Document:

hgv-ex107_342.htm

Exhibit 10.7

2020 PSU – WANG

 

SECOND AMENDED AND RESTATED
PERFORMANCE- AND SERVICE-BASED
RESTRICTED STOCK UNIT AGREEMENT

HILTON GRAND VACATIONS INC.
2017 OMNIBUS INCENTIVE PLAN

AWARD NOTICE

The Participant has been granted Performance- and Service-Based Restricted Stock Units (or “RSUs”) with the terms set forth in this Award Notice and subject to the terms and conditions of the Plan and the Second Amended and Restated Performance- and Service-Based Restricted Stock Unit Agreement, including its appendices, to which this Award Notice is attached. Capitalized terms used and not defined in this Award Notice shall have the meanings set forth in the Second Amended and Restated Performance- and Service-Based Restricted Stock Unit Agreement and the Plan.

1.General.

Participant: Mark D. Wang

Date of Grant:

Performance Period: 

Target Number of Restricted Stock Units Granted:  RSUs

2.Performance Conditions.

Performance Conditions (the “Performance Conditions”): The extent to which the Performance Conditions are satisfied and the number of RSUs which become vested, if any, shall be calculated with respect to each Performance Component identified below. All determinations made with respect to Adjusted EBITDA and Contract Sales shall be made by the Committee in its sole discretion and the applicable Performance Conditions shall not be achieved and the RSUs shall not vest unless and to the extent that the Committee certifies that such Performance Conditions have been met.

	
 
	
•
	
Adjusted EBITDA. The total number of RSUs which become vested based on the achievement of Adjusted EBITDA performance levels shall be equal to (x) the target number of RSUs multiplied by (y) a relative weighting component equal to seventy percent (70%), multiplied by (z) the Achievement Percentage determined based upon the applicable Adjusted EBITDA Position for the Performance Period as follows, and rounded down to the nearest whole Share:

	
Level of Achievement
	
 
	
Adjusted EBITDA Position
	
 
	
Percentage of 
Award Earned

	
Below Threshold
	
 
	
Less than$[●]M
	
 
	
0%

	
Threshold
	
 
	
$[●]M
	
 
	
50%

	
Target
	
 
	
$[●]M
	
 
	
100%

	
Maximum
	
 
	
$[●]M
	
 
	
200%

 

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•
	
Contract Sales. The total number of RSUs which become vested based on the achievement of Contract Sales performance levels shall be equal to (x) the target number of RSUs specified above with respect to Contract Sales multiplied by (y) a relative weighting component equal to thirty percent (30%), multiplied by (z) the Achievement Percentage determined based upon the applicable Contract Sales Position for the Performance Period as follows, and rounded down to the nearest whole Share:

	
Level of Achievement
	
 
	
Adjusted EBITDA Position
	
 
	
Percentage of 
Award Earned

	
Below Threshold
	
 
	
Less than$[●]M
	
 
	
0%

	
Threshold
	
 
	
$[●]M
	
 
	
50%

	
Target
	
 
	
$[●]M
	
 
	
100%

	
Maximum
	
 
	
$[●]M
	
 
	
200%

 

	
 
	
•
	
Continued Employment or Service. In addition to the attainment of the Performance Conditions, the Participant must be an employee of or in service to the Company or the Company Group from the Date of Grant until the last day of the Performance Period, except to the extent otherwise provided in the Plan or the Agreement.

	
 
	
•
	
Committee Discretion to Adjust Performance Goals and/or Calculations.  In the event of an acquisition or disposition of any business, line of business or assets by the Company (and in the case of an acquisition, only such acquisition transaction in which the Company is the acquiror and/or the surviving entity, and does not otherwise constitute a Change in Control), the Committee shall in good faith and in such manner as it may deem equitable adjust the performance goals and/or the calculation of Adjusted EBITDA and Contract Sales to reflect the projected effect of such transaction(s) or event(s).

3.Definitions.

For purposes of this Award Notice:

(a)“Achievement Percentage” means the “Percentage of Award Earned” specified with respect to the below threshold, threshold, target, and/or maximum levels for each Performance Component, as applicable, or a percentage determined using linear interpolation if actual performance falls between threshold and target, or between target and maximum levels (and rounded to the nearest whole percentage point and, if equally between two percentage points, rounded up). In the event that actual performance does not meet the threshold level for any Performance Component, the “Achievement Percentage” with respect to such Performance Component shall be zero.

(b)“Adjusted EBITDA” means the Company’s earnings before interest expense, taxes and depreciation and amortization, (i) adjusted to exclude gains, losses and expenses in connection with (A) asset dispositions, (B) foreign currency transactions, (C) debt restructurings/retirements,(D) non-cash impairment losses, (E) reorganization costs, including severance and relocation costs, (F) share-based and certain other compensation expenses, (G) costs related to the spin-off, and (H) other items, and (ii) further adjusted for net construction related recognition and deferral activity.

(c)“Contract Sales” means the total dollar amount of vacation ownership interest products under purchase agreements signed during the period where the Company has received a down payment of at least ten percent (10%) of the contract price, net of upgrades, before first-day incentives.

(d)“Performance Components” means the performance criteria applicable to an Award, as set forth on the Award Notice. 

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SECOND AMENDED AND RESTATED
PERFORMANCE- AND SERVICE-BASED
RESTRICTED STOCK UNIT AGREEMENT

HILTON GRAND VACATIONS INC.
2017 OMNIBUS INCENTIVE PLAN

This Second Amended and Restated Performance- and Service-Based Restricted Stock Unit Agreement (the “Second Amended and Restated Agreement”), entered into the [  ] day of [  ], 2020 and effective as of the Date of Grant (as defined below), is between Hilton Grand Vacations Inc., a Delaware corporation (the “Company”), and the Participant (as defined below).

WHEREAS, the Company has adopted the Hilton Grand Vacations Inc. 2017 Omnibus Incentive Plan (as it may be amended, the “Plan”) to provide a means through which the Company and the other members of the Company Group may attract and retain key personnel and to provide a means whereby officers, employees, consultants and advisors of the Company and the other members of the Company Group can acquire and maintain an equity interest in the Company or receive an incentive award; 

WHEREAS, the Participant is an employee or consultant of the Company or another member of the Company Group; and

WHEREAS, the Committee has determined to grant performance- and service-based RSUs to the Participant as provided for herein, and the Company and the Participant hereby wish to memorialize the terms and conditions applicable to the performance- and service-based RSUs.

NOW, THEREFORE, the parties hereto agree as follows:

1.Definitions. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. In addition to other terms defined herein or in the Award Notice, the following terms shall have the following meanings for purposes of this Agreement:

(a)“Agreement” shall mean this Second Amended and Restated Performance- and Service-Based Restricted Stock Unit Agreement including (unless the context otherwise requires) the Award Notice, Appendix A, and the appendices for non-U.S. Participants attached hereto as Appendix B and Appendix C.

