Exhibit 10.7

RESTRICTED STOCK AWARD AGREEMENT

MARKET-BASED VESTING

PAYCOM SOFTWARE, INC.

2014 LONG-TERM INCENTIVE PLAN

 

1.Grant of Award.  Pursuant to the Paycom Software, Inc. 2014 Long-Term
Incentive Plan (the “Plan”) for Employees, Contractors, and Outside Directors of
Paycom Software, Inc., a Delaware corporation (the “Company”), the Company
grants to

____________________________________

(the “Participant”)

an Award of Restricted Stock in accordance with Section 6.4 of the Plan.  The
number of shares of Common Stock awarded under this Restricted Stock Award
Agreement – Market-Based Vesting (this “Agreement”) is _________________ shares
(the “Awarded Shares”). The “Date of Grant” of this Award is _________________.

2.Subject to Plan; Purpose; Definitions.  

a.This Agreement is subject to the terms and conditions of the Plan, and the
terms of the Plan shall control to the extent not otherwise inconsistent with
the provisions of this Agreement.  To the extent the terms of the Plan are
inconsistent with the provisions of the Agreement, this Agreement shall
control.  This Agreement is subject to any rules promulgated pursuant to the
Plan by the Board or the Committee and communicated to the Participant in
writing.

b.The Awarded Shares provided for in this Agreement are intended to: (i) provide
the Participant with a long-term stake in the Company; (ii) provide the
Participant with an incentive to contribute to the Company’s overall
performance; and (iii) develop and maintain stockholders of the Company whose
interests are aligned with the Company’s interests.  The Participant
acknowledges that the Company is distinct from its Subsidiaries and that the
Participant’s employer is not the Company, but a Subsidiary of the Company.  The
Participant further acknowledges and agrees that (x) the Awarded Shares provided
for herein are entirely supplemental to, and independent of, any wage or other
compensation provided to the Participant by any of the Subsidiaries in
consideration of the Participant’s services, and this Award is expressly
contingent upon each of the terms, conditions and requirements provided for
herein, and (y) the Company would not have granted this Award to the
Participant, but for the Participant’s agreement to be bound by the terms,
conditions and requirements provided for herein, including, without limitation,
the provisions set forth in Section 4 of this Agreement.

c.The capitalized terms used herein that are defined in the Plan shall have the
same meanings assigned to them in the Plan; provided, that the following terms
shall have the meanings set forth below:

i.“Appraised Value” means the value ascribed to a share of the subject Equity
Securities as set forth in the most recent written appraisal previously issued
by an independent Person selected by the audit committee of the Company
nationally recognized as having experience in providing investment banking or
similar appraisal or valuation services and with expertise generally in the
valuation of securities; provided, that it being

 

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understood that neither the Board nor the audit committee shall have any
obligation to obtain any such appraisal more than once per calendar year.

ii. “Clawback” shall have the meaning set forth in Section 4(b).

iii.“Clawback Period” shall mean the period beginning on the Date of Grant and
ending on the sixtieth (60th) day following the three (3) year anniversary of
the date of the Participant’s Termination of Service.

