Exhibit 10.3

 

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Amended and Restated Executive Employment Agreement (“Agreement”) is
entered into by and between Paycom Software, Inc. (the “Company”) and Jeffrey
York (“Executive”).  This Agreement is entered on March 9, 2020 and, other than
with respect to those amended sections set forth herein, which amended sections
shall be effective upon execution of this Agreement by each of the parties
hereto, is effective as of January 1, 2014 (the “Effective Date”).  

 

WHEREAS, the operations of the Company and its Affiliates (defined below) are a
complex matter requiring direction and leadership in a variety of arenas;

 

WHEREAS, Executive possesses certain experience and expertise that qualify him
to provide the direction and leadership required by the Company and its
Affiliates;

 

WHEREAS, the Company has provided Executive with highly confidential information
pertaining to the Company and its Affiliates and will continue to provide new
confidential information after the execution of this Agreement;

 

WHEREAS, the Company and Executive acknowledge and confirm that this Agreement
arises from and is integrally related to Executive’s sale of the goodwill of a
business to the Company; and,

 

WHEREAS, subject to the terms and conditions hereinafter set forth, the Company
therefore wishes to employ Executive as an officer of the Company in the role as
its Chief Sales Officer, and Executive wishes to accept such employment;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions, and conditions set forth in this Agreement, the
parties hereby agree:

 

1.Definitions.The following capitalized terms shall have the meanings set forth
below.

 

1.1“Affiliates” means, with respect to any particular Person, any other Person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such particular Person.  As used
in this definition, the term “control” shall mean (i) the ownership (directly or
indirectly) of more than 50% of the ownership or voting interests of any
particular Person or (ii) the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or otherwise.

1.2“Board” shall mean the Board of Directors of the Company.

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1.3“Cause” shall mean, with respect to Executive, any of the following: (a) the
repeated failure of Executive to perform such duties as are lawfully requested
by the Chief Executive Officer, (b) the failure by such Executive to observe all
reasonable, lawful material policies of the Company and its subsidiaries
applicable to Executive and communicated to Executive in writing, (c) any action
or omission constituting gross negligence or willful misconduct of such Person
in the performance of his or her duties, (d) the material breach by Executive of
any provision of Executive’s employment or the breach by Executive of any
non‑competition, non‑solicitation or similar restrictive agreement with the
Company or any of its subsidiaries, (e) any act or omission by Executive
constituting fraud, embezzlement, disloyalty or dishonesty with respect to the
Company or its subsidiaries, (f) the use by Executive of illegal drugs or
repetitive abuse of other drugs or repetitive excess consumption of alcohol
interfering with the performance of Executive’s duties, or (g) the commission by
Executive of any felony or of a misdemeanor involving dishonesty, disloyalty or
moral turpitude.  

1.4“Change in Control” shall mean the following: (a) any Person other than a
trustee or other fiduciary holding securities of the Company under an employee
benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), directly or indirectly, of securities of the Company
representing 50% or more of (i) the outstanding shares of common stock of the
Company or (ii) the combined voting power of the Company’s then-outstanding
securities (other than pursuant to a transaction described in clause (b) that
does not constitute a Change in Control thereunder); (b) the Company is party to
a merger or consolidation, or series of related transactions, which results in
the voting securities of the Company outstanding immediately prior thereto
failing to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or another entity) at least
fifty (50%) percent of the combined voting power of the voting securities of the
Company or such surviving or other entity outstanding immediately after such
merger or consolidation (or a parent company thereof); (c) the sale or
disposition of all or substantially all of the Company’s assets (or consummation
of any transaction, or series of related transactions, having similar effect);
(d) there occurs a change in the composition of the Board of Directors of the
Company within a two-year period, as a result of which fewer than a majority of
the directors are Incumbent Directors; (e) the dissolution or liquidation of the
Company; or (f) any transaction or series of related transactions that has the
substantial effect of any one or more of the foregoing.  Notwithstanding the
foregoing, to the extent required to comply with Section 409A of the Code, no
event shall be deemed a “Change in Control” unless such event also constitutes a
change in ownership or control within the meaning of Section 409A of the Code.

1.5“Code” shall mean the Internal Revenue Code of 1986, as amended.

1.6“Compensation Committee” means the Compensation Committee of the Board.

