Paycom Software, Inc 8-K, filed Feb 7, 2024
Paycom Software, Inc. (PAYC)
About this 8-K
Paycom Software, Inc filed this 8-K on February 7, 2024.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Co-Chief Executive Officers
On February 7, 2024, the Board of Directors (the “Board”) of Paycom Software, Inc. (the “Company”) appointed Christopher G. Thomas as Co-Chief Executive Officer of the Company. Mr. Thomas will serve as Co-Chief Executive Officer alongside Chad Richison, who has served as the Company’s Chief Executive Officer and President since he founded the Company in 1998 and as Chairman of the Board since August 2016. Effective February 7, 2024, Mr. Richison’s new title is Co-Chief Executive Officer, President and Chairman of the Board.
Mr. Thomas, 46, has served as the Company’s Chief Operating Officer since September 2023 and, as Co-Chief Executive Officer, he will continue to fulfill the role of principal operating officer. Since joining the Company in 2018, Mr. Thomas served in a variety of leadership roles in operations and client service, including as Vice President of Operations from July 2022 to March 2023 and as Senior Executive Vice President of Operations from March 2023 to September 2023. Prior to joining Paycom, he was a senior manager of business systems at Love’s Travel Stops for over seven years. Mr. Thomas’s career has spanned from small business ownership to leadership roles across multiple industries. He earned his bachelor’s degree in business administration from the University of Oklahoma.
There are no arrangements or understandings between Mr. Thomas and any other person pursuant to which Mr. Thomas was named Co-Chief Executive Officer of the Company. Mr. Thomas does not have any family relationship with any of the Company’s directors or executive officers or any persons nominated or chosen by the Company to become a director or executive officer. Mr. Thomas does not have any direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K.
Co-Chief Executive Officer Compensation
As Co-Chief Executive Officers, each of Messrs. Richison and Thomas will be paid an annual base salary of $800,000, effective as of the Company’s next regularly scheduled payroll date. In addition, the Compensation Committee of the Board approved the grant of the following equity awards to Mr. Thomas, in each case effective February 7, 2024: (i) an award of 17,209 time-based restricted stock units (“RSUs”), subject to the terms and conditions of the Paycom Software, Inc. 2023 Long-Term Incentive Plan (the “LTIP”) and a Restricted Stock Unit Award Agreement – Time-Based Vesting (Executive) (the “RSU Award Agreement”), which provides that 4,104 RSUs will vest on February 5, 2025, 4,105 RSUs will vest on February 5, 2026 and 9,000 RSUs will vest on February 5, 2027 (the “RSU Award”); (ii) an award of 15,000 performance-based restricted stock units (“PSUs”), subject to the terms and conditions of the LTIP and a Restricted Stock Unit Award Agreement – Performance-Based Vesting (the “PSU Award Agreement”), which provides for performance-based vesting based on a revenue performance goal (the “PSU Award”); and (iii) an award of 4,104 shares of common stock of the Company, par value $0.01 per share (“Common Stock”), subject to the terms and conditions of the LTIP and a Stock Award Agreement (the “Stock Award Agreement”), which provides for immediate vesting of such shares (the “Stock Award” and, collectively with the RSU Award and the PSU Award, the “Thomas Awards”). The foregoing descriptions of the terms of the RSU Award Agreement, the PSU Award Agreement and the Stock Award Agreement are not complete and are qualified in their entirety by reference to the full text of each of the RSU Award Agreement, the PSU Award Agreement and the Stock Award Agreement, respectively, copies of which are filed with this Current Report on Form 8-K as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.
Thomas Letter Agreement
On February 7, 2024, the Company and Mr. Thomas entered into a letter agreement (the “Thomas Letter Agreement”) setting forth certain terms of Mr. Thomas’s employment and the compensation he is to receive as Co-Chief Executive Officer, including but not limited to (i) his annual base salary, as described above, (ii) the Thomas Awards, as described above, and (iii) an automobile allowance of $1,000 per month. The foregoing description of the terms of the Thomas Letter Agreement is not complete and is qualified in its entirety by reference to the full text of the Thomas Letter Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.4 and is incorporated herein by reference.
Richison Letter Agreement; Forfeiture of 2020 CEO Performance Award
As previously disclosed, on November 23, 2020, the Company granted to Mr. Richison a performance-based equity award consisting of 1,610,000 shares of restricted Common Stock (the “2020 CEO Performance Award”). On February 7, 2024, the Company and Mr. Richison entered into a letter agreement (the “Richison Letter Agreement”) pursuant to which, among other things, Mr. Richison acknowledged and agreed that the change in his position from Chief Executive Officer to Co-Chief Executive Officer triggers the termination and forfeiture of the 2020 CEO Performance Award in accordance with its terms. In addition, pursuant to the Richison Letter Agreement, the Second Amended and Restated Executive Employment Agreement, dated March 9, 2020, by and between the Company and Mr. Richison, was amended to (i) contemplate Mr. Richison’s new title and (ii) clarify provisions related to Mr. Richison’s existing private aircraft and personal security benefits. The foregoing description of the terms of the Richison Letter Agreement is not complete and is qualified in its entirety by reference to the full text of the Richison Letter Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.5 and is incorporated herein by reference.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On February 7, 2024, the Board approved amended and restated bylaws of the Company (as so amended and restated, the “Amended and Restated Bylaws”). The Amended and Restated Bylaws, which are effective February 7, 2024, provide that the Board may, by resolution, appoint two persons to the same office, such that an officer position may be filled by two individuals serving simultaneously. Prior to this amendment and restatement, the existing bylaws did not expressly contemplate two persons serving in an officer position simultaneously.
The foregoing description of the Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, a copy of which is filed with this Current Report on Form 8-K as Exhibit 3.1 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On February 7, 2024, the Company issued a press release announcing the appointment of Mr. Thomas as Co-Chief Executive Officer. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PAYCOM SOFTWARE, INC. | ||||||
| Date: February 7, 2024 | By: | /s/ Craig E. Boelte | ||||
| Name: | Craig E. Boelte | |||||
| Title: | Chief Financial Officer | |||||
Exhibit 3.1
AMENDED AND RESTATED
BYLAWS
OF
PAYCOM SOFTWARE, INC.
(Effective February 7, 2024)
*****
ARTICLE I
OFFICES
Section 1.01. Registered Office. The address of the registered office of Paycom Software, Inc. (the “Corporation”) in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808.
Section 1.02. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
Section 1.03. Books. The books of the Corporation may be kept within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01. Time and Place of Meetings. All meetings of stockholders shall be held at such place, if any, either within or without the State of Delaware, on such date and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a designation by the Board of Directors). The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place but may instead be held solely by means of remote communication or held in person and by means of remote communication.
Section 2.02. Annual Meetings. An annual meeting of stockholders shall be held for the election of directors and to transact such other business as may properly be brought before the meeting in accordance with these Bylaws.
Section 2.03. Special Meetings. A special meeting of stockholders may be called only by the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board (as defined below) or by the President of the Corporation and may not be called by any other person.
Section 2.04. Conduct at Meetings. The Chairman of the Board of Directors or the President of the Corporation shall act as chairman or co-chairman, as applicable, of any meetings of stockholders. The Secretary of the Corporation shall act as secretary of the meeting. If the Secretary is not present, the chairman of the meeting shall appoint a secretary of the meeting. The Board of Directors may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Unless otherwise determined by the Board of Directors prior to the meeting, the chairman of the meeting shall determine the order of business and shall have the authority in his or her discretion to regulate the conduct of any such meeting, including, without limitation, convening the meeting and adjourning the meeting (whether or not a quorum is present), announcing the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote, imposing restrictions on the persons (other than stockholders of record of the Corporation or their duly appointed proxies) who may attend any such meeting, establishing procedures for the dismissal of business not properly presented, maintaining order at the meeting and safety of those present, restricting entry to the meeting after the time fixed for commencement thereof and limiting the circumstances in which any person may make a statement or ask questions, and the time allotted thereto, at any meeting of stockholders.
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Section 2.05. Notice of Meetings; Waivers of Notice; Adjourned Meetings.
(a) Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“Delaware Law”), such notice shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting. Without limiting the manner by which notices of meetings otherwise may be given effectively to stockholders, any such notice may be given by electronic transmission in accordance with applicable law. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
(b) A written waiver of any such notice signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
(c) The Board of Directors or the chairman of the meeting may adjourn the meeting to another time or place, if any (whether or not a quorum is present), and notice need not be given of the adjourned meeting if the time thereof, place, if any, thereof and the means of remote communication, if any, are provided in accordance with applicable law. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting.
Section 2.06. Quorum. Unless otherwise provided under the Corporation’s Certificate of Incorporation or these Bylaws and subject to Delaware Law, the presence, in person or by proxy, of the holders of a majority of the outstanding capital stock of the Corporation entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business. A quorum, once established, shall not be broken by the subsequent withdrawal of enough votes to otherwise leave less than a quorum. If a quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting or a majority in voting interest of the stockholders present in person or represented by proxy may adjourn the meeting, in the manner provided in Section 2.05(c), until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted that might have been transacted at the meeting as originally notified.
Section 2.07. Voting.