iv.“Confidential Information” means trade secrets, confidential or proprietary
information, and all other information, documents or materials owned, developed
or possessed by Paycom that are not generally known to the public or within the
industry of Paycom.  Confidential Information includes, but is not limited to,
Paycom’s customer names and Paycom’s customer contact person names; Paycom’s
customers’ nonpublic personal information; Paycom’s pricing information, pricing
promotions, and pricing strategies; Paycom’s customer pricing; Paycom’s lead
lists; Paycom’s prospective customer information, including prospective customer
contact information, prospective customer pricing, prospective customer
preferences, prospective customer feedback, and prospective customer timing
needs; Paycom’s customers’ employee information, including Paycom’s customers’
employee salary information and Paycom’s customers’ employees’ personally
identifiable information; information concerning Paycom’s employee salary
information, compensation information, commission policies, bonus policies,
benefits policies (but specifically excluding the Participant’s own individual
salary, benefits, bonus and compensation information); Paycom employees’
personally identifiable information; Paycom’s employees’ performance
information, whether aggregated or individualized; information pertaining to
Paycom customer complaints, whether aggregated or individualized; information
pertaining to any Paycom customer’s requests for additional functionality,
whether aggregated or individualized; information pertaining to any Paycom
customer’s use of a specific payroll processing system or provider; Paycom’s
marketing promotions and strategies; Paycom’s sales promotions and strategies;
Paycom’s reputation management activities and strategies; Paycom’s competitive
advantage analyses; Paycom’s competitive disadvantage analyses; Paycom’s product
development information, including specifications, design and pricing structure;
Paycom’s nonpublic financial information; Paycom’s licensee relationships;
Paycom’s proprietary technology and proprietary file formats, including its
application program interface (API), database structure, file formats, converter
files and information security protocols; Paycom’s referral source
relationships, including brokers, accountants and other referral source
relationships; Paycom’s business processes; and/or any and all material
nonpublic information with respect to any aspect of Paycom’s
business.  Confidential Information shall not include any information that is or
becomes generally publicly available (other than as a result of violation of
this Agreement by the Participant).

v.“Demotion” means (a) a material decrease in the compensation (exclusive of
commissions and bonuses) of the Participant, provided that, a decrease in
compensation that is uniformly applied to Employees, Contractors or Outside
Directors who are similarly situated to the Participant (as determined by the
Company in its sole discretion) shall not constitute a Demotion; (b) a
diminution of the Participant’s position to a lower position within Paycom; or
(c) a material diminution of the Participant’s authority, duties or
responsibilities, with notice to the Participant that, based on the
Participant’s performance, the Participant will have materially less authority
or be responsible for materially lesser duties or responsibilities, in each case
as determined by the Company, in its sole discretion.

 

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vi. “Equity Securities” means, as applicable, (a) any capital stock or other
share capital, (b) any securities (other than debt securities) directly or
indirectly convertible into or exchangeable for any capital stock, membership
interests or other share capital or containing any profit participation
features, (c) any rights or options directly or indirectly to subscribe for or
to purchase any capital stock, other share capital or securities containing any
profit participation features or to subscribe for or to purchase any securities
(other than debt securities) directly or indirectly convertible into or
exchangeable for any capital stock, other share capital or securities (other
than debt securities) containing any profit participation features, (d) any
share appreciation rights, phantom share rights or other similar rights, or (e)
any Equity Securities as defined in clauses (a) through (d) above issued or
issuable with respect to the securities referred to in clauses (a) through (d)
above in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.

vii.“Equity Securities Value Per Share” means, for any class or series of Equity
Securities of the Company, for any date, the price determined by the first of
the following clauses that applies: (a) if such Equity Securities are then
listed or quoted on a Trading Market, the arithmetic average of the VWAP of a
share of such Equity Securities on each of the twenty (20) consecutive Trading
Days immediately preceding such date; (b) if the Equity Securities are not then
listed or quoted for trading on a Trading Market and if prices for such Equity
Securities are then reported on the OTC Bulletin Board (or a similar
organization or agency succeeding to its functions of reporting prices), the
arithmetic average of the closing bid price per share of such Equity Securities
so reported on each of the twenty (20) consecutive Trading Days immediately
preceding such date; or (c) in all other cases, the Appraised Value of a share
of such Equity Securities.

viii.“First TEV Threshold” means $__________.

ix.“Forfeiture Activities” shall have the meaning set forth in Section 4(e).

x. “Material Contact” means, with respect to any Paycom customer or prospective
Paycom customer, the Participant, during the term of the Participant’s service
with Paycom: (a) directly interacted with such customer or prospective customer;
(b) supervised an Employee who interacted with such customer or prospective
customer; or (c) obtained or received nonpublic information from Paycom
specifically related to such customer or prospective customer, including,
without limitation, as a result of the Participant’s attendance at or access to
meetings or discussions in which said customer or prospective customer was
specifically discussed.

xi. “Paycom” means the Company and its Subsidiaries collectively.

xii.“Relevant Paycom Customer” means any Paycom customer that maintains an
office located within the Territory and with which the Participant had Material
Contact.

