party pricing service, see Note 1 "Summary of Significant Accounting Policies." The Company did not transfer any assets between Levels during fiscal 2016 or 2015 . In addition, the Company did not adjust the prices obtained from the independent pricing service. The Company has no...

  • Page 57
    ... investments: Cash and cash equivalents Short-term marketable securities Long-term marketable securities Total corporate investments $ $ 3,191.1 23.5 7.8 3,222.4 $ $ 1,639.3 26.6 28.9 1,694.8 2016 2015 Funds held for clients represent assets that, based upon the Company's intent, are restricted for...

  • Page 58
    ...clients' payroll and tax payment obligations and are recorded on the Consolidated Balance Sheets at the time that the Company impounds funds from clients. The client funds obligations represent liabilities that will be repaid within one year of the balance sheet date. The Company has reported client...

  • Page 59
    ... balance at June 30, 2015 and 2014 is net of accumulated impairment losses of $42.7 million related to the Employer Services segment. Components of intangible assets, net, are as follows: June 30, Intangible assets: Software and software licenses Customer contracts and lists Other intangibles Less...

  • Page 60
    ... commercial paper program and funding for general corporate purposes, if necessary. The Company had no borrowings through June 30, 2016 under the credit agreements. Our U.S. short-term funding requirements related to client funds are sometimes obtained through a short-term commercial paper program...

  • Page 61
    ... is recorded over the vesting period and is initially based on the fair value of the award on the grant date and is subsequently remeasured at each reporting date during the vesting period based on the change in ADP stock price. No dividend equivalents are paid on units awarded under the time-based...

  • Page 62
    ... stock awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase programs. The Company repurchased 13.8 million shares in fiscal 2016 as compared to 18.2 million shares repurchased in fiscal 2015 . The Company considers several factors...

  • Page 63
    ...was estimated at the date of grant using the following assumptions: 2016 Risk-free interest rate Dividend yield Weighted average volatility factor Weighted average expected life (in years) Weighted average fair value (in dollars) (A) The weighted average fair values of shares granted were as follows...

  • Page 64
    ... of base pay plus interest. The plan interest credit rate varies from year-to-year based on the ten-year U.S. Treasury rate . Employees are fully vested upon completion of three years of service. The Company's policy is to make contributions within the range determined by generally accepted...

  • Page 65
    ... to discontinued operations for fiscal 2015 were total one-time charges of $3.2 million for curtailment charges and special termination benefits directly attributable to the spin-off of CDK. The net actuarial loss and prior service credit for the defined benefit pension plans that are included in...

  • Page 66
    ... the net pension expense generally were: Years ended June 30, Discount rate Expected long-term rate of return on assets Increase in compensation levels 2016 4.25% 7.00% 4.00% 2015 4.05% 7.25% 4.00% 2014 4.50% 7.25% 4.00% The discount rate is based upon published rates for high-quality fixed...

  • Page 67
    ... including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The pension plans have no Level 3 investments at June 30, 2016 . The following table...

  • Page 68
    ...: Years ended June 30, Current: Federal Foreign State Total current Deferred: Federal Foreign State Total deferred Total provision for income taxes $ $ $ 2016 2015 2014 2,028.5 206.2 2,234.7 $ $ 1,895.3 175.4 2,070.7 $ $ 1,635.6 243.6 1,879.2 2016 2015 2014 579.0 85.0 76.6 740.6 $ 576...

  • Page 69
    ...of June 30, 2016 , the Company has approximately $39.0 million of federal net operating loss carry-forwards from acquired companies. The net operating losses have an annual utilization limitation pursuant to section 382 of the Internal Revenue Code and expire through 2031 . The Company has state net...

  • Page 70
    ...follows: Taxing Jurisdiction U.S. (IRS) Arizona California Illinois New York New Jersey Canada India Fiscal Years under Examination 2015-2016 2010-2013 2012-2014 2007-2014 2010-2014 2011-2014 2012-2014 2004-2011, 2013-2015 The Company regularly considers the likelihood of assessments resulting from...

  • Page 71
    ... of the Company's tax return for the year ended June 30, 2014 , which did not have a material impact to the consolidated financial statements of the Company. NOTE 11 . COMMITMENTS AND CONTINGENCIES The Company has obligations under various facilities, equipment leases and software license agreements...

  • Page 72
    ... the Company received a Commissioner's Charge from the U.S. Equal Employment Opportunity Commission ("EEOC") alleging that the Company has violated Title VII of the Civil Rights Act of 1964 by refusing to recruit, hire, transfer and promote certain persons on the basis of their race, in the State of...

  • Page 73
    ... the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. There is a reconciling item for the difference between actual interest income earned on invested funds held for clients and interest credited to Employer Services and PEO...

  • Page 74
    United States Year ended June 30, 2016 Revenues from continuing operations Assets from continuing operations Year ended June 30, 2015 Revenues from continuing operations Assets from continuing operations Year ended June 30, 2014 Revenues from continuing operations Assets from continuing operations $...