(a) Unless otherwise provided by Delaware Law or the Certificate of Incorporation, each stockholder shall be entitled to one vote for each outstanding share of capital stock of the Corporation held by such stockholder. Any share of capital stock of the Corporation held by the Corporation shall have no voting rights. Except as otherwise provided by Delaware Law, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the majority of the shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Subject to the rights of the holders of any series of preferred stock to elect additional directors under specific circumstances, nominees for director shall be elected by a majority of the votes cast at any meeting for the election of directors at which a quorum is present. For purposes of these Bylaws, a “majority of votes cast” shall mean that the number of shares of capital stock of the Corporation voted “for” a nominee’s election exceeds the number of shares of capital stock of the Corporation voted “against” such nominee’s election, with abstentions and broker non-votes not counted as votes cast either “for” or “against” such nominee’s election. Notwithstanding the foregoing, in the event of a “contested election” of directors, nominees for director shall be elected by a plurality of the votes cast by holders of shares of capital stock of the Corporation entitled to vote in the election of directors at a meeting at which a quorum is present. For purposes of these Bylaws, a “contested election” shall mean an annual or special meeting of the Corporation with respect to which (i) the Secretary of the Corporation receives a notice that a stockholder has nominated or intends to nominate a person for election to the Board of Directors in compliance with the requirements for stockholder nominees for director set forth in Section 2.10 of these Bylaws or under applicable law and (ii) such nomination has not been withdrawn by such stockholder on or prior to the tenth day before the Corporation first mails its notice of meeting for such meeting to the stockholders.
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(b) If a nominee for director who is an incumbent director is not elected and no successor has been elected at such meeting, the director shall promptly tender his or her resignation to the Board of Directors. The Nominating and Corporate Governance Committee of the Board of Directors (the “Nominating and Corporate Governance Committee”) shall consider the tendered resignation and recommend to the Board of Directors whether to accept it. The Board of Directors shall consider and act on the tendered resignation, taking into account the Nominating and Corporate Governance Committee’s recommendation, within 90 days following certification of the stockholder vote, and thereafter shall promptly disclose its decision whether to accept the director’s tendered resignation (and, if applicable, the reasons for rejecting the resignation) in a press release to be disseminated in the manner that the Corporation’s press releases typically are distributed. Any director who tenders his or her resignation pursuant to this provision shall not participate in the Nominating and Corporate Governance Committee’s recommendation or the decision of the Board of Directors with respect to his or her resignation. If such incumbent director’s resignation is not accepted by the Board of Directors, such director shall continue to serve until the annual meeting of stockholders at which the term of office of the Class to which such director stood for election expires and until his or her successor is duly elected, or his or her earlier resignation or removal. If a director’s resignation is accepted by the Board of Directors pursuant to these Bylaws, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of these Bylaws or may decrease the size of the Board of Directors.
(c) Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, and delivered to the Secretary of the Corporation. The authorization of a person to act as proxy may be documented, signed, and delivered in accordance with Section 116 of Delaware Law, provided, that such authorization shall set forth, or be delivered with, information enabling the Corporation to determine the identity of the stockholder granting such authorization. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. No proxy shall be voted after three (3) years from its date, unless said proxy provides for a longer period.
(d) Shares abstaining from voting on a matter and broker non-votes will be counted for purposes of determining a quorum but will not count as votes cast.
Section 2.08. Permitted Actions by Written Consent. Unless otherwise provided in the Certificate of Incorporation, an action to be taken at any annual or special meeting of stockholders may not be taken without a meeting, without prior notice or without a vote.
Section 2.09. Voting Lists. The officer or agent having charge of the transfer book for stock of the Corporation shall make a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order, with the address of and the number of shares of stock held by each, available for inspection by any stockholder, for any purpose germane to the meeting, for a period of ten (10) days ending on the day before the meeting, either (a) during ordinary business hours, at the Corporation’s principal executive offices or (b) on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting. The original stock transfer books (or any duplicates thereof maintained by the Corporation) shall be the only evidence of the identity of the stockholders entitled to examine such list or transfer books or to vote at any meeting of stockholders.
Section 2.10. Advance Notice of Stockholder Nominations and Proposals.
(a) Timely Notice. At an annual meeting of the stockholders, only such nominations of persons for the election to the Board of Directors shall be considered and such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations or such other business must be: (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any authorized committee thereof) or (iii) otherwise properly brought before an annual meeting by a stockholder (A) who is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner is the
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beneficial owner of shares of the Corporation) both at the time such notice of meeting is delivered and on the record date for the determination of stockholders entitled to vote at the annual meeting of stockholders, (B) who is entitled to vote at the meeting and (C) who complies with the procedures set forth in this Section 2.10. For the avoidance of doubt, the foregoing clause (iii) shall be the exclusive means for a stockholder to make nominations or propose other business at an annual meeting of stockholders (other than a proposal included in the Corporation’s proxy statement pursuant to and in compliance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). In addition, any proposal of business (other than the nomination of persons for election to the Board of Directors) must be a proper matter for stockholder action. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.10(a)(iii), a Proposing Stockholder (as defined below) must have given timely notice thereof pursuant to this Section 2.10, in writing to the Secretary of the Corporation, even if such matter is already the subject of any notice to the stockholders or Public Disclosure (as defined below) from the Board of Directors. To be timely, a Proposing Stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Corporation: (x) not later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one hundred and twentieth (120th) day in advance of the anniversary of the previous year’s annual meeting if such meeting is to be held on a day which is not more than thirty (30) days in advance of the anniversary of the previous year’s annual meeting or not later than seventy (70) days after the anniversary of the previous year’s annual meeting; and (y) with respect to any other annual meeting of stockholders, not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the close of business on the tenth (10th) day following the first date of Public Disclosure of the date of such meeting. In no event shall the Public Disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period) for the giving of a stockholder’s notice as described above.
(b) Stockholder Nominations. For the nomination of any person or persons for election to the Board of Directors, a Proposing Stockholder’s timely notice to the Secretary of the Corporation (in accordance with the time periods for delivery of timely notice as set forth in this Section 2.10) shall set forth or include:
(i) the name, age, business address and residence address of each nominee proposed in such notice;
(ii) the principal occupation or employment of each such nominee;
(iii) the number of shares of capital stock of the Corporation which are owned of record and directly or indirectly beneficially by each such nominee (if any);
(iv) such other information concerning each such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved) or other filings required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder;
(v) a completed and signed questionnaire regarding the background and qualification of such person to serve as a director, in the form to be provided by the Secretary upon written request of any stockholder of record within ten (10) days of such request;
(vi) a written statement and agreement executed by the nominee acknowledging that such person:
(A) consents to being named in the proxy statement as a nominee and to serving as a director if elected;
(B) intends to serve as a director for the full term for which such person is standing for election; and
(C) makes the following representations: (1) that the director nominee has read and agrees to adhere to the Corporation’s Corporate Governance Guidelines, Code of Ethics and Business Conduct, Related Party Transactions Policy, and any other of the Corporation’s policies or guidelines applicable to directors, including with regard to securities trading, (2) that the director nominee is not and will not become a party to any agreement, arrangement, or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any nomination or other business proposal, issue, or question (a “Voting Commitment”) that has not been disclosed to the Corporation or any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, and (3) that the director nominee is not and will not become a party to any agreement, arrangement, or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement, or indemnification (“Compensation Arrangement”) that has not been disclosed to the Corporation in connection with such person’s nomination for director or service as a director;
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(vii) as to the Proposing Stockholder:
(A) the name and address of the Proposing Stockholder as they appear on the Corporation’s books and the name and address of any Related Person (as defined below) of the Proposing Stockholder;
(B) the class or series and number of shares of the Corporation’s capital stock which are directly or indirectly owned by the Proposing Stockholder (beneficially and of record) and owned by any Related Person of the Proposing Stockholder, as of the date of the Proposing Stockholder’s notice, and a representation that the Proposing Stockholder will notify the Corporation in writing of the class and number of such shares owned of record and beneficially as of the record date for the meeting promptly following the later of the record date or the first date of Public Disclosure of the record date;
(C) a description of any agreement, arrangement or understanding (written or oral) between such Proposing Stockholder, on the one hand, and any Related Person of the Proposing Stockholder, on the other hand, related to (1) the nomination or other business proposed or (2) any subject matter that will be material in such Proposing Stockholder’s solicitation of stockholders (including, without limitation, matters of social, labor, environmental or governance policy), regardless of whether such agreement, arrangement or understanding relates specifically to the Corporation;
(D) a description of any agreement, arrangement or understanding (written or oral) between such Proposing Stockholder or any Related Person of the Proposing Stockholder, on the one hand, and the director nominee or any other person or persons (including their names) acting in concert with such nominee, on the other hand, related to (1) the nomination or (2) any subject matter that will be material in such Proposing Stockholder’s solicitation of stockholders (including, without limitation, matters of social, labor, environmental or governance policy), regardless of whether such agreement, arrangement or understanding relates specifically to the Corporation;
(E) the class or series, if any, and number of options, warrants, puts, calls, convertible securities, stock appreciation rights, or similar rights, obligations or commitments with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares or other securities of the Corporation or with a value derived in whole or in part from the value of any class or series of shares or other securities of the Corporation, whether or not such instrument, right, obligation or commitment shall be subject to settlement in the underlying class or series of shares or other securities of the Corporation (each a “Derivative Security”), which are, directly or indirectly, beneficially owned by the Proposing Stockholder or any Related Person of the Proposing Stockholder;
