EX-10.2



 Exhibit 10.2 

PAYCOM SOFTWARE, INC. 

ANNUAL INCENTIVE PLAN 

Article I 
 Purpose

 The purpose of the Paycom Software, Inc. Annual Incentive Plan (the “Plan”) is to advance the interests
of Paycom Software, Inc., Delaware corporation (the “Company”) and its stockholders by (a) providing certain Employees of the Company and its Subsidiaries (as hereinafter defined) with incentive compensation which is
tied to the achievement of pre-established and objective performance goals, (b) identifying and rewarding superior performance and providing competitive compensation to attract, motivate, and retain Employees who have outstanding skills and
abilities and who achieve superior performance, and (c) fostering accountability and teamwork throughout the Company. 
 The Plan is
intended to provide Participants (as hereinafter defined) with incentive compensation which is not subject to the deduction limitation rules prescribed under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”), and should be construed to the extent possible as providing for remuneration which is “performance-based compensation” within the meaning of Code Section 162(m) and the treasury regulations promulgated
thereunder. 
 Article II 

Definitions 
 For
the purposes of this Plan, unless the context requires otherwise, the following terms shall have the meanings indicated: 

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. 

“Award” means a grant of Incentive Compensation that may be paid to an Eligible Employee upon the satisfaction of
specified Performance Goal(s) for a particular Performance Period; such Performance Period may be for a period of less than a Fiscal Year (e.g., six months, a “Short-Term Award”), a period equal to a Fiscal Year (an
“Annual Award”), or a period in excess of a Fiscal Year (e.g., three Fiscal Years, a “Long-Term Award”). 

“Base Pay” means for a Participant that is employed at the beginning of the Performance Period, a Participant’s
annualized rate of base salary in effect on the first day of the Performance Period, or, for any other Participant, a Participant’s annualized rate of base salary in effect on the first day of Participant’s employment during the
Performance Period, each according to the books and records of the Company, excluding overtime, commissions, bonuses, disability pay, any Incentive Compensation paid to the Participant, or any other payment in the nature of a bonus or compensation
paid under any other employee plan, contract, agreement, or program. 
 “Beneficial Owner” shall have the meaning
set forth in Rule 13d-3 under the Exchange Act. 
 “Board” means the Board of Directors of the Company. 

“Business Unit” means any segment or operating or administrative unit, including geographical unit, of the Company
identified by the Committee as a separate business unit, or a Subsidiary identified by the Committee as a separate business unit. 

  
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 “Business Unit Performance Goals” means the objective performance goals
established for each Business Unit in accordance with Sections 5.1 and 5.2 below for any Performance Period. 

“Change in Control” means the occurrence of the event set forth in any one of the following paragraphs, except as
otherwise provided herein: 
 (a) a transaction or series of transactions in which any Person becomes, after the effective
date of this Plan, the Beneficial Owner, directly or indirectly, of (i) securities representing thirty percent (30%) or more of the combined voting power of the Company’s then-outstanding securities or (ii) Common Stock
representing thirty percent (30%) or more of the outstanding shares of Common Stock of the Company, other than a transaction described in clause (b) that does not constitute a Change in Control thereunder; 

(b) any 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 percent (50%) 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; 

(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) during any consecutive twelve month period, individuals who,
on the effective date of this Plan, constitute the board of directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the board of directors or other governing body of the Company, its
successor or survivor; provided, that any individual becoming a director subsequent to the effective date of this Plan but prior to any Change of Control, whose nomination or election was approved or recommended by a vote of the
majority of the Incumbent Directors then on the Board, shall be considered an Incumbent Director; 
 (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 provisions of this “Change in Control” definition, to the extent necessary to
comply with Section 409A of the Code, an event shall not constitute a “Change in Control” for purposes of the Plan, unless such event also constitutes a change in the Company’s ownership, its effective control or the ownership of
a substantial portion of its assets within the meaning of Section 409A of the Code. 
 “Code” means the
Internal Revenue Code of 1986, as amended. 
 “Committee” means the Compensation Committee of the Board or any other
committee as determined by the Board, which shall consist of two or more “outside directors” within the meaning of Code Section 162(m). 

“Company” means Paycom Software, Inc., a Delaware corporation. 