  • Page 75
    ... for the fiscal 2017 policy year on terms substantially similar to the fiscal 2016 reinsurance policy to cover losses up to $1 million per occurrence related to the workers' compensation and employer's liability deductible reimbursement insurance protection for PEO Services worksite employees. 72

  • Page 76
    ... (ii) such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Management's Report on Internal Control over Financial Reporting It is the responsibility of Automatic Data Processing, Inc.'s ("ADP...

  • Page 77
    ... of ADP's internal control over financial reporting. The Deloitte & Touche LLP attestation report is set forth below. /s/ Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer /s/ Jan Siegmund Jan Siegmund Chief Financial Officer Roseland, New Jersey August 5, 2016 74

  • Page 78
    ... Internal Control over Financial Reporting There were no changes in ADP's internal control over financial reporting that occurred during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, ADP's internal control over financial reporting. 75

  • Page 79
    ... REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Automatic Data Processing, Inc. Roseland, New Jersey We have audited the internal control over financial reporting of Automatic Data Processing, Inc. and subsidiaries (the "Company") as of June 30, 2016, based on...

  • Page 80
    ... Iran and any Iranian financial institution within the United States or the possession or control of any U.S. person. As previously disclosed, during the Company's second quarter of fiscal 2016, in the course of a compliance review of its clients and vendors globally, the Company determined that two...

  • Page 81
    ... to June 2011. Mark D. Benjamin joined ADP in 1992. Prior to his appointment as President, Global Enterprise Solutions, which includes National Account Services, Benefit Services, Recruitment Process Outsourcing, Multinational Companies and Employer Services International, in July 2013, he served...

  • Page 82
    ... - National Account Services, ADP Canada, and GlobalView and Employer Services International, from March 2010 to May 2011. Stuart Sackman joined ADP in 1992. Prior to his appointment as Vice President, Global Product and Technology in March 2015, he served as Corporate Vice President and General...

  • Page 83
    ...and Services See "Independent Registered Public Accounting Firm's Fees" in the Proxy Statement for the Company's 2016 Annual Meeting of Stockholders, which information is incorporated herein by reference. Part IV Item 15. Exhibits, Financial Statement Schedules (a) Financial Statements and Financial...

  • Page 84
    ... to Exhibit 10.14 to the Company's Current Report on Form 8-K dated June 19, 2015 Five-Year Credit Agreement, dated as of June 15, 2016, among Automatic Data Processing, Inc., the Lenders Party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., BNP Paribas, Wells...

  • Page 85
    ...Exhibit 10.25 to the Company's Current Report on Form 8-K dated August 13, 2008 (Management Compensatory Plan) Automatic Data Processing, Inc. 2008 Omnibus Award Plan - incorporated by reference to Appendix A to the Company's Proxy Statement for its 2008 Annual Meeting of Stockholders filed with the...

  • Page 86
    ... of Independent Registered Public Accounting Firm Certification by Carlos A. Rodriguez pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 Certification by Jan Siegmund pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 Certification by Carlos A. Rodriguez pursuant to 18...

  • Page 87
    AUTOMATIC DATA PROCESSING, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (In thousands) Column A Column B (1) Balance at beginning of period Year ended June 30, 2016: Allowance for doubtful accounts: Current Long-term Deferred tax valuation allowance Year ended June 30, 2015:...

  • Page 88
    ... duly authorized. AUTOMATIC DATA PROCESSING, INC. (Registrant) August 5, 2016 By /s/ Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on...

  • Page 89
    /s/ R. Glenn Hubbard (R. Glenn Hubbard) /s/ John P. Jones (John P. Jones) /s/ William J. Ready (William J. Ready) /s/ Sandra S. Wijnberg (Sandra S. Wijnberg) Director August 5, 2016 Director August 5, 2016 Director August 5, 2016 Director August 5, 2016 86

  • Page 90
    ...French Commercial Code, French labor law and Article 80 bis of the French tax code and tax administrative guidelines published by the French tax authorities (in particular, BOI-RSA-ES-20-10-10-20140812) (" French Law "). The French Sub Plan is applicable to Awards granted to employees of the Company...

  • Page 91
    ... Grant and (iii) 80% of the average purchase price of the treasury Shares held by the Company on the Date of Grant; If the Common Stock is not listed on NYSE or NASDAQ or on any other similar regulated stock exchange as defined by French administrative guidelines BOI-RSA-ES-20-10-10-20140812 n°160...

  • Page 92
    ... Law. Article 7(d) of the Plan (" Method of Exercise and Form of Payment ") shall not be applicable to French Options. 7. Vesting Period French Options shall vest and become exercisable in such manner and on such date or dates determined by the Committee and set forth in the Award Agreement, and...