(b)“Award Notice” shall mean the notice to the Participant.

(c)“Date of Grant” shall mean the “Date of Grant” listed in the Award Notice.

(d)“Participant” shall mean the “Participant” listed in the Award Notice.

(e)“Performance Conditions” shall mean the performance conditions set forth in the Award Notice.

(f)“Performance Period” shall mean the performance period set forth in the Award Notice.

(g)“Restrictive Covenant Violation” shall mean the Participant’s breach of the Restrictive Covenants listed on Appendix A or any covenant regarding confidentiality, competitive activity, solicitation of the Company’s vendors, suppliers, customers, or employees, or any similar provision applicable to or agreed to by the Participant.

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(h)“Retirement” shall mean the Participant’s termination of employment with the Company Group, other than (i) for Cause or while grounds for Cause exist, (ii) due to the Participant’s death or (iii) due to or during the Participant’s Disability, in each case, following the date on which both (X) the Participant attained the age of 55 years old and (Y) the number of completed years of the Participant’s employment with any member(s) of the Company Group (including any predecessor of a member thereof, including, for the avoidance of doubt, employment by Hilton Worldwide and its affiliates prior to January3, 2017) is at least ten (10).

(i)“RSUs” shall mean that total number of performance- and service-based restricted stock units listed in the Award Notice as “Target Number of Restricted Stock Units Granted” (or such greater or lesser number of RSUs as may be vested and earned herein, as determined in the Committee’s discretion), as such number of performance- and service-based restricted stock units may be adjusted in accordance with Section 10 below.

(j)“Shares” shall mean a number of shares of the Company’s Common Stock equal to the number of RSUs (or such greater or lesser number of shares as may be vested and earned herein, as determined in the Committee’s discretion).

2.Grant of Units. On _______________, the Company granted the RSUs to the Participant, each of which represents the right to receive one Share upon vesting of such RSUs, subject to and in accordance with the terms, conditions and restrictions set forth in the Plan, the Award Notice, and this Agreement.

3.RSU Account. The Company shall cause an account (the “Unit Account”) to be established and maintained on the books of the Company to record the number of RSUs credited to the Participant under the terms of this Agreement. The Participant’s interest in the Unit Account shall be that of a general, unsecured creditor of the Company.

4.Vesting; Settlement; Tax Withholding.

(a)As promptly as practicable (and, in no event more than 70 days) following the last day of the Performance Period, the Committee shall determine if and the extent to which the Performance Conditions have been satisfied (the date of such determination, the “Determination Date”), and any RSUs with respect to which the Performance Conditions have been satisfied shall become vested effective as of the last day of the Performance Period, subject to Section 5(d); provided that, unless otherwise provided in Section 5, the Participant also meets the continued employment or service condition set forth in the Award Notice. Any RSU which does not become vested effective as of the last day of the Performance Period shall be cancelled and forfeited to the Company without consideration or any further action by the Participant or the Company. In the event of an equity restructuring, the Committee shall adjust any Performance Condition to the extent it is affected by such restructuring in order to preserve (without enlarging) the likelihood that such Performance Condition shall be satisfied. The manner of such adjustment shall be determined by the Committee in its sole discretion. For this purpose, “equity restructuring” shall mean an “equity restructuring” as defined in Financial Accounting Standards Board Accounting Standards Codification 718-10 (formerly Statement of Financial Accounting Standards 123R).

(b)The Company shall deliver to the Participant one share of Common Stock for each vested RSU (as adjusted under the Plan), pursuant to Section 4(c) below, and each such vested RSU shall be cancelled upon delivery.

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(c)Shares, free and clear of all restrictions, shall be issued to the Participant (or his or her beneficiary) only in the event, and to the extent, that the RSUs have vested and been earned as provided in the Award Notice and in the Agreement. Upon vesting of the RSUs, Shares shall be issued to the Participant (or his or her beneficiary) within 70 days following the applicable vesting date set forth in Section 4(a) herein. Notwithstanding the foregoing, the following provisions shall apply: (i) any Shares earned and vested due to termination of employment or service as provided in Section 5(b) or Section 5(e) shall be paid within 70 days following the Participant’s Termination Date; (ii) any Shares earned and vested following Retirement as provided in Section 5(c) shall be paid within 70 days following the applicable vesting date set forth in Section 4(a) and Section 5(c) herein; (iii) any Shares earned and vested as a result of a Change in Control as provided in Section 5(h) shall be paid within 70 days following the date of the Change in Control; and (iv) any Shares earned and vested due to a Qualifying Termination as provided in Section 5(i) shall be paid within 70 days following the Participant’s Termination Date. If the 70-day period described herein begins in one calendar year and ends in another, the Participant (or his or her beneficiary) shall not have the right to designate the calendar year of the payment (except as otherwise provided below with respect to a delay in payments if the Participant is a “specified employee”). Further, if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Participant (or his or her beneficiary), the payment will be treated as made within the applicable 70-day time period specified herein if the payment is made during the first taxable year of the Participant in which the calculation of the amount of the payment is administratively practicable or otherwise in accordance with Code Section 409A. Notwithstanding the foregoing, if the Participant is or may be a “specified employee” (as defined under Code Section 409A), and the distribution is considered deferred compensation under Code Section 409A, then such distribution if made due to separation from service shall be subject to delay as provided in Section 14(u) of the Plan (or any successor provision thereto).

(d)The Participant shall be required to pay to the Company or, if different, the Service Recipient, an amount in cash (by check or wire transfer) equal to the aggregate amount of any income, employment and/or other applicable taxes (the “Withholding Taxes”) that are statutorily required to be withheld in respect of the RSUs. Alternatively, the Company may elect, in its sole discretion, to satisfy this requirement by withholding such amount from any cash compensation or other cash amounts owing to the Participant. Without limiting the foregoing, the Committee may (but is not obligated to), in its sole discretion, permit or require the Participant to satisfy, all or any portion of the minimum Withholding Taxes that are statutorily required to be withheld with respect to the RSUs by (i) the delivery of shares of Common Stock (which are not subject to any pledge or other security interest) that have been both held by the Participant and vested for any period of time as established from time to time by the Committee in order to avoid adverse accounting treatment under GAAP having an aggregate Fair Market Value equal to such minimum statutorily required Withholding Taxes (or portion thereof); or (ii) having the Company withhold from the Shares otherwise issuable or deliverable to, or that would otherwise be retained by, the Participant upon the vesting of the RSUs, a number of Shares with an aggregate Fair Market Value equal to an amount not in excess of such minimum statutorily required Withholding Taxes (or portion thereof). Notwithstanding the foregoing, the Committee, subject to its having considered the applicable accounting impact of any such determination, has full discretion to allow the Participant to satisfy, in whole or in part, any additional Withholding Taxes payable by him or her with respect to the RSUs by electing to have the Company withhold from the Shares issuable to the Participant upon the vesting of the RSUs, a number of Shares having an aggregate Fair Market Value that is greater than the applicable minimum required statutory Withholding Taxes (but such withholding may in no event be in excess of the maximum statutory withholding amount(s) in the Participant’s relevant tax jurisdiction). Further, for non-U.S. Participants, the Company may withhold from the Shares issuable to such non-U.S. Participant upon the vesting of the RSUs, a number of Shares having an aggregate Fair Market Value up to the maximum statutory withholding amount(s) in the non-U.S. Participant’s relevant tax jurisdiction.