(F) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by the Proposing Stockholder or beneficial owner or any of their affiliates or associates, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of capital stock or other securities of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Proposing Stockholder or any Related Person of the Proposing Stockholder or any of their respective affiliates or associates with respect to any class or series of capital stock or other securities of the Corporation, or that provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series or capital stock or other securities of the Corporation;
(G) a description of any other direct or indirect opportunity for the Proposing Stockholder or any Related Person of the Proposing Stockholder to profit or share in any profit (including any performance-based fees) derived from any increase or decrease in the value of shares or other securities of the Corporation;
(H) any proxy, contract, arrangement, understanding or relationship pursuant to which the Proposing Stockholder or any Related Person of the Proposing Stockholder or any of their respective affiliates or associates has a right to vote any shares or other securities of the Corporation;
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(I) any rights to dividends on the shares of the Corporation owned beneficially by the Proposing Stockholder or any Related Person of the Proposing Stockholder or any of their respective affiliates or associates that are separated or separable from the underlying shares of the Corporation;
(J) any proportionate interest in shares of the Corporation or Derivative Securities held, directly or indirectly, by a general or limited partnership in which the Proposing Stockholder or any Related Person of the Proposing Stockholder or any of their respective affiliates or associates is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, if any;
(K) a description of all agreements, arrangements, and understandings between the Proposing Stockholder or any Related Person of the Proposing Stockholder or any of their respective affiliates or associates and any other person(s) (including their name(s)) in connection with or related to the ownership or voting of capital stock of the Corporation or Derivative Securities;
(L) a representation that the Proposing Stockholder is a holder of record of shares of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice or to propose such other business, and an acknowledgement that, if the Proposing Stockholder (or a qualified representative (as defined below) of the Proposing Stockholder) does not appear to present the Proposing Stockholder’s nomination or other business proposal at such meeting, the Corporation need not present the Proposing Stockholder’s nomination or other business proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation;
(M) the names and addresses of other stockholders (including beneficial and record owners) known by the Proposing Stockholder to support the nomination or other business proposal, and to the extent known, the class or series and number of all shares of the Corporation’s capital stock owned beneficially or of record by such other stockholders;
(N) [INTENTIONALLY OMITTED];
(O) [INTENTIONALLY OMITTED];
(P) any other information relating to the Proposing Stockholder and any Related Person of the Proposing Stockholder that would be required to be disclosed in a proxy statement soliciting proxies for the election of such person as a director in an election contest (even if an election contest is not involved) or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(Q) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among the Proposing Stockholder or any Related Person of the Proposing Stockholder, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Proposing Stockholder or any Related Person of the Proposing Stockholder, or any person acting in concert therewith, was the “registrant” for purposes of such rule and the nominee was a director or executive officer of such registrant;
(R) any direct or indirect interest of the Proposing Stockholder or any Related Person of the Proposing Stockholder in any contract with the Corporation or any affiliate of the Corporation (including any employment agreement, collective bargaining agreement or consulting agreement);
(S) a complete and accurate description of any pending, or to the Proposing Stockholder’s knowledge, threatened, legal proceeding in which such Proposing Stockholder or any Related Person of the Proposing Stockholder is a party or participant involving the Corporation or, to such Proposing Stockholder’s knowledge, any current or former officer, director, affiliate or associate of the Corporation;
(T) a statement of whether or not the Proposing Stockholder, its qualified representatives and/or any Related Person of the Proposing Stockholder intend to solicit proxies or votes in support of such director nominees or nomination in accordance with Rule 14a-19 promulgated under the Exchange Act (and if
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so, such statement shall also include an undertaking that the Proposing Stockholder will deliver to beneficial owners of shares representing at least 67% of the voting power of the stock entitled to vote generally in the election of directors either (1) at least 20 calendar days before the annual meeting, a copy of its definitive proxy statement for the solicitation of proxies for its director candidates, or (2) at least 40 calendar days before the annual meeting a Notice of Internet Availability of Proxy Materials that would satisfy the requirements of Rule 14a-16(d) of the Exchange Act);
(U) a representation that the Proposing Stockholder will provide the Corporation with the updates and supplements required by Section 2.10(d);
(V) a representation that the Proposing Stockholder has complied with all applicable requirements of state law and the Exchange Act with respect to matters set forth in this Section 2.10.
The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.
(c) Other Stockholder Proposals. For all business other than director nominations, a Proposing Stockholder’s notice to the Secretary of the Corporation shall set forth as to each matter the Proposing Stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the text of any proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment); (iii) any other information relating to the Proposing Stockholder required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder and (iv) all of the other information required by Section 2.10(b)(vii) above.
(d) Supplements and Updates.
(i) A Proposing Stockholder providing notice of a director nomination or other business proposed to be brought before an annual meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.10 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (A) in the case of the update and supplement required to be made as of the record date for the meeting, not later than five (5) business days after such record date and (B) in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof, as applicable, not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof. For the avoidance of doubt, any information provided pursuant to this Section 2.10(d) shall not be deemed to cure any deficiencies in a notice previously delivered pursuant to this Section 2.10 and shall not extend the time period for the delivery of notice pursuant to this Section 2.10. If a Proposing Stockholder fails to provide any written update or supplement in accordance with this Section 2.10(d), the information as to which such written update or supplement relates may be deemed not to have been provided in accordance with this Section 2.10.
(ii) If any information submitted pursuant to this Section 2.10 shall be inaccurate in any material respect, such information shall be deemed not to have been provided in accordance with this Section 2.10. The Proposing Stockholder shall notify the Secretary in writing at the principal executive offices of the Corporation of any material inaccuracy or material change in any information submitted pursuant to this Section 2.10 (including if the Proposing Stockholder or any Related Person of the Proposing Stockholder no longer intends to solicit proxies in accordance with the representation made pursuant to Section 2.10(b)(vii)(T) within two (2) business days after becoming aware of such inaccuracy or change. Upon written request of the Secretary on behalf of the Board of Directors (or a duly authorized committee thereof), the Proposing Stockholder shall provide, within five (5) business days after delivery of such request (or such earlier period as may be specified in such request), (A) written verification, reasonably satisfactory to the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by such Proposing Stockholder pursuant to this Section 2.10 and (B) a written affirmation of any information submitted by such Proposing Stockholder pursuant to this Section 2.10 as of an earlier date. If the Proposing Stockholder fails to provide such written verification or affirmation within such period, the information as to which written verification or affirmation was requested may be deemed not to have been provided in accordance with this Section 2.10.
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(e) Proxy Rules. Notwithstanding the foregoing provisions of this Section 2.10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.10. Nothing in this Section 2.10 shall be deemed to (i) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor rule thereto), or (ii) affect any rights of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation. This Section 2.10 shall not apply to a proposal proposed to be made by a stockholder if the stockholder has notified the Corporation of the stockholder’s intention to present the proposal at an annual or special meeting only pursuant to and in compliance with Rule 14a-8 under the Exchange Act and such proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such meeting.
(f) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as is a proper matter for stockholder action under Delaware Law and as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors (or any authorized committee thereof) or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (A) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in this Section 2.10 is delivered to the Secretary of the Corporation and upon the record date for the determination of stockholders entitled to vote at the meeting, (B) who is entitled to vote at the meeting and upon such election and (C) who complies with the notice procedures set forth in this Section 2.10. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by this Section 2.10 shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day prior to such special meeting and not earlier than the close of business on the later of the one hundred and twentieth (120th) day prior to such special meeting or the tenth (10th) day following the date of Public Disclosure of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the Public Disclosure of an adjournment or postponement of a special meeting commence a new time period (or extend any notice time period) for the giving of a stockholder’s notice as described above.
(g) Effect of Noncompliance.
(i) Notwithstanding anything in these Bylaws to the contrary: (A) no nominations shall be made or business shall be conducted at any annual or special meeting except in accordance with the procedures set forth in this Section 2.10, and (B) unless otherwise required by law, if a Proposing Stockholder intending to propose business or make nominations at an annual or special meeting pursuant to this Section 2.10 does not comply with or provide the information required under this Section 2.10 to the Corporation promptly following the later of the record date or the first date of Public Disclosure of the record date, or the Proposing Stockholder (or a qualified representative of the Proposing Stockholder) does not appear at the meeting to present the proposed business or nominations, such business or nominations shall not be considered, notwithstanding that proxies in respect of such business or nominations may have been received by the Corporation.
(ii) Notwithstanding the foregoing provisions of this Section 2.10, unless otherwise required by law, no stockholder shall solicit proxies in support of director nominees other than the Corporation’s nominees unless such stockholder has compiled with Rule 14a-19 promulgated under the Exchange Act in connection with the solicitation of such proxies. If (A) any stockholder provides notice pursuant to Rule 14a-19(b) under the Exchange Act and (B) such stockholder subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or (3) under the Exchange Act (as determined by the Board of Directors or an officer designated thereby), then the Corporation shall disregard any proxies for any proposed nominees on the Corporation’s proxy card other than the Corporation’s nominees, notwithstanding that proxies in favor thereof may have been received by the Corporation. Upon request by the Corporation, if any stockholder provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such stockholder shall deliver to the Secretary, no later than five (5) business days prior to the applicable meeting, reasonable evidence that the requirements of Rule 14a-19(a)(3) under the Exchange Act have been satisfied.
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(iii) The Board of Directors (or an officer designated thereby) shall have the power and the duty to determine whether a nomination has been made or other business has been proposed in accordance with the provisions set forth in this Section 2.10, and, if the Board of Directors or such officer determines that any nomination was not made or such other business was not proposed in accordance with the provisions of this Section 2.10, such nomination or such other proposed business shall not be considered at the meeting in question.
(h) Definitions.