  
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 “Company Performance Goals” means the objective performance goals
established for the Company in accordance with Sections 5.1 and 5.3 below for any Performance Period. 
 “Covered
Employee” shall have the same meaning as the term “covered employee” (or its counterpart, as such term may be changed from time to time) contained in the treasury regulations promulgated under Code Section 162(m), or
their respective successor provision or provisions, that being an employee for whom the limitation on deductibility for compensation pursuant to Code Section 162(m) is applicable. 

“Disability” means a Participant is qualified for long-term disability benefits under the Company’s or
Subsidiary’s disability plan or insurance policy; or, if no such plan or policy is then in existence or if the Participant is not eligible to participate in such plan or policy, that the Participant, because of a physical or mental condition
resulting from bodily injury, disease, or mental disorder, is unable to perform his or her duties of employment for a period of six (6) continuous months, as determined in good faith by the Committee, based upon medical reports or other
evidence satisfactory to the Committee. Notwithstanding the foregoing sentence, in the event an Award issued under the Plan is subject to Code Section 409A, then, in lieu of the foregoing definition and to the extent necessary to comply with
the requirements of Code Section 409A, the definition of “Disability” for purposes of such Award shall be the definition of “disability” provided for under Code Section 409A and the regulations or other guidance issued
thereunder. 
 “Eligible Employee” shall mean any Employee of the Company or any Subsidiary. 

“Employee” means a common law employee (as defined in accordance with the treasury regulations and revenue rulings
applicable under Code Section 3401(c)) of the Company or any Subsidiary of the Company. 
 “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to time. 
 “Fiscal Year” means the fiscal year of
the Company, which is the twelve-month (12-month) period ending on December 31 of each calendar year. 
 “Incentive
Compensation” means the compensation approved by the Committee to be paid to a Participant for any Performance Period under the Plan. 

“Individual Performance Goals” means the objective performance goals established for an individual Participant in
accordance with Section 5.6 below for any Performance Period. 
 “Maximum Achievement” means, for a
Participant for any Performance Period, the maximum level of achievement of a set of Performance Goals required for Incentive Compensation to be paid at the maximum bonus level, which shall be established by the Committee in accordance with
Section 5.1 below. 
 “Participant” means an Employee of the Company or a Subsidiary who satisfies the
eligibility requirements of Article IV of the Plan and who is selected by the Committee (or an Authorized Officer, duly appointed in accordance with Article III) to participate in the Plan for any Performance Period. 

“Performance Criteria” shall have the meaning set forth in Section 5.2 below. 

“Performance Goals” means the Individual Performance Goals, Business Unit Performance Goals, and Company Performance
Goals established by the Committee for a Participant, the Company and/or each Business Unit for any Performance Period, as provided in Sections 5.1, 5.2, 5.3, and 5.6 below. 

  
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 “Performance Period” means the period selected by the Committee for the
payment of Incentive Compensation, which period shall be scheduled in good faith at the time the Performance Goals for such period are established. Unless the Committee, in its discretion, specifies other Performance Periods for the payment of
Incentive Compensation hereunder, the Performance Period shall be a Fiscal Year. 
 “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (1) the Company or any of its subsidiaries, (2) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its Affiliates, (3) an underwriter temporarily holding securities pursuant to an offering of such securities or (4) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 

“Plan” means the Paycom Software, Inc. Annual Incentive Plan, as it may be amended from time to time. 

“Subsidiary” means (i) any corporation in an unbroken chain of corporations beginning with the Company, if each
of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain, (ii) any limited partnership,
if the Company or any corporation described in item (i) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement of the general partner, and
(iii) any partnership or limited liability company, if the partners, members or unitholders thereof are composed only of the Company, any corporation listed in item (i) above, any limited partnership listed in item (ii) above or any
other limited liability company described in this item (iii). “Subsidiaries” means more than one of any such corporations, limited partnerships, partnerships, or limited liability company. 

“Target Achievement” means, for a Participant for any Performance Period, the level of achievement of a set of
Performance Goals required for Incentive Compensation to be paid at the target bonus level, which shall be established by the Committee in accordance with Section 5.1 below. 

“Threshold Achievement” means, for a Participant for any Performance Period, the minimum level of achievement of a set
of Performance Goals required for any Incentive Compensation to be paid at the threshold bonus level, which shall be established by the Committee in accordance with Section 5.1 below. 

