Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Description
of Debt Securities
The debt securities will be our direct
senior unsecured general obligations. The debt securities will be issued in one or more series under an indenture between us and
U.S. Bank National Association, as trustee.
We have summarized all of the material
provisions of the indenture below. The following description of the provisions of the indenture does not purport to be complete
and is subject to, and qualified in its entirety by, reference to the indenture, a form of which has been filed as an exhibit to
the registration statement of which this prospectus forms a part, and you should read the indenture for provisions that may be
important to you. In the summary below, we have included references to section numbers of the indenture so that you can easily
locate these provisions.
General
The debt securities will be our direct
senior unsecured general obligations. The debt securities will rank equally with all of our other senior and unsubordinated debt.
The provisions of the indenture allow us
to “reopen” a previous issue of a series of debt securities and issue additional debt securities of that series.
A prospectus supplement relating to any
series of debt securities being offered will include specific terms relating to the offering. The terms will be established in
an officers’ certificate or a supplemental indenture. The officers’ certificate or supplemental indenture will be signed
at the time of issuance and will contain important information. The officers’ certificate or supplemental indenture will
be filed as an exhibit to a Current Report on Form 8-K of ADP, which will be publicly available. The officers’ certificate
or supplemental indenture will include some or all of the following terms for a particular series of debt securities:
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the title of the securities;
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any limit on the amount that may be issued;
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whether or not the debt securities will be issued in global form and who the depositary will be;
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the interest rate or the method of computing the interest rate;
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the date or dates from which interest will accrue, if any, or how such date or dates will be determined, and the interest payment
date or dates and any related record dates;
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the place(s) where and the manner in which payments will be made;
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ADP’s right, if any, to defer payment of interest and the maximum length of any deferral period;
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the terms and conditions on which the debt securities may be redeemed at the option of ADP;
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the date(s), if any, on which, and the price(s) at which ADP is obligated to redeem, or at the holder’s option to purchase,
such series of debt securities and other related terms and provisions;
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any provisions granting special rights to holders when a specified event occurs;
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any changes to or additional events of default or covenants;
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any special tax implications of the debt securities;
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the denominations in which the debt securities will be issued, if other than denominations of $2,000 and whole multiples of
$1,000; and
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any other specific terms of the securities that are not inconsistent with the indenture. (section 2.01)
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Fixed Rate Debt Securities
Each fixed rate debt security will mature
on the date specified in the applicable prospectus supplement.
Each fixed rate debt security will bear
interest from the date of issuance at the annual rate stated on its face until the principal is paid or made available for payment.
Interest on fixed rate debt securities will be computed on the basis of a 360-day year of twelve 30-day months. Interest on fixed
rate debt securities will accrue from and including the most recent interest payment date in respect of which interest has been
paid or duly provided for, or, if no interest has been paid or duly provided for, from and including the issue date or any other
date specified in a prospectus supplement on which interest begins to accrue. Interest will accrue to but excluding the next interest
payment date, or, if earlier, the date of maturity or earlier redemption or repayment, as the case may be.
Payments of interest on fixed rate debt
securities will be made on the interest payment dates specified in the applicable prospectus supplement. However, if the first
interest payment date is less than 15 days after the date of issuance, interest will not be paid on the first interest payment
date, but will be paid on the second interest payment date.
Unless otherwise specified in the applicable
prospectus supplement, if any scheduled interest payment date, maturity date or date of redemption or repayment is not a business
day, then we may pay the applicable interest, principal and premium, if any, on the next succeeding business day, and no additional
interest will accrue during the period from and after the scheduled interest payment date, maturity date or date of redemption
or repayment. (section 13.07)
A fixed rate debt security may pay a level
amount in respect of both interest and principal amortized over the life of the debt security. Payments of principal and interest
on amortizing debt securities will be made on the interest payment dates specified in the applicable prospectus supplement, and
at maturity or upon any earlier redemption or repayment. Payments on amortizing debt securities will be applied first to interest
due and payable and then to the
reduction
of the unpaid principal amount. We will provide to the original purchaser, and will furnish to subsequent holders upon request
to us, a table setting forth repayment information for each amortizing debt security.
