Document:

Exhibit 10.1

      

       

        

      SETTLEMENT AGREEMENT AND GENERAL RELEASE

    

    

    This SETTLEMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is entered into as of October 30, 2019, by and among Plaintiff UMB Bank, N.A. (“Plaintiff”), in its capacity as trustee of an express
      trust for the benefit of each and every holder of one or more contingent value rights (the “CVR Holders”), on the one hand, and Defendant Sanofi, a French société anonyme, with share capital of 2,504,039,842 euros, registered at the Registry of
      Commerce and Companies of Paris under registration number 395 030 844 and having its registered office at 54 rue La Boétie, 75008 Paris, France (“Defendant” or “Sanofi”), on the other hand.

    

    

    RECITALS

    

    

    WHEREAS, in connection with Sanofi’s 2011 acquisition of Genzyme Corporation (“Genzyme”), Sanofi agreed to and did issue one publicly-traded contingent value right (“CVR”) per Genzyme share;

    

    

    WHEREAS, the terms of the CVRs are set forth in the Contingent Value Rights Agreement, by and between Sanofi and the predecessor trustee, American Stock Transfer & Trust Company, LLC (“AST”),
      dated as of March 30, 2011 (the “CVR Agreement”);

    

    

    WHEREAS, on November 9, 2015, AST commenced litigation against Sanofi in an action captioned American Stock Transfer & Trust Company, LLC, as Trustee v. Sanofi,
      No. 15-cv-08725 (the “Action”), which was filed in the United States District Court for the Southern District of New York (the “Court”);

    

    

    WHEREAS, on January 29, 2016, Sanofi moved to dismiss Counts II and III of the November 9, 2015 complaint (the “Complaint”);

    

    

    WHEREAS, on or about May 13, 2016, AST noticed its resignation as trustee under the CVR Agreement, which resignation became effective on June 30, 2016;

    

    

    WHEREAS, on June 17, 2016, AST filed a Supplemental Complaint;

    

    

    WHEREAS, on June 30, 2016, UMB Bank, N.A. was appointed as successor trustee under the CVR Agreement;

    

    

    WHEREAS, on July 8, 2016, UMB Bank, N.A. filed an unopposed motion to substitute itself as plaintiff in the Action, which motion was granted by the Court on July 19, 2016;

    

    

    WHEREAS, on July 15, 2016, UMB Bank, N.A. filed a motion for partial summary judgment as to Count IV of the Supplemental Complaint;

    

    

    WHEREAS, on September 8, 2016, the Court issued a Decision and Order (i) granting Sanofi’s motion to dismiss with respect to Count III; (ii) denying (in part) Sanofi’s motion to dismiss with respect
      to Count II; and (iii) denying without prejudice to renewal UMB Bank N.A.’s motion for partial summary judgment with respect to Count IV (UMB Bank, N.A. v. Sanofi, 2016 WL 4938000 (S.D.N.Y. Sept. 8, 2016));

     

    

    
      
        

    

    WHEREAS, on November 30, 2016, UMB Bank, N.A. entered into a Funding Agreement with certain named Investors and counsel to provide current funding for the Action (the “Funding Agreement”);

    

    

    WHEREAS, on February 1, 2017, UMB Bank, N.A. filed a First Amended Complaint;

    

    

    WHEREAS, on August 29, 2017, UMB Bank, N.A. filed a Second Amended Complaint (the Complaint, Supplemental Complaint, First Amended Complaint, and Second Amended Complaint are collectively referred to
      herein as the “Complaints”);

    

    

    WHEREAS, on October 6, 2017, UMB Bank, N.A. filed a motion for partial summary judgment as to Count VI of the Second Amended Complaint;

    

    

    WHEREAS, on May 29, 2018, the Court issued a Decision and Order (i) granting UMB Bank, N.A.’s motion for partial summary judgment as to Count VI of the Second Amended Complaint; and (ii) denying UMB
      Bank N.A.’s request for immediate enforcement of the Order (UMB Bank, N.A. v. Sanofi, 2018 WL 2426654 (S.D.N.Y. May 29, 2018));

    

    

    WHEREAS, on September 13, 2019, Plaintiff and Defendant filed motions for summary judgment with respect to Counts I, II, and VII of the Second Amended Complaint;

    

    

    WHEREAS, Plaintiff, as Trustee for the benefit of the CVR Holders, believes that settlement on the terms set forth herein is in the best interests of all CVR Holders and that the termination of the
      CVR Agreement and the extinguishment of the CVRs on the terms set forth herein is not adverse to the CVR Holders; and

    

    

    WHEREAS, Plaintiff, upon direction from a majority of CVR Holders in form and substance acceptable to Plaintiff in its sole discretion, and Defendant (together, the “Parties,” and each individually,
      a “Party”) have agreed to settle all claims that were or could have been brought in the Action or that otherwise relate to the subject matter of the Action, the CVR Agreement, and the CVRs, and to fully and completely settle the Action without any
      admission of liability or wrongdoing (the “Settlement”).