Article III 

Administration 
 3.1
Committee’s Authority. Subject to the terms of this Article III, the Plan shall be administered by the Committee. For each Performance Period, the Committee shall have full authority to (i) designate the Eligible Employees
who shall participate in the Plan; (ii) establish the Performance Goals and achievement levels for each Participant pursuant to Article V hereof; and (iii) establish and certify the achievement of the Performance Goals.
Notwithstanding any provision of the Plan to the contrary, any decision concerning the awarding of Incentive Compensation hereunder (including, without limitation, establishment of Performance Goals, Threshold Achievement, Target Achievement,
Maximum Achievement, and any other information necessary to calculate Incentive Compensation for a Covered Employee for such Performance Period) shall be made exclusively by the members of the Committee who are at that time “outside”
directors, as that term is used in Code Section 162(m) and the treasury regulations promulgated thereunder. 

  
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 3.2 Committee Action. A majority of the Committee shall constitute a quorum, and the act
of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee. 
 3.3
Committee’s Powers. The Committee shall have the power, in its discretion, to take such actions as may be necessary to carry out the provisions and purposes of the Plan and shall have the authority to control and manage the operation and
administration of the Plan. In order to effectuate the purposes of the Plan, the Committee shall have the discretionary power and authority to construe and interpret the Plan, to supply any omissions therein, to reconcile and correct any errors or
inconsistencies, to decide any questions in the administration and application of the Plan, and to make equitable adjustments for any mistakes or errors made in the administration of the Plan. All such actions or determinations made by the
Committee, and the application of rules and regulations to a particular case or issue by the Committee, in good faith, shall not be subject to review by anyone, but shall be final, binding and conclusive on all persons ever interested hereunder.

 To the extent permitted by applicable law, the Committee also may, in its discretion and by a resolution adopted by the Committee,
authorize one or more officers of the Company (each an “Authorized Officer”), solely with respect to Employees who are not Covered Employees, within the ten most highest compensated officers of the Company, or Authorized
Officers: (i) determine the amount of Incentive Compensation payable to such Employees in accordance with the terms of the Plan; (ii) establish Performance Goals for such Employees, and certify whether, and to what extent, such Performance
Goals were achieved for the applicable Performance Period; and (iii) authorize payment to such Employees in accordance with Article VI. 

In construing the Plan and in exercising its power under provisions requiring the Committee’s approval, the Committee shall attempt to
ascertain the purpose of the provisions in question, and when the purpose is known or reasonably ascertainable, the purpose shall be given effect to the extent feasible. Likewise, the Committee is authorized to determine all questions with respect
to the individual rights of all Participants under this Plan, including, but not limited to, all issues with respect to eligibility. The Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan including, but
not limited to, the power to: 
 (a) designate the Eligible Employees who shall participate in the Plan; 

(b) maintain complete and accurate records of all Plan transactions and other data in the manner necessary for proper
administration of the Plan; 
 (c) adopt rules of procedure and regulations necessary for the proper and efficient
administration of the Plan, provided the rules and regulations are not inconsistent with the terms of the Plan as set out herein. All rules and decisions of the Committee shall be uniformly and consistently applied to all Participants in similar
circumstances; 
 (d) enforce the terms of the Plan and the rules and regulations it adopts; 

(e) review claims and render decisions on claims for benefits under the Plan; 

(f) furnish the Company or the Participants, upon request, with information that the Company or the Participants may require
for tax or other purposes; 

  
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 (g) employ agents, attorneys, accountants or other persons (who also may be
employed by or represent the Company) for such purposes as the Committee considers necessary or desirable in connection with its duties hereunder; and 

(h) perform any and all other acts necessary or appropriate for the proper management and administration of the Plan. 

Article IV 

Eligibility 
 For
each Performance Period, the Committee shall select the particular Eligible Employees to whom Incentive Compensation may be awarded for such Performance Period; with respect to Covered Employees, such determination shall be made within the first
ninety (90) days of such Performance Period (and in the case of a Performance Period less than a Fiscal Year, such determination shall be made no later than the date that 25% of the Performance Period has elapsed). To the extent permitted by
the Committee, Employees who participate in the Plan may also participate in other incentive or benefit plans of the Company or any Subsidiary. Notwithstanding any provision in this Plan to the contrary, the Committee may grant one or more Awards to
an Eligible Employee at any time, and from time to time, and the Committee shall have the discretion to determine whether any such Award shall be a Short-Term Award, an Annual Award or a Long-Term Award. 