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(e)The Company shall pay any costs incurred in connection with issuing the Shares. Upon the issuance of the Shares (to the extent earned) to the Participant, the Participant’s Unit Account shall be eliminated. Notwithstanding anything in this Agreement to the contrary, the Company shall have no obligation to issue or transfer the Shares as contemplated by this Agreement unless and until such issuance or transfer shall comply with all relevant provisions of law and the requirements of any stock exchange on which the Company’s shares are listed for trading.

5.Termination of Employment or Service.

(a)Subject to the provisions of this Section 5, if the Participant’s employment with or service to the Company Group terminates for any reason, the unvested RSUs shall terminate as of the effective date of termination (the “Termination Date”), and all of the Participant’s rights hereunder with respect to such unvested RSUs shall cease as of the Termination Date (unless otherwise provided for by the Committee in accordance with the Plan).

(b)If the Participant’s employment or service is terminated by the Service Recipient during the Performance Period due to or during the Participant’s Disability or due to the Participant’s death, a pro-rated number of the target number of RSUs granted hereunder shall become vested and nonforfeitable (irrespective of performance) based on the number of days in the Performance Period prior to the Termination Date relative to the number of the days in the full Performance Period. Any RSUs that vest as provided herein shall be settled in accordance with Section 4.

(c)In the event the Participant’s employment with or service to the Company Group is terminated as a result of the Participant’s Retirement, the RSUs granted hereunder shall remain outstanding and eligible to vest, notwithstanding such termination of employment or service, based on (and to the extent) the Committee’s determination that the Performance Conditions have been satisfied on the Determination Date, in accordance with the schedule set forth in the Award Notice, so long as no Restrictive Covenant Violation occurs (as determined by the Committee, or its designee, in its sole discretion) prior to the Determination Date. Any RSUs that vest as provided herein shall be settled in accordance with Section 4. As a pre-condition to the Participant’s right to continued vesting following Retirement, the Committee, or its designee, may require the Participant to certify in writing prior to the applicable vesting date that no Restrictive Covenant Violation has occurred. Notwithstanding the foregoing, if the Date of Grant of the RSUs is not at least six months prior to the date of the Participant’s Retirement, any unvested RSUs shall terminate as of the Termination Date.

(d)If the Participant’s employment with or service to the Company Group terminates for any reason after the last day of the Performance Period and before the Determination Date (other than a termination by the Company for Cause, or by the Participant while grounds for Cause exist or without Good Reason), and no Restrictive Covenant Violation occurs before the Determination Date, then all RSUs shall remain outstanding and eligible to vest based on (and to the extent) the Committee’s determination that the Performance Conditions have been satisfied on the Determination Date.

(e)Notwithstanding anything herein to the contrary, the RSUs granted hereunder shall become immediately fully vested as of the Termination Date and settled in accordance with Section 4 if the Participant’s employment with or service to the Company Group shall be terminated by the Company other than for Cause, or by the Participant for Good Reason, in either case if such termination of the Participant’s employment occurs within 12 months following a Change in Control (for the avoidance of doubt, a Change in Control alone shall not, also, result in any vesting hereunder), with the actual number of RSUs determined based on (i)actual performance through the Termination Date, as determined by the Committee, or (ii)if the Committee determines that measurement of actual performance cannot be reasonably assessed, the assumed achievement of target performance as determined by the Committee.

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(f)For purposes of this Section 5, “Good Reason” means the occurrence of any of the following, without the Participant’s written consent:

(i)a material diminution in the Participant’s base salary;

(ii)a material diminution in the Participant’s authority, duties, responsibilities or position; or

(iii)a permanent reassignment by the Company or the Service Recipient of the Participant’s primary office to a location that is more than 100 miles from the Participant’s assigned primary office;

provided, however, that a termination by the Participant for any of the reasons listed in (i)through (iii) above shall not constitute a termination for Good Reason unless the Participant shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 60 days after the initial occurrence of such event), and the Company fails to cure such event within 30 days after receipt of this written notice. The Participant’s employment must be terminated for Good Reason within 120 days after the occurrence of an event of Good Reason.

(g)The Participant’s rights with respect to the RSUs shall not be affected by any change in the nature of the Participant’s employment or service so long as the Participant continues to be an employee or consultant, respectively, of the Company Group. Whether (and the circumstances under which) employment or service has terminated and the determination of the Termination Date for the purposes of this Agreement shall be determined by the Committee (or, with respect to any Participant who is not a director or “officer” as defined under Rule16a-1(f) of the Exchange Act, such action may also be taken by its designee, in each case whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to the designee’s own employment for purposes of the RSUs).

(h)Without limiting the effect of Section 5(e) herein, and subject to Section 12 of the Plan, in the event of a Change in Control during the Participant’s employment with or service to the Company Group or while any RSUs remain outstanding and eligible to vest, and prior to the completion of the Performance Period, the successor or surviving company in the Change in Control may assume or substitute for the RSUs (or in which the Company is the ultimate parent corporation and continues the RSUs), with the actual number of RSUs determined based on (i) actual performance through the date of such Change in Control, as determined by the Committee, or (ii) if the Committee determines that measurement of actual performance cannot be reasonably assessed, the assumed achievement of target performance as determined by the Committee, and such assumed or substituted RSUs shall remain outstanding and eligible to vest based on continued service through the last day of the Performance Period, except to the extent otherwise provided in the Plan or the Agreement. Notwithstanding the foregoing, in the event the successor or surviving company in the Change in Control does not assume or substitute for the RSUs (or in which the Company is the ultimate parent corporation and does not continue the RSUs) on substantially similar terms or with substantially equivalent economic benefits (as determined by the Committee) as RSUs outstanding under the Plan immediately prior to the Change in Control, then the target number of RSUs granted hereunder shall become immediately fully vested as of the date of such Change in Control and settled in accordance with Section 4.