(i) A Proposing Stockholder shall be deemed to be “acting in concert” with a Person if such Proposing Stockholder has knowingly acted (whether or not pursuant to an express agreement, arrangement or understanding) at any time during the prior two (2) years in concert with such Person (or Control Person thereof) in relation to matters (whether or not specific to the Corporation) that will be material to the Proposing Stockholder’s solicitation of stockholders, including, without limitation, matters of social, labor, environmental and governance policy; provided, however, that a Proposing Stockholder shall not be deemed to be acting in concert with a Person whose primary business is to serve as investment manager or adviser with respect to investing and trading in securities for a client or its own account.
(ii) “Control Person” means, with respect to any Person, collectively, (A) any direct and indirect control Person of such first Person, and (B) such first Person’s and any control Person’s respective directors, trustees, executive officers and managing members (including, with respect to an entity exempted from taxation under Section 501(1) of the Internal Revenue Code, each member of the board of trustees, board of directors, executive council or similar governing body thereof);
(iii) “Family Member” means a Person’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares the Person’s home.
(iv) “Person” means an individual, corporation, partnership, limited liability company, association, joint stock company, trust, unincorporated organization or a government or political subdivision thereof.
(v) “Proposing Stockholder” means, collectively, any stockholder giving the notice of director nomination or proposal of other business or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination is made or other business is proposed, such beneficial owner, and if such stockholder or beneficial owner is an entity, each Control Person thereof (in each case of a stockholder, beneficial owner or Control Person, together with any Family Member thereof).
(vi) “Public Company” means a company with a class of equity securities registered pursuant to Section 12 of the Exchange Act, whether or not trading in such securities has been suspended.
(vii) “Public Disclosure” shall mean a disclosure made in a press release reported by the Dow Jones News Services, The Associated Press or a comparable national news service or in a document filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act, and the rules and regulations promulgated thereunder.
(viii) A “qualified representative” of a stockholder means a person that is a duly authorized officer, manager or partner of such stockholder or is authorized by a writing (A) executed by such stockholder, (B) delivered (or a reliable reproduction or electronic transmission of the writing is delivered) by such stockholder to the Corporation prior to the taking of the action taken by such person on behalf of such stockholder and (C) stating that such person is authorized to act for such stockholder with respect to the action to be taken.
(ix) “Related Person”, with respect to a Proposing Stockholder, shall be deemed to be a Person (and any Control Person thereof) with respect to which such Proposing Stockholder is acting in concert.
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ARTICLE III
DIRECTORS
Section 3.01. General Powers. Except as otherwise provided by Delaware Law or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
Section 3.02. Number, Election and Term of Office. The number of directors which shall constitute the Board of Directors shall be fixed exclusively from time to time solely by resolution adopted by the affirmative vote of a majority of the Whole Board. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. As set forth in Article VI of the Certificate of Incorporation, as amended to date, the directors shall be divided into three (3) classes (each, a “Class”), designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. Except as otherwise provided in the Certificate of Incorporation, each director shall serve for a term ending on the date of the third annual meeting of stockholders next following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. Directors need not be stockholders.
Section 3.03. Quorum and Manner of Acting. Unless the Certificate of Incorporation or these Bylaws require a greater number, a majority of the Whole Board shall constitute a quorum for the transaction of business at any meeting of the Board of Directors and, except as otherwise expressly required by Delaware Law, the Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. When a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 3.04. Time and Place of Meetings. The Board of Directors shall hold its meetings at such place, if any, either within or without the State of Delaware, and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a determination by the Board of Directors).
Section 3.05. Annual Meeting. The Board of Directors shall meet as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such place either within or without the State of Delaware, on such date and at such time as shall be specified in a notice thereof given as hereinafter provided in Section 3.07 herein or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.
Section 3.06. Regular Meetings. Regular meetings of the Board of Directors may be held without notice being given at such time and at such place as shall from time to time be determined by the Board of Directors.
Section 3.07. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or by the President and shall be called by the Chairman of the Board of Directors or by the President on the written request of a majority of the Whole Board. Notice of special meetings of the Board of Directors shall be given to each director at least twenty-four (24) hours before the date of the meeting, or such shorter notice period as may be deemed necessary or advisable by the person or persons calling the meeting. Notice of special meetings of the Board of Directors shall be given in such manner as is determined by the Board of Directors. The notice need not specify the purpose of the meeting and, unless indicated in the notice thereof, any and all business may be transacted at a special meeting.
Section 3.08. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may
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unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and permitted by applicable law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by Delaware Law to be submitted to the stockholders for approval or (b) adopting, amending or repealing the Bylaws of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
Section 3.09. Committee Rules. Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member is absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
Section 3.10. Action by Consent. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and any consent may be documented, signed, and delivered in any manner permitted by Section 116 of Delaware Law. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board of Directors or committee in accordance with applicable law.
Section 3.11. Telephonic Meetings. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or such committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other and be heard, and such participation in a meeting shall constitute presence in person at the meeting.
Section 3.12. Resignation. Any director may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President or to the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. A verbal resignation shall not be deemed effective until confirmed by the director in writing or by electronic transmission to the Corporation.
Section 3.13. Vacancies. Except as otherwise provided in the Certificate of Incorporation, vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors may be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director, and each director so elected shall hold office for a term that shall coincide with the term of the Class to which such director shall have been elected. If there are no directors in office, then an election of directors may be held in accordance with Delaware Law. Unless otherwise provided in the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies and each director so chosen shall hold office as provided in the filling of the other vacancies.
Section 3.14. Removal. Any director may be removed from office as provided in the Certificate of Incorporation.
Section 3.15. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.
Section 3.16. Preferred Stock Directors. Notwithstanding anything else contained herein, whenever the holders of one or more classes or series of Preferred Stock shall have the right, voting separately as a class or series, to elect directors, the election, term of office, filling of vacancies, removal and other features of such directorships shall be governed by the terms of the resolutions applicable thereto adopted by the Board of Directors pursuant to the Certificate of Incorporation, and such directors so elected shall not be subject to the provisions of Sections 3.02, 3.13 and 3.14 of this Article III unless otherwise provided therein.
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ARTICLE IV
OFFICERS
Section 4.01. Positions and Appointment. The officers of the Corporation shall be a Chief Executive Officer, a President, a Chief Financial Officer, a Treasurer and a Secretary. The Board of Directors may, by resolution, designate the Chairman of the Board of Directors of the Corporation as an officer. In accordance with Section 4.01(f) of these Bylaws, the Board of Directors may, by resolution, appoint other officers and delegate to any officer of the Corporation the power to appoint and remove the other officers referenced in Section 4.01(f) of these Bylaws. Any two (2) or more offices may be held by the same person. The Board of Directors may, by resolution, appoint two (2) persons to the same office, such that an officer position may be filled by two (2) individuals serving simultaneously, with the titles of such persons to be as designated by the Board of Directors. In case any officer is absent, or for any other reason that the Board of Directors may deem sufficient, the Chief Executive Officer or the President or the Board of Directors may delegate for the time being the powers or duties of such officer to any other officer.
(a) Chief Executive Officer. The Chief Executive Officer of the Corporation (the “Chief Executive Officer”) shall perform such duties as may be assigned to him or her from time to time by the Board of Directors. Subject to the direction of the Board of Directors, he or she shall have, and exercise, direct charge of, and general supervision over, the business and affairs of the Corporation and shall be its chief policy making officer. He or she shall from time to time report to the Board of Directors all matters within his or her knowledge that the interests of the Corporation may require to be brought to its notice, and shall also have such other powers and perform such other duties as may be specifically assigned to him or her from time to time by the Board of Directors. The Chief Executive Officer shall see that all resolutions and orders of the Board of Directors are carried into effect, and in connection with the foregoing, shall be authorized to delegate to the other officers such of his or her powers and such of his or her duties as he or she may deem to be advisable. The Chief Executive Officer shall possess the power to sign all contracts, certificates and other instruments of the Corporation as the Board of Directors from time to time may prescribe.
(b) President. The President of the Corporation (the “President”) shall perform such duties as may be assigned to him or her from time to time by the Board of Directors. Subject to the direction of the Board of Directors, he or she shall perform all duties incident to the office of a president in a corporation organized under Delaware Law. The President shall see that all resolutions and orders of the Board of Directors are carried into effect, and in connection with the foregoing, shall be authorized to delegate to the other officers such of his or her powers and such of his or her duties as he or she may deem to be advisable. The President may execute and deliver certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments that the Board of Directors has authorized to be executed and delivered, except in cases where the execution and delivery thereof shall be expressly delegated solely to another officer or delivery thereof shall be otherwise required by law to be executed and delivered by another person.
(c) Chief Financial Officer. The Chief Financial Officer of the Corporation (the “Chief Financial Officer”) shall be the principal financial officer of the Corporation. The Chief Financial Officer shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office and shall perform such other duties as may be assigned to him or her from time to time by the Board of Directors, the Chief Executive Officer or the President.
(d) Treasurer. The Treasurer of the Corporation (the “Treasurer”) shall have the custody of the Corporation’s funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors or by any officer authorized by the Board of Directors to make such designation. The Treasurer shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office and shall perform such other duties as may be specifically assigned to him or her from time to time by the Board of Directors, the Chief Executive Officer or the President. The Treasurer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments authorized by the Board of Directors and may execute and deliver such documents, certificates and such other instruments that the Board of Directors has authorized to be executed and delivered, except in cases where the execution and delivery thereof shall be expressly delegated to another officer or as otherwise required by law to be executed and delivered by another person.