Optional Redemption
Unless the prospectus supplement relating
to any series of debt securities provides otherwise with respect to such series, each series of debt securities will be redeemable
in whole at any time or in part from time to time, at our option, at a redemption price equal to the greater of:
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100% of the principal amount of the series of debt securities to be redeemed; or
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the sum of the present values of the remaining scheduled payments of principal and interest on the series of debt securities
to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury Rate plus a spread as specified in the
applicable prospectus supplement.
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In each case we will pay accrued and unpaid
interest on the principal amount to be redeemed to the date of redemption.
“Comparable Treasury Issue”
means the United States Treasury security selected by the Independent Investment Banker as having an actual or interpolated maturity
comparable to the remaining term (“Remaining Life”) of the series of debt securities to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of such series of debt securities.
“Comparable Treasury Price”
means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker”
means the investment banking institution or institutions specified in the applicable prospectus supplement and their respective
successors, or, if such firms or the successors, if any, to such firm or firms, as the case may be, are unwilling or unable to
select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by us.
“Reference Treasury Dealer”
means the investment banking institutions specified as such in the applicable prospectus supplement; provided, however, that if
any of them ceases to be a primary U.S. Government securities dealers (each a “Primary Treasury Dealer”), we will substitute
another Primary Treasury Dealer.
“Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m., New York City time,
on the third business day preceding such redemption date (or date of deposit in the case of a satisfaction and discharge).
“Treasury Rate” means, with
respect to any redemption date, the rate per year equal to:
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the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently
published statistical release designated “H.15” or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable
Treasury Issue; provided that, if no maturity is within three months before or after the remaining life of the series of debt securities
to be redeemed, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined
and the Treasury Rate shall be interpolated or extrapolated from those yields on a straight line basis, rounding to the nearest
month; or
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(ii)
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if such release (or any successor release) is not published during the week preceding the calculation date or does not contain
such yields, the rate per year equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
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The Treasury Rate will be calculated on
the third business day preceding the redemption date (or date of deposit in the case of a satisfaction and discharge). As used
in the immediately preceding sentence and in the definition of “Reference Treasury Dealer Quotations” above, the term
“business day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City
are authorized or required by law to remain closed.
Notice of any redemption will be electronically
delivered or mailed at least 30 but not more than 60 days before the redemption date to each holder of record of the series of
debt securities to be redeemed at its registered address. The notice of redemption will state, among other things, the amount of
the series of debt securities to be redeemed, the redemption date, the CUSIP(s) and ISIN number(s), the manner in which the redemption
price will be calculated and the place or places that payment will be made upon presentation and surrender of the series of debt
securities to be redeemed. If less than all of a series of debt securities are to be redeemed at our option, the trustee will select
by lot or in such other manner in accordance with the customary procedures of the depositary, the debt securities of that series,
or portions of the debt securities of that series, to be redeemed. Unless we default in the payment of the redemption price with
respect to any debt securities called for redemption, interest will cease to accrue on such debt securities at the redemption date.
(sections 3.02 and 3.03)
ADP will not be required (i) to issue,
register the transfer of or exchange any series of debt securities during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any debt securities of any series so selected for redemption in whole or in part, except the
unredeemed portion of any such series of debt securities being redeemed in part. (section 2.05)
Covenants
Under
the indenture, ADP agrees, among other things, to pay the interest, principal and any premium on the debt securities when due (section
4.01), and to maintain a place of payment (section 4.02). However, the covenants under the indenture do not, among other things:
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limit the amount of indebtedness or lease obligations that may be incurred by us and our subsidiaries; or
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restrict us from paying dividends or making distributions on our capital stock or purchasing or redeeming our capital stock.
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The applicable prospectus supplement may
contain additional covenants that impose various restrictions on ADP and, as a result, afford the holders of its securities certain
protections. You should review the full text of the covenants in the applicable prospectus supplement and supplemental indenture
to evaluate the covenants.