(i)Notwithstanding anything to the contrary contained herein, in the event of a Qualifying Termination (as defined in the Severance Agreement) and a Change in Control has not occurred, a pro-rated number of the target number of RSUs granted hereunder shall become vested and nonforfeitable (irrespective of performance) as of the Termination Date based on the number of days in the Performance Period prior to the Termination Date (inclusive), plus an additional 730 days (not to exceed 1,095 days), relative to the number 1,095. Any RSUs that vest as provided herein shall be settled in accordance with Section 4.

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6.Dividend Equivalents. A Participant holding unvested RSUs shall be entitled to be credited with dividend equivalent payments (upon the payment by the Company of dividends on Shares), which shall accrue in cash without interest (unless otherwise elected by the Committee) and shall be delivered in cash (unless the Committee in its sole discretion, elects to settle such amount in shares of Common Stock, other securities, other Awards or other property having a Fair Market Value as of the settlement date equal to the amount of such dividends). Accrued dividend equivalents shall not be paid unless and until the underlying RSUs (or portion thereof) have vested. Any such dividend equivalents in respect of unvested RSUs shall be paid within fifteen (15) days after the RSUs are vested and become payable or distributable unless the Committee determines otherwise.

7.Restrictions on Transfer. The Participant may not assign, alienate, pledge, attach, sell or otherwise transfer or encumber the RSUs or the Participant’s right under the RSUs to receive Shares (unless such transfer is specifically required pursuant to a domestic relations order or by applicable law), other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against any member of the Company Group; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

8.No Right to Continued Employment or Service. Neither the Plan, the Agreement nor any action taken thereunder or hereunder shall be construed as giving the Participant any right to be retained in the employ or service of the Service Recipient or any other member of the Company Group. The Service Recipient or any other member of the Company Group may at any time dismiss the Participant from employment or discontinue any consulting relationship, free from any liability or claim under the Plan or this Agreement, unless otherwise expressly provided in the Plan or this Agreement.

9.No Rights as a Stockholder. Except as otherwise provided in the Plan or this Agreement, the Participant shall not be entitled to the privileges of ownership in respect of the Shares until the Shares have been issued or delivered to the Participant.

10.Adjustments Upon Change in Capitalization. The terms of this Agreement, including the RSUs, the Participant’s Unit Account, any dividend equivalent payments accrued pursuant to Section 6 and/or the Shares, shall be subject to adjustment in accordance with Section 12 of the Plan. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Company’s Common Stock (whether in the form of cash or other property) to the extent provided in the Plan.

11.Award Subject to Plan. By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The RSUs granted hereunder are subject to the Plan. The terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. Unless the Committee determines otherwise, in the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan shall govern and prevail.

12.Severability. If any provision of the Plan or this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to the Participant or the RSUs, or would disqualify the Plan or the RSUs under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Agreement, such provision shall be construed or deemed stricken as to such jurisdiction, the Participant or the RSUs and the remainder of the Plan and this Agreement shall remain in full force and effect.

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13.Governing Law; Waiver of Jury Trial; Venue. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof. The Participant hereby irrevocably waives all right to a trial by jury in any suit, action or other proceeding instituted by or against such Participant in respect of the Participant’s rights or obligations hereunder. Any suit, action or proceeding with respect to this Agreement (or any provision incorporated by reference), or any judgment entered by any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the State of Florida, and each of the Participant, the Company, and any transferees who hold RSUs pursuant to a valid assignment, hereby submit to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding, or judgment. Each of the Participant, the Company, and any transferees who hold RSUs pursuant to a valid assignment hereby irrevocably waive (a) any objections which he or she may now or hereafter have to the laying of the venue of any suit, action, or proceeding arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Florida and (b) any claim that any such suit, action, or proceeding brought in any such court has been brought in any inconvenient forum.

14.Language. If the Participant has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version thereof, and in the event of any conflict the English version shall govern. The Participant acknowledges that the Participant is sufficiently proficient in English to understand the terms and conditions of the Plan and this Agreement.

15.Successors in Interest. Any successor to the Company shall have the benefits of the Company under, and be entitled to enforce, this Agreement. Likewise, the Participant’s legal representative shall have the benefits of the Participant under, and be entitled to enforce, this Agreement. All obligations imposed upon the Participant and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors.

16.Data Privacy Consent.

The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participant’s personal data as described in this Agreement and any other RSU grant materials by and among, as applicable, the Service Recipient, the Company and other members of the Company Group for the purpose of implementing, administering and managing the Plan.

Participant understands that the Company and the Service Recipient may hold certain personal information about the Participant, including, but not limited to, the Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all stock options, restricted stock units or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

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The Participant understands that Data will be transferred to any third parties as may be selected by the Company (presently or in the future), which assist the Company with the implementation, administration and management of the Plan. The Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than the Participant’s country. The Participant understands that if the Participant resides outside the United States the Participant may request a list with the names and addresses of any potential recipients of the Data by contacting the Participant’s local human resources representative. The Participant authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan. The Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Plan. The Participant understands that if the Participant resides outside the United States, the Participant may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Participant’s local human resources representative. Further, the Participant understands that the Participant is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or if the Participant later seeks to revoke the Participant’s consent, the Participant’s employment status or service with the Service Recipient will not be affected; the only consequence of refusing or withdrawing the Participant’s consent is that the Company may not be able to grant options or other equity awards to the Participant or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing the Participant’s consent may affect the Participant’s ability to participate in the Plan. For more information on the consequences of the Participant’s refusal to consent or withdrawal of consent, the Participant understands that the Participant may contact the Participant’s local human resources representative.

17.Restrictive Covenants. The Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates, that the Participant shall be allowed access to confidential and proprietary information (including but not limited to trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients and partners involved in those businesses, and the goodwill associated with the Company and its Affiliates. Participant accordingly agrees to the provisions of Appendix A to this Agreement (the “Restrictive Covenants”). For the avoidance of doubt, the Restrictive Covenants contained in this Agreement are in addition to, and not in lieu of, any other restrictive covenants or similar covenants or agreements between the Participant and the Company or any of its Affiliates.

18.Repayment of Proceeds; Clawback Policy; Compliance with Ownership and Other Policies and Agreements.

(a)If a Restrictive Covenant Violation occurs or the Company discovers after a termination of employment or service that grounds existed for Cause at the time thereof, then the Participant shall be required, unless the Committee determines otherwise, in addition to any other remedy available (on anon-exclusive basis), to pay to the Company, within ten (10) business days of the Company’s request to the Participant therefor, an amount equal the aggregate after-tax proceeds (taking into account all amounts of tax that would be recoverable upon a claim of loss for payment of such proceeds in the year of repayment) the Participant received upon the sale or other disposition of, or distributions in respect of, the RSUs and any Shares or cash issued in respect thereof. Any reference in this Agreement to grounds existing for a termination of employment or service with Cause shall be determined without regard to any notice period, cure period or other procedural delay or event required prior to finding of or termination with Cause.