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(e) Secretary. The Secretary of the Corporation (the “Secretary”) shall attend all meetings of the Board of Directors and all meetings of stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for any committee when required. He or she shall give, or cause to be given, notice of all meetings of stockholders and, when necessary, special meetings of the Board of Directors. The Secretary shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office, and he or she shall perform such other duties as may be assigned to him or her from time to time by the Board of Directors, the Chief Executive Officer or the President. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, then either the Board of Directors or the Chairman of the Board of Directors may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature.
(f) Other Officers; Delegation of Power. In addition to the officers enumerated in this Section 4.01, the Board of Directors may, by resolution, appoint such other officers as the Board of Directors may deem necessary, each of whom shall have the powers and duties assigned to him or her from time to time by the Board of Directors, the Chief Executive Officer or the President. The Board of Directors may delegate to any officer of the Corporation the power to appoint and to remove any such other officers and to prescribe their respective powers and duties.
Section 4.02. Term; Vacancies. Each officer of the Corporation shall hold office until his or her successor is appointed, or until his or her earlier death, resignation or removal. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine.
Section 4.03. Removal. Any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors or by other officers upon whom such power of removal may have been conferred by the Board of Directors. The removal of an officer shall be without prejudice to such officer’s contract rights, if any.
Section 4.04. Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors (or to an officer if the Board of Directors has delegated to such officer the power to appoint and to remove such officer). The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4.05. Compensation. Compensation of all executive officers shall be approved by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the Corporation; provided, that compensation of some or all executive officers may be determined by a committee established for that purpose if so authorized by the Board of Directors or as required by applicable law or any applicable rule or regulation, including any rule or regulation of any stock exchange upon which the Corporation’s securities are then listed for trading.
ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates For Stock; Uncertificated Shares. The shares of the Corporation shall be represented by certificates; provided, that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock may be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of shares represented by certificates of the same class and series shall be identical. Every holder of stock represented by certificates shall be entitled to have a certificate signed by any two (2) authorized officers of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Corporation shall not have power to issue a certificate in bearer form.
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Section 5.02. Transfer Of Shares. Shares of the stock of the Corporation may be transferred on the record of stockholders of the Corporation by the holder thereof or by such holder’s duly authorized attorney upon surrender of a certificate therefor properly endorsed or upon receipt of proper transfer instructions from the registered holder of uncertificated shares or by such holder’s duly authorized attorney and upon compliance with appropriate procedures for transferring shares in uncertificated form, unless waived by the Corporation.
Section 5.03. Authority for Additional Rules Regarding Transfer. The Board of Directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of the stock of the Corporation, as well as for the issuance of new certificates in lieu of those which may be lost or destroyed, and may require of any stockholder requesting replacement of lost or destroyed certificates, bond in such amount and in such form as they may deem expedient to indemnify the Corporation, and/or the transfer agents, and/or the registrars of its stock against any claims arising in connection therewith.
Section 5.04. Lost, Stolen or Destroyed Stock Certificates. The Corporation may issue a new stock certificate in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to agree to indemnify the Corporation and/or to give the Corporation a bond sufficient to indemnify it, against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.
Section 5.05 Consideration for Shares. Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board of Directors. The consideration may consist of any tangible or intangible property or benefit to the Corporation including, but not limited to, cash, promissory notes, services performed, contracts for services to be performed or other securities. Shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of partly paid uncertificated shares, there will have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.
ARTICLE VI
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 6.01. General. The Corporation shall, to the fullest extent permitted by law as it presently exists or may hereafter be amended, indemnify and hold harmless any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer in any other capacity while serving as a director or officer, against all expenses, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”), and any other penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, have reasonable cause to believe that the person’s conduct was unlawful.
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Section 6.02. Actions by or in the Right of the Corporation. The Corporation shall, to the fullest extent permitted by law as it presently exists or may hereafter be amended, indemnify and hold harmless any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer in any other capacity while serving as a director or officer, against all expenses, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, excise taxes or penalties under ERISA, and any other penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State Delaware or such other court shall deem proper.
Section 6.03. Indemnification Against Expenses. To the extent that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 6.01 and 6.02 hereof, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
Section 6.04. Board Determinations. Any indemnification under Sections 6.01 and 6.02 hereof (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because the person has met the applicable standard of conduct set forth in Sections 6.01 and 6.02 hereof. Such determination shall be made with respect to a person who is a director or officer at the time of such determination: (a) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum; (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (c) if there are no such disinterested directors, by independent counsel in a written opinion to the Board of Directors; or (d) by the stockholders.
Section 6.05. Advancement of Expenses. Expenses (including attorneys’ fees) incurred by an officer or director of the Corporation or, subject to Section 6.08 hereof, by an employee or agent of the Corporation, in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director, officer, employee or agent to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized by law or in this Section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the Corporation or persons serving at the request of the Corporation as directors, officers, employees or agents of another corporation, partnership, limited liability company, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.
Section 6.06. Nonexclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, these Bylaws, or under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding office, and shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of such a person.
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Section 6.07. Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, against any expense, liability or loss asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of Delaware Law, the Certificate of Incorporation or this Article VI.
Section 6.08. Other Indemnification and Advancement of Expenses. The Corporation may, by action of the Board of Directors, provide indemnification and advancement of expenses to employees and agents of the Corporation with the same or lesser scope and effect as the foregoing indemnification of, and advancement of expenses to, directors and officers.
Section 6.09. Certain Definitions. For purposes of this Article VI, (a) references to “the Corporation” shall include, in addition to the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VI with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation.”
Section 6.10. Repeal or Modification of Indemnification. All rights to indemnification and to the advancement of expenses under this Article VI shall be deemed to be a contract between the Corporation and each director, officer, employee, fiduciary or agent who serves or served in such capacity at any time while this Article VI is in effect. Any repeal or modification of this Article VI or any repeal or modification of relevant provisions of Delaware Law or any other applicable laws shall not in any way diminish any rights to indemnification and advancement of expenses of such indemnitee or the obligations of the Corporation arising hereunder with respect to any proceeding arising out of, or relating to, any actions, transactions or facts occurring prior to the final adoption of such repeal or modification.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. Fixing the Record Date.
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing such record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, that the Board of Directors may in its discretion or as required by law fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
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(c) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date upon which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or any officer or agent of the Corporation having custody of the book in which proceedings of stockholders’ meeting are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
Section 7.02. Dividends. Subject to limitations contained in Delaware Law and the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.
Section 7.03. Year. Except as otherwise determined by the Board of Directors, the fiscal year of the Corporation shall commence on January 1 and end on December 31 of each year.
Section 7.04. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 7.05. Voting of Stock Owned by the Corporation. The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any corporation (except this Corporation) in which the Corporation may hold stock.
Section 7.06. Amendments. These Bylaws or any of them may be altered, amended or repealed, or new Bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors. Unless a higher percentage is required by the Certificate of Incorporation as to any matter that is the subject of these Bylaws, all such amendments must be approved by the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities of the Corporation then entitled to vote generally in the election of directors, voting together as a single class, or by a majority of the Whole Board.
Section 7.07. Headings. Section or paragraph headings are inserted herein only for convenience of reference and shall not be considered in the construction of any provision hereof.
ARTICLE VIII
CHOICE OF FORUM
Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VIII.
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Exhibit 10.2
RESTRICTED STOCK UNIT AWARD AGREEMENT
PERFORMANCE-BASED VESTING
PAYCOM SOFTWARE, INC.
2023 LONG-TERM INCENTIVE PLAN
1. Award of Performance-Based Restricted Stock Units. Pursuant to the Paycom Software, Inc. 2023 Long-Term Incentive Plan (the “Plan”) for Employees, Contractors, and Outside Directors of Paycom Software, Inc., a Delaware corporation (the “Company”), the Company grants to
[_________]
(the “Participant”)
an Award of performance-based Restricted Stock Units (“PSUs”) in accordance with Section 6.6 of the Plan, subject to the terms and conditions of the Plan and this Restricted Stock Unit Award Agreement – Performance-Based Vesting (this “Agreement”). The number of PSUs granted under this Agreement is [_________] units (the “Awarded Units”). Each Awarded Unit shall be a notional share of Common Stock, with the value of each Awarded Unit being equal to the Fair Market Value of a share of Common Stock at any time. The “Date of Grant” of this Award is [_________].
2. Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Agreement. To the extent the terms of the Plan are inconsistent with the provisions of the Agreement, this Agreement shall control. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing. Unless otherwise defined herein, the capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan.
3. Vesting of Awarded Units. Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Units shall become vested on the applicable Vesting Date (as defined on Exhibit A, attached hereto), based on the achievement of the performance goals and the terms and conditions set forth in Exhibit A, and rounded up or down to the nearest whole unit (the “Performance Vesting Conditions”). Any Awarded Units which have become vested pursuant to the terms of this Agreement are collectively referred to herein as “Vested PSUs,” and any Awarded Units that, at the particular time of determination, have not become vested in accordance with this Agreement shall be collectively referred to herein as “Non-Vested PSUs.”
4. Forfeiture of Awarded Units. Except as otherwise provided in Section 3 and Exhibit A, upon the Participant’s Termination of Service for any reason, the Participant shall be deemed to have forfeited all of the Participant’s Non-Vested PSUs. Upon forfeiture, all of the Participant’s rights with respect to the forfeited Non-Vested PSUs shall cease and terminate, without any further obligations on the part of the Company.
5. Conversion of Vested PSUs; Payment. Subject to Section 25 and Section 26 hereof, any Awarded Units that vest in accordance with Section 3 and become Vested PSUs shall be converted into shares of Common Stock and paid to the Participant (or in the event of the Participant’s death, to the Participant’s estate) on, or as soon as reasonably practicable after, the applicable Vesting Date (but in any event, within thirty (30) days of the date on which the Awarded Units vest and become Vested PSUs).