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1.7“Confidential Information” shall mean trade secrets, confidential or
proprietary information, and all other information, documents or materials
owned, developed or possessed by the Company or its Affiliates that are not
generally known to the public or within the industry of the
Company.  Confidential Information includes, but is not limited to, customer
lists, preferences and contacts, financial information, business plans, product
cost or pricing, information regarding future development, locations or
acquisitions, personnel records (including records of the Company’s clients) and
software programs.  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 Executive).

1.8“Incumbent Director” means each member of the Board on the Effective Date and
each other member of the Board whose nomination or election to the Board is
approved by a majority of the then Incumbent Directors.

1.9“Person” has the meaning given in Section 7701(a)(1) of the Code.  Person
shall include more than one Person acting as a group as defined by the Final
Treasury Regulations issued under Section 409A of the Code.

1.10“Public Offering” shall mean an underwritten sale to the public of the
Company’s equity securities (or its successor’s equity securities) pursuant to
an effective registration statement filed with the SEC on Form S-1 (or any
successor form adopted by the SEC) and after which the Company’s (or its
successor’s) equity securities are listed on the New York Stock Exchange, the
NYSE MKT or The NASDAQ Stock Market; provided, that a Public Offering shall not
include any issuance of equity securities in any merger or other business
combination, and shall not include any registration of the issuance of equity
securities to existing securityholders or employees of the Company and its
subsidiaries on Form S-4 or Form S-8 (or any successor form adopted by the SEC).

1.11“Restricted Period” shall mean: (a) if the Termination Date is before the
initial Public Offering, twelve (12) months following the Termination Date; or
(b) if the Termination Date is after the initial Public Offering, thirty-six
(36) months following the consummation of the initial Public Offering and twelve
(12) months following the Termination Date (such twelve (12) month period to run
concurrently with the aforementioned thirty-six (36) month period if both
periods are applicable).

2.Term.  This Agreement shall commence on January 1, 2014 and shall continue
until three (3) years following the consummation of the initial Public Offering
(which was on April 21, 2014), subject to earlier termination as set forth in
Section 5 below (“Initial Term”).  The Agreement has been renewed on April 22,
2017, April 22, 2018 and April 22, 2019, and will automatically renew, subject
to earlier termination as herein provided, for successive one (1) year periods
(the “Additional Terms”), unless either Executive or the Company provide notice
of non-renewal at least forty-five (45) days prior to the expiration of the
Initial Term or the then Additional Term, whichever is applicable.  The Initial
Term and any Additional Term(s) shall be referred to collectively as the “Term.”
Notwithstanding the foregoing, and subject to earlier termination as herein
provided, the presently effective Additional Term of this Agreement shall
continue through December 31, 2020, at which time it will be subject to
expiration or renewal for successive one (1) year Additional Terms from such
date, as provided for in this section.

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3.Capacity and Performance.  

 

3.1During the Term, Executive shall serve the Company as its Chief Sales Officer
and shall report directly to the Chief Executive Officer.  During the Term,
Executive shall be employed by the Company on a full-time basis and shall
perform such duties and responsibilities, consistent and customary with the
position of Chief Sales Officer, on behalf of the Company and its Affiliates as
may reasonably be designated from time to time by the Chief Executive Officer.

 

3.2During his employment with the Company, Executive shall devote his full
business time and commercially reasonable efforts, business judgment, skill, and
knowledge exclusively to the advancement of the business and interests of the
Company and its Affiliates and to the discharge of his duties and
responsibilities hereunder.  Executive shall not engage in any other competitive
business activity or serve in any competitive industry, trade, professional,
governmental, or academic position during his employment with the Company,
except as may be expressly approved by the Board in writing.  The foregoing
shall not limit Executive's right to: (a) serve on civic or charitable boards or
committees or up to two corporate boards that are not engaged in business
competition with the Company; (b) engage in such activities as are reasonably
necessary to monitor and protect his interests as a minority stockholder in
other companies, to the extent a reasonably prudent minority stockholder would
be expected to engage in such activities; and (c) invest Executive’s personal
assets in such manner as will not require any material services by Executive in
the operation of the entities in which such investments are made, to the extent
such activities do not individually or in the aggregate interfere with the
discharge of Executive’s duties hereunder in a matter so that such activities
will not prevent Executive from fulfilling Executive’s obligations to the
Company hereunder.