Article V 

Determination of Goals and Incentive Compensation 

5.1 Establishment of Business Unit and Company Performance Goals. No later than the ninetieth (90th) day of the Performance Period (and in the case of a Performance Period less than a Fiscal Year, such determination shall be made no later than the date that 25% of the Performance Period has
elapsed), the Committee shall approve, as applicable, the following: (i) the Business Unit Performance Goals for the Performance Period, (ii) the Company Performance Goals for the Performance Period, (iii) the Threshold Achievement,
Target Achievement, and Maximum Achievement levels for the Business Unit Performance Goals and Company Performance Goals for the Performance Period, (iv) with respect to each Participant, Incentive Compensation for achievement of Threshold
Achievement, Target Achievement, and Maximum Achievement levels and the relative weighting of each Performance Goal in determining the Participant’s Incentive Compensation, and (v) a schedule setting forth the payout opportunity for
Threshold Achievement, Target Achievement, and Maximum Achievement levels. 
 5.2 Categories of Business Unit Performance Goals. The
Business Unit Performance Goals, if any, established by the Committee for any Performance Period may differ among Participants and Business Units. For each Business Unit, any Business Unit Performance Goals shall be based on the performance of the
Business Unit. Performance criteria for a Business Unit shall be related to the achievement of financial and operating objectives of the Business Unit, which, where applicable, shall be within the meaning of Code Section 162(m), and consist of
one or more of any of the following criteria: annualized new recurring revenue; cash flow; cost; revenues; increased revenue; revenue budget growth; revenue ratios; customer growth; sales; ratio of debt to debt plus equity; net borrowing, credit
quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; adjusted earnings before interest, taxes, depreciation and amortization; gross margin;
earnings per share (whether on a pre-tax, after-tax, operational or other basis); earnings per share growth; operating earnings; capital expenditures; expenses or expense levels; expense controls; economic value added; ratio of operating earnings to
capital spending or any other operating ratios; free cash flow; cash flow from operations; net profit; net sales; booked sales budget; net income; 

  
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net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions; sales growth; price of the Company’s
common stock; return on net assets, equity or stockholders’ equity; return on capital employed; return on invested capital; market share; total market value; inventory levels, inventory turn or shrinkage; stockholder value; total enterprise
value; or total return to stockholders (“Performance Criteria”). Any Performance Criteria may be measured in absolute terms, relative to a peer group or index, relative to past performance, or as otherwise determined by the
Committee. Any Performance Criteria may include or exclude (i) extraordinary, unusual and/or non-recurring items of gain or loss, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or
laws, or (iv) the effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases. In all other respects, Performance Criteria shall be calculated in accordance with the Company’s financial
statements, under generally accepted accounting principles, or under a methodology established by the Committee which is consistently applied and identified in the audited financial statements, including footnotes, or the Management’s
Discussion and Analysis of Financial Condition and Results of Operation section of the Company’s Annual Report on Form 10-K. 
 5.3
Company Performance Goals. The Company Performance Goals, if any, established by the Committee for any Performance Period shall relate to the achievement of predetermined financial and operating objectives for the Company and its Subsidiaries
on a consolidated basis, which, where applicable, shall be within the meaning of Code Section 162(m) and consist of one or more of any combination of the factors set forth in Section 5.2 above, as applied to the Company and its
Subsidiaries on a consolidated basis. The Company Performance Goals may be established either on an absolute or on a per share basis reflecting dilution of shares as the Committee deems appropriate and, if the Committee so determines, net of or
including cash dividends. The Company Performance Goals may also be established on a relative basis as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, a group of companies
deemed by the Committee to be comparable to the Company. 
 5.4 Certification. On or before March 15 of the year immediately
following the end of the applicable Performance Period and following receipt of the independent auditor’s report, the Committee shall certify in writing and in compliance with the requirements of Treasury Regulation 1.162-27 (and successor
regulations thereto) in the case of any Award intended to qualify under Code Section 162(m): (i) the extent to which each Business Unit achieved its Business Unit Performance Goals, if any, for the Performance Period, (ii) the extent
to which the Company achieved its Company Performance Goals, if any, for the Performance Period, (iii) the calculation of the Participants’ Incentive Compensation, and (iv) the determination by the Committee of the amount of Incentive
Compensation, if any, to be paid to each Participant for the Performance Period. In determining whether Performance Goals have been achieved and Incentive Compensation is payable for a given Performance Period, generally accepted accounting
principles to the extent applicable to the Performance Goal shall be applied on a basis consistent with prior periods, and such determinations shall be based on the calculations made by the Company and binding on each Participant. Approved minutes
of the Committee meeting in which the certification required by this Section 5.4 is made shall be treated as written certification for purposes for this Section 5.4. 

