THE ULTIMATE SOFTWARE GROUP, INC. DIRECTOR FEE OPTION AGREEMENT FOR NON- EMPLOYEE DIRECTORS
Exhibt 10.27
This AGREEMENT, made as of this [___] day of [___], 20[___], by and between The Ultimate
Software Group, Inc. (the “Company”) and
__________________ (the “Optionee”);
WHEREAS, the Company has adopted an Amended and Restated Nonqualified Stock Option Plan (the
“Plan”) pursuant to which certain employees, officers and directors of the Company and its
Subsidiaries are given the opportunity to acquire or increase their equity ownership in the Company
through the purchase of shares of Common Stock, par value $.01 per share, of the Company (“Stock”);
and
WHEREAS, the Plan provides that each member of the Board of Directors that is not an employee
of the Company (a “Nonemployee Director”) shall receive a grant of a stock option on the first
business day of each calendar quarter in lieu of directors’ fees earned during the preceding
calendar quarter;
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 the number of shares of Stock specified in Appendix A hereto at a purchase price
(the “Option Price”) per share set forth therein. Appendix A may be amended by the Company from
time to time to reflect additional grants, or the exercise of Options, following the date hereof.
Each option identified in Appendix A shall be 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. (Each option identified in Appendix A is hereinafter referred to as
an “Option”.)
3. Vesting Schedule. Each Option shall vest and become exercisable immediately upon
the date of grant. Each Option shall remain exercisable until it terminates as provided in Section
5 hereof.
4. Exercise of Option.
a. Method of Exercise. An 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 an Option, the
Fair Market
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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 an Option is exercised.
b. Delivery of Stock Certificates Upon Exercise. Upon each exercise of an 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 an Option until the Company shall have received such assurances
from its counsel as the Company may reasonably request that the exercise of the 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.
5. Termination of Option. Except as otherwise stated herein or in the Plan, each
Option, to the extent not theretofore exercised, shall terminate on tenth anniversary of its date
of grant. If the Optionee’s service as a member of the Board of Directors is terminated for any
reason other than for “cause” (as defined in the Plan), the Optionee (or, to the extent provided in
the Plan, his legal representative or estate) shall have the right, during the period ending three
years after such termination, to exercise each Option to the extent not theretofore exercised;
provided, however, that such three year period may be extended (but not beyond the
terms of the Options) upon determination of the Committee. If the Optionee is removed from the
Board of Directors for cause, the Optionee’s right to exercise any unexercised portion of an Option
shall immediately terminate and all rights thereunder shall cease.
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 an 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.
Notwithstanding anything herein to the contrary, upon a Change of Control in which shares of
Stock are converted into cash, securities or other property, any outstanding Option may, at the
election of the Committee, be terminated and the Participant would under such circumstances
receive, with respect to each share of the Stock issuable under any Option outstanding at such
time, a payment in cash equal to the excess of the Change of Control Price of the Stock over the
Option Price of the Stock less amounts withheld in satisfaction of applicable federal and state
withholding and other employment taxes. In making any election hereunder, the Committee shall act
in accordance with this Agreement, the Plan and its fiduciary duties.
7. Rights Prior to Exercise of Option. Each Option is nontransferable by the
Optionee, except that (i) in the event of the Optionee’s death an 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, and (ii) on a case by case basis as may be approved by
the Committee in its discretion in accordance with the terms of the Plan, the Participant may,
during his lifetime and subject to
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the prior approval of the Committee at the time of proposed transfer, transfer all or part of an
Option to or for the benefit of a Permitted Transferee in a manner consistent with the
requirements for a Form S-8 registration statement under the Act. The Optionee or his Beneficiary
shall have no rights as a stockholder with respect to the shares subject to an Option until
exercise of the Option and delivery to the Optionee of shares of Stock.
8. Entire Agreement. This Agreement sets forth the entire agreement and understanding
between the parties hereto as to the Options, and merges and supersedes all prior discussions,
agreements (including, without limitation, any stock option agreements) and understandings of every
kind and nature between them with respect to the Options. This Agreement shall not be changed or
amended except by a writing signed by each of the parties hereto.
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.
[SIGNATURE ON FOLLOWING PAGE]
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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: | /s/ Xxxxx Xxxxxx | |||
| Name: Xxxxx Xxxxxx | ||||
| Title: CEO, President and Founder | ||||
| (Signature of Optionee) | ||||
| (Print Name) | ||||
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Appendix A
Date of Grant |
# of Shares Subject to Option | Option Price | ||||||||||
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