 

4.Compensation and Benefits. As compensation for all services performed by
Executive during the Term, Executive shall receive the following:

 

4.1Base Salary.  During the Term, the Company shall pay Executive a base salary
at a rate not less than Three Hundred Fifty-Six Thousand Four Hundred Dollars
and Zero Cents ($356,400.00) per year, less any and all lawful withholdings or
deductions, payable in accordance with the payroll practices of the Company for
its executives, and subject to increases from time to time as may be approved by
the Board (“Base Salary”).  

 

4.2Bonus.  Subject to the provisions of this Section 4.2, Executive shall be
eligible to earn an annual bonus of 75% of his Base Salary (or such larger
amount approved by the Compensation Committee) (the “Target Bonus”) in
accordance with the Company’s bonus plan applicable to executive officers of the
Company. The actual amount of the bonus payable with respect to a fiscal year
(the “Bonus”) shall be determined by the Compensation Committee, in its sole
discretion, and shall be paid in accordance with the plans, policies and
procedures adopted by the Compensation Committee from time to time.  

 

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4.3Vacation.  During the Term, Executive shall receive and be entitled to take
vacation in accordance with the policies of the Company as in effect from time
to time, and subject to the reasonable business needs of the Company.  Executive
shall not be entitled to payment for any accrued but unused vacation pay if the
Company terminates Executive for Cause.  However, if Executive's employment is
terminated for any other reason, Executive shall be entitled to receive payment
for all accrued but unused vacation pay.

 

4.4Company Automobile.  During the Term, the Company shall provide Executive use
of a Company automobile with a lease value of up to Two Thousand Dollars and
Zero Cents ($2,000.00) per month (subject to increases from time to time as may
be approved by the Board or an appropriate committee thereof) for Executive’s
business or personal use, less any required taxes or withholdings.    

 

4.5Other Benefits. Executive shall be entitled to participate in or receive
benefits under the Company's Executive Benefit Plan and any plan or arrangement
made available from time to time by the Company to its employees generally
(including any health, dental, vision, disability, life insurance, 401k, or
other retirement programs) (“Benefits”).  Any such plan or arrangement shall be
revocable and subject to termination or amendment at any time only in accordance
with the terms and conditions of such plans or arrangements, without recourse by
Executive, provided that no such termination or amendment shall disadvantage
Executive or his wife or dependents disproportionately to any other participants
therein (except as may be required by laws or regulations, such as those related
to “top-heavy” or “top hat” plans).

 

4.6Business Expenses.  The Company shall pay or reimburse Executive for all
reasonable, customary and necessary business expenses incurred or paid by
Executive in the performance of his duties and responsibilities hereunder,
subject to any maximum annual limit and other restrictions on such expenses set
by the Board and to such reasonable substantiation and documentation as may be
specified by the Company from time to time.

 

4.7Clawback.  Executive acknowledges and agrees that any compensation or
benefits paid to Executive by the Company, pursuant to this Agreement or
otherwise, shall be subject to recovery by the Company in accordance with
Section 304 of the Sarbanes-Oxley Act of 2002 or any other clawback law or
regulation applicable to executives of the Company, if any, as amended from time
to time.

 

5.Termination of Employment and Severance Benefits During the Term.
Notwithstanding the provision of Section 2 hereof and subject to the provisions
of Section 20 below, Executive's employment may terminate prior to or at the
expiration of the Term under the following circumstances (each, a “Termination
Date”):

 

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5.1Death.  In the event of Executive's death during the Term, Executive's
employment hereunder shall immediately and automatically terminate. In such
event, the Company, shall pay to Executive's designated beneficiaries or, if no
beneficiaries have been designated by Executive, to his estate, (i) the Base
Salary earned but not paid through the Termination Date; (ii) the amount of any
accrued but unused vacation calculated as of the Termination Date; and (iii) any
business expenses incurred by Executive but un-reimbursed on the Termination
Date, provided that such expenses and required substantiation and documentation
are submitted within ninety (90) days of termination and that such expenses are
reimbursable under Company policy (all of the foregoing, “Final
Compensation”).  The Final Compensation shall be paid by the Company on the next
regular payroll period following his death (or, if later, on the next regular
payroll period after the Company receives notice of Executive’s death).

 

5.2Disability.

 

(a)If, as a result of Executive’s incapacity due to physical or mental illness,
Executive shall have been absent from Executive’s duties with the Company on a
full-time basis for one hundred eighty (180) consecutive calendar days or two
hundred seventy (270) non-consecutive days in any eighteen (18) month period,
and within thirty (30) days after written notice of termination Executive shall
not have returned to the full-time performance of his duties, with or without
reasonable accommodations, the Company may thereafter notify Executive of
termination.  In the event of such termination, the Company shall pay to
Executive the Final Compensation on the next regular payroll period following
his Termination Date.