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(b)The RSUs shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (i) any clawback, forfeiture or other similar policy adopted by the Board or the Committee and as in effect from time to time and (ii) applicable law. Further, to the extent that the Participant receives any amount in excess of the amount that the Participant should otherwise have received under the terms of this Agreement for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the Participant shall be required to repay any such excess amount to the Company.

(c)Without limiting the terms of the Plan, and as a condition to receiving the RSUs or any benefit hereunder, the Participant agrees that he or she shall abide by all provisions of any equity retention policy, stock ownership guidelines and/or other policies adopted by the Company or an Affiliate, each as in effect from time to time and to the extent applicable to the Participant.

19.Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. By accepting this Agreement and the grant of the RSUs contemplated hereunder, the Participant expressly acknowledges that (A) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (B) the grant of RSUs is a one-time benefit that does not create any contractual or other right to receive future grants of RSUs or other Awards under the Plan, or benefits in lieu of RSUs; (C) all determinations with respect to future grants of RSUs, if any, including the grant date, the number of Shares granted and the applicable vesting terms, shall be at the sole discretion of the Committee and/or the Company; (D) the Participant’s participation in the Plan is voluntary; (E) the value of the RSUs is an extraordinary item of compensation that is outside the scope of the Participant’s employment or consulting contract, if any, and nothing can or must automatically be inferred from such employment or consulting contract or its consequences; (F) grants of RSUs are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, the Participant waives any claim on such basis, and for the avoidance of doubt, the RSUs shall not constitute an “acquired right” under the applicable law of any jurisdiction; and (G) the future value of the underlying Shares is unknown and cannot be predicted with certainty. In addition, the Participant hereby waives any claim to continued vesting of the RSUs or to damages or severance entitlement related to non-continuation of the RSUs beyond the period provided under the Plan or this Agreement, except to the extent of any provision to the contrary in any written employment contract or other agreement between the Service Recipient and/or any member of the Company Group and the Participant, whether any such agreement is executed before, on or after the Date of Grant.

20.Amendment of Agreement. The Committee may, to the extent consistent with the terms of the Plan and this Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any RSUs granted hereunder or this Agreement, prospectively or retroactively (including after the Participant’s Termination); provided, that, other than as provided in the Plan, any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to the RSUs granted hereunder shall not to that extent be effective without the consent of the Participant; provided, further, that in no event shall any such amendment alter the Minimum Vesting Condition.

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21.Award Administrator. The Company may from time to time designate a third party (an “Award Administrator”) to assist the Company in the implementation, administration and management of the Plan and any RSUs granted thereunder, including, but not limited to, by sending award notices on behalf of the Company to Participants, and by facilitating through electronic means acceptance of agreements by Participants.

22.Section 409A of the Code.

(a)Notwithstanding any provision of the Plan or this Agreement to the contrary, it is intended that the provisions of this Agreement comply with, or be exempt from, Section 409A of the Code, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. The Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or in respect of the Participant in connection with this Agreement (including any taxes and penalties under Section 409A of the Code), and neither the Service Recipient nor any other member of the Company Group shall have any obligation to indemnify or otherwise hold the Participant (or any beneficiary) harmless from any or all such taxes or penalties. If the RSUs are considered “deferred compensation” subject to Section 409A of the Code, references in this Agreement to “termination of employment” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A of the Code. For purposes of Section 409A of the Code, each of the payments that may be made in respect of the RSUs shall be deemed as separate payments.

(b)Notwithstanding anything in the Plan or this Agreement to the contrary, if a Participant is a “specified employee” within the meaning of Section 409A of the Code, no payments in respect of any RSU that is “deferred compensation” subject to Section 409A of the Code and which would otherwise be payable upon the Participant’s “separation from service” (as defined in Section 409A of the Code) shall be made to such Participant prior to the date that is six (6) months after the date of the Participant’s “separation from service” or, if earlier, the date of the Participant’s death. Following any applicable six (6) month delay, all such delayed payments shall be paid in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.

(c)Unless otherwise provided by the Committee in this Agreement or otherwise, in the event that the timing of payments in respect of the RSUs (that would otherwise be considered “deferred compensation” subject to Section 409A of the Code) would be accelerated upon the occurrence of (i) a Change in Control, no such acceleration shall be permitted (to the extent required under Section 409A) unless the event giving rise to the Change in Control satisfies the definition of a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation pursuant to Section 409A of the Code or (ii) a Disability, no such acceleration shall be permitted unless the Disability also satisfies the definition of “Disability” pursuant to Section 409A of the Code if and to the extent required under Section 409A of the Code.

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23.Restriction on Restricted Stock Unit Award and Shares. The obligation of the Company to settle the RSUs in Shares or other consideration shall be subject to all applicable laws, rules and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of this Agreement to the contrary, the Company shall be under no obligation to offer to sell, and shall be prohibited from offering to sell or selling, any Shares underlying the RSUs unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel (if the Company has requested such an opinion), satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any of the Shares. The Committee shall have the authority to provide that all Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, this Agreement, the Federal securities laws or the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or quoted and any other applicable Federal, state, local or non-U.S. laws, rules, regulations and other requirements, and, without limiting the generality of the Plan, the Committee may cause a legend or legends to be put on certificates representing the Shares. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to the Performance- and Service-Based Restricted Stock Unit Agreement that the Committee, in its sole discretion, deems necessary or advisable in order that this Agreement complies with the legal requirements of any governmental entity to whose jurisdiction this Agreement is subject. The Committee may cancel the RSUs or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of shares of Common Stock from the public markets, the Company’s issuance of the Shares to the Participant, the Participant’s acquisition of the Shares from the Company and/or the Participant’s sale of Common Stock to the public markets, illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of the RSUs in accordance with the foregoing, the Company shall, subject to any limitations or reductions as may be necessary to comply with Section 409A of the Code, provide the Participant with a cash payment or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to the RSUs.

24.Book Entry Delivery of Shares. Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Company may elect to issue or deliver such Shares in book entry form in lieu of certificates.

25.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through a non-line or electronic system established and maintained by the Company or a third party designated by the Company.

26.Acceptance and Agreement by the Participant. By accepting the RSUs (including through electronic means), the Participant agrees to be bound by the terms, conditions and restrictions set forth in the Plan, this Agreement and the Company’s policies, as in effect from time to time, relating to the Plan.