    

    

    AGREEMENT

    

    

    NOW, THEREFORE, for good and valid consideration the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

    

    

    
      
        	I.	
                Definitions

              

      

    

    

    

    For purposes of this Agreement, the following Definitions will apply:

     

    

    
      
        

    

    A.          Sanofi Released Persons.  “Sanofi Released Persons” means each and all of the following:  (a) Sanofi; (b) Sanofi’s respective past and/or present subsidiaries and affiliates (the
      “Affiliated Releasees”); and (c) the past and/or present employees, officers, and directors of Sanofi or any of the Affiliated Releasees (the “Additional Releasees,” together with Sanofi and the Affiliated Releasees, the “Releasees”); and (d) the
      Releasees’ past and/or present managing directors, representatives, agents, attorneys (including, but not limited to, all counsel who have appeared in the Action and their respective law firms), insurers, reinsurers, principals, members, managers,
      families, stockholders, heirs, executors, trustees, personal representatives, estates administrators, predecessors, divisions, successors, and assigns.

    

    

    B.           Plaintiff Released Persons.  “Plaintiff Released Persons” means each and all of the following:  (a) Plaintiff; (b) AST; (c) each Person whose claims Plaintiff holds, who has
      assigned any claims or proceeds from a claim to Plaintiff, or whom Plaintiff represents (or is suing on behalf of in the Action or otherwise), including, without limitation, each and every CVR Holder; and (d) Plaintiff’s and AST’s respective past
      and/or present affiliates, subsidiaries, general partners, parents, limited partners, managing directors, representatives, agents, attorneys (including, but not limited to, all counsel who have appeared in the Action and their respective law firms),
      insurers, reinsurers, principals, members, managers, families, stockholders, heirs, executors, trustees, personal representatives, estates administrators, predecessors, divisions, successors, and assigns.

    

    

    C.           Released Persons.  “Released Persons” means, collectively, the Sanofi Released Persons and the Plaintiff Released Persons.

    

    

    D.          Released Claims.  “Released Claims” means any and all claims, demands, actions, causes of action, obligations, debts, judgments, interests, complaints, claims, liabilities,
      promises, agreements, controversies, suits, rights, damages, costs, losses, debts, charges, expenses (including attorneys’ fees and disbursements of counsel, other professionals, and consultants), and liabilities of any and all kind, nature, and
      description, whether direct or derivative, whether at law or in equity (upon any legal or equitable theory, whether contractual, tort-based, common law, or statutory, whether arising under federal, state, common, or foreign law, whether based on bad
      faith, allegedly intentional, willful, negligent, or reckless conduct, whether asserted as claims, cross-claims, counterclaims, third-party claims, or in any other manner in any pleadings or filings in the Court, in any federal or state court, or in
      any other court, arbitration proceeding, administrative agency, or other forum in the United States or elsewhere), whether such are known or Unknown (as that term is employed in Paragraph II.K of this Agreement), secured or unsecured, contingent or
      absolute, choate or inchoate, suspected or unsuspected, ripened or unripened, liquidated or unliquidated, perfected or unperfected, whether asserted on the Releasing Persons’ own behalf or on behalf of another Person, and whether they be directly,
      indirectly, nominally, or beneficially possessed or claimed by the Releasing Person, that such Person, or any Person or entity claiming through such Person or by right in respect of such Person, has ever had since the beginning of time, now has, or
      that may arise or accrue in the future against any of the Released Persons that:  (a) in any way arise out of, are based upon, relate to, or concern the facts, matters, occurrences, claims made, allegations, representations, omissions, actions (or
      failure to act), transactions, agreements, or conduct alleged, complained of, set forth, referred to, involved in, or which could have been raised or made in the Action and/or any of the Complaints; (b) in any way arise out of, are based upon, relate
      to, or concern the CVR Agreement and/or the CVRs; (c) in any way relate to or concern the development and/or commercialization of alemtuzumab (marketed under the brand name Lemtrada); and/or (d) in any way relate to or concern the production and/or
      manufacturing of Cerezyme and/or Fabrazyme.  Released Claims do not include claims relating to the enforcement of this Agreement, but do include claims under the CVR Agreement that, by the CVR Agreement’s express terms, would otherwise survive the
      termination of the CVR Agreement.

    

    

    
      
        

    

    E.         Person.  “Person” means an individual, corporation, limited liability company, professional corporation, limited liability partnership, partnership, limited partnership,
      association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity, as well as each of their spouses, heirs, predecessors,
      successors, representatives, and assigns.

    

    

    F.           Plaintiff Releasors.  “Plaintiff Releasors” means each and all of the following:  (a) Plaintiff; (b) each Person whose claims Plaintiff holds, who has assigned any claims or
      proceeds from any claims to Plaintiff, or whom Plaintiff represents (or is suing on behalf of in the Action or otherwise), including, without limitation, each and every CVR Holder (together with Plaintiff, the “Releasors”); and (c) all of the
      Releasors’ present or former partners, limited partners, officers, directors, employees, agents, affiliates, owners, predecessors, successors, assigns, heirs, executors, administrators, trustees, and any other Person who has the right, ability,
      standing, or capacity to assert, prosecute, or maintain any of the Released Claims or to obtain the proceeds of any recovery (in whole or in part) on those claims.

    

    

    G.          Sanofi Releasors.  “Sanofi Releasors” means each and all of the following:  (a) Sanofi; (b) Sanofi’s respective past and/or present subsidiaries and affiliates (the “Affiliated
      Releasors”); and (c) the past and/or present employees, officers, and directors of Sanofi or any of the Affiliated Releasors.