 

(b)The Board may designate another employee to act in Executive's place during
any period of Executive's disability which shall not constitute Good Reason
hereunder.  Notwithstanding any such designation, Executive shall continue to
receive his compensation and benefits in accordance with Section 4, to the
extent permitted by the then-current terms of the applicable benefit plans,
until Executive becomes eligible for disability income benefits under the
Company's disability income plan or until the termination of his employment,
whichever shall first occur.

 

5.3By the Company for Cause.  During the Term, the Company may terminate
Executive's employment for Cause as defined in Section 1.3 above.  If
Executive’s employment is terminated for Cause as defined in Section 1.3 above,
then the Company shall have no further obligation to Executive other than to pay
his Final Compensation on the next regular payroll period following his
Termination Date.

 

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5.4By the Company Without Cause.  During the Term, the Company may terminate
Executive's employment without Cause at any time.  If Executive’s employment is
terminated by the Company without Cause following the initial Public Offering
then, in addition to paying Executive the Final Compensation and subject to
Executive’s compliance with Article 7 in all material respects, the Company
shall: (a) continue to pay Executive the Base Salary at the rate in effect on
the Termination Date during the Restricted Period, with the first payment being
on the Company’s next regular payroll period which is at least eight (8)
business days following the effective date of the Release (defined below)
(provided that if the 60-day time period for the Release begins in one taxable
year and ends in a subsequent taxable year, the first payment shall be paid in
the subsequent taxable year (for example, if Executive terminates on December 1,
then the first payment shall not be paid until on or after January 1 of the next
year, regardless of when the Release is returned)); (b) continue Executive’s
health insurance benefits for the Restricted Period (at a cost no less favorable
than that paid by Executive immediately prior to the Termination Date) or the
economic equivalent thereto if such continuation is not permissible under the
terms of the Company’s health insurance plan or would otherwise expose the
Company to tax or other penalties;  and (c) pay Executive an amount equal to the
pro rata amount of the Bonus Executive would have earned for the year in which
the termination occurred, based on the Company’s performance for the entire
fiscal year in which the termination occurred relative to the performance
measurements that were pending at the time of termination and to be used to
determine Executive’s bonus for such year.   Any such prorated Bonus shall be
payable at such time or times as bonuses are payable to the other executives of
the Company (the benefits, which the parties acknowledge are not required by
law, outlined in Section(s) 5.4(a), (b) and (c) are collectively referenced as
the “Severance”).  Any obligation of the Company to provide Executive the
Severance is conditioned on Executive signing, delivering to the Company and not
revoking a release, in a form acceptable to the Company (the “Release”), within
sixty (60) days of his Termination Date, which Release in any event will require
Executive to reaffirm his obligations and commitments to the Company under
Section 7 of this Agreement.

 

5.5By Executive for Good Reason.  During the Term, Executive may terminate his
employment at any time for Good Reason.  The following shall constitute “Good
Reason” for termination by Executive:

 

(a)any material reduction by the Company in Executive’s Base Salary without
Executive’s prior consent;

(b)following a Change in Control, any change in Executive’s status, reporting,
duties or position that represents a demotion or diminution from Executive’s
status, reporting, duties or position in effect before such Change in Control;
or

(c)any material breach by the Company of this Agreement between it and
Executive.

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Executive shall not be deemed to have been terminated for Good Reason pursuant
to Section(s) 5.5(a), (b) or (c) above unless Executive delivers to the Company
a written notice of termination for Good Reason specifying the alleged Good
Reason within thirty (30) days after Executive first learns of the existence of
the circumstances giving rise to Good Reason, within thirty (30) days following
delivery of such notice, the Company has failed to cure the circumstances giving
rise to Good Reason, and Executive resigns within fifteen (15) days after the
end of the cure period.

If Executive’s employment is terminated by Executive for Good Reason following
the initial Public Offering then, in addition to immediately paying Executive
the Final Compensation, Executive shall be paid the Severance at the same time
and subject to the same terms and conditions as described in Section 5.4
hereof.  Any obligation of the Company to provide Executive the Severance is
conditioned on Executive signing, delivering the Release to the Company and not
revoking the Release as provided therein within sixty (60) days of his
Termination Date.