Consolidation, Merger or Sale
We may not consolidate with or merge into,
or convey, transfer or lease all or substantially all of our properties and assets to, any person unless:
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(a) we will be the continuing corporation or (b) the successor corporation or person formed by such consolidation or into which
we are merged or to which all or substantially all of our property and assets are conveyed, transferred or leased is a corporation,
partnership or trust organized and validly existing under the laws of the United States of America, any State thereof or the District
of Columbia and shall expressly assume and such successor corporation or person expressly assumes our obligations on the debt securities
and under the indenture; and
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immediately after giving effect to such transaction, no event of default or event, which after notice or lapse of time or both
would become an event of default, shall have occurred and be continuing.
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Any such successor, acquiror or lessor
of such assets will succeed to every right and power of ADP under the indenture. Thereafter, except in the case of a lease, the
predecessor or transferor of such assets will be relieved of all obligations and covenants under the indenture and the debt securities.
(sections 10.01 and 10.02)
This covenant would not apply to any recapitalization
transaction, a change of control of ADP or a highly leveraged transaction, unless the transaction or change of control were structured
to include a merger or consolidation or conveyance, transfer or lease of all or substantially all of our properties and assets
as set forth in the indenture.
Events of Default Under the Indenture
The following are events of default under
the indenture with respect to any series of debt securities issued:
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we fail to pay interest when due and such failure continues for 30 days, unless the time for payment has been properly extended
or deferred in accordance with the terms of the particular series;
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we fail to pay the principal or any premium when due, unless the maturity has been properly extended in accordance with the
terms of the particular series;
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we fail to observe or perform any other covenant or agreement contained in the debt securities or the indenture, other than
a covenant or agreement specifically relating to another series of debt securities, and such failure continues for 90 days after
we receive a notice of default from the trustee or from the holders of at least 25% in aggregate principal amount of the outstanding
debt securities of all of the affected series;
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certain events of bankruptcy or insolvency, whether voluntary or not; and
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any additional events of default that may be established with respect to a particular series of debt securities under the indenture,
as may be specified in the applicable prospectus supplement. (section 6.01)
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If, with regard to any series, an event
of default resulting from a failure to pay principal, any premium or interest occurs and is continuing, the trustee or the holders
of at least 25% in aggregate principal amount of the outstanding debt securities of that series may declare the principal of all
debt securities of that series immediately due and payable. (section 6.01)
If an event of default other than a failure
to pay principal, any premium or interest occurs and is continuing, the trustee or the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of all affected series (all such series voting together as a single class) may declare
the principal of all debt securities of such affected series immediately due and payable. (section 6.01)
If an event of default relating to events
in bankruptcy or insolvency of ADP occurs and is continuing, then the entire principal amount of all of the debt securities outstanding,
and the interest accrued thereon, if any, will automatically become due and payable immediately, without any declaration or other
act by the trustee or any holder.