    

    

    H.           Releasing Persons.  “Releasing Persons” means, collectively, the Plaintiff Releasors and the Sanofi Releasors.

    

    

    I.            Court Approval.  “Court Approval” means a Final Non-Appealable Order (as defined below) pursuant to the Minnesota Trust Code, Minn. Stat. §§ 501C.0201-.0208 (i) approving this
      Agreement and directing the Parties to implement its terms and those of the Funding Agreement, (ii) providing that the CVR Agreement is terminated and that none of the Trustee, the CVR Holders, and Sanofi shall have any further rights or obligations
      under the CVR Agreement, (iii) approving the notice(s) sent by the Trustee to the CVR Holders in connection with this Agreement and the court approval thereof and providing that that such notice(s) satisfy any and all notice requirements relating to
      court approval and as set forth in the CVR Agreement, including, for the avoidance of doubt, those imposed on Sanofi, and (iv) providing that Sanofi shall have no responsibility to anyone, including the CVR Holders, relating to the Trustee’s
      distribution of the Settlement Payment.  Sanofi and the Trustee shall both appear and reasonably cooperate in seeking Court Approval.  Final Non-Appealable Order means the entry of an approval order pursuant to the Minnesota Trust Code, Minn. Stat.
      §§ 501C.0201-.0208, and either (i) expiration of all appeal periods without an appeal (including, without limitation, the expiration of any time to apply for discretionary review), or (ii) if an appeal is taken, upon entry of an order finally
      affirming the approval order without possibility of further appeal or when the time for any further appeal has expired (including without limitation the expiration of any time to apply for discretionary review).

     

    

    
      
        

    

    J.           Effective Date.  The “Effective Date” refers to the receipt of Court Approval as provided in Paragraph  1.I above.  The Parties acknowledge and agree that the following events
      shall also take place in connection with the Settlement:  (i) the Action will be voluntarily dismissed with prejudice as set forth in Paragraph II.B; (ii) the CVRs will be delisted from the NASDAQ and extinguished as set forth in Paragraph II.C; and
      (iii) Plaintiff shall send notice of the terms of this Agreement to the CVR Holders.  Plaintiff and Defendant will reasonably cooperate in seeking the prompt occurrence of items (i) through (iii) listed herein.  For the avoidance of doubt, each of
      (i) and (ii) listed herein is intended to follow and be contingent upon the occurrence of the Effective Date.

    

    

    
      
        	II.	
                Terms

              

      

    

    

    

    A.           Settlement Payment.

    

    

    1.          No later than five (5) business days after this Agreement is fully executed, Sanofi shall pay a total of $315,000,000 (the “Settlement Payment”) in full and complete satisfaction of all
      claims asserted in the Action and in exchange for the release set forth herein.  The Settlement Payment shall be paid by wire transfer to the interest bearing escrow account identified in Exhibit A hereto (the “Escrow Account”), which Escrow
      Account will be governed by the terms of the Escrow Agreement entered into contemporaneously herewith and attached as Exhibit C hereto.  The Settlement Payment will be held in the Escrow Account until each of the following three events has occurred:
      (i) Court Approval; (ii) the Joint Dismissal Order (as defined below) has been So Ordered by the Court; and (iii) the CVRs are delisted from the NASDAQ and extinguished as set forth in Paragraph II.C.

    

    

    2.         Payment of the Settlement Payment as provided in Paragraph II.A.1, above, shall constitute a full and valid discharge of Sanofi’s payment obligations pursuant to this Agreement.

    

    

    3.          The distribution of the Settlement Payment will be solely determined by Plaintiff, with no involvement or direction from Sanofi.  Court Approval shall include, without limitation,
      directing the Trustee to make payments in accordance with the terms of the Funding Agreement.

    

    

    4.           If the Parties do not obtain Court Approval, then within five (5) business days following the issuance of a court order or ruling that fails to provide Court Approval, the Settlement
      Payment shall be returned in its entirety to Sanofi and this Settlement Agreement shall be null and void ab initio and the parties shall revert, without prejudice, to their respective status in the Action as of September 20, 2019.

     

    

    B.           Dismissal of the Action.

    

    

    1.          Upon execution of this Agreement, Sanofi, through its attorneys, shall execute and deliver to the attorneys for Plaintiff a Joint Stipulation of Dismissal With Prejudice (and without
      costs to any Person) in the form attached hereto as Exhibit B (the “Joint Dismissal Order”).

    

    

    
      
        

    

    
      2.            The Joint Dismissal Order shall be executed and filed by Plaintiff no later than two (2) business days following the Effective Date.

    

     

    

    C.          NASDAQ Delisting.  The Parties agree that the CVRs will be extinguished in their entirety and delisted from the NASDAQ promptly upon the occurrence of the Effective Date.  Sanofi
      shall undertake all steps necessary to promptly effectuate the delisting and shall commence the delisting process no later than one (1) business day following the Effective Date. Sanofi further agrees to, within one (1) business day of the
      commencement of the delisting process, provide evidence to Plaintiff of NASDAQ’s filing of a Form 25 with the Securities and Exchange Commission with respect to the CVRs.  Plaintiff agrees that it will reasonably cooperate with Sanofi to complete the
      delisting, but any expenses associated therewith shall be borne by Sanofi.

