Paychex 2014 Annual Report Download - page 79

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PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Company provided matching contributions as follows: 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; 50% of up to 6% of eligible pay
that an employee contributed to the Plan between February 2012 and November 2013; and 50% of up to 4% of
eligible pay that an employee contributed to the Plan between January 2011 and February 2012. Company
contributions to the Plan for fiscal years 2014, 2013, and 2012 were $16.4 million, $13.1 million, and $10.3
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 $12.3 million and $10.7 million as of May 31, 2014 and May 31, 2013, 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, 2014, 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, 2015
Bank of America, N.A. ................................ $250 million February 28, 2015
PNC Bank, National Association ........................ $150 million February 28, 2015
Wells Fargo Bank, National Association .................. $150 million February 28, 2015
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
administered under an intercreditor agreement among the Lenders. Under certain circumstances, individual
Lenders may require that collateral be transferred from the pooled account into segregated accounts for the
benefit of such individual Lenders.
The primary uses of the lines of credit would be to meet short-term funding requirements related to deposit
account overdrafts and client fund obligations arising from electronic payment transactions on behalf of clients in
the ordinary course of business, if necessary. No amounts were outstanding against these lines of credit during
fiscal 2014 or as of May 31, 2014.
Certain of the financial institutions are also parties to the Company’s credit facility and irrevocable standby
letters of credit, which are discussed below.
Credit facility: In June 2013, the Company entered into a committed, unsecured, five-year syndicated
credit facility, expiring on June 21, 2018. Under the credit facility, Paychex of New York LLP (the “Borrower”)
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