THE ULTIMATE SOFTWARE GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This AGREEMENT, made as of this day of , 199 , by
and between The Ultimate Software Group, Inc. (the "Company") and
(the "Optionee");
WHEREAS, the Company has adopted a Nonqualified Stock Option
Plan (the "Plan") pursuant to which certain employees and officers of and
investors in the Company are given the opportunity to acquire or increase their
equity ownership in the Company through the purchase of shares of Class C
Common Stock, par value $.01 per share, of the Company ("Stock"); and
WHEREAS, the Compensation Committee of the Board of Directors
has approved the grant to the Optionee, under the Plan, of the option provided
for herein;
NOW, THEREFORE, in consideration of the premises, it is
agreed by and between the parties as follows:
1. DEFINITION OF TERMS. All terms not defined herein shall
have the meaning given to them in the Plan.
2. GRANT OF OPTION. The Company has granted to the Optionee
the right, privilege and option to purchase shares of Stock at a purchase
price (the "Option Price") of $ per share. This option is subject to
the conditions hereinafter provided and subject to the terms and conditions set
forth in the Plan, a copy of which the Optionee acknowledges having received.
(This option is hereinafter referred to as the "Option".)
3. VESTING SCHEDULE. Subject to the terms of the Plan, the
Option shall vest and become exercisable , provided that the Optionee
remains an employee of the Company on such respective dates. Such installments
shall be cumulative. No Option shall be exercisable after it terminates as
provided in Section 5 hereof.
4. EXERCISE OF OPTION.
a. METHOD OF EXERCISE. The Option shall be
exercised in whole or in part by written notice of exercise delivered to the
Secretary of the Company, at the Company's principal place of business, which
notice shall specify the number of shares being purchased. The notice shall be
accompanied by a check or shares of Stock, or any combination thereof, in
payment of the Option Price pursuant to the Plan for the number of shares
specified in the notice of exercise. As an alternative, payment of the Option
Price shall be deemed satisfied (i) if the Stock is listed on a national
securities exchange, by delivery to the Company of an assignment of a
sufficient amount of the proceeds from the
sale of Stock acquired upon exercise to pay for all of the Stock acquired upon
exercise and an authorization to the broker or selling agent to pay that amount
to the Company, which sale shall be made at the Participant's direction at the
time of exercise, and (ii) if the Stock is not listed on a national securities
exchange, by having the Company withhold a number of shares of Stock otherwise
issuable to the Participant upon exercise of the Option, the Fair Market Value
of which equals the Option Price. For purposes hereof, the Fair Market Value of
the shares of Stock delivered and withheld shall be determined as of the date
on which the Option is exercised.
b. DELIVERY OF STOCK CERTIFICATES UPON EXERCISE.
Upon each exercise of this Option, the Company shall mail or deliver to the
Optionee (or Beneficiary in the case of exercise by a Beneficiary), as promptly
as practicable, a stock certificate or certificates representing the shares
then purchased, and will pay all stamp taxes payable in connection therewith.
Notwithstanding the foregoing, the Company shall not be obligated to deliver
any such certificate or certificates upon exercise of this Option until the
Company shall have received such assurances from its counsel as the Company may
reasonably request that the exercise of this Option and the issuance of shares
of Stock pursuant to such exercise will not violate the Securities Act of 1933
(the "Act"), as amended (as then in effect or any similar statute then in
effect), or the securities laws of any State applicable to such exercise,
issuance or transfer. Such assurances may include (but need not be limited to)
opinions of counsel to the Company, covenants by the holder or transferee to
observe such Act and laws and the placement of a legend on such certificate or
certificates restricting subsequent transfers or sales except in compliance
with such Act and laws.
Further, the Company may make such provisions as it may deem
appropriate for the withholding of any taxes or payment of any taxes which it
determines it may be required to withhold or pay in connection with the Option
(including taxes with respect to Stock received by exercise of the Option). The
obligation of the Company to issue and deliver Stock pursuant to the Option is
conditioned upon the satisfaction of the provisions set forth in the preceding
sentence.
5. TERMINATION OF OPTION. Except as herein otherwise stated,
the Option, to the extent not theretofore exercised, shall terminate on
(which is the tenth anniversary of the Plan).
6. ANTI-DILUTION. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger or
consolidation, or the sale, conveyance, lease or other transfer by the Company
of all or substantially all of its property, or any other change in the
corporate structure or shares of the Company, pursuant to any of which events
the then outstanding shares of Stock are split up or combined, or are changed
into, become exchangeable at the holder's election for, or entitle the holder
thereof to, other shares of stock, or in the case of any other transaction
described in Section 424(a) of the Internal Revenue Code, then the number and
kind of shares subject to the Option and the price per share shall be
proportionately adjusted in accordance with the Plan (or other action
taken with respect to an offering of rights, warrants or options) to prevent
dilution or
enlargement of the Optionee's rights hereunder. Nothing in this paragraph shall
require the issuance of any fractional shares.
7. RIGHTS PRIOR TO EXERCISE OF OPTION. The Option is
nontransferable by the Optionee, except that in the event of the Optionee's
death the Option may be transferred by the Optionee's will or by the laws of
descent and distribution and shall then be exercisable only until the date
applicable under Section 5 above. During the Optionee's lifetime, the Option
shall be exercisable only by the Optionee. The Optionee or his Beneficiary
shall have no rights as a stockholder with respect to the shares subject to the
Option until exercise of the Option and delivery to the Optionee of shares of
Stock.
8. REGISTRATION. The parties understand that the Stock is not
registered pursuant to any Federal or State securities statutes, nor is it
currently listed on any national, regional or local stock exchange.
Promptly following an initial public offering of securities
of the Company under the Securities Act of 1933, the Company will register,
with the Securities and Exchange Commission, the Stock which has been reserved
for issuance under the Plan pursuant to a registration statement Form S-8 (or
on any successor form established by the Securities and Exchange Commission for
purposes of registering securities issued pursuant to employee benefit plans).
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
10. BINDING EFFECT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
THE ULTIMATE SOFTWARE GROUP, INC.
BY:
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TITLE:
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(SIGNATURE OF OPTIONEE)
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(PRINT NAME)
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