xiii.“Relevant Paycom Employee” means an Employee (a) with whom the Participant
directly interacted during the time that the Participant was employed by (or if
the Participant is a Contractor or an Outside Director, was providing services
to) Paycom; (b) whom the Participant directly supervised or who reported
directly to the Participant or the Participant’s direct reports; or (c) about
whom the Participant obtained or received

 

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nonpublic information from Paycom specifically related to such Employee’s
performance or employment.

xiv.“Relevant Prospective Customer” means any Paycom prospective customer that
maintains an office located within the Territory and with which the Participant
had Material Contact.

xv.“Second TEV Threshold” means $____________.

xvi.“Territory” shall mean a geographic area or areas located within any of the
following territorial areas: (i) a one hundred (100) mile radius or radii of any
office location(s) in which the Participant worked during the Participant’s
tenure with Paycom; and (ii) if applicable, a fifty (50) mile radius or radii of
any sales territory(ies) boundary(ies) assigned to the Participant during the
Participant’s tenure with Paycom.  Notwithstanding the foregoing, Territory
shall be limited to only include areas located within the United States of
America.

xvii.“Total Enterprise Value” means the sum of: (i) the product of (A) the
Equity Securities Value Per Share of a share of Common Stock not subject to
vesting or other restrictions multiplied by (B) the number of outstanding shares
of Common Stock, less (y) the number of outstanding shares of Restricted Stock
or Other Awards of shares of Common Stock without vesting restrictions, in each
case, issued after the date of this Agreement (including outstanding shares of
Common Stock resulting from the vesting of such Restricted Stock), and less (z)
the number of shares of Common Stock issued by the Company after the date of
this Agreement in connection with any merger, consolidation, share exchange or
other transaction in which, in each case, the Company acquires voting securities
of another Person or all or any portion of another Person’s assets; (ii) for
each other class or series of Equity Securities of the Company, if any, the
product of (A) Equity Securities Value Per Share for such class or series of
such Equity Securities of the Company multiplied by (B) the number of shares of
such class or series of such Equity Securities of the Company, less (y) the
number of shares of such class or series of such Equity Securities issued under
the Plan (or otherwise issued for compensatory purposes) after the date of this
Agreement, and less (z) the number of shares of such class or series of such
Equity Securities issued by the Company after the date of this Agreement in
connection with any merger, consolidation, share exchange or other transaction
in which, in each case, the Company acquires the voting securities of another
Person or all or any portion of another Person’s assets; and (iii) the principal
amount of all outstanding funded indebtedness of the Company as of the last day
of the month immediately preceding the date of calculation less the aggregate
amount of cash and cash equivalents of the Company (exclusive of funds held on
behalf of clients) as of the last day of the month immediately preceding the
date of calculation.

xviii. “Trading Day” means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the applicable Trading
Market or in the applicable securities market.

xix.“Trading Market” means the primary securities exchange on which the Common
Stock is listed or quoted for trading on the date in question.

xx.“VWAP” means the daily volume weighted average price of a share of the Common
Stock for such date on the Trading Market on which the Common Stock is then

 

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listed or quoted for trading as reported by Bloomberg L.P. (or successor
thereto) using its “Volume at Price” function (based on a Trading Day from 9:30
a.m. (New York City time) to 4:00 p.m. (New York City time)).

3.Vesting.  Except as specifically provided in this Agreement and subject to
certain restrictions and conditions set forth in the Plan, the Awarded Shares
shall vest as set forth below. Any Awarded Shares that become vested in
accordance with this Section 3 shall be referred to as “Vested Shares” and any
Awarded Shares that, at the particular time of determination, have not become
vested in accordance with this Section 3 shall be referred to as “Non-Vested
Shares.”  The Awarded Shares shall vest as follows:

a.One-half (1/2) of the Awarded Shares shall vest on the first date, if any,
that the Total Enterprise Value equals or exceeds the First TEV Threshold,
provided that (i) the Participant is employed by (or if the Participant is a
Contractor or an Outside Director, is providing services to) the Company or a
Subsidiary on that date and (ii) such date occurs on or before the sixth (6th)
anniversary of the Date of Grant; and

b.One-half (1/2) of the Awarded Shares shall vest on the first date, if any,
that the Total Enterprise Value equals or exceeds the Second TEV Threshold,
provided that (i) the Participant is employed by (or if the Participant is a
Contractor or an Outside Director, is providing services to) the Company or a
Subsidiary on that date and (ii) such date occurs on or before the sixth (6th)
anniversary of the Date of Grant;