27.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying Shares. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

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28.Appendices For Non-U.S. Participants. Notwithstanding any provisions in this Agreement, Participants residing and/or working outside the United States shall be subject to the Terms and Conditions for Non-U.S. Participants attached hereto as Appendix B and to any Country-Specific Terms and Conditions for the Participant’s country attached hereto as Appendix C. If the Participant relocates from the United States to another country, the Terms and Conditions for Non-U.S. Participants and the applicable Country-Specific Terms and Conditions shall apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Moreover, if the Participant relocates between any of the countries included in the Country-Specific Terms and Conditions, the special terms and conditions for such country shall apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Terms and Conditions for Non-U.S. Participants and the Country-Specific Terms and Conditions constitute part of this Agreement.

29.Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

30.Right of Offset. Subject to any considerations under Section 409A of the Code, the Company shall have the right to offset against its obligation to deliver Shares under this Agreement any outstanding amounts (including, without limitation, travel and entertainment or advance account balances, loans, repayment obligations under any Awards or amounts repayable to the Company pursuant to tax equalization, housing, automobile or other employee programs) that the Participant then owes to any member of the Company Group and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement. Notwithstanding the foregoing, if the RSUs are “deferred compensation” subject to Section 409A of the Code, the Committee shall have no right to offset against its obligation to deliver Shares under this Agreement if such offset could subject the Participant to the additional tax imposed under Section 409A of the Code in respect of the RSUs.

31.Waiver. The Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant or any other participant in the Plan.

32.Rules of Construction. Headings are given to the sections of this Agreement solely as a convenience to facilitate reference. The reference to any statute, regulation or other provision of law shall (unless the Administrator determines otherwise) be construed to refer to any amendment to or successor of such provision of law.

33.Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one in the same agreement.

[Signatures follow]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be effective as of the Date of Grant.

 

	
HILTON GRAND VACATIONS INC.

	
By:
	
 
	
 

	
 
	
 
	
[NAME]

	
 
	
 
	
[TITLE]

	
	
Acknowledged and Agreed:

	
 

	
Participant Signature

 

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APPENDIX A
Restrictive Covenants

1.Non-Competition; Non-Solicitation.

(a)Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees as follows:

(i)During Participant’s employment with or service to the Company or its Affiliates (the “Employment Term”) and for a period that ends on the later of (A) one year following the date Participant ceases to be employed by or in service to the Company or any of its Affiliates or (B) the last date any portion of the Award granted under this Agreement is eligible to vest if Participant ceases to be employed by the Company or any of its Affiliates as a result of the Participant’s Retirement (the “Restricted Period”), Participant shall not, whether on Participant’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in soliciting in competition with the Restricted Group in the Business, the business of any then current or prospective client or customer with whom Participant (or his direct reports) had personal contact or dealings on behalf of the Company or any of its Affiliates during the one-year period preceding Participant’s termination of employment or service.

(ii)During the Restricted Period, Participant shall not directly or indirectly:

(A)engage in the Business providing services in the nature of the services Participant provided to the Company at any time in the one year prior to the termination of Participant’s employment or service, for a Competitor;

(B)enter the employ of, or render any services to, a Competitor, except where such employment or services do not relate in any manner to the Business;

(C)acquire a financial interest in, or otherwise become actively involved with, a Competitor, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or

(D)intentionally and adversely interfere with, or attempt to adversely interfere with, business relationships between the members of the Restricted Group and any of their clients, customers, suppliers, partners, members or investors.

(iii)Notwithstanding anything to the contrary in this Appendix A, Participant may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Business (including, without limitation, a Competitor) which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Participant (A) is not a controlling person of, or a member of a group which controls, such person and (B) does not, directly or indirectly, own 2% or more of any class of securities of such Person.

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(iv)During the Restricted Period, Participant shall not, whether on Participant’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

(A)solicit or encourage any executive-level employee of the Restricted Group, with whom Participant has had material business contact during the Employment Term or, if no longer an employee or consultant, in the one year prior to the termination of Participant’s employment with or service to any member of the Company Group, to leave the employment of the Restricted Group to become affiliated in any respect with a Competitor or otherwise be engaged in the Business; or

(B)hire any such executive-level employee to become affiliated in any respect with a Competitor or otherwise be engaged in the Business and with whom Participant had material business contact in the one year prior to the termination of Participant’s employment with or service to the Company, who (x) was employed by the Restricted Group as of the date of Participant’s termination of employment with or service to the Company or any of its Affiliates or (y)left the employment of the Restricted Group within one year after the termination of Participant’s employment with or service to the Company or any of its Affiliates.

(v)For purposes of this Agreement:

(A)“Restricted Group” shall mean the Company Group and, to the extent engaged in the Business, its Affiliates, provided, however, that for the purposes of this definition, an “Affiliate” shall not include any portfolio company of The Blackstone Group L.P. or its Affiliates (other than the Company Group).

(B)“Business” shall mean the business of owning, financing, developing, redeveloping, managing, marketing, operating, licensing, leasing or franchising vacation, timeshare or lodging properties, and natural ancillary business products and services related to such business, including, without limitation, membership services, exchange programs, rental programs, and provision of amenities.

(C)“Competitor” shall mean any person engaged in the Business, including but not limited to any vacation, timeshare or lodging companies that are comparable in size to the Company, including, without limitation, Marriott Vacations Worldwide, Wyndham Vacation Ownership, Interval Leisure Group, Disney Vacation Club, Hyatt Vacation Ownership, Holiday Inn Club Vacations, Bluegreen Vacations, Diamond Resorts International and Westgate Resorts.

(b)It is expressly understood and agreed that although Participant and the Company consider the restrictions contained in this Section 1 to be reasonable, if a judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Appendix A is an unenforceable restriction against Participant, the provisions of this Appendix A shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Appendix A is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. Notwithstanding the foregoing, if Participant’s principal place of employment or service on the date hereof is located in Virginia, then this Section 1(b) of this Appendix A shall not apply following Participant’s termination of employment or service to the extent any such provision is prohibited by applicable Virginia law.

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(c)The period of time during which the provisions of this Section 1 shall be in effect shall be extended by the length of time during which Participant is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

(d)Notwithstanding the foregoing, if Participant’s principal place of employment or service on the date hereof is located in California or any other jurisdiction where any provision of this Section 1 is prohibited by applicable law, then the provisions of this Section 1 shall not apply following Participant’s termination of employment or service to the extent any such provision is prohibited by applicable law.

2.Confidentiality; Non-Disparagement; Intellectual Property; Protected Rights.

(a)Confidentiality.