    

    

    D.          Not Otherwise Entitled.  The Parties agree that except as otherwise set forth in this Agreement:  (i) Plaintiff is entitled to no payments or other consideration from any of the
      Sanofi Released Persons in respect of the Released Claims; and (ii) Sanofi is entitled to no payments or other consideration from any of the Plaintiff Released Persons in respect of the Released Claims.

    

    

    E.            Acknowledgements.  Each Party acknowledges that it has read and understands this Agreement and that it has had the opportunity to consult with its attorneys before signing this
      Agreement.

     

    F.          Release by the Plaintiff Releasors. For and in consideration of the agreements provided herein, each of the Plaintiff Releasors fully, finally, and forever releases, relinquishes,
      and discharges each and every one of the Sanofi Released Persons from any and all of the Released Claims.  Plaintiff represents and warrants that, to the best of its present knowledge (and without any duty of inquiry), neither it nor any of the other
      Plaintiff Releasors have filed any suit, charge, claim, complaint, or action against any Sanofi Released Person with respect to the Released Claims or any aspect thereof (other than the Action, which is now being fully settled), and has neither
      authorized anyone else to do so on its behalf nor has any such claim or right been transferred or assigned to them or anyone else by subrogation, agreement, court order, operation of law, or otherwise.  This release will become effective upon the
      Effective Date.  Upon and after the Effective Date, each Sanofi Released Person may plead this Agreement as a complete defense and bar to any Released Claim brought in contravention hereof.

    

    

    G.           Covenants by the Plaintiff Releasors.  Effective upon execution of this Agreement, the Plaintiff Releasors covenant and agree that:

    

    

    (a)          No Plaintiff Releasor will sue or bring any action or cause of action, including by way of third party claim, cross-claim, or counterclaim, or by right of representation or subrogation,
      against any Sanofi Released Person with respect to any or all of the Released Claims;

     

    (b)         No Plaintiff Releasor will file, commence, prosecute, intervene in, participate in (as a class member, representative, or otherwise), or receive any benefits or other relief from any
      other lawsuit, arbitration, or other proceeding or order in any jurisdiction that is based upon, arises out of, or relates to any or all of the Released Claims against any or all of the Sanofi Released Persons; and

     

    
      
        

    

    (c)          If involuntarily included in any such action, the Plaintiff Releasors will use their best efforts to withdraw therefrom.

     

    H.         Release by the Sanofi Releasors.  For and in consideration of the agreements provided herein, each of the Sanofi Releasors fully, finally, and forever releases, relinquishes, and
      discharges each and every one of the Plaintiff Released Persons from any and all of the Released Claims.  Sanofi represents and warrants that, to the best of its knowledge, neither it nor any of the other Sanofi Releasors have filed any suit, charge,
      claim, complaint, or action against any Plaintiff Released Person with respect to the Released Claims or any aspect thereof, and has neither authorized anyone else to do so on its behalf nor has any such claim or right been transferred or assigned to
      it or anyone else by subrogation, agreement, court order, operation of law, or otherwise.  This release will become effective upon the Effective Date.  Upon and after the Effective Date, each Plaintiff Released Person may plead this Agreement as a
      complete defense and bar to any Released Claim brought in contravention hereof.

    

    

    I.            Covenants by the Sanofi Releasors.  Effective upon execution of this Agreement, the Sanofi Releasors hereby covenant and agree that:

    

    

    (a)         the Sanofi Releasors will not sue or bring any action or cause of action, including by way of third party claim, cross-claim, or counterclaim, or by right of representation or
      subrogation, against any Plaintiff Released Person with respect to any or all of the Released Claims;

     

    (b)          the Sanofi Releasors will not file, commence, prosecute, intervene in, participate in (as a class member, representative, or otherwise), or receive any benefits or other relief from any
      other lawsuit, arbitration, or other proceeding or order in any jurisdiction that is based upon, arises out of, or relates to any or all of the Released Claims against any or all of the Plaintiff Released Persons; and

     

    (c)          If involuntarily included in any such action, the Sanofi Releasors will use their best efforts to withdraw therefrom.

     

    J.            Cal. Civ. Code § 1542.  Each of the Parties expressly waives any and all rights under Section 1542 of the California Civil Code, and any like provision or principle of law in
      any other jurisdiction.  Section 1542 provides as follows:

    

    

    A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing
      the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

     

    

    
      
        

    

    Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of the persons and entities released herein, each Party expressly acknowledges that the
      releases contained in this Agreement are intended to include in their effect, without limitation, claims and causes of action that it does not know or suspect to exist at the time of the execution hereof, including those that may be created by any
      change in law or statute (described herein as “Unknown”), and that the releases herein contemplate extinguishment of all such claims and causes of action.  The Parties acknowledge that the foregoing waiver was a separately bargained for and key
      element of this Agreement and is made with full knowledge and understanding of its consequences and effect after consultation with counsel.

    

    

    K.          Non-Admission of Liability.  The Parties agree that they have entered into this Agreement in compromise of disputed claims and that entry into this Agreement is not an admission
      of any liability or wrongdoing on the part of the Sanofi Released Persons, nor an admission by Plaintiff that any of Sanofi’s defenses have any merit.