 

5.6By Executive Other than for Good Reason.  During the Term, Executive may
terminate his employment at any time upon sixty (60) days' written notice to the
Company.  In the event of termination of Executive pursuant to this Section 5.6,
the Board may elect to waive the period of notice, or any portion thereof, and,
if the Board so elects, the Company shall pay Executive his Base Salary for the
notice period (or for any remaining portion of the period).  If Executive’s
employment is voluntarily terminated by him other than for Good Reason, then the
Company shall pay Executive the Final Compensation on the next regular payroll
period following his Termination Date.

 

5.7By Expiration of the Term.  Upon expiration of the Term, if Executive’s
employment with the Company terminates at the expiration of the Term, Executive
shall be paid the Final Compensation on the next regular payroll period
following his Termination Date.   If the expiration of the Term was the result
of  the Company issuance of a notice of non-renewal to Executive pursuant to
Section 2, then, in addition to paying Executive the Final Compensation,
Executive shall be paid the Severance at the same time and subject to the same
terms as described in Section 5.4 hereof.  Any obligation of the Company to
provide Executive the Severance is conditioned on Executive signing, delivering
the Release to the Company and not revoking the Release as provided therein
within sixty (60) days of his Termination Date.

 

6.Effect of Termination.

 

6.1Benefits.  Benefits shall terminate pursuant to the terms of the applicable
benefit plans based on the date of the termination of Executive's employment
without regard to any continuation of Base Salary or other payment to Executive
following such Termination Date.

 

6.2Restricted Stock Grants.  The restricted stock grants made pursuant to that
certain Restricted Stock Award Agreement by and between the Company (or its
successor or affiliate) and Executive dated as of January 1, 2014 shall vest in
accordance with the terms of such agreement.

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6.3Survival of Obligations.  Provisions of this Agreement shall survive any
termination of Executive's employment hereunder, including termination of this
Agreement upon the expiration of the Term, if so provided herein or if necessary
or desirable to accomplish the purposes of other surviving provisions, including
without limitation the obligations of Executive under Sections 7 and 8 hereof
and the obligations of the Company under Section 5.  

 

7.Confidential Information, Ownership of Information, Inventions, Work Product,
Restrictive Covenants and Defend Trade Secrets Act.  

 

7.1Confidential Information.  Executive acknowledges that the Company and its
Affiliates continually develop Confidential Information, that Executive may
develop Confidential Information for the Company or its Affiliates, and that the
Company has and will continue to provide Executive with Confidential Information
during the course of his employment.  Executive will comply with the policies
and procedures of the Company and its Affiliates for protecting Confidential
Information and shall not disclose to any person or entity or use, other than as
required by applicable law or for the proper performance of his duties and
responsibilities to the Company and its Affiliates, any Confidential Information
obtained by Executive incident to his employment by the Company or any of its
Affiliates. Notwithstanding this Section 7.1 or any other provision of this
Agreement, (a) Executive may disclose Confidential Information when required to
do so by a court of competent jurisdiction, by any governmental agency having
authority over Executive or the business of the Company or its Affiliates or by
any administrative body or legislative body (including a committee thereof) with
jurisdiction to order Executive to divulge, disclose or make accessible such
information; and (b) nothing in this Agreement is intended to interfere with
Executive’s right to (i) report possible violations of state or federal law or
regulation to any governmental or law enforcement agency or entity; (ii) make
other disclosures that are protected under the whistleblower provisions of state
or federal law or regulation; (iii) file a claim or charge with the Equal
Employment Opportunity Commission (“EEOC”), any state human rights commission,
or any other governmental agency or entity; or (iv) testify, assist, or
participate in an investigation, hearing, or proceeding conducted by the EEOC,
any state human rights commission, any other governmental or law enforcement
agency or entity, or any court.  For purposes of clarity, in making or
initiating any such reports or disclosures or engaging in any of the conduct
outlined in subsection (b) above, Executive may disclose Confidential
Information to the extent necessary to such governmental or law enforcement
agency or entity or such court, need not seek prior authorization from the
Company or its Affiliates, and is not required to notify the Company or its
Affiliates of any such reports, disclosures or conduct.