  • Page 93
    ...days preceding the Date of Grant and the average purchase price of the treasury Shares held by the Company on the Date of Grant and (ii) the French Exercise Price. 14. Effective Date - Duration of the French Sub Plan The French Sub Plan shall be effective as of April 6, 2016 (the " French Effective...

  • Page 94
    ... in accordance with French Law. 16. Award Agreement The Award Agreement described in Article 14(a) of the Plan shall in particular indicate (i) the number of French Options, (ii) the French Exercise Price and (iii) the Date of Grant. 17. Governing Law This French Sub Plan shall be governed by and...

  • Page 95
    ...-entry form on the Payout Date. For Participants whose home country is not the United States, subject to the other terms and conditions contained in this Agreement, the Company shall settle the Award by the payment to the Participant in cash (without interest) of an amount equal to the Fair Market...

  • Page 96
    ...death, Disability (as defined in the Plan) or retirement (defined for purposes of this Agreement as voluntary termination of employment at or after age 65, or age 55 with 10 years of service with the Company or its Affiliates), Participant shall be entitled to receive a pro-rata portion of the Award...

  • Page 97
    ... of completed months from July 1, 20[XX] until the date of Participant's termination of employment, divided by (ii) 36. " Yearly Performance Percentage " is a number, expressed as a percentage, determined by the Company using straight line interpolation between the low and high of the Financial...

  • Page 98
    ... granting and delivery of the Award, and any other obligations of the Company under this Agreement, shall be subject to all applicable federal, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. Transferability . No...

  • Page 99
    ... of any jurisdiction other than the State of Delaware. (g) Headings . The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement. AUTOMATIC DATA PROCESSING, INC. _____

  • Page 100
    ... [DATE] AUTOMATIC DATA PROCESSING, INC. 2008 OMNIBUS AWARD PLAN STOCK OPTION GRANT AGREEMENT AUTOMATIC DATA PROCESSING, INC. (the "Company"), pursuant to the 2008 Omnibus Award Plan (the "Plan"), hereby irrevocably grants you (the "Participant"), on [DATE] the right and option to purchase shares of...

  • Page 101
    ...(i) if the Participant satisfied the Normal Retirement Criteria at the time of Participant's total and permanent disability, the expiration of 36 months after termination of Participant's employment from the Company or any of its subsidiaries because of total and permanent disability, or (ii) if the...

  • Page 102
    ... such automatic exercise, the Company shall deliver to the Participant the number of shares of Common Stock for which the option was deemed exercised less the number of shares of Common Stock having a Fair Market Value, as of such date, sufficient to (1) pay the full price for each of the shares of...

  • Page 103
    ...-will term of employment will not change. 14. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant. 15. This Agreement, the Plan...

  • Page 104
    AUTOMATIC DATA PROCESSING, INC. 2008 OMNIBUS AWARD PLAN PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT AUTOMATIC DATA PROCESSING, INC. (the " Company "), pursuant to the 2008 Omnibus Award Plan (the " Plan "), hereby irrevocably grants you (the " Participant "), on [DATE] (the " Grant Date ...

  • Page 105
    ... with the PRSU Award; provided , however , that each time the Company pays a dividend with respect to a share of Common Stock during the period from the Grant Date to the Payout Date, the Participant shall be credited with or paid a cash amount equal to the product of (i) the number of PRSUs then...

  • Page 106
    ... at any time for any reason whatsoever. Although over the course of employment terms and conditions of employment may change, the at-will term of employment will not change. (d) Successors . The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors...

  • Page 107
    ... ADP TotalSource Group, Inc. Automatic Data Processing Insurance Agency, Inc. Automatic Data Processing Limited Automatic Data Processing Limited (UK) Incorporation Delaware Kentucky Brazil New Jersey Canada Germany France France Netherlands France Vermont Netherlands Delaware Arizona India Delaware...

  • Page 108
    ...-170506, on Form S-8, and Registration Statement No. 333-206631 on Form S-3 of our reports dated August 5, 2016, relating to the consolidated financial statements and consolidated financial statement schedule of Automatic Data Processing, Inc. and subsidiaries (the "Company"), and the effectiveness...

  • Page 109
    ... ACT OF 1934 I, Carlos A. Rodriguez, certify that: 1. 2. 3. 4. I have reviewed this Annual Report on Form 10-K of Automatic Data Processing, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the...

  • Page 110
    ... CERTIFICATION PURSUANT TO RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 I, Jan Siegmund, certify that: 1. 2. 3. 4. I have reviewed this Annual Report on Form 10-K of Automatic Data Processing, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact...

  • Page 111
    ... In connection with the Annual Report of Automatic Data Processing, Inc. (the "Company") on Form 10-K for the fiscal year ending June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carlos A. Rodriguez, President and Chief Executive Officer of the...

  • Page 112
    ... with the Annual Report of Automatic Data Processing, Inc. (the "Company") on Form 10-K for the fiscal year ending June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jan Siegmund, Chief Financial Officer of the Company, certify, pursuant...