Notwithstanding the foregoing, all Awarded Shares not previously vested shall
immediately become vested in full upon a Termination of Service as a result of
the Participant’s death or Total and Permanent Disability.  In addition, in the
event that (i) a Change in Control occurs, and (ii) this Agreement is not
assumed by the surviving corporation or its parent, or the surviving corporation
or its parent does not substitute its own restricted shares, then immediately
prior to the effective date of such Change in Control, all Awarded Shares not
previously vested shall thereupon immediately become fully vested.

4.Forfeiture of Awarded Shares.  Notwithstanding anything herein to the
contrary, Awarded Shares shall be forfeited and shall cease to be outstanding as
set forth below:

 

a.Awarded Shares that are not vested in accordance with Section 3 shall be
forfeited on the earlier of (i) the sixth (6th) anniversary of the Date of Grant
with respect to all Awarded Shares; (ii) the date of the Participant’s
Termination of Service with respect to all Awarded Shares; or (iii) the date of
the Participant’s Demotion with respect to all Awarded Shares. Upon forfeiture,
all of the Participant’s rights with respect to the forfeited Awarded Shares
shall cease and terminate, without any further obligations on the part of the
Company.  

 

b.The Participant acknowledges that: (i) Paycom continually develops
Confidential Information, and that the Participant has had and will continue to
have access to Confidential Information which, if disclosed, would unfairly and
inappropriately assist in competition against the Company or any of its
Subsidiaries, (ii) the Participant has generated and will continue to generate
goodwill for Paycom in the course of the Participant’s service; and (iii) the
Company has an interest in maintaining stockholders whose interests are aligned
with Paycom’s interests.  Accordingly, if at any time during the Clawback
Period, the Company determines that the Participant has engaged in Forfeiture
Activities, all Awarded Shares (whether or not vested and whether then held by
the Participant or any other Person) shall be subject to the following
provisions (collectively, the “Clawback”):    

 

 

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1. If the Participant has engaged in Forfeiture Activities and has not
transferred any of the Awarded Shares, then the Participant shall forfeit all of
the Awarded Shares;

2.If the Participant has engaged in Forfeiture Activities and has transferred
all of the Awarded Shares, then the Participant shall pay to the Company an
amount equal to the gross proceeds received in respect of such transferred
Awarded Shares; or

 

3.If the Participant has engaged in Forfeiture Activities and has transferred
some, but not all, of the Vested Shares, then the Participant shall (x) forfeit
all of the non-transferred Vested Shares, (y) pay to the Company an amount equal
to the gross proceeds received in respect of any transferred Vested Shares, and
(z) forfeit all Non-Vested Shares.  

 

The Clawback set forth in this Section 4(b) shall survive the Participant’s
Termination of Service and the termination of this Agreement.

 

c.In the event the Company is unable to conclusively establish the amount of the
gross proceeds received by the Participant in respect of the Participant’s
transferred Vested Shares, then such amount shall be deemed to be an amount
calculated based on the following formula:

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where

 

P1

= the Equity Securities Value Per Share as of the last Trading Day of the
calendar year in which the Date of Grant occurred;

 

P2

=the sum of the Equity Securities Value Per Share as of the last Trading Day of
each calendar year that has elapsed following the year in which the Date of
Grant occurred but prior to the date that the Company delivers written notice to
the Participant of its intent to enforce the Clawback;

 

P3

=the Equity Securities Value Per Share as of the Trading Day immediately prior
to the date that the Company delivers written notice to the Participant of its
intent to enforce the Clawback;

 

Y

=the number of calendar-year-ends that have occurred between the Date of Grant
and the date that the Company delivers written notice to the Participant of its
intent to enforce the Clawback; and

 

TS

=the number of transferred Vested Shares.