    

    

    L.           Confidentiality/Communications to Third Parties.  The terms and conditions of this Agreement and of the Settlement are confidential, and no Party shall disclose such terms and
      conditions to any third party, provided, however, that the Parties may disclose the terms and conditions of this Agreement to their attorneys; as required by applicable regulations (including to their
      accountants if so required), statute, court rule, or court order; as necessary to enforce their rights under this Agreement; in any court proceeding seeking Court Approval (without any obligation to seal or redact); and Plaintiff, in its capacity as
      Trustee for the benefit of the CVR Holders, may disclose the terms and conditions of this Agreement to the CVR Holders, provided, however, that Sanofi is provided with
      the opportunity to review any notice to CVR Holders before such notice is disseminated by Plaintiff.

    

    

    M.         No Disparagement.  Plaintiff and Defendant each agree not to take any action or make any statement, written or oral, that disparages the other, or that has the intended or
      foreseeable effect of damaging the reputation of the other, with respect to this Agreement or the subject matter of the Action.

    

    

    
      
        	

              	N.	
                Use of the Settlement Agreement.

              

      

    

     

    1.           Whether or not the Settlement is consummated and whether or not the Effective Date occurs, the facts and terms of the Settlement and this Agreement (including all exhibits hereto), as
      well as all negotiations, discussions, acts performed, agreements, drafts, documents signed, and proceedings in connection with the Settlement:

     

    (a)         shall not be described as, construed as, interpreted as, or offered or received against Sanofi as evidence of and/or deemed to be evidence of any presumption, concession, or admission by
      Sanofi as to:  (i) the truth of any fact alleged in the Complaints; (ii) the validity of any claim that has been or could have been asserted in the Action or in any other litigation, action, or proceeding, or that otherwise relates to the subject
      matter of the Action; (iii) the deficiency of any defense that has been or could have been asserted in the Action or in any other litigation, action, or proceeding; and/or (iv) any liability, negligence, fault, or wrongdoing on its part;

     

    
      
        

    

    (b)          shall not be described as, construed as, interpreted as, or offered or received against Plaintiff as evidence of and/or deemed to be evidence of any presumption, concession, or admission
      by Plaintiff as to:  (i) the truth of any fact alleged by Sanofi in defense of the Action or any deficiency in the claims asserted in the Complaints; (ii) the validity of any defense or counterclaim that has been or could have been asserted in the
      Action or in any other litigation, action, or proceeding, or that otherwise relates to the subject matter of the Action; (iii) the deficiency of any claim that has been or could have been asserted in the Action or in any other litigation, action, or
      proceeding; and/or (iv) any liability, negligence, fault, or wrongdoing on its part;

     

    (c)          shall not be described as, construed as, interpreted as, offered or received against Sanofi and/or Plaintiff as an admission or concession that the consideration to be given in the
      Settlement represents the amount that could be or would have been awarded to Plaintiff after trial; and

     

    (d)          shall not be offered or received against any of the Parties in any other civil, criminal, or administrative action, litigation, or proceeding, except in connection with any action,
      litigation, or proceeding to enforce the terms of this Agreement.

     

    2.           Notwithstanding Paragraph II.L hereof, any of the Released Persons may file, cite, and/or refer to this Agreement or the Joint Dismissal Order in any other action or proceeding that may
      be brought against them in any forum in order to effectuate the liability protection granted hereunder or to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release and discharge, good faith settlement,
      judgment bar or reduction, any theory of claim preclusion or issue preclusion, or any similar defense or counterclaim.

     

    3.            The provisions of and obligations in Paragraph II.M hereof shall survive and remain in full force and effect and be binding in all respects on the Parties even if the Settlement is not
      consummated and/or the Effective Date does not occur.

    

    

    O.           Entire Agreement; Modification.  This Agreement constitutes the entire agreement between the Parties and overrides and replaces all prior negotiations and terms proposed or
      discussed, whether in writing or orally, about the subject matter hereof.  No modification of this Agreement will be valid unless it is in writing identified as an Amendment to this Agreement and is signed by all Parties.

    

    

    P.           Governing Law.  This Agreement is governed by and shall be construed in accordance with the laws of the State of New York (or United States federal law, to the extent
      applicable), including any applicable statutes of limitation, without regard to any otherwise applicable principles of conflicts of law or choice of law rules (whether of the State of New York or any other jurisdiction) that would result in the
      application of the substantive or procedural rules or law of any other jurisdiction.

    

    

    
      
        

    

    
      Q.           Remedies for Breach.

    

     

    

    1.           In the event that any Plaintiff Releasor brings an action against any Sanofi Released Person based on any Released Claim, or in the event that Plaintiff breaches this Agreement, Sanofi
      or any other Sanofi Released Person may, at its or their option and as applicable (a) plead this Agreement in bar to any such action and (b) seek as against such Plaintiff Releasor any and all remedies available at law or in equity, including
      injunctive relief and monetary damages, costs, and reasonable attorneys’ fees.

    

    

    2.            In the event that any Sanofi Releasor brings an action against any Plaintiff Released Person based on any Released Claim, or in the event Sanofi breaches this Agreement, Plaintiff or
      any other Plaintiff Released Person may, at its or their option and as applicable (a) plead this Agreement in bar to any such action, and (b) seek as against such Sanofi Releasor any and all remedies available at law or in equity, including
      injunctive relief and monetary damages, costs, and reasonable attorneys’ fees.

    

    

    3.           The Parties agree and acknowledge that money damages are not an adequate remedy for any breach of the provisions of this Agreement and that a non-breaching Party may, in its sole
      discretion, apply to the United States District Court for the Southern District of New York for specific performance or injunctive relief (without posting a bond or other security) against the breaching party in order to enforce or prevent any
      violation of the provisions of this Agreement, and the other Party shall not object to such remedies on the basis that an adequate remedy at law exists.

     

    

    4.            Notwithstanding the foregoing, the Parties agree that for any dispute arising out of or relating to this Agreement, before filing any litigation, the Parties shall first seek mediation
      of such dispute.  The cost of mediation shall be divided equally between the Parties.

    

    

    R.           Fees and Costs.  Except as otherwise expressly set forth herein, each Party shall bear its own costs and expenses, including any and all legal and expert fees, incurred in
      connection with the Action and this Agreement.

    

    

    S.           Construction.  Each Party has cooperated in the drafting and preparation of this Agreement.  Accordingly, in any construction of any of the terms of this Agreement, the same
      shall not be construed against any Party.  The captions and headings of the Paragraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.  Unless the context of this Agreement clearly
      requires otherwise:  (a) references to the plural include the singular, the singular the plural, and the part the whole, (b) references to one gender include all genders, (c) “or” has the inclusive meaning frequently identified with the phrase
      “and/or,” (d) “including” has the inclusive meaning frequently identified with the phrase “including but not limited to” or “including without limitation,” (e) references to “hereunder,” “herein,” or “hereof” relate to this Agreement as a whole, and
      (f) the terms “dollars” and “$” refer to United States dollars.  Section, subsection, exhibit, and paragraph references are to this Agreement as originally executed unless otherwise specified.  Any reference herein to any statute, rule, regulation,
      or agreement, including this Agreement, shall be deemed to include such statute, rule, regulation, or agreement as it may be modified, varied, amended, or supplemented from time to time.

    

    

    
      
        

    

    T.            Counterparts. This Agreement may be executed in multiple counterparts (including via facsimile or other electronic mail), which shall be deemed an original, but all of which
      together shall constitute one and the same instrument.

    

    

    U.           Binding Effect.   Upon execution by the Parties, this Agreement is binding upon and shall inure to the benefit of the Parties, their successors, assigns, heirs, executors, legal
      representatives, and administrators.

    

    

    V.            Additional Representations and Warranties.

     

    1.            Each Party represents and warrants that:

    

    

    (a)          The undersigned has the full legal right and capacity to enter into this Agreement and perform its obligations hereunder.  This Agreement has been duly and validly executed and delivered
      by such Party and, assuming due authorization, execution and delivery by the other Party, constitutes a legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to laws of general
      application relating to bankruptcy, insolvency, and the relief of debtors, and rules of law governing specific performance, injunctive relief, or other equitable remedies.

    

    

    (b)         The execution and delivery by such Party of this Agreement, the performance by such Party of its obligations hereunder, and the consummation of the transactions contemplated hereby, will
      not (a) result in the violation by such Party of any statute, law, rule, regulation, agreement, or ordinance, or any judgment, decree, order, writ, permit, or license of any governmental or regulatory authority applicable to such Party, or (b) other
      than Court Approval, require such Party to obtain any consent, approval, or action of, make any filing with, or give any notice to any Person, which action has not already been undertaken by such Party.

    

    

    W.          Enforcement of the Agreement.

    

    

    1.           In the event that Plaintiff breaches this Agreement, Sanofi, upon written notice to Plaintiff, may sue to enforce the terms hereof, or seek damages occasioned by the breach.  In the
      event Sanofi breaches this Agreement, Plaintiff, upon written notice to Sanofi, may sue to enforce the terms hereof, or seek damages occasioned by the breach.

    

    

    X.           Limitation on Assignment.  No Party shall assign its rights or obligations under this Agreement without the prior written consent of the other Party.

    

    

    Y.           Third-Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any person or entity other than the Parties and their respective heirs, successors, and
      permitted assigns (other than as contemplated by the releases contained herein).

    

    

    [SIGNATURES APPEAR ON NEXT PAGE]

    

    

    
      
        

    

    IN WITNESS WHEREOF, the Parties sign this Agreement as of the date first above referenced with the intent to be bound by its terms and conditions.

    

    

    	
            /s/ Gavin Wilkinson

          	 
	
            Name: Gavin Wilkinson

          	 
	
            Title: Senior Vice President

          	 
	
            UMB Bank, N.A.

          	 
	
            120 South Sixth Street, Suite 1400

          	 
	
            Minneapolis, MN 55402

          	 

    

    

    	
            /s/ Claire Terrazas

          	 
	
            Name: Claire Terrazas

          	 
	
            Title: Vice President, Corporate Legal Affairs

          	 
	
            Sanofi

          	 
	
            54 Rue la Boétie

          	 
	
            75008 Paris, France

          	 

    

    

    
      
        

    

    Exhibit A

    

    

    ESCROW ACCOUNT

    

    

    
      
        

    

    Exhibit B

    

    

    UNITED STATES DISTRICT COURT

     SOUTHERN DISTRICT OF NEW YORK

     

    

    
      	 	 	 	:

            	 	 
	UMB BANK, N.A., as Trustee,	 	 	
              :

            	 	
               

            
	 	 	 	:

            	 	 
	

            	Plaintiff, 

            	 	:

            	 	
               

            
	 	 	 	:

            	 	Case No. 15 Civ. 8725 (GBD) (RWL)
	v.	 	 	 	:

            	 	

            
	 	 	 	:

            	 	ECF CASE
	
              SANOFI,

            	 	

            	
              :

            	

            
	 	 	 	:

            	 	 
	

            	Defendant.	 	:

            	 	
               

            
	 	 	 	:

            	 	 

    

    

    JOINT STIPULATION OF DISMISSAL WITH PREJUDICE

    

    

    Pursuant to Federal Rule of Civil Procedure 41(a)(1), Plaintiff UMB Bank, N.A., as Trustee, and Defendant Sanofi hereby stipulate and agree that this action and all claims and defenses asserted herein be dismissed with
      prejudice, with each party bearing its own attorneys’ fees, costs, and expenses relating thereto.  The parties also hereby withdraw and terminate all pending motions, including summary judgment motions, submitted in this action.

    Dated:  October __, 2019

    

    

    
      	
              So Ordered: 

              

            	

            	 	 

      	 	 
	
              CAHILL GORDON & REINDEL LLP

            	
              WEIL, GOTSHAL & MANGES LLP

            
	

            	

            	 	

            
	
              Charles A. Gilman

            	
              John A. Neuwirth

            
	
              Jonathan D. Thier

            	
              Joshua S. Amsel

            
	
              Michael B. Weiss

            	
              Stefania D. Venezia

            
	
              80 Pine Street

            	
              767 Fifth Avenue

            
	
              New York, NY 10005

            	
              New York, NY 10153

            
	
              Telephone: (212) 701-3000

            	
              Telephone: (212) 310-8297

            
	
              Attorneys for UMB Bank, N.A.

            	
              Attorneys for Sanofi

            

      

    

    
      
        

    

    Exhibit C:   Escrow Agreementpayc-ex102_386.htm

Exhibit 10.2

 

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 Chad Richison (“Executive”).  This Agreement is entered on October 28, 2019 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 Executive has disclosed to the Company that, while continuing to perform his duties as Chief Executive Officer and President of the Company, Executive may also seek to engage in other certain outside business activities unrelated to and not competitive with the Company’s business activities;

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 Executive 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.

 

1.3.“Cause” shall mean, with respect to Executive, the occurrence of any one of the following:  (a) the repeated failure of Executive to perform such duties as are lawfully requested and communicated in writing to Executive by the Board or the board of directors of any subsidiary of the Company (to the extent such duties are consistent with Executive’s position with the Company or any of its subsidiaries), (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.    Notwithstanding the foregoing, in the case of subsections (a), (b), (c), and (d) of this Section 1.3, Cause shall not be deemed to exist unless (i) Company gives Executive prior written notice that the Company believes Executive is in violation of subsections (a), (b), (c), or (d) of his Section 1.3; and (ii) Company gives Executive a ten (10) day opportunity to cure; and (iii) Executive fails to cure prior to the end of such ten (10) day period.

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.

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 the Effective Date 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 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 provides written 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, 2019, at which time it will be subject to expiration or renewal for a successive one (1) year Additional Term, as provided for in this section.

	
 
	
3.
	
Capacity and Performance.

3.1.Capacity.  During the Term, Executive shall serve the Company as its Chief Executive Officer and President and shall report directly to the Board.  During the Term, Executive shall be employed by the Company and shall perform such duties and responsibilities, consistent and customary with the positions of Chief Executive Officer and President, on behalf of the Company and its Affiliates as may reasonably be designated from time to time by the Board.

3.2.Capacity and Performance.

(a) During his employment with the Company, Executive shall devote his commercially reasonable efforts, business judgment, skill, and knowledge to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder.

(b) It is acknowledged and agreed between the Company and Executive that Executive shall have the right and option to pursue other outside business and non-business activities and interests while employed by the Company pursuant to this Agreement, and may perform services and engage in activities for such other business entities so long as such activities and interests are not in violation of Executive’s obligations to the Company pursuant to this Agreement.  Such outside business and non-business activities and interest may include, but shall not be limited to, Executive performing services as a manager, managing member, officer, or director on behalf of other outside business or non-business entities not affiliated with the Company or its Affiliates.

(c) Notwithstanding the provisions of this Section 3.2, Executive shall not engage in any outside business activities that either: (i) are competitive with the products or services of the Company or its Affiliates (whether then-current or in development), or (ii) interfere with Executive’s duties and responsibilities to the Company.

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

4.1.Base Salary.  During the Term, the Company shall pay Executive a base salary at a rate not less than Seven Hundred Eleven Thousand Three Hundred Sixty Dollars and Fifty Two Cents ($711,360.52) 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”).

4.2.Bonus.  Subject to the provisions of this Section 4.2, Executive shall be eligible to earn an annual bonus of 100% 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.

4.3.Vacation.  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.

4.4.Aircraft.  During the Term, the Company shall either: (i) contract with NetJets or a similar private business jet charter company to provide 24 hour-per-day, 365 day-per-year access to a Medium Cabin private aircraft for Executive’s business or personal travel; or (ii) purchase, lease or charter, and provide 24 hour-per-day, 365 day-per-year access to, a Medium Cabin private aircraft for Executive’s business or personal travel.  Executive shall be entitled to up to seventy-five (75) hours of flight time for Executive’s designated non-Company use per calendar year pursuant to this Section, for which Executive shall not be required to reimburse the Company.  To the extent Executive exceeds seventy-five (75) hours of non-Company flight time use in a calendar year, Executive shall reimburse the Company for any excess.  The Company will withhold any required taxes or withholding with respect to the benefits described in this Section 4.4 from Executive’s Base Salary.

4.5.Company Automobile.  During the Term, the Company shall provide Executive use of a Company automobile with a lease value of up to Two Thousand Dollars ($2,000.00) per month for Executive’s business or personal use, less any required taxes or withholdings.

4.6.Personal Security.  During the Term, the Company shall pay the reasonable expenses for Executive’s personal and home security.

4.7.Country Club.  During the Term, the Company shall provide Executive with a Country Club membership in any country club or recreational sports club of Executive’s choosing at a cost of up to Seven Hundred Fifty Dollars ($750.00) per month, less any required taxes or withholdings.

4.8.Administrative Assistant.  During the Term, the Company shall provide Executive with one (1) full-time administrative assistant mutually agreed upon by the Company and Executive.  As Executive directs from time to time, the administrative assistant may assist the Executive with all manner of Executive’s business dealings and personal dealings, including Executive’s business dealings on behalf of the Company, personal and family matters, and/or Executive’s outside business and non-business activities.  It is additionally agreed between the Company and Executive that, from time to time and on an as-needed basis, Executive may additionally use other Company administrative staff to assist Executive in all manner of Executive’s other non-Company activities.

4.9.Other 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).

4.10.Business 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.

4.11.Clawback. 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”):

5.1.Death.  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).

5.2.Disability.

(a)If, as a result of Executive’s incapacity due to physical or mental illness, Executive shall have been unable to perform the essential functions of the Executive’s duties with the Company 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 performance of the essential functions 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.

5.3.By the Company for Cause.  During the Term, the Company may terminate Executive's employment for Cause as defined in Section 1.3 above, after the Company provides Executive with written notice identifying the reasons constituting such Cause (and subject to any applicable cure period as may be specifically provided in Section 1.3).  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.

5.4.By 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; (c) continue to pay the reasonable expenses for Executive’s security for a period of two years after termination of this Agreement and consistent with the Company’s provision of such security pursuant to Section 4.6 during the Term; and (d) 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) (c) and (d) 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.

5.5.By Executive for Good Reason.  During the Term, Executive may terminate his employment for Good Reason in accordance with this Section 5.5.  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)any change, made by the Company and without Executive’s written consent in his individual capacity, in Executive’s status, reporting, duties or position that represents a demotion or diminution from Executive’s status, reporting, duties or position as President, Chief Executive Officer, and Chairperson of the Board as such positions were in effect at the time this Agreement was entered into; and/or

(c)any material breach of this Agreement by the Company.

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 identifying the reasons constituting Good Reason.  For purposes of this Agreement, Good Reason shall not be deemed to exist unless (x) Executive gives the Company written notice of his objection to such occurrence constituting Good Reason within forty-five (45) days after Executive first learns of such occurrence, (y) such occurrence is not corrected by the Company within twenty (20) days of its receipt of such notice, and (z) Executive resigns his employment with the Company for such Good Reason by written notice to the Company not more than thirty (30) days following the expiration of the 20-day 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. 

5.6.By 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.

5.7.By 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.

6.1.Benefits.  Except as may apply pursuant to any Severance provided for in this Agreement, benefits to Executive 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.

6.2.Restricted Stock Grants.  The restricted stock grants made pursuant to those certain Restricted Stock Award Agreements by and between the Company (or its successor or affiliate) and Executive shall vest in accordance with the terms of such agreements.

6.3.Survival 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.

7.1.Confidential 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.

7.2.Safeguard 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.

7.3.Ownership of Information, Inventions and Original Work.  Executive agrees that, in connection with his employment with the Company, 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)Confidential Information of the Company was used in its conception or development; or

(b)It (i) relates, at the time of conception or reduction to practice, to a product or service of the Company, (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 employment with the Company and/or its subsidiaries, or (iii) results from any work performed by Executive for the Company.  Notwithstanding Section 7.3(b), if the foregoing intellectual property described in Section 7.3(b) is conceived, developed or reduced to practice entirely after the Executive is no longer an employee of the Company, 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 of such Work Product will be available to and remain the sole property of the Company at all times.

7.4.Restrictive 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 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, Executive shall not be prohibited from owning up to one percent of the outstanding stock of a corporation which is publicly traded and competes with the business of the Company, 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 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 (as that term is defined in Section 7.3 above).  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.”

	
 
	
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 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.  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.

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

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

	
 
	
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. Chad Richison
23700 N. Pennsylvania Ave.
Edmond, OK 73025

 

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.

	
 
	
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)-(d) 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).

(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.

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/ Chad Richison
	
 
	
/s/ Frederick C. Peters, II

	
Chad Richison
	
 
	
By:
	
Frederick C. Peters, II

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

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