STOCK UNIT AWARD AGREEMENT The Ultimate Software Group, Inc. Amended and Restated 2005 Equity and Incentive Plan
Exhibit 10.4
The Ultimate Software Group, Inc.
Amended and Restated 2005 Equity and Incentive Plan
Amended and Restated 2005 Equity and Incentive Plan
This
STOCK UNIT AWARD AGREEMENT (this “Agreement”) made as of this ___ day of
__________________, 20___, between The Ultimate Software Group, Inc., a Delaware corporation (the
“Company”), and
__________________ (the “Participant”), is made pursuant to the terms of The
Ultimate Software Group, Inc. Amended and Restated 2005 Equity and Incentive Plan (the “Plan”).
Section 1. Definitions. Capitalized terms used herein but not defined shall
have the meanings set forth in the Plan. For purposes of this Agreement, the terms “change in
control,” “separation from service,” and “specified employee” shall have the meanings attributed to
such terms under section 409A of the Code and the treasury regulations and other guidance
promulgated thereunder.
Section 2. Stock Unit Award. The Company hereby grants to the Participant an
aggregate Stock Unit Award of [•] stock units (the “Stock Units”). Of this aggregate amount of
Stock Units, [•] Stock Units represent the Participant’s elective deferral of a portion of the
Participant’s Performance Award under the Plan in respect of
fiscal year ______ (the “Elective
Units”), and [•] Stock Units represent the Company’s match of the amounts deferred by the
Participant under the Participant’s Performance Award in respect of fiscal year ___, each as
specified in Appendix A hereto. The Award hereunder 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 Participant acknowledges having received.
Section 3. Vesting Requirements.
(a) Vesting of Award. The Stock Units shall become fully vested on the fourth (4th)
anniversary of the Date of Grant as set forth on Appendix A, and, subject to the provisions
of Section 4 hereof, shall be payable in accordance with Section 5 hereof, subject to the
Participant’s continued employment with the Company or any of its Subsidiaries on such vesting
date.
(b) Full Accelerated Vesting. Notwithstanding the provisions of Section 3(a) hereof,
upon (i) the Participant’s termination of employment as a result of death or Disability, or (ii)
the occurrence of a “change in control” (as described in Section 1 hereof) of the Company, the
Stock Units shall become fully and immediately vested, and shall be payable in accordance with
Section 5 hereof, to the extent that they have not previously been forfeited in accordance with
Section 4 hereof.
(c) Partial Accelerated Vesting. Notwithstanding the provisions of Section 3(a)
hereof, upon the Participant’s termination of employment by the Company without
“Cause” (as defined below), the Stock Units shall become immediately vested as to 1/48th (one
forty-eighth) of the Stock Units hereunder for each complete calendar month of continued
employment by the Participant with the Company or any Subsidiary following the Date of Grant, and
shall be payable in accordance with Section 5 hereof, to the extent that the Stock Units have not
previously been forfeited in accordance with Section 4 hereof. For purposes hereof, termination
for “Cause” shall mean a termination of employment due to (i) embezzlement or misappropriation of
corporate funds, (ii) any acts of dishonesty resulting in conviction for a felony, (iii)
misconduct resulting in material injury to the Company, (iv) a significant violation of Company
policy, (v) willful refusal to perform, or substantial disregard of, the duties properly assigned
to the Participant, or (vi) a significant violation of any contractual, statