Paychex 2012 Annual Report Download - page 67

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PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Performance shares: Beginning in July 2010, the Board approved grants of restricted performance shares
to officers. These awards have a two-year performance period, after which the amount of restricted shares earned
will be determined based on achievement against established performance targets. The restricted shares earned
will then be subject to a one-year service period. Performance shares do not have voting rights or earn dividend
equivalents during the performance period. The fair value of performance shares is equal to the closing market
price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends
over the performance period.
The following table summarizes performance share activity for the two years ended May 31, 2012:
In millions, except per share amounts
Performance
shares
Weighted-average
grant-date
fair value
per share
Unearned performance shares as of May 31, 2010 .............. —$—
Granted(1) .............................................. 0.1 $23.85
Forfeited ............................................... — $23.55
Unearned performance shares as of May 31, 2011 .............. 0.1 $23.90
Granted(1) .............................................. 0.1 $28.87
Forfeited ............................................... — $25.38
Unearned performance shares as of May 31, 2012 .............. 0.2 $26.83
(1) Performance shares granted assuming achievement of performance goals at target. Actual amount of shares
to be earned may differ from this amount.
Non-compensatory employee benefit plan: The Company offers an Employee Stock Purchase Plan to all
employees under which the Company’s common stock can be purchased through a payroll deduction with no
discount to the market price and no look-back provision. All transactions occur directly through the Company’s
transfer agent and no brokerage fees are charged to employees, except for when stock is sold. The plan has been
deemed non-compensatory and therefore, no stock-based compensation costs have been recognized for fiscal
years 2012, 2011, or 2010 related to this plan.
Note E — Funds Held for Clients and Corporate Investments
Funds held for clients and corporate investments are as follows:
May 31, 2012
In millions
Amortized
cost
Gross
unrealized
gains
Gross
unrealized
losses
Fair
value
Type of issue:
Funds held for clients money market securities and
other cash equivalents ........................ $2,157.2 $ — $ — $2,157.2
Available-for-sale securities:
General obligation municipal bonds ............ 1,295.0 39.1 (0.2) 1,333.9
Pre-refunded municipal bonds(1) ............... 326.8 7.5 — 334.3
Revenue municipal bonds .................... 487.9 13.2 (0.1) 501.0
Variable rate demand notes ................... 889.8 — — 889.8
Total available-for-sale securities .............. 2,999.5 59.8 (0.3) 3,059.0
Other ...................................... 8.8 0.5 (0.1) 9.2
Total funds held for clients and corporate
investments ............................... $5,165.5 $60.3 $(0.4) $5,225.4
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