The holders of a majority in aggregate
principal amount of the outstanding debt securities of all affected series (voting together as a single class) may waive any past
default with respect to such series and its consequences, except a default or events of default regarding payment of principal,
any premium or interest, in which case the holders of a majority in aggregate principal amount of the outstanding debt securities
of each affected series shall vote to waive such default or event of default as a separate class. Such a waiver will eliminate
the default. (section 6.06)
Unless otherwise specified in the indenture,
if an event of default occurs and is continuing, the trustee will be under no obligation to exercise any of its rights or powers
under the indenture unless the holders of the debt securities have offered the trustee security or indemnity reasonably satisfactory
to it against the costs, expenses and
liabilities
that it might incur. The holders of a majority in aggregate principal amount of the outstanding debt securities of all series
affected by an event of default, voting together as a single class, or, in the event of a default in the payment of principal,
any premium or interest, the holders of a majority of the aggregate principal amount outstanding of each affected series voting
as a separate class, will have the right to direct the time, method and place of conducting any proceeding for any remedy available
to the trustee, or exercising any trust or power conferred on the trustee with respect to the debt securities of such series,
provided that:
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such direction is not in conflict with any law or the indenture or unduly prejudicial to the rights of holders of any other
series of debt securities outstanding under the indenture; and
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unless otherwise provided under the Trust Indenture Act, the trustee need not take any action that might involve it in personal
liability. (section 6.06)
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A holder of the debt securities of a particular
series will only have the right to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other
remedies, in each case with respect to such series of debt securities, if:
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the holder has given written notice to the trustee of a continuing event of default;
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in the case of an event of default relating to the payment of principal, any premium or interest, the holders of at least 25%
in aggregate principal amount of the outstanding debt securities of the particular series have made written request to the trustee
to institute proceedings as trustee;
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in the case of an event of default not relating to payment of principal, any premium or interest, the holders of at least 25%
in aggregate principal amount of the outstanding debt securities of all series affected by such event of default (voting together
as a single class) have made written request to the trustee to institute proceedings as trustee;
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such holders have offered the trustee indemnity or security reasonably satisfactory to it to cover the cost of the proceedings;
and
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the trustee does not institute a proceeding, and does not receive conflicting directions from a majority in principal amount
of the outstanding debt securities of (i) the particular series, in the case of an event of default relating to the payment of
principal, any premium or interest, or (ii) all affected series, in the case of an event of default not relating to the payment
of principal, any premium or interest, in each case, within 60 days of receiving the written notice of an event of default. (section
6.04)
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Discharge, Defeasance and Covenant Defeasance
We can discharge or defease our obligations
under the indenture as set forth below.
We may discharge our obligations to the
beneficial owners of any series of debt securities that have not already been delivered to the trustee for cancellation and that
have either become due and payable or are by their terms to become due and payable within one year (or to be called for redemption
within one year). We may effect a discharge by irrevocably depositing with the trustee money or government obligations or a combination
thereof, as trust funds, in an amount sufficient to pay when due, whether at maturity, upon redemption or otherwise, the principal
of, and premium, if any, and interest on, the debt securities.
Unless otherwise provided in the applicable
prospectus supplement, we may also discharge any and all of our obligations to the beneficial owners of any series of debt securities
at any time (“legal defeasance”). We also may be released from the obligations imposed by any covenants of any outstanding
series of debt securities and provisions of the indenture, and we may omit to comply with those covenants without creating an event
of default (“covenant defeasance”). We may effect legal defeasance and covenant defeasance only if, among other things:
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we irrevocably deposit with the trustee money or government obligations, as trust funds, in an amount sufficient to pay when
due (whether at maturity, upon redemption, or otherwise) the principal of, and premium, if any, and interest on all outstanding
debt securities of the series; and
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we deliver to the trustee an opinion of counsel from a nationally recognized law firm to the effect that the beneficial owners
of the series of debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the
legal defeasance or covenant defeasance, as applicable, and that legal defeasance or covenant defeasance, as applicable, will not
otherwise alter the beneficial owners’ U.S. federal income tax treatment of principal, premium, if any, and interest payments
on the series of debt securities, which opinion, in the case of legal defeasance, must be based on a ruling of the Internal Revenue
Service, or a change in U.S. federal income tax law.
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Although we may discharge or defease our
obligations under the indenture as described in the two preceding paragraphs, we may not avoid, among other things, our duty to
register the transfer or exchange of any series of debt securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of debt securities or to maintain an office or agency in respect of any series of debt securities.
We may exercise our legal defeasance option
notwithstanding our prior exercise of our covenant defeasance option.
Modification of Indenture; Waiver
Without the consent of any holders of debt
securities, ADP and the trustee may change the indenture:
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to fix any ambiguity, defect or inconsistency in the indenture;
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to effect the assumption of a successor corporation of our obligations under the indenture and the outstanding debt securities;
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to add to our covenants for the benefit of the holders of all or any series of debt securities under the indenture or surrender
any right or power we have under the indenture;
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to change anything that does not materially adversely affect the interests of any holder of debt securities of any series;
and
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to effect certain other limited purposes described in the indenture. (section 9.01)
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The rights of holders of a series of debt
securities may be changed by ADP and the trustee with the written consent of the holders of a majority of the aggregate principal
amount of the outstanding debt securities of all series then outstanding under the indenture (all such series voting together as
a single class). However, the following changes may only be made with the consent of each holder of debt securities of each series
affected by the change:
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extending the fixed maturity;
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reducing the principal amount;
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reducing the rate of or extending the time of payment of interest;
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reducing any premium payable upon redemption; or
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reducing the percentage of debt securities referred to above, the holders of which are required to consent to any amendment.