5.5 Award Based on Level of Achievement. If Threshold Achievement is attained with respect to a Performance Goal, then the Incentive
Compensation that may be paid to such Participant with respect to such Performance Goal shall be based on the Committee’s predetermined schedule (which may allow for interpolation between achievement levels). 

5.6 Established Performance Periods and Performance Goals. Appendix A, which shall, from time to time, be updated by the
Committee for each Performance Period, sets forth (i) the 

  
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Performance Goals established and approved by the Committee pursuant to this Article V with respect to the applicable Performance Period; (ii) the Threshold Achievement, Target
Achievement, and Maximum Achievement levels for each Performance Criteria underlying the Performance Goals; and (iii) the payout schedules for the Incentive Compensation that may be paid to the Participant with respect to the achievement of the
Performance Goals. 
 5.7 Limitation on Total Incentive Compensation. Notwithstanding any provision to the contrary contained herein,
the maximum Incentive Compensation payable to any Participant with respect to any single Award shall not exceed $5,000,000. 
 Article VI

 Payment of Incentive Compensation 

6.1 Form and Time of Payment. Subject to the provisions of Sections 6.2 and 6.3 below and except as otherwise provided
herein, a Participant’s Incentive Compensation for a Performance Period shall be paid in the calendar year immediately following the close of the year in which such Performance Period ends, following receipt of the independent auditor’s
report, but no later than March 15 of such year. The payment shall be in the form of a cash lump sum payment. 
 6.2 Forfeiture Upon
Termination Prior to End of Performance Period. If a Participant’s employment with the Company and all of its Subsidiaries is terminated voluntarily by the Participant for any reason, or is terminated by his or her employer for any reason
other than the death or Disability of the Participant, during a Performance Period, then such Participant will immediately forfeit any right to receive any Incentive Compensation hereunder for such Performance Period. Under such circumstances where
the termination of employment occurs after the Performance Period has ended but prior to the date of actual payment, the Committee shall pay the Participant an amount not to exceed the amount set forth according to the terms of the Award. 

6.3 Pro Rata Payment for Death or Disability; New Hires. 

(a) Death or Disability. If during a Performance Period, a Participant’s employment is terminated by reason of the
Participant’s death or Disability, then such Participant shall, if the Committee so determines, be eligible to receive pro rata portion of the Incentive Compensation that would have been payable to such Participant, if he or she had remained
employed, based on the number of days worked during the Performance Period. Such Incentive Compensation shall be paid at the time and in the manner set forth in Section 6.1 hereof. 

(b) New Hires; Promotions. Any individual who is newly-hired or becomes an Eligible Employee during a Performance Period
and who is selected by the Committee to participate in the Plan shall be eligible to receive a pro rata portion of the Incentive Compensation to which he or she could have been entitled if he or she had been employed for the full Performance Period,
based on the number of days during the Performance Period during which he or she is a Participant in the Plan and calculated on the basis of his or her Base Pay received for the Performance Period. Such Incentive Compensation shall be paid at the
time and in the manner set forth in Section 6.1 hereof. 

  
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 6.4 Recoupment for Restatements. Notwithstanding any other language in this Plan, the
Committee may recoup all or any portion of any Incentive Compensation paid to a Participant, in the event of a restatement of the Company’s financial statements to the extent that the amount of the Incentive Compensation would have been lower
if the Company’s financial statements had been as restated. 
 6.5 Change in Control. In the event of a Change in Control, the
Company shall make a lump sum payment to each Participant equal to a prorated amount of any potential Incentive Compensation payable under any Award made to such Participant, calculated by multiplying the amount payable for Target Achievement by the
percentage of the Performance Period completed prior to the Change in Control. In the event of such a lump sum payment, no further Incentive Compensation shall be payable under any such Award. 