 

d.The Company shall deliver prompt written notice to the Participant of the
Company’s intent to enforce the Clawback.  Upon forfeiture, all of the
Participant’s rights with respect to the forfeited Awarded Shares shall cease
and terminate, without any further obligations on the part of the Company.  The
Company shall not initiate enforcement of its right of Clawback beyond the
Clawback Period; provided, however, the Company may continue its enforcement of
any right of Clawback beyond the Clawback Period.

 

e.The Participant shall have engaged in “Forfeiture Activities” if the
Participant, subject to the restrictions of any applicable law (including the
right to engage in conduct protected by Section 7 of the National Labor
Relations Act): (i) during the term of the Participant’s service with Paycom or
during the two (2) year period following a Termination of Service (A) directly
or indirectly hires or solicits any Relevant Paycom Employee to leave the employ
of Paycom; (B)

 

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directly or indirectly solicits or encourages any Relevant Paycom Customer to
cease doing business with, or materially alter its business relationship with
Paycom; (C) directly or indirectly solicits or encourages any Relevant
Prospective Customer to cease doing business with, or materially alter its
business relationship with Paycom; (D) directly or indirectly solicits or
encourages any Relevant Paycom Customer to purchase the same or similar goods or
services, or a combination thereof, as those offered by Paycom from an entity or
Person other than Paycom; or (E) directly or indirectly solicits or encourages
any Relevant Prospective Customer to purchase the same or similar goods or
services, or a combination thereof, as those offered by Paycom from an entity or
Person other than Paycom (ii) during the term of the Participant’s service with
Paycom or during the two (2) year period following a Termination of Service,
makes or solicits or encourages others to make or solicit directly or indirectly
any derogatory, negative, unflattering, critical, insulting, offensive,   

deprecating, belittling, harmful, undesirable or intentionally misleading
statement or communication, including statements or communications made on
social media, in a text or similar message, in an e-mail or in any other form
whatsoever, about the Company, its Subsidiaries or any of their respective
officers, directors, employees, businesses, products, services or activities; or
(iii) during the term of the Participant’s service with Paycom or during the
three (3) period following a Termination of Service, discloses to any Person or
entity or uses, other than as required by applicable law or for the proper
performance of his or her duties and responsibilities to Paycom, any
Confidential Information obtained by or known to the Participant.  The
determination of whether the Participant has engaged in Forfeiture Activities
will be made by Paycom in its sole and absolute discretion.  The restrictions
set forth in this Section 4(e) shall survive the Participant’s Termination of
Service and the termination of this Agreement.

 

f.Notwithstanding Section 4(e), the Participant shall not have engaged in
Forfeiture Activities by providing truthful testimony or information compelled
by valid legal process, or by reporting possible violations of applicable law or
making other disclosures that are protected under the whistleblower provisions
of applicable law, to the Securities and Exchange Commission, the Equal
Employment Opportunity Commission, the National Labor Relations Board, the
Occupational Safety and Health Commission or any similar state agency.  Further,
the Participant shall not have engaged in Forfeiture Activities and will not be
held criminally or civilly liable under any federal or state trade secret law
for the disclosure of a trade secret that: (i) is made (A) in confidence to a
federal, state, or local government official, either directly or indirectly, or
to an attorney; and (B) solely for the purpose of reporting or investigating a
suspected violation of law; or (ii) is made in a complaint or other document
that is filed under seal in a lawsuit or other proceeding.  If the Participant
files a lawsuit for retaliation against the Company or any of its Subsidiaries
for reporting a suspected violation of law, the Participant shall not have
engaged in Forfeiture Activities and may disclose the Company and its
Subsidiaries’ trade secrets to the Participant’s attorney and use the trade
secret information in the court proceeding if the Participant: (x) files any
document containing the trade secret under seal; and (y) does not disclose the
trade secret, except pursuant to court order.

 

5.Restrictions on Awarded Shares.  The Participant shall not be permitted to
sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of
the Non-Vested Shares until such shares become Vested Shares in accordance with
Section 3.  The Committee may in its sole discretion, remove any or all of such
restrictions (or any other restrictions contained herein) on any Awarded Shares
whenever it may determine that, by reason of changes in applicable law or
changes in circumstances after the date of this Agreement, such action is
appropriate.

