Exhibit 97.1
Paycom Software, Inc.
Compensation Recovery (Clawback) Policy
(As adopted October 30, 2023)
This Compensation Recovery Policy (this “Policy”) of Paycom Software, Inc., a Delaware corporation (the “Company”), is hereby adopted as of October 30, 2023, by the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) in compliance with Section 10D of the Exchange Act and Section 303A.14 of the New York Stock Exchange (the “NYSE”) Listed Company Manual (“Section 303A.14”), to be effective October 2, 2023 (the “Effective Date”). Certain terms shall have the meanings set forth in “Section 3. Definitions” below.
Section 1. Recovery Requirement.
Subject to Section 4 of this Policy, in the event the Company is required to prepare an Accounting Restatement, then the Committee hereby directs the Company, to the fullest extent permitted by governing law, to recover from each Executive Officer the amount, if any, of Erroneously Awarded Compensation received by such Executive Officer, with such recovery occurring reasonably promptly after the Restatement Date relating to such Accounting Restatement.
The Committee may effect recovery in any manner consistent with applicable law including, but not limited to, (i) seeking reimbursement of all or part of Erroneously Awarded Compensation previously received by an Executive Officer, together with any expenses reasonably incurred in connection with the recovery of such Erroneously Awarded Compensation; (ii) cancelling prior grants of Incentive-Based Compensation, whether vested or unvested, restricted or deferred, or paid or unpaid, and through the forfeiture of previously vested equity awards; (iii) cancelling or setting-off against planned future grants of Incentive-Based Compensation; (iv) deducting all or any portion of such Erroneously Awarded Compensation from any other remuneration payable by the Company to such Executive Officer; and (v) any other method authorized by applicable law or contract.
The Company’s right to recovery pursuant to this Policy is not dependent on if or when the Accounting Restatement is filed with the Securities and Exchange Commission.
Section 2. Incentive-Based Compensation Subject to this Policy.
This Policy applies to all Incentive-Based Compensation received by each current or former Executive Officer on or after the Effective Date:
This Policy shall apply and govern Incentive-Based Compensation received by any Executive Officer, notwithstanding any contrary or supplemental term or condition in any document, plan or agreement including, without limitation, any employment contract, indemnification agreement, equity or bonus agreement, or equity or bonus plan document.
Section 3. Definitions.
For purposes of this Policy, the following terms shall have the meanings set forth below:
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Section 4. Exceptions to Recovery.
Notwithstanding the foregoing, the Company is not required to recover Erroneously Awarded Compensation to the extent that the Committee has made a determination that recovery would be impracticable and that:
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Section 5. Right to Adjust Unvested Incentive-Based Compensation.
If the Committee, in its sole discretion, determines that the performance metrics of outstanding but unvested Incentive-Based Compensation were established using Financial Reporting Measures that were impacted by the Accounting Restatement, the Committee, in its sole discretion, may adjust such Financial Reporting Measures or modify such Incentive-Based Compensation, in such manner as the Committee determines, in its sole discretion, is appropriate.
Section 6. No Right to Indemnification or Insurance.
The Company shall not indemnify any Executive Officer against the loss of Erroneously Awarded Compensation or losses arising from any claims relating to the Company’s enforcement of this Policy. In addition, the Company shall not pay, or reimburse any Executive Officer for, any premiums for a third-party insurance policy purchased by the Executive Officer or any other party that would fund any of the Executive Officer’s potential recovery obligations under this Policy.
Section 7. Interpretation and Amendment of this Policy.
The Committee, in its discretion, shall have the sole authority to interpret and make any determinations regarding this Policy. Any interpretation, determination, or other action made or taken by the Committee shall be final, binding, and conclusive on all interested parties. The determination of the Committee need not be uniform with respect to one or more persons subject to this Policy. The Committee may amend this Policy from time to time in its discretion and shall amend the Policy to comply with applicable law and any rules or standards adopted by the NYSE or any national securities exchange on which the Company’s securities are then listed. The Committee may terminate this Policy at any time.
Section 8. Other Recoupment Rights.
The Company intends that this Policy will be applied to the fullest extent of the law. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement (including, without limitation, “Incentive-Based Compensation Recovery Agreements” entered into by the Company) and any other remedies available to the Company under applicable law.
Section 9. Successors.
This Policy shall be binding and enforceable against all Executive Officers and their respective beneficiaries, heirs, executors, administrators or other legal representatives.
Section 10. Filing Requirement.
The Company shall file this Policy as an exhibit to its Annual Report on Form 10-K.
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