Article VII 

Miscellaneous Provisions 

7.1 Non-Assignability. A Participant may not alienate, assign, pledge, encumber, transfer, sell
or otherwise dispose of any rights or benefits awarded hereunder prior to the actual receipt thereof; and any attempt to alienate, assign, pledge, sell, transfer or assign prior to such receipt, or any levy, attachment, execution or similar process
upon any such rights or benefits shall be null and void ab initio. 
 7.2 No Right To Continue In Employment. Nothing in the
Plan confers upon any Employee the right to continue in the employ of the Company or any Subsidiary, or interferes with or restricts in any way the right of the Company and its Subsidiaries to discharge any Employee at any time (subject to any
contract rights of such Employee), including, without limitation, before or after the date such Participant is entitled to payment with respect to an Award. 

7.3 Indemnification of Committee; No Duties; Waiver of Claims. No member of the Committee, nor any officer or Employee of the Company
acting with or on behalf of the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all of the members of the Committee and each and any officer or Employee
of the Company acting with or on their behalf shall be indemnified and protected by the Company in respect of any such action, determination, or interpretation to the fullest extent provided by law. Except to the extent required by any unwaiveable
requirement under applicable law, no member of the Committee (and no officer, Employee or Affiliate of the Company) shall have any duties or liabilities, including without limitation any fiduciary duties, to any Participant (or any Person claiming
by and through any Participant) as a result of this Plan, any Award or any Claim arising hereunder and, to the fullest extent permitted under applicable law, each Participant (as consideration for receiving and accepting an Award) irrevocably waives
and releases any right or opportunity such Participant might have to assert (or participate or cooperate in) any Claim against any member of the Committee and any officer, Employee or Affiliate of the Company arising out of this Plan. 

7.4 No Trust or Plan Funding. The Company (and not any of its Affiliates) will be solely responsible for the payment of all amounts
hereunder. The Plan shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating assets of the Company for payment of any amounts hereunder. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and any Participant. No Participant, beneficiary, or other person shall have any interest in any particular assets of the Company (or any of its
Affiliates) by reason of the right to receive any Incentive Compensation under the Plan. To the extent that any Participant acquires a right to receive any payment from the Company pursuant to an Award, such right shall be no greater than the right
of any general unsecured creditor of the Company. 

  
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 7.5 Governing Law. This Plan shall be construed in accordance with the laws of the State
of Delaware, without giving effect to principles of conflict of laws, and the rights and obligations created hereby shall be governed by the laws of the State of Delaware. The Participant’s sole remedy for any claim, liability or obligation of
any nature, arising out of or relating to this Plan or an alleged breach of this Plan, or an Award (collectively, “Claims”) shall be against the Company, and no Participant shall have any claim or right of any nature against
any Affiliate or any owner or existing or former director, officer or Employee of the Company or any Affiliate. The individuals and entities described above in this Section 7.5 (other than the Company) shall be third-party beneficiaries
of this Plan for purposes of enforcing the terms of this Section 7.5. 
 7.6 Binding Effect. This Plan shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and the Participants, and their heirs, assigns, and personal representatives. 

7.7 Construction of Plan. The captions used in this Plan are for convenience only and shall not be construed in interpreting the Plan.
Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall also include the plural, and conversely. 

7.8 Integrated Plan. This Plan constitutes the final and complete expression of agreement with respect to the subject matter hereof.

 7.9 Tax Requirements. The Company (and, where applicable, its Subsidiaries) shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy applicable taxes required by law to be withheld with respect to any payment of any Incentive Compensation to a Participant. 