 

7.2Safeguard and Return of Documents.  All documents, records, tapes, and other
media of every kind and description relating to the business, present or
otherwise, of the Company or its Affiliates, and any copies, in whole or in
part, thereof (the “Documents”), whether or not prepared by Executive, shall be
the sole and exclusive property of the Company and its Affiliates.  Executive
shall safeguard all Documents and shall surrender to the Company at the time his
employment terminates all Documents then in Executive's possession or control
with the exception of this Agreement or other documents related to Executive's
compensation or benefits.

 

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7.3Ownership of Information, Inventions and Original Work.  Executive agrees
that any creative works, discoveries, developments, designs, software, computer
programs, inventions, improvements, modifications, enhancements, know-how,
formulation, concept, methods, processes, or idea which is made, conceived,
created, developed or reduced to practice by Executive, either alone or with
others (collectively referred to as “Work Product”) is the exclusive property of
the Company if:

 

(a)It was conceived or developed in any part on Company time;

 

(b)Any equipment, facilities, materials, or Confidential Information of the
Company was used in its conception or development; or

 

(c)It (i) relates, at the time of conception or reduction to practice, to the
Company’s business, (ii) relates, at the time of conception or reduction of
practice, to a research or development project of the Company that was
demonstrably anticipated or existed prior to or at the time of the termination
of Executive’s service to the Company and/or its subsidiaries, or (iii) results
from any work performed by Executive for the Company.  Notwithstanding
Section 7.3(c)(i), if the foregoing intellectual property described in
Section 7.3(c)(i) is conceived, developed or reduced to practice entirely after
the latest to occur of the time at which: (A) the Executive is no longer
employed by the Company and (B) the Executive is no longer serving as a director
on the Board, then such intellectual property shall not constitute Work Product.

 

Executive agrees to assist the Company in obtaining a patent or copyrights on
such Work Product and to provide such documentation and assistance as is
necessary for the Company to obtain such patent or copyright.  Executive shall
maintain adequate written records of such Work Product in such format as may be
specified by the Company.  Such records will be available to and remain the sole
property of the Company at all times.  

 

7.4Restrictive Covenants.  Executive acknowledges that, in order to effectuate
the promise to hold Confidential Information in trust for the Company and in
order to protect the Company's legitimate business interests (which include, but
are not limited to, continuation of contracts and relationships with its
customers, its reputation, its competitive advantage and its goodwill), it is
necessary to enter into the following restrictive covenants.  Without the prior
written consent of the Company, Executive shall not, during the Restricted
Period:

 

(a)directly or indirectly manage, operate, control, participate in, consult
with, render services for or in any manner engage in any business or enterprise
(including any division, group or franchise of a larger organization), whether
as a proprietor, owner, member, partner, stockholder, director, officer,
employee, consultant, joint venturer, investor, sales representative or other
participant, in which the Company or any of its subsidiaries engaged at any time
during the two year period immediately preceding the date Executive’s employment
with the Company and its subsidiaries terminates  (or the date of determination
if the date of determination is prior to the date Executive’s employment with
the Company and its subsidiaries terminated) or engages or proposes to engage as
of such termination date (or the date of determination if the date of
determination is prior to the date Executive’s employment with the Company and
its subsidiaries

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terminated), in each case, anywhere in any State where the Company or one of its
subsidiaries maintained an office immediately preceding such termination date
(or the date of determination if the date of determination is prior to the date
Executive’s employment with the Company and its subsidiaries terminated);  

 

(b)directly or indirectly induce or attempt to induce any employee of the
Company or any of its subsidiaries to leave the employ of such entity;

 

(c)subject to the restrictions of any applicable law, directly or indirectly
induce or attempt to induce any established customer of the Company or any of
its subsidiaries to cease doing business with, or materially alter its business
relationship with, such entity;

 

(d)directly or indirectly solicit the sale of goods or services, or a
combination thereof, to established customers of the Company or any of its
subsidiaries; or

 

(e) make or solicit or encourage others to make or solicit directly or
indirectly any derogatory or negative statement or communication about the
Company, its subsidiaries or any of their respective businesses, products,
services or activities; provided, however, that the restriction set forth in
this clause (e) will not prohibit truthful testimony compelled by valid legal
process. Notwithstanding the foregoing, the Executive shall not be prohibited
from owning up to one percent of the outstanding stock of a corporation which is
publicly traded, so long as Executive has no active participation in the
business of such corporation.