(i)Participant shall not at any time (whether during or after Participant’s employment with or service to the Company) (x) retain or use for the benefit, purposes or account of Participant or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company or any of its Affiliates (other than its professional advisers who are bound by confidentiality obligations or otherwise in performance of Participant’s duties under Participant’s employment or service and pursuant to customary industry practice), any non-public proprietary or confidential information (including, without limitation, trade secrets know-how research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals) concerning the past, current or future business, activities and operations of the Company, its Subsidiaries or Affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

(ii)“Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Participant’s breach of this covenant; (b )made legitimately available to Participant by a third party without breach of any confidentiality obligation of which Participant has knowledge; or (c) required by law to be disclosed provided that, unless otherwise provided under applicable law, with respect to subsection (c), Participant shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and reasonably cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(iii)Except as required by law, Participant shall not disclose to anyone, other than Participant’s family (it being understood that, in this Agreement, the term “family” refers to Participant’s spouse, minor children, parents and spouse’s parents) and advisors, the existence or contents of this Agreement provided that Participant may disclose to any prospective future employer the provisions of this Appendix A. This Section 2(a)(iii) shall terminate if the Company publicly discloses a copy of this Agreement (or, if the Company publicly discloses summaries or excerpts of this Agreement, to the extent so disclosed).

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(iv)Upon termination of Participant’s employment with or service to the Company or any of its Affiliates for any reason, Participant shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its Subsidiaries or Affiliates; and (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Participant’s possession or control (including any of the foregoing stored or located in Participant’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information, except that Participant may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information.

(v)Participant acknowledges and agrees that the Company and its Affiliates will prosecute any non-confidential disclosure or misappropriation of the Company’s and/or its Affiliates’ trade secrets to the full extent allowed by federal, state and common law. Participant further acknowledges and agrees that Participant has received and understands the following notice concerning immunity from liability for confidential disclosure of a trade secret to the government or in a court filing: Pursuant to the Defend Trade Secrets Act, 18 U.S.C. § 1833, an individual shall 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 (A)in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (B) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(b)Non-Disparagement. During Participant’s Employment Term and at all times thereafter (including following the termination of Participant’s Employment Term for any reason), Participant shall not to intentionally make any statement that criticizes, ridicules, disparages or is otherwise derogatory of the Company, any of its Affiliates, or any of their respective officers, directors, stockholders, employees or other service providers, or any product or service offered by the Company or any of its Affiliates; provided, however, that nothing contained in this Section 2(b) shall preclude Participant from providing truthful testimony in any legal proceeding, or making any truthful statement (i) to any governmental agency; (ii) as required or permitted by applicable law or regulation; (iii) as required by court order or other legal process; or (iv) after the Restricted Period, for any legitimate business reason.

(c)Intellectual Property.

(i)If Participant has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with third parties, prior to Participant’s employment or engagement by the Company or any of its Affiliates, that are relevant to or implicated by such employment (“Prior Works”), Participant hereby grants the Company a perpetual,  non-exclusive royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company’s current and future business.

(ii)If Participant creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Participant’s employment by or service to the Company and within the scope of such employment or service and with the use of any Company resources (“Company Works”), Participant shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

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(iii)Participant shall take all reasonably requested actions and execute all reasonably requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works. If the Company is unable for any other reason, after reasonable attempt, to secure Participant’s signature on any document for this purpose, then Participant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Participant’s agent and attorney in fact, to act for and in Participant’s behalf and stead to execute any documents and to do all other lawfully permitted acts required in connection with the foregoing.

(iv)Participant shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Participant shall comply with all relevant policies and guidelines of the Company that are from time to time previously disclosed to Participant, including regarding the protection of Confidential Information and intellectual property and potential conflicts of interest. Participant acknowledges that the Company may amend any such policies and guidelines from time to time, and that Participant remains at all times bound by their most current version from time to time previously disclosed to Participant.

(d)Protected Rights. Notwithstanding any other provision of this Agreement, (i) nothing in this Agreement or any other agreement prohibits the Participant from reporting possible violations of law or regulation to any governmental agency or entity, including, but not limited to, the Department of Justice, the Securities and Exchange Commission, the Congress and any agency Inspector General (the “Government Agencies”), or communicating with Government Agencies or otherwise participating in any investigation or proceeding that may be conducted by Government Agencies, including providing documents or other information, (ii) the Participant does not need the prior authorization of the Company to take any action described in (i), and the Participant is not required to notify the Company that he or she has taken any action described in (i); and (iii )this Agreement does not limit the Participant’s right to receive an award for providing information relating to a possible securities law violation to the Securities and Exchange Commission. Further, notwithstanding the foregoing, the Participant will not be held criminally or civilly liable under any federal, state or local trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order.

The provisions of Section 2 hereof shall survive the termination of Participant’s employment or service for any reason (except as otherwise set forth in Section 2(a)(iii) hereof).  

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APPENDIX B

HILTON GRAND VACATIONS INC.
2017 OMNIBUS INCENTIVE PLAN
PERFORMANCE- AND SERVICE-BASED
RESTRICTED STOCK UNIT AGREEMENT

TERMS AND CONDITIONS FORNON-U.S. PARTICIPANTS

Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Plan and the Performance- and Service-Based Restricted Stock Unit Agreement.

1.Responsibility for Taxes. This provision supplements Section 4(d) of the Performance- and Service-Based Restricted Stock Unit Agreement:

(a)The Participant acknowledges that, regardless of any action taken by the Company or, if different, the Service Recipient, the ultimate liability for all income tax, excise tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant (“Tax-Related Items”) is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company or the Service Recipient. The Participant further acknowledges that the Company and/or the Service Recipient (1)make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to, the grant, vesting or settlement of the RSUs, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges that the Company and/or the Service Recipient (or former service recipient, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, the Participant is deemed to have been issued the full number of Shares subject to the vested RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of satisfying the Withholding Taxes.

(c)Finally, the Participant agrees to pay to the Company or the Service Recipient, any amount of the Withholding Taxes that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if the Participant fails to comply with the Participant’s obligations in connection with the Withholding Taxes.

(d) Notwithstanding anything to the contrary in the Plan or in Section 4(d) of the Performance- and Service-Based Restricted Stock Unit Agreement, if the Company is required by applicable law to use a particular definition of fair market value for purposes of calculating the taxable income for the Participant, the Company shall have the discretion to calculate the Shares to be withheld to cover any Withholding Taxes by using either the price used to calculate the taxable income under applicable law or by using the closing price per Share on the New York Stock Exchange (or other principal exchange on which the Shares then trade) on the trading day immediately prior to the date of delivery of the Shares.