 

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6.Legend.  The following legend shall be placed on all certificates issued
representing Awarded Shares:

On the face of the certificate:

“Transfer of this stock is restricted in accordance with conditions printed on
the reverse of this certificate.”

On the reverse:

“The shares of stock evidenced by this certificate are subject to and
transferable only in accordance with that certain Paycom Software, Inc. 2014
Long-Term Incentive Plan and that certain restricted stock award agreement, by
and between the company and the participant, DATED AS OF _____________, copies
of which are on file at the principal office of the Company in Oklahoma City,
Oklahoma.  No transfer or pledge of the shares evidenced hereby may be made
except in accordance with and subject to the provisions of said Plan.  By
acceptance of this certificate, any holder, transferee or pledgee hereof agrees
to be bound by all of the provisions of said Plan.”

The following legend shall be inserted on a certificate evidencing Common Stock
issued under the Plan if the shares were not issued in a transaction registered
under the applicable federal and state securities laws:

“Shares of stock represented by this certificate have been acquired by the
holder for investment and not for resale, transfer or distribution, have been
issued pursuant to exemptions from the registration requirements of applicable
state and federal securities laws, and may not be offered for sale, sold or
transferred other than pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to the Company.”

All Awarded Shares owned by the Participant shall be subject to the terms of
this Agreement and shall be represented by a certificate or certificates bearing
the foregoing legend.

 

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7.Delivery of Certificates; Registration of Shares.  The Company shall deliver
certificates for Awarded Shares to the Participant or shall register such
Awarded Shares in the Participant’s name, free of restriction under this
Agreement, promptly after, and only after, such Awarded Shares have become
Vested Shares in accordance with Section 3.  In connection with any issuance of
a certificate for Restricted Stock, the Participant shall endorse such
certificate in blank or execute a stock power in a form satisfactory to the
Company in blank and deliver such certificate and executed stock power to the
Company.

8.Rights of a Stockholder.  Except as provided in Section 4 and Section 5 above,
the Participant shall have, with respect to his Awarded Shares, all of the
rights of a stockholder of the Company, including the right to vote the shares,
and the right to receive any dividends thereon, subject to the provisions of
this Section 8.  Any stock dividends paid with respect to Awarded Shares shall
at all times be treated as Awarded Shares and shall be subject to all
restrictions placed on such Awarded Shares; any such stock dividends paid with
respect to such Awarded Shares shall vest as the related Awarded Shares become
vested.  Any cash dividends paid with respect to Non-Vested Shares shall at all
times be subject to the provisions of this Agreement (including the vesting and
forfeiture provisions set forth above); any such cash dividends paid with
respect to such Non-Vested Shares shall vest as such shares become Vested
Shares, and shall be paid to the Participant on the date the Non-Vested Shares
to which such cash dividends relate become Vested Shares.

9.Voting.  The Participant, as record holder of the Awarded Shares, has the
exclusive right to vote, or consent with respect to, such Awarded Shares until
such time as the Awarded Shares are transferred in accordance with this
Agreement; provided that this Section 9 shall not create any voting right where
the holders of such Awarded Shares otherwise have no such right.

10.Adjustment to Number of Awarded Shares.  The number of Awarded Shares shall
be subject to adjustment in accordance with Articles 11-13 of the Plan.

11.Specific Performance.  The parties acknowledge that remedies at law will be
inadequate remedies for breach of this Agreement and consequently agree that
this Agreement shall be enforceable by specific performance.  The remedy of
specific performance shall be cumulative of all of the rights and remedies at
law or in equity of the parties under this Agreement.

12.Participant’s Representations.  Notwithstanding any of the provisions hereof,
the Participant hereby agrees that he or she will not acquire any Awarded
Shares, and that the Company will not be obligated to issue any Awarded Shares
to the Participant hereunder, if the issuance of such shares shall constitute a
violation by the Participant or the Company of any provision of any law or
regulation of any governmental authority.  Any such determination by the Company
shall be final, binding, and conclusive.  The rights and obligations of the
Company and the rights and obligations of the Participant are subject to all
applicable laws.