 

7.5 Defend Trade Secrets Act.  Executive is hereby notified in accordance with
the Defend Trade Secrets Act of 2016 that Executive will not be held criminally
or civilly liable under any federal or state trade secret law for the disclosure
of a trade secret that is made in confidence to a federal, state, or local
government official, either directly or indirectly, or to an attorney solely for
the purpose of reporting or investigating a suspected violation of law, or is
made in a complaint or other document that is filed under seal in a lawsuit or
other proceeding.  If Executive files a lawsuit for retaliation against the
Company or its Affiliates for reporting a suspected violation of law, Executive
may disclose the Company’s or its Affiliates’ trade secrets to Executive’s
attorney and use the trade secret information in the court proceeding if
Executive files any document containing the trade secret under seal, and does
not disclose the trade secret, except pursuant to court order.

 

8.Assignment of Rights to Work Product.  Executive shall promptly and fully
disclose all Work Product to the Company.  Executive hereby assigns and agrees
to assign to the Company (or as otherwise directed by the Company) Executive's
full right, title and interest in and to all Work Product.  Executive agrees to
execute any and all applications for domestic and foreign patents, copyrights,
or other proprietary rights and to do such other acts (including, without
limitation, execute and delivery of instruments of further assurance or
confirmation) requested by the Company to assign the Work Product to the Company
and to permit the Company to enforce any patents, copyrights, or other
proprietary rights to the Work Product.  All copyrightable works that Executive
creates in the course of his employment by the Company shall be considered “work
made for hire.”

 

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9.Enforcement of Covenants.  Executive agrees that these restraints are
necessary for the reasonable and proper protection of the Company and its
subsidiaries and their trade secrets and Confidential Information and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area, and that these restraints, individually or
in the aggregate, will not prevent Executive from obtaining other suitable
employment during the period in which Executive is bound by the
restraints.  Executive agrees that, before providing services, whether as an
employee or consultant, to any entity during the Restricted Period, Executive
will provide a copy of Articles 7, 9, and 18 to such entity.  Executive
acknowledges that each of these covenants has a unique, very substantial and
immeasurable value to the Company and its subsidiaries, that Executive has
sufficient assets and skills to provide a livelihood while such covenants remain
in force and that, as a result of the foregoing, in the event that Executive
breaches such covenants, monetary damages would be an insufficient remedy for
the Company and equitable enforcement of the covenant would be
proper.  Executive therefore agrees that the Company, in addition to any other
remedies available to it, will be entitled to preliminary and permanent
injunctive relief against any breach by Executive of any of those covenants,
without the necessity of showing actual monetary damages or the posting of a
bond or other security.  Executive and the Company further agree that, in the
event that any provision of Article 7 is determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a time, too large a geographic area or too great a range of activities, that
provision will be deemed to be modified to permit its enforcement to the maximum
extent permitted by law. Executive further covenants that Executive will not
challenge the reasonableness or enforceability of any of the covenants set forth
in Article 7 and that Executive will reimburse the Company and its subsidiaries
for all costs (including reasonable attorneys’ fees) incurred in connection with
any action to enforce any of the provisions of Article 7 if Executive challenges
the reasonability or enforceability of any of the provisions of Article 7, it
being understood and agreed that a dispute as to whether Executive’s conduct in
fact violates or violated the terms of Article 7 is not, by itself, a challenge
regarding the reasonableness or enforceability of Article 7.  It is also agreed
that each of the Company's subsidiaries will have the right to enforce all of
Executive’s obligations to that subsidiary under this Agreement, including
without limitation pursuant to Article 7.  

 

10.Assignment and Succession.

10.1No Assignment by Executive.  This Agreement is personal to Executive and
shall not be assignable by Executive.  

 

10.2Succession.  This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.  

 

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11.Notices.  All notices which are required or may be given pursuant to the
terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier or (iv) sent via
facsimile confirmed in writing as follows:

If to the Company:

 

Paycom Software, Inc.

7501 W. Memorial Road

Oklahoma City, OK 73142

Attention:  Board of Directors

 

If to Executive:

 

Mr. Jeffrey York

XXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXX

 

or to such other address or addresses as either party shall have designated in
writing to the other party hereto, provided, however, that any notice sent by
certified or registered mail shall be deemed delivered on the date of delivery
as evidenced by the return receipt.