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2.Nature of Grant. This provision supplements Section 19 of the Performance- and Service-Based Restricted Stock Unit Agreement:

In accepting the grant of the RSUs, the Participant acknowledges, understands and agrees that:

(a)the RSU grant and the Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company or any member of the Company Group;

(b)the RSUs and the Shares subject to the RSUs, and the income from and value of same, are not intended to replace any pension rights or compensation;

(c)unless otherwise agreed with the Company, the RSUs and the Shares subject to the RSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a director of any member of the Company Group;

(d)for purposes of the RSUs, the Termination Date shall be the date the Participant is no longer actively providing services to the Company or any member of the Company Group (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, the Participant’s right to vest in the RSUs under the Plan, if any, shall terminate as of such date and shall not be extended by any notice period (e.g., the Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the RSUs grant (including whether the Participant may still be considered to be providing services while on a leave of absence);

(e)unless otherwise provided in the Plan or by the Company in its discretion, the RSUs and the benefits evidenced by this Agreement do not create any entitlement to have the RSUs or any such benefits transferred to, or assumed by, another company nor be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Company’s Common Stock; and

(f)neither the Company nor any member of the Company Group shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of the RSUs or of any amounts due to the Participant pursuant to the settlement of the RSUs or the subsequent sale of any Shares acquired upon settlement.

3.Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that the Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect his or her ability to, directly or indirectly, acquire, sell, or attempt to sell Shares or rights to Shares (e.g., RSUs) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions or Participant’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant is responsible for ensuring compliance with any applicable restrictions and is advised to consult his or her personal legal advisor on this matter.

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4.Foreign Asset/Account Reporting; Exchange Controls. The Participant’s country may have certain foreign asset and/or account reporting requirements and/or exchange controls that may affect the Participant’s ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside the Participant’s country. The Participant may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. The Participant also may be required to repatriate sale proceeds or other cash received as a result of the Participant’s participation in the Plan to his or her country through a designated bank or broker and/or within a certain time after receipt. The Participant acknowledges that it is his or her responsibility to be compliant with such regulations, and the Participant is advised to consult his or her personal legal advisor for any details.

5.Termination of Employment. This provision supplements Section 5(c) of the Performance- and Service-Based Restricted Stock Unit Agreement:

Notwithstanding anything in this Section 5(c), if the Company receives a legal opinion that there has been a legal judgment and/or legal development in the Participant’s jurisdiction that likely would result in the favorable treatment that applies to the RSUs when the Participant terminates employment as a result of the Participant’s Retirement being deemed unlawful and/or discriminatory, the provisions of this Section 5(c) regarding the treatment of the RSUs when the Participant terminates employment as a result of the Participant’s Retirement shall not be applicable to the Participant and the remaining provisions of this Section 5 shall govern.

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APPENDIX C

HILTON GRAND VACATIONS INC.
2017 OMNIBUS INCENTIVE PLAN
PERFORMANCE- AND SERVICE-BASED
RESTRICTED STOCK UNIT AGREEMENT

COUNTRY-SPECIFIC TERMS AND CONDITIONS

Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Plan, the Performance- and Service-Based Restricted Stock Unit Agreement and the Terms and Conditions for Non-U.S. Participants.

Terms and Conditions

This Appendix C includes additional terms and conditions that govern the RSUs if the Participant resides and/or works in one of the countries listed below. If the Participant is a citizen or resident of a country (or is considered as such for local law purposes) other than the one in which the Participant is currently residing and/or working or if the Participant moves to another country after receiving the grant of the RSUs, the Company shall, in its discretion, determine the extent to which the terms and conditions herein shall be applicable to the Participant.

Notifications

This Appendix C also includes information regarding exchange controls and certain other issues of which the Participant should be aware with respect to the Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2017. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information in this Appendix C as the only source of information relating to the consequences of the Participant’s participation in the Plan because the information may be out of date at the time that the RSUs vest or the Participant sells Shares acquired under the Plan.

In addition, the information contained herein is general in nature and may not apply to the Participant’s particular situation and the Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant is advised to seek appropriate professional advice as to how the relevant laws in the Participant’s country may apply to the Participant’s situation.

If the Participant is a citizen or resident of a country other than the one in which the Participant is currently residing and/or working (or if the Participant is considered as such for local law purposes) or if the Participant moves to another country after receiving the grant of the RSUs, the information contained herein may not be applicable to the Participant in the same manner.

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JAPAN

Notifications

Foreign Asset/Account Reporting Information. If the Participant holds assets (including cash and Shares acquired under the Plan, and possibly RSUs) outside of Japan with a value exceeding ¥50,000,000 (as of December 31 each year), the Participant is required to comply with annual tax reporting obligations with respect to such assets. The Participant is responsible for complying with this reporting obligation, if applicable, and should consult with Participant’s personal tax advisor to ensure that the Participant is properly complying with applicable reporting requirements.

UNITED KINGDOM

Terms and Conditions

Responsibility for Taxes. This provision supplements Section 1 of the Terms and Conditions for Non-U.S. Participants:

Without limitation to Section 1 of the Terms and Conditions for Non-U.S. Participants, the Participant hereby covenants to pay all Tax-Related Items, as and when requested by the Company, the Service Recipient or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or other relevant authority). The Participant also agrees to indemnify and keep indemnified the Company and the Service Recipient against any Tax-Related Items that they are required to pay or withhold on the Participant’s behalf, have paid or will pay to HMRC (or any other tax authority or other relevant authority).

25payc-ex101_141.htm

Exhibit 10.1

 

SECOND AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT 

This Second 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 March 9, 2020 and is effective as of January 1, 2014 except with respect to (i) Section 2 and Section 4.5, which shall be effective upon execution of this Agreement by each of the parties hereto, and (ii) those sections amended and restated in the Amended and Restated Executive Employment Agreement dated October 28, 2019 (other than Section 2), which amended and restated sections shall be effective as of October 28, 2019 (in each case, as applicable, 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.“Code” shall mean the Internal Revenue Code of 1986, as amended.

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

1.6.“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).

1.7.“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.

1.8.“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.

2

 

 

1.9.“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).

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

	
 
	
2.
	
Term.  This Agreement shall commence on January 1, 2014 and shall continue until three (3) years following the consummation of the initial Public Offering (which was on April 21, 2014), subject to earlier termination as set forth in Section 5 below (“Initial Term”).  The Agreement has been renewed on April 22, 2017, April 22, 2018, April 22, 2019 and January 1, 2020, and will automatically renew, subject to earlier termination as herein provided, for successive one (1) year periods (the “Additional Terms”), unless either Executive or the Company 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, 2020, at which time it will be subject to expiration or renewal for successive one (1) year Additional Terms from such date, as provided for in this section.

	
 
	
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.

3

 

 

(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

 

 

4.4.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 (subject to increases from time to time as may be approved by the Board or an appropriate committee thereof) for Executive’s business or personal use, less any required taxes or withholdings.

4.6.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).

5

 

 

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.

6

 

 

(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.

7

 

 

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.

8

 

 

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 

9

 

 

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.

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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.

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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.

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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

XXXXXXXXXXXX

XXXXXXXXXXXX

 

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.

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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 

14

 

 

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.

 

* * * * *

 

15

 

 

IN WITNESS WHEREOF, the parties have executed this Second 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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