7.10 Accounting of Compensation. Unless otherwise specifically provided in such benefit plan, any amounts paid to a Participant
hereunder shall not be treated as compensation paid to such Participant for the purposes of any other benefit plan. 
 7.11
Adjustments. In the event of (a) any merger, reorganization, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights, offering, extraordinary dividend (including a
spin-off), or other similar change affecting the Company’s common stock; (b) any purchase, acquisition, sale, or disposition of a significant amount of assets other than in the ordinary course of business, or of a significant business;
(c) any change resulting from the accounting effects of discontinued operations, extraordinary income or loss, changes in accounting as determined under generally accepted accounting principles, or restatement of earnings; or (d) any
charge or credit resulting from an item which is classified as “non-recurring,” “restructuring,” or similar unusual item on the Company’s audited financial statements which, in the case of (a) – (d), results in a
change in the components of the calculations of any of the criteria upon which the Performance Goals are based, as established by the Committee, in each case with respect to the Company or any other entity whose performance is relevant to the
achievement of any Performance Goal included in an Award, the Committee shall, without the consent of any affected Participant, amend or modify the terms of any outstanding Award that includes any Performance Goal based in whole or in part on the
financial performance of the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event or events, such that the criteria for evaluating such financial performance of the Company or such other entity
(and the achievement of the corresponding Performance Goal) will be substantially the same (as determined by the Committee or the committee of the board of directors of the surviving corporation) following such event as prior to such event;
provided, however, that the Committee shall not take any action pursuant to this Section which would constitute an impermissible exercise of discretion pursuant to Code Section 162(m). 

  
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 Article VIII 

Amendment or Discontinuance 

Except as provided in Section 7.11, the Committee may at any time and from time to time, without the consent of the Participants,
alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided that any amendment that modifies any pre-established Performance Goal for a Participant who is a Covered Employee (or his successor(s), as may be applicable) under
this Plan with respect to any particular Performance Period may only be effected on or prior to that date which is ninety (90) days following the commencement of such Performance Period (and in the case of a Performance Period less than a
Fiscal Year, such determination shall be made no later than the date that 25% of the Performance Period has elapsed). In addition, the Board shall have the power to discontinue the Plan in whole or in part and amend the Plan in any manner advisable
in order for Incentive Compensation granted under the Plan to qualify as “performance-based” compensation under Code Section 162(m) (including amendments as a result of changes to Code Section 162(m) or the regulations thereunder
to permit greater flexibility with respect to Incentive Compensation granted under the Plan). 
 Article IX 

Effect of the Plan 

Neither the adoption of this Plan nor any action of the Board or the Committee shall be deemed to give any Participant any right to be granted
Incentive Compensation or any other rights. In addition, nothing contained in this Plan and no action taken pursuant to its provisions shall be construed to (a) give any Participant any right to any compensation, except as expressly provided
herein; (b) be evidence of any agreement, contract or understanding, express or implied, that the Company or any Subsidiary will employ a Participant in any particular position; (c) give any Participant any right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in meeting its obligations hereunder; or (d) create a trust of any kind or a fiduciary relationship between the Company and a Participant or any other person. 

Article X 
 Code
Section 409A Compliance 
 This Plan is intended to be exempt from or comply with Code Section 409A and shall be
interpreted in a manner consistent with Code Section 409A and the treasury regulations and guidance issued thereunder. To the extent (i) any payment to which a Participant becomes entitled under this Plan in connection with the
Participant’s termination of service with the Company (for reasons other than death) constitutes a payment of deferred compensation subject to Code Section 409A, and (ii) the Participant is deemed at the time of such termination to be
a “specified employee” under Code Section 409A to whom the following provisions must apply, then such payment shall not be made or commence until the earliest of (A) the expiration of the six (6) month period measured from
the date of Participant’s termination of service with the Company; or (B) the date of the Participant’s death following such termination of service. Upon the expiration of the applicable deferral period, any payment which would have
otherwise been made during that period in the absence of this Article X shall be made to the Participant or the Participant’s beneficiary. 

Article XI 
 Term

 The effective date of this Plan shall be as of January 1, 2015, subject to stockholder approval. The material terms of this
Plan shall be disclosed and submitted to the stockholders of the Company at the 

  
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next annual meeting of stockholders and thereafter every five (5) years (unless earlier terminated) for approval in accordance with the requirements of Code Section 162(m). This Plan
and any benefits granted hereunder shall be null and void if stockholder approval is not obtained at the applicable meeting of stockholders of the Company, and no award or payment of Incentive Compensation under this Plan to any Covered Employee
shall be made unless such applicable stockholder approval is obtained. This Plan shall remain in effect until it is terminated by the Committee or the Board. 

* * * * * * * * 

  
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 IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of May 5, 2015,
by its Chief Executive Officer pursuant to prior action taken by the Board. 
  

			
	PAYCOM SOFTWARE, INC.
		
	By:		/s/ Chad Richison
	Name:		Chad Richison
	Title:		Chief Executive Officer