(section 9.02)
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Form, Exchange, and Transfer
The debt securities of each series will
be issued in fully registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess
thereof. The indenture provides that debt
securities
of a series may be issued in temporary or permanent global form and may be issued as book-entry securities that will be deposited
with The Depository Trust Company or another depositary named by ADP and identified in a prospectus supplement with respect to
such series. (sections 2.03, 2.06 and 2.11)
A holder of debt securities of any series
can exchange such debt securities for other debt securities of the same series, in any authorized denomination and with the same
terms and aggregate principal amount. A holder may present debt securities for exchange or for registration of transfer at the
office of the security registrar or at the office of any transfer agent designated by ADP for such purpose. Unless otherwise provided
in the debt securities to be transferred or exchanged, no service charge will be made for any registration of transfer or exchange,
but ADP may require payment of any related taxes or other governmental charges. The prospectus supplement will name the security
registrar and any transfer agent initially designated for any series of debt securities. ADP may at any time change the transfer
agent by written notice delivered to the trustee. (section 2.05)
If the debt securities of any series are
to be redeemed, ADP will not be required to:
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issue, register the transfer of, or exchange any debt securities of that series during a period beginning 15 days before the
day of mailing of a notice of redemption and ending at the close of business on the day of mailing; or
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register the transfer of or exchange any debt securities of a series, or a portion of a series, that has been called for redemption.
(section 2.05 and 4.02)
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Rights and Duties of the Trustee
The trustee, except when there is an event
of default, will perform only those duties as are specifically stated in the indenture. If an event of default has occurred with
respect to any series of debt securities, the trustee must exercise with respect to such debt securities the rights and powers
it has under the indenture and use the same degree of care and skill as a prudent person would exercise or use in the conduct of
his or her own affairs. Except as provided in the preceding sentence, the trustee is not required to exercise any of the powers
given it by the indenture at the request of any holder of debt securities unless it is offered security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that it might incur. The trustee is not required to spend or risk
its own money or otherwise become financially liable while performing its duties or exercising its rights or powers unless it reasonably
believes that it will be repaid or receive adequate indemnity. The trustee will not be deemed to have any notice of any default
or event of default unless a responsible officer of the trustee has actual knowledge of or receives written notice of the default
which specifies the existence of such default or event of default with respect to the affected securities and the indenture. Furthermore,
the rights and protections of the trustee, including its right of indemnification under the indenture, extend to the trustee’s
officers, directors, agents and employees, and will survive the trustee’s resignation and removal and final payment of the
securities. (sections 7.01 and 7.02)
Payment and Paying Agents
We will pay interest on any debt securities
to the person in whose name the debt securities are registered on the regular record date for the applicable interest payment date.
(sections 2.03 and 3.03)
We will pay principal, any premium and
interest on the debt securities of a particular series at the office of one or more paying agents that we designate for that series.
Unless otherwise stated in the applicable officers’ certificate, supplemental indenture and prospectus supplement, we will
initially designate the corporate trust office of the trustee in the City of New York as our sole paying agent. We will be required
to maintain a paying agent in each place of payment for the debt securities. (sections 4.01, 4.02 and 4.03)
All money we pay to a paying agent or the
trustee for the payment of principal, any premium or interest on any debt security which remains unclaimed for a period of two
years after the principal, premium or interest has become due and payable will, upon our request, be repaid to us, and the holder
of the debt security may then look only to us for payment of those amounts. (section 11.05)
Governing Law
The indenture and the debt securities will
be governed by and interpreted in accordance with the laws of the State of New York. (section 13.05)