6. Dividend Equivalents. If any dividends or other distributions are paid with respect to the shares of Common Stock underlying the Awarded Units while the Awarded Units are outstanding, (i) the dollar amount or Fair Market Value of such dividends or distributions with respect to the number of shares of Common Stock then underlying the Awarded Units shall be credited to a bookkeeping account and held (without interest) by the Company for the account of the Participant until the date the Awarded Units become Vested PSUs and are converted and paid; and (ii) such dividend equivalents withheld pursuant to clause (i) attributable to any Awarded Units shall be distributed to such Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividend equivalents, if applicable, upon the date such Awarded Units become Vested PSUs and are converted and paid. Such dividend equivalents shall be subject to the same vesting and forfeiture provisions as the Awarded Units to which they relate. Any accrued amounts with respect to Non-Vested PSUs shall be forfeited upon any forfeiture of the related Non-Vested PSUs.
7. No Fractional Shares. Awarded Units may be converted only with respect to full shares, and no fractional share of Common Stock shall be issued.
8. Nonassignability. This Award and the Awarded Units are not assignable or transferable by the Participant, except by will or by the laws of descent and distribution.
9. Rights of a Stockholder. The Participant will have no rights of a stockholder with respect to any shares of Common Stock covered by this Agreement until the registration of such shares in the Participant’s name for the shares of Common Stock issued upon the conversion of Vested PSUs. The Awarded Units shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 6 and Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such shares of Common Stock. The Participant, by his or her execution of this Agreement, agrees to execute any documents requested by the Company in connection with the issuance of shares of Common Stock upon the conversion of Vested PSUs.
10. Adjustment to Number of Awarded Units. The number of shares of Common Stock covered by the Awarded Units shall be subject to adjustment in accordance with Articles 11-13 of the Plan.
11. Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.
12. Participant’s Representations. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Company will not be obligated to issue any shares of Common Stock to the Participant hereunder, if the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any such determination by the Company shall be final, binding, and conclusive. The rights and obligations of the Company and the rights and obligations of the Participant are subject to all Applicable Laws.
13. Investment Representation. Unless the shares of Common Stock issued upon the conversion of Vested PSUs are issued to the Participant in a transaction registered under applicable federal and state securities laws, by his or her execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be acquired hereunder will be acquired by the Participant for investment purposes for his or her own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Stock issued upon the conversion of Vested PSUs is issued to him or her in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.
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14. Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for his or her review by the Company and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.
15. Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).
16. No Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Contractor or as an Outside Director, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor, or Outside Director at any time.
17. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement, and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.
18. Covenants and Agreements as Independent Agreements. Each of the covenants and agreements that are set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.
19. Entire Agreement. This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement, or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.
20. Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.
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21. Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties; provided, however, that the Company may change or modify this Agreement without the Participant’s consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A (as defined below). Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.
22. Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.
23. Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.
24. Notice. Any notice required or permitted to be delivered hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the third (3rd) day after the date mailed, by certified or registered mail (in each case, return receipt requested, postage pre-paid). Notices must be sent to the respective parties at the following addresses (or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:
Notice to the Company shall be addressed and delivered as follows:
Paycom Software, Inc.
7501 W. Memorial Rd.
Oklahoma City, OK 73142
Attn: Chief Financial Officer
Notice to the Participant shall be addressed and delivered as set forth on the signature page.
25. Section 409A. The Award is intended to be exempt from or comply with the requirements of Section 409A of the Code and the rules and regulations issued thereunder (“Section 409A”) and shall be construed accordingly. Notwithstanding any other provision of this Agreement or the Plan to the contrary, with respect to any payments and benefits to which Section 409A applies, if the Participant is a “specified employee,” within the meaning of Section 409A, then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Section 409A, amounts that would otherwise be payable during the six-month period immediately following the Participant’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant’s death, the Participant’s estate) in a lump sum on the first business day after the earlier of the date that is six (6) months following the Participant’s separation from service or the Participant’s death. It is intended that each conversion and settlement of shares of Common Stock to be delivered under this Agreement shall be treated as a separate payment for purposes of Section 409A.
26. Tax Requirements. The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 26, the term “Company” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company shall, prior to the date of conversion, require the Participant receiving shares of
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Common Stock upon conversion of Vested PSUs to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payment must be made prior to the delivery of any shares of Common Stock by the Company’s withholding of a number of shares to be delivered upon the conversion of such Vested PSUs, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment (the “Net Settlement of Shares”), provided that, the Committee (excluding the Participant if the Participant is a member of the Committee) may, in its sole discretion, instead permit the satisfaction of the tax withholding obligation (A) by the delivery of cash to the Company in an amount that equals the required tax withholding obligations of the Company; (B) if the Company, in its sole discretion, so consents in writing, the actual delivery by the Participant to the Company of shares of Common Stock, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares) the required tax withholding payment; or (C) any combination of (A), (B), or the Net Settlement of Shares. The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant; provided, however, if the Participant is a “specified employee” as defined in Section 1.409A-1(i) of the final regulations under Section 409A of the Code who is subject to the six (6) months delay provided for in Section 25 above, the Company shall withhold the number of shares attributable to the employment taxes on the date of the Participant’s Termination of Service and withhold the number of shares attributable to the income taxes on the date which occurs six (6) months following the date of the Participant’s Termination of Service (or, if earlier, the date of death of the Participant).
* * * * * * * * * *
[Remainder of Page Intentionally Left Blank;
Signature Page Follows.]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.
| COMPANY: | ||
| Paycom Software, Inc. | ||
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| Name: |
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| Title: |
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| PARTICIPANT: | ||
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Signature | ||
| Name: |
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| Address: |
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Exhibit A
Performance Vesting Conditions
| Performance Period: | January 1, 2024 – December 31, 2024 (the “Performance Period”). | |
| Performance Goal: | For the Performance Period, the Awarded Units shall vest based on the total revenues of the Company and its Subsidiaries as reported in a publicly disseminated report relating to the Company’s financial results for the Performance Period (the “Total Revenues”) (the “Performance Goal”). | |
| Vesting Date: | The “Performance Vesting Date” shall be the date on which the Committee determines for the Performance Period, the actual achievement of the Performance Goal, which shall occur in the calendar year following the end of the Performance Period, but in no event later than sixty (60) days following the end of the Performance Period, provided that, except as provided below, the Participant is employed by or providing services to the Company on Performance Vesting Date. For purposes of this Agreement, each and any of the Performance Vesting Date, the Death/Disability Vesting Date (as defined below), and the CIC Termination Vesting Date (as defined below), shall be a “Vesting Date”. | |
| Vesting Schedule: | The Awarded Units will be eligible to vest based on the Total Revenues, as set forth below. The Committee shall determine the Total Revenues for the Performance Period, and shall determine the payout percentage, if any, of the Awarded Units (the “Revenue Payout Percentage”), that will vest and become Vested PSUs, as set forth below: | |
| Performance Level (Total Revenues) |
Revenue Payout Percentage / Vested PSUs | |
| Threshold: Less than $[_________] | 0% of the Awarded Units | |
| Target: Equal to or greater than $[_________] | 100% of the Awarded Units |
| If the target performance level (i.e., $[_________] in Total Revenues) is not met, then none of the Awarded Units shall vest, and such Awarded Units shall be forfeited. The aggregate number of Awarded Units that shall vest and become Vested PSUs shall be rounded up or down to the nearest whole unit. |
| Death / Total and Permanent Disability: | Notwithstanding the foregoing, upon the occurrence of a Termination of Service due to the Participant’s death or Total and Permanent Disability prior to the Performance Vesting Date, all unvested Awarded Units shall become fully vested as of the date of such Termination of Service (the “Death/Disability Vesting Date”). |
| A-1 |
| Retirement: | Notwithstanding the foregoing, in the event of the Participant’s Termination of Service due to Retirement prior to the Performance Vesting Date, the Awarded Units shall remain outstanding and eligible for vesting on the Performance Vesting Date based on the actual achievement of each Performance Goal, and pro-rated based on a fraction, determined by the number of completed days of service from the Date of Grant through the date of Retirement over the total number of days in the Performance Period. Any Awarded Units that do not vest on the Performance Vesting Date shall terminate and be forfeited as of the Performance Vesting Date. | |
| Termination of Service without Cause or for Good Reason (without a Change in Control): | Notwithstanding the foregoing, in the event of the Participant’s Termination of Service by the Company without Cause (as defined below) or by the Participant for Good Reason (as defined below) prior to the Performance Vesting Date, the Awarded Units shall remain outstanding and eligible for vesting on the Performance Vesting Date based on the actual achievement of the Performance Goal, and pro-rated based on a fraction, determined by the number of completed days of service from the Date of Grant through the date of the Participant’s Termination of Service over the total number of days in the Performance Period. Any Awarded Units that do not vest on the Performance Vesting Date shall terminate and be forfeited as of the Performance Vesting Date. | |
| Termination of Service without Cause or for Good Reason (in Connection with or after a Change in Control): | Notwithstanding the foregoing, in the event of the Participant’s Termination of Service by the Company without Cause or by the Participant for Good Reason in connection with or during the twelve (12) month period immediately following the consummation of a Change in Control but prior to the Performance Vesting Date, all unvested Awarded Units shall become fully vested as of the date of such Termination of Service (the “CIC Termination Vesting Date”). | |
| Definitions: | For purposes of this Exhibit A, the following capitalized terms used herein shall have the same meanings set forth below:
“Cause” shall mean: with respect to the Participant, any of the following: (a) the repeated failure of the Participant to perform such duties as are lawfully requested by the Board of Directors, (b) the failure by the Participant to observe all reasonable, lawful material policies of the Company and its Subsidiaries applicable to the Participant and communicated to the Participant in writing, (c) any action or omission constituting gross negligence or willful misconduct of the Participant in the performance of his or her duties, (d) the material breach by the Participant of any provision of the Participant’s employment or the breach by the Participant of any non-competition, non-solicitation or similar restrictive agreement with the Company or any of its Subsidiaries, (e) any act or omission by the Participant constituting fraud, embezzlement, disloyalty or dishonesty with respect to the Company or its Subsidiaries, (f) the use by the Participant of illegal drugs or repetitive abuse of other drugs or repetitive excess consumption of alcohol interfering with the performance of the Participant’s duties, or (g) the commission by the Participant of any felony or of a misdemeanor involving dishonesty, disloyalty or moral turpitude. | |
| A-2 |
| “Good Reason” shall mean: a Termination of Service by the Participant due to (a) any material reduction by the Company in the Participant’s base salary without the Participant’s prior consent; or (b) following a Change in Control, any change in the Participant’s status, reporting, duties or position that represents a demotion or diminution from the Participant’s status, reporting, duties or position in effect before such Change in Control. The Participant shall not be deemed to have been terminated for Good Reason unless the Participant delivers to the Company a written notice of termination for Good Reason specifying the alleged Good Reason within thirty (30) days after the Participant first learns of the existence of the circumstances giving rise to Good Reason, within thirty (30) days following delivery of such notice, the Company has failed to cure the circumstances giving rise to Good Reason, and the Participant resigns within fifteen (15) days after the end of the cure period. |
| A-3 |
Exhibit 10.3
STOCK AWARD AGREEMENT
PAYCOM SOFTWARE, INC.
2023 LONG-TERM INCENTIVE PLAN
1. Grant of Award. Pursuant to the Paycom Software, Inc. 2023 Long-Term Incentive Plan (the “Plan”) for Employees, Contractors, and Outside Directors of Paycom Software, Inc., a Delaware corporation (the “Company”), the Company grants to
[ ]
(the “Participant”)
an Award of Restricted Stock in accordance with Section 6.4 of the Plan. The number of shares of Common Stock awarded under this Stock Award Agreement (this “Agreement”) is [ ] shares (the “Awarded Shares”). The “Date of Grant” of this Award is [ ].
2. Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Agreement. To the extent the terms of the Plan are inconsistent with the provisions of the Agreement, this Agreement shall control. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing. Unless otherwise defined herein, the capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan.
3. Vesting. Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Shares shall vest as follows: one hundred percent (100%) of the Awarded Shares shall vest on the Date of Grant, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.
4. Forfeiture of Awarded Shares. Awarded Shares that are not vested in accordance with Section 3 shall be forfeited and shall cease to be outstanding on the date of the Participant’s Termination of Service. Upon forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Shares shall cease and terminate, without any further obligations on the part of the Company.
5. Restrictions on Awarded Shares. The Participant shall not be permitted to sell, transfer, offer, pledge, hypothecate, loan, margin, assign, gift or otherwise encumber or dispose of, either voluntarily or involuntarily, or to enter into any contract, option, right, warrant or other arrangement or understanding with respect to the Awarded Shares until such shares become vested in accordance with Section 3. The Committee may in its sole discretion, remove any or all of such restrictions (or any other restrictions contained herein) on any Awarded Shares whenever it may determine that, by reason of changes in applicable law or changes in circumstances after the date of this Agreement, such action is appropriate.
6. Legend; Registration of Shares. The Company shall electronically register the Awarded Shares in the name of the Participant, which shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Awarded Shares, as determined in the sole discretion of the Committee. No stock certificate or certificates shall be issued with respect to the Awarded Shares. The Company shall register the Awarded Shares in the Participant’s name, free of restriction under this Agreement, promptly after, and only after, such Awarded Shares have become vested in accordance with Section 3.
7. Rights of a Stockholder. Except as provided in Section 4 and Section 5 above, the Participant shall have, with respect to the Awarded Shares, all of the rights of a stockholder of the Company, including the right to vote the shares, and the right to receive any dividends thereon, subject to the provisions of this Section 7; provided that, (A) any cash dividends or stock dividends with respect to the Awarded Shares shall be withheld by the Company for the Participant’s account (“Withheld Dividends”); and (B) such Withheld Dividends attributable to any particular Awarded Share shall be distributed to the Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such Withheld Dividends, if applicable, upon the release of restrictions on such share (i.e., upon vesting) and, if such share is forfeited, the Participant shall forfeit and have no right to such Withheld Dividends.
8. Voting. The Participant, as record holder of the Awarded Shares, has the exclusive right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded Shares are transferred in accordance with this Agreement; provided that this Section 8 shall not create any voting right where the holders of such Awarded Shares otherwise have no such right.
9. Adjustment to Number of Awarded Shares. The number of Awarded Shares shall be subject to adjustment in accordance with Articles 11-13 of the Plan.
10. Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.
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11. Participant’s Representations. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not acquire any Awarded Shares, and that the Company will not be obligated to issue any Awarded Shares to the Participant hereunder, if the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any such determination by the Company shall be final, binding, and conclusive. The rights and obligations of the Company and the rights and obligations of the Participant are subject to all Applicable Laws.
12. Investment Representation. Unless the Awarded Shares are issued to the Participant in a transaction registered under applicable federal and state securities laws, by the Participant’s execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be purchased and or received hereunder will be acquired by the Participant for investment purposes for the Participant’s own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Stock is issued to the Participant in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.
13. Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for the Participant’s review by the Company, and represents that the Participant is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.
14. Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).
15. No Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Contractor or as an Outside Director, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor, or Outside Director at any time.
16. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.
17. Covenants and Agreements as Independent Agreements. Each of the covenants and agreements that are set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company or its Subsidiaries, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.
18. Entire Agreement. This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.
19. Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein. No Person shall be permitted to acquire any Awarded Shares without first executing and delivering an agreement in the form satisfactory to the Company making such Person or entity subject to the restrictions on transfer contained herein.
20. Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.
21. Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.
22. Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.
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23. Notice. Any notice required or permitted to be delivered hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the third (3rd) day after the date mailed, by certified or registered mail (in each case, return receipt requested, postage pre-paid). Notices must be sent to the respective parties at the following addresses (or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:
Notice to the Company shall be addressed and delivered as follows:
Paycom Software, Inc.
7501 W. Memorial Rd.
Oklahoma City, OK 73142
Attn: Chief Financial Officer
Notice to the Participant shall be addressed and delivered as set forth on the signature page.
24. Tax Requirements. The Participant is hereby advised to consult immediately with the Participant’s own tax advisor regarding the tax consequences of this Agreement, the method and timing for filing an election to include this Agreement in income under Section 83(b) of the Code, and the tax consequences of such election. By execution of this Agreement, the Participant agrees that if the Participant makes such an election, the Participant shall provide the Company with written notice of such election in accordance with the regulations promulgated under Section 83(b) of the Code. The Company or, if applicable, any Subsidiary (for purposes of this Section 24, the term “Company” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Participant receiving shares of Common Stock issued under the Plan shall pay to the Company, in accordance with the provisions of this Section 24, the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payment must be made prior to the delivery of any shares of Common Stock by the Company’s withholding of a number of shares to be delivered upon the vesting of such Awarded Shares, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment (the “Net Settlement of Shares”), provided that, the Committee (excluding the Participant if the Participant is a member of the Committee) may, in its sole discretion, instead permit the satisfaction of the tax withholding obligation (A) by the delivery of cash to the Company in an amount that equals the required tax withholding obligations of the Company; (B) if the Company, in its sole discretion, so consents in writing, the actual delivery by the Participant to the Company of shares of Common Stock, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares) the required tax withholding payment; or (C) any combination of (A), (B), or the Net Settlement of Shares. The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.
* * * * * * * * * *
[Remainder of Page Intentionally Left Blank.
Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence the Participant’s consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.
| COMPANY: | ||
| Paycom Software, Inc. | ||
| By: |
| |
| Name: |
| |
| Title: |
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| PARTICIPANT: | ||
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| Signature | ||
| Name: |
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| Address: |
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Exhibit 10.4
Christopher G. Thomas
Via E-Mail
February 7, 2024
Dear Chris,
We are very pleased to offer you the position of Co-Chief Executive Officer of Paycom Software, Inc. (“Paycom”) and its subsidiaries (collectively, the “Company”), reporting to the Paycom Board of Directors (“Board”). Your employment in this role is subject to the terms and conditions set forth in this letter.
Your expected start date in this Co-Chief Executive Officer role is February 7, 2024 and is subject to modification by the Company (your “Start Date”). Your position will be based in Oklahoma City, Oklahoma.
Effective beginning on the Company’s next regularly scheduled payroll date following the Start Date, you will be paid an annualized base salary of $800,000.00, payable bi-weekly in accordance with the standard payroll practices of the Company and subject to all withholdings and deductions as required by law. You will be eligible for an annual bonus pursuant to the Paycom Software, Inc. Annual Incentive Plan. The performance criteria and potential payouts for the 2024 annual bonus and bonuses thereafter will be determined by the Compensation Committee of Paycom’s Board of Directors (the “Compensation Committee”).
You will receive a car allowance of One Thousand Dollars ($1,000) per month for your business or personal use, subject to increases from time to time as may be approved by the Board or the Compensation Committee, less any required taxes or withholdings.
Subject to approval by the Compensation Committee, effective on or as soon as practicable following your Start Date, Paycom will grant you equity awards pursuant to the Paycom Software, Inc. 2023 Long-Term Incentive Plan (the “LTIP”) consisting of: (1) an award of 17,209 time-based restricted stock units, subject to time-based vesting as follows: 4,104 units vesting on February 5, 2025, 4,105 units vesting on February 5, 2026, and 9,000 units vesting on February 5, 2027, provided that you are employed by or otherwise providing services to the Company through the applicable vesting date (the “Time-Based Award”); (2) an award of 15,000 performance-based restricted stock units, subject to performance-based vesting based on a “Total Revenues” performance goal for the 2024 performance period, provided that you are employed by or otherwise providing services to the Company through the applicable vesting date (the “Performance-Based Award”); and (3) 4,104 shares of common stock of Paycom, with such shares fully vested as of the grant date (the “Stock Award”). The Time-Based Award, the Performance-Based Award, and the Stock Award shall be subject to the terms and conditions of the LTIP and the applicable award agreement that is provided to you by Paycom in connection with the grant of such awards, including any restrictions on transfer of the awarded shares or units and any forfeiture provisions in the event of a termination of your employment.
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While we anticipate a mutually beneficial relationship with you, the Company recognizes your right to terminate this relationship at any time. Similarly, we reserve the same right to alter, modify, or terminate this employment relationship at will at any time with or without notice or cause.
This letter reflects the entire understanding regarding the terms of your employment with the Company with the exception of (a) your agreement to the Company’s corporate and personnel policies, (b) the Non-Solicitation Agreement between you and Paycom Payroll, LLC signed by you on November 8, 2018, (c) the Employee Confidentiality, Non-Disparagement, Non-Disclosure, Proprietary Information and Indemnification Agreement between you and Paycom Payroll, LLC signed by you on November 13, 2018, (d) Paycom’s Incentive-Based Compensation Recovery Agreement for executive officers and (e) any previously granted award agreements under the LTIP or the Paycom Software, Inc. 2014 Long-Term Incentive Plan (including but not limited to the clawback and forfeiture provisions therein). Accordingly, with those exceptions, this letter supersedes and replaces any prior oral or written communication on the subject of your employment by Paycom in any capacity. By signing this letter, you agree that you are not relying on, have not relied on, and you specifically disavow reliance on, any oral or written statement, representation, or inducement relating to your employment that is not contained in this letter.
All of us at the Company are excited about the prospect of you accepting the Co-Chief Executive Officer role. If you have any questions about the above details, please call me immediately. If you wish to accept this position, please sign below and return this letter agreement to me.
I look forward to hearing from you.
| Yours sincerely, |
| PAYCOM SOFTWARE, INC. |
| /c/ Frederick C. Peters II |
| By: Frederick C. Peters II |
| Title: Lead Director of the Board of Directors, on behalf of the Board of Directors |
Accepted:
| /s/ Christopher G. Thomas |
| Christopher G. Thomas |
| Date: February 7, 2024 |
2
Exhibit 10.5
Chad Richison
XXXXX
XXXXX
February 7, 2024
Re: Amendment of Executive Employment Agreement; Forfeiture of Award
Dear Chad:
This letter (this “Agreement”) sets out the terms of your continuing relationship with Paycom Software, Inc. (the “Company”) and amends that certain Second Amended and Restated Executive Employment Agreement entered into on March 9, 2020, and effective January 1, 2014 except as otherwise provided therein (the “Existing Agreement”).
You hereby acknowledge and agree that, effective February 7, 2024 (the “Transition Date”), your position as “Chief Executive Officer and President” is changed to “Co-Chief Executive Officer and President.” You further acknowledge and agree that you consent to this change and that this change does not constitute “Good Reason” under Section 5.5 of the Existing Agreement, or under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “2014 LTIP”), the Paycom Software, Inc. 2023 Long-Term Incentive Plan (the “2023 LTIP,” together with the 2014 LTIP, the “LTIPs”) or any award agreement issued pursuant to the LTIPs, including, without limitation, that certain Restricted Stock Award Agreement – Market-Based Vesting (CEO), by and between you and the Company, dated November 23, 2020 (the “2020 RS Award”).
This Agreement amends the Existing Agreement as follows, effective as of the Transition Date:
| 1. | The Fourth Recital is amended and restated in its entirety as follows: |
“WHEREAS, the Executive has disclosed to the Company that, while continuing to perform his duties as Co-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;”
| 2. | The Sixth Recital is amended and restated in its entirety as follows: |
“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 Co-Chief Executive Officer and President, and Executive wishes to accept such employment;”
| 3. | Section 3.1 is amended to replace all references therein to “Chief Executive Officer and President” with “Co-Chief Executive Officer and President”. |
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| 4. | Section 4.4 is amended to replace all references therein to “Medium Cabin private aircraft” with “Medium Cabin private aircraft (which includes any Midsize or Super-Midsize private aircraft)”. |
| 5. | Section 4.6 is amended and restated in its entirety as follows: |
“4.6. Personal Security. During the Term, the Company shall pay the reasonable expenses for Executive’s personal security and for any appropriate security in locations that Executive frequents, including his residence.”
| 6. | Section 4.11 is amended and restated in its entirety as follows: |
“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, the Paycom Software, Inc. Compensation Recovery Policy, or any other clawback law, regulation or policy applicable to executives of the Company, if any, as amended from time to time.”
| 7. | Section 5.5(b) is amended and restated in its entirety as follows: |
“(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 Co-Chief Executive Officer, President and Chairman of the Board, as such positions were in effect as of February 7, 2024; and/or”
You agree that, other than as set forth herein, the Existing Agreement remains in full force and effect.
You acknowledge and agree that, due to your change in position, the 2020 RS Award and all Awarded Shares (as defined in the 2020 RS Award) will terminate and be forfeited, effective as of the Transition Date, in accordance with the terms of the 2020 RS Award.
By signing below, you agree that you are knowingly and voluntarily signing this Agreement.
[Remainder of Page Intentionally Left Blank
Signature Page Follows]
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| Kind Regards, |
| PAYCOM SOFTWARE, INC. |
| /s/ Frederick C. Peters II |
| By: Frederick C. Peters II |
| Title: Lead Director of the Board of Directors, on behalf of the Board of Directors |
| ACCEPTED AND AGREED: |
| /s/ Chad Richison |
| Chad Richison |
| Date: February 7, 2024 |
Exhibit 99.1
Chris Thomas Promoted to Paycom Co-CEO with Chad Richison
Chad Richison’s title becomes Co-CEO, President and Chairman
OKLAHOMA CITY – (Feb. 7, 2024) – Paycom Software, Inc. (NYSE:PAYC) (“Paycom”), a leading provider of comprehensive, cloud-based human capital management software, its board of directors and CEO, Chad Richison, announced the promotion of Chris Thomas, former Chief Operating Officer, to the role of Co-CEO, effective today. Thomas will serve as Co-CEO with Paycom’s founder, President and Chairman, Richison, whose innovative leadership propelled the organization into the S&P 500 within less than six years of becoming a publicly traded company.
Thomas served as Paycom’s COO since September 2023, following his time as Senior Executive Vice President of Operations. Thomas joined Paycom in 2018, and has served in a variety of leadership roles where he has led over 10 departments across Paycom, including client service, learning, banking, human capital management, new client implementation and tax, to name a few. Prior to Paycom, Thomas held numerous senior leadership positions at Love’s, one of the 10 largest privately held companies in the U.S with $26.5 billion in revenue in 2023, according to Forbes.
“Chris is a leader who has been instrumental in helping build Paycom into the world-class HR and payroll software company it is today. We have so much opportunity ahead of us, and I have extreme confidence in Chris as a leader I can share responsibilities with going forward,” said Richison. “This announcement is a natural progression for the company, and further illustrates the trust I have in our leadership team. I’m committed to Paycom and am excited to see the value this creates.”
Richison founded Paycom in 1998, and since then Paycom has changed the way businesses and their employees operate. This evolution is a direct result of innovative, industry-first solutions like online payroll, Employee Self-Service®, Direct Data Exchange®, Manager on-the-Go®, Beti® and, most recently, GONE™.
“I’m honored to be in a position to help lead an organization that has truly revolutionized the HR and payroll software industry,” said Thomas. “Just as Paycom has done historically, we will remain focused on relentlessly pursuing the best customer service and innovation in the industry, because our goal is to deliver the greatest possible ROI to our clients. We are excited about this progression of our organization and the value it will bring to our clients, employees and investors.”
In their Co-CEO roles, Richison’s key focus will be on product innovation and strategy, and Thomas will continue to focus on operating other aspects of the business.
About Paycom
For 25 years, Paycom Software, Inc. (NYSE:PAYC) has simplified businesses and the lives of their employees through easy-to-use HR and payroll technology to empower transparency through direct access to their data. And thanks to its industry-first solution, Beti®, employees now do their own payroll and are guided to find and fix costly errors before payroll submission. From onboarding and benefits enrollment to talent management and more, Paycom’s software streamlines processes, drives efficiencies and gives employees power over their own HR information, all in a single app. Recognized nationally for its technology and workplace culture, Paycom can now serve businesses of all sizes in the U.S. and internationally.
Media Contact:
Jason Bodin
1-800-580-4505
media@paycom.com