12.Severability.  If any portion or provision of this Agreement shall, to any
extent, be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application or such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

13.Waiver.  No waiver of such provision hereof shall be effective unless made in
writing and signed by the waiving party.  The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

14.Entire Agreement.  This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof, and supersedes all prior
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of Executive's employment, including Section 5(e) of
the Securities Purchase Agreement dated July 2, 2007 by and among WCAS Paycom
Holdings, Inc., Paycom Payroll, LLC, Ernest Group, Inc., The Ruby Group, Inc.,
Executive, Shannon Rowe, William Kerber and Henry J. Binkowski and excluding
only any agreements governing the rights and obligations of the Company and
Executive with respect to the securities of the Company, and any
Company-provided separate benefit or severance plans, all of which remain in
full force and effect in accordance with their terms.  

 

15.Amendment.  This Agreement may be amended or modified only by a written
instrument signed by Executive and by an expressly authorized representative of
the Board.

 

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16.Headings.  The headings and captions in this Agreement are for convenience
only and in no way define or describe the scope or content of any provision of
this Agreement.

 

17.Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.

 

18.Governing Law.  This Agreement shall be construed, and the legal relations
between the parties determined, in accordance with the laws of the State of
Delaware, without regard to its conflicts of law rules.  To the extent that a
court of competent jurisdiction concludes that application of Delaware law to
all or part of Section 7.4 is contrary to Oklahoma public policy or statutes,
Executive acknowledges that this Agreement relates to Executive’s sale of the
goodwill of the Company, as defined in 15 O.S. § 218, and agrees to comply with
Sections 7.4(a)-(b) to the fullest extent permitted by law.

 

19.Attorney’s Fees.  The Company agrees to pay or reimburse Executive for the
reasonable attorney fees incurred by Executive in connection with the review of
this Agreement and any related documents, up to a maximum of Fifteen Thousand
Dollars and Zero Cents ($15,000.00).  Such payment will be made promptly
following the date Executive executes this Agreement with the Company, upon
receipt by the Company of an appropriate invoice from the attorney for the fees
with respect to such review.

 

20.Section 409A of the Code.

 

(a)To the extent (i) any payments to which Executive becomes entitled under this
Agreement, or any agreement or plan referenced herein, in connection with
Executive’s termination of employment with the Company constitute deferred
compensation subject to Section 409A of the Code; (ii) Executive is deemed at
the time of his separation from service to be a “specified employee” under
Section 409A of the Code; and (iii) at the time of Executive’s separation from
service the Company is publicly traded (as defined in Section 409A of Code),
then such payments (other than any payments permitted by Section 409A of the
Code to be paid within six (6) months of Executive’s separation from service)
shall not be made until the earlier of (x) the first day of the seventh month
following Executive’s separation from service or (y) the date of Executive’s
death following such separation from service.  During any period that payment or
payments to Executive are deferred pursuant to the foregoing, Executive shall be
entitled to interest on the deferred payment or payments at a per annum rate
equal to Federal-Funds rate as published in The Wall Street Journal on the date
of Executive’s termination of employment with the Company. Upon the expiration
of the applicable deferral period, any payments which would have otherwise been
made during that period (whether in a single sum or in installments) in the
absence of this Section 19 (together with accrued interest thereon) shall be
paid to Executive or Executive’s beneficiary in one lump sum.

 

(b)A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a “separation from service” (within the meaning of Section 409A of the
Code).

 

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(c)For purposes of Section 409A of the Code, each payment under Section 5 hereof
(and each other severance plan payment) will be treated as a separate payment.

 

(d)Any reimbursement of expenses made under this Agreement shall only be made
for eligible expenses incurred during the Term, and no reimbursement of any
expense shall be made by the Company after December 31st of the year following
the calendar year in which the expense was incurred.  Any amount eligible for
reimbursement under this Agreement during a taxable year may not affect expenses
eligible for reimbursement in any other taxable year, and any right to
reimbursement under this Agreement is not subject to liquidation or exchange for
another benefit.

 

(e)It is intended that this Agreement comply with the provisions of Section 409A
of the Code and the regulations and guidance of general applicability issued
thereunder so as to not subject Executive to the payment of additional interest
and taxes under Section 409A of the Code, and in furtherance of this intent,
this Agreement shall be interpreted, operated and administered in a manner
consistent with these intentions.

 

*************

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Executive Employment Agreement as of the date first set forth above.

 

 

EXECUTIVE

 

PAYCOM SOFTWARE, INC.

 

 

 

/s/ Jeffrey York

 

/s/ Frederick C. Peters, II

Jeffrey York

 

By:

Frederick C. Peters, II

 

 

Title:

Lead Director of the Board of Directors, on behalf of the Board of Directors