13.Investment Representation.  Unless the Awarded Shares are issued in a
transaction registered under applicable federal and state securities laws, by
his or her execution hereof, the Participant represents and warrants to the
Company that all Common Stock which may be purchased and or received hereunder
will be acquired by the Participant for investment purposes for his or her own
account and not with any intent for resale or distribution in violation of
federal or state securities laws.  Unless the Common Stock is issued to him or
her in a transaction registered under the applicable federal and state
securities laws, all certificates issued with respect to the Common Stock shall
bear an appropriate restrictive investment legend and shall be held
indefinitely, unless they are subsequently registered under the applicable
federal and state securities laws or the Participant obtains an opinion of
counsel, in form and substance satisfactory to the Company and its counsel, that
such registration is not required.

 

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14.Participant’s Acknowledgments.  The Participant acknowledges that a copy of
the Plan has been made available for his review by the Company, and represents
that he is familiar with the terms and provisions thereof, and hereby accepts
this Award subject to all the terms and provisions thereof.  The Participant
hereby agrees to accept as binding, conclusive, and final all decisions or
interpretations of the Committee or the Board, as appropriate, upon any
questions arising under the Plan or this Agreement.

15.Law Governing.  This Agreement shall be governed by, construed, and enforced
in accordance with the laws of the State of Delaware (excluding any conflict of
laws rule or principle of Delaware law that might refer the governance,
construction, or interpretation of this agreement to the laws of another state).

16.No Right to Continue Service or Employment.  Nothing herein shall be
construed to confer upon the Participant the right to continue in the employ or
to provide services to the Company or any Subsidiary, whether as an Employee or
as a Contractor or as an Outside Director, or interfere with or restrict in any
way the right of the Company or any Subsidiary to discharge the Participant as
an Employee, Contractor, or Outside Director at any time.

17.Legal Construction.  In the event that any one or more of the terms,
provisions, or agreements that are contained in this Agreement shall be held by
a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect for any reason, the invalid, illegal, or unenforceable term,
provision, or agreement shall not affect any other term, provision, or agreement
that is contained in this Agreement and this Agreement shall be construed in all
respects as if the invalid, illegal, or unenforceable term, provision, or
agreement had never been contained herein.

18.Covenants and Agreements as Independent Agreements.  Each of the covenants
and agreements that are set forth in this Agreement shall be construed as a
covenant and agreement independent of any other provision of this
Agreement.  The existence of any claim or cause of action of the Participant
against Paycom, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants and
agreements that are set forth in this Agreement.

19.Entire Agreement.  This Agreement together with the Plan supersede any and
all other prior understandings and agreements, either oral or in writing,
between the parties with respect to the subject matter hereof and constitute the
sole and only agreements between the parties with respect to the said subject
matter.  All prior negotiations and agreements between the parties with respect
to the subject matter hereof are merged into this Agreement.  Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement or the Plan and
that any agreement, statement or promise that is not contained in this Agreement
or the Plan shall not be valid or binding or of any force or effect.

20.Parties Bound.  The terms, provisions, and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to the benefit of the
parties and their respective heirs, executors, administrators, legal
representatives, and permitted successors and assigns, subject to the limitation
on assignment expressly set forth herein.  No Person shall be permitted to
acquire any Awarded Shares without first executing and delivering an agreement
in the form satisfactory to the Company making such Person or entity subject to
the restrictions on transfer contained herein.

21.Modification.  No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and
signed by the parties.  Notwithstanding the preceding sentence, the Company may
amend the Plan to the extent permitted by the Plan.

 

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22.Headings.  The headings that are used in this Agreement are used for
reference and convenience purposes only and do not constitute substantive
matters to be considered in construing the terms and provisions of this
Agreement.

23.Gender and Number.  Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.

24.Notice.  Any notice required or permitted to be delivered hereunder shall be
in writing and shall be deemed to have been given (a) when delivered by hand
(with written confirmation of receipt); (b) when received by the addressee if
sent by a nationally recognized overnight courier (receipt requested); or (c) on
the third (3rd) day after the date mailed, by certified or registered mail (in
each case, return receipt requested, postage pre-paid).  Notices must be sent to
the respective parties at the following addresses (or at such other addresses as
they have theretofore specified by written notice delivered in accordance
herewith:

Notice to the Company shall be addressed and delivered as follows:

Paycom Software, Inc.

7501 W. Memorial Rd.

Oklahoma City, OK 73142

Attn:  Chief Financial Officer

 

Notice to the Participant shall be addressed and delivered as set forth on the
signature page.

 

25.Tax Requirements.  The Participant is hereby advised to consult immediately
with his or her own tax advisor regarding the tax consequences of this
Agreement, the method and timing for filing an election to include this
Agreement in income under Section 83(b) of the Code, and the tax consequences of
such election.  By execution of this Agreement, the Participant agrees that if
the Participant makes such an election, the Participant shall provide the
Company with written notice of such election in accordance with the regulations
promulgated under Section 83(b) of the Code.  The Company or, if applicable, any
Subsidiary (for purposes of this Section 25, the term “Company” shall be deemed
to include any applicable Subsidiary), shall have the right to deduct from all
amounts paid in cash or other form in connection with the Plan, any Federal,
state, local, or other taxes required by law to be withheld in connection with
this Award.  The Participant receiving shares of Common Stock issued under the
Plan shall pay to the Company, in accordance with the provisions of this Section
25, the amount of any taxes that the Company is required to withhold in
connection with the Participant’s income arising with respect to this
Award.  Such payment must be made prior to the delivery of any certificate
representing shares of Common Stock, as follows: (i) if the Participant is a
Reporting Participant and/or is subject to the Company’s “Insider Trading
Policy” at the time of vesting of Awarded Shares, then the tax withholding
obligation must be satisfied by the Company’s withholding of a number of shares
to be delivered upon the vesting of such Awarded Shares, which shares so
withheld have an aggregate Fair Market Value that equals (but does not exceed)
the required tax withholding payment (the “Net Settlement of Shares”), provided
that, the Committee (excluding the Participant if the Participant is a member of
the Committee) may, in its sole discretion, instead require the satisfaction of
the tax withholding obligation in accordance with (ii)(A), (ii)(B) or (ii)(D)
below; or (ii) if the Participant is neither a Reporting Participant nor subject
to the Company’s “Insider Trading Policy” at the time of vesting of Awarded
Shares, then such payment may be made (A) by the delivery of cash to the Company
in an amount that equals or exceeds (to avoid the issuance of fractional shares)
the required tax withholding obligations of the Company; (B) if the Company, in
its sole discretion, so consents in writing, the actual delivery by the
Participant to the Company of shares of Common Stock, other than Restricted
Stock or Common Stock that the Participant has acquired from the

 

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Company within six (6) months prior thereto, which shares so delivered have an
aggregate Fair Market Value that equals or exceeds (to avoid the issuance of
fractional shares) the required tax withholding payment; (C) if the Company, in
its sole discretion, so consents in writing, by the Net Settlement of Shares; or
(D) any combination of (A), (B), or (C).  The Company may, in its sole
discretion, withhold any such taxes from any other cash remuneration otherwise
paid by the Company to the Participant.  

* * * * * * * * * *

[Remainder of Page Intentionally Left Blank.

Signature Page Follows]

 

 

 

 

 

 

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Each party to this Agreement consents to the use of electronic signatures in the
execution of this Agreement.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.  A PDF, scanned item, or
other reproduction of this Agreement and/or its signature page may be executed
by one or more of the parties, and an executed copy of such signature page of
this Agreement may be delivered by one or more of the parties by email or
similar instantaneous electronic transmission pursuant to which the signature
of, or on behalf of, the party is set forth electronically on the signature
page, and such execution and delivery shall be considered valid, legally binding
and effective for all purposes.  

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Participant, to evidence his or her consent and
approval of all the terms hereof, has duly executed this Agreement, as of the
date specified in Section 1 hereof.

COMPANY:

 

Paycom Software, Inc.

 

PARTICIPANT:

 

 

 

 

 

 

Signature

 

Signature

Name:

 

Date:  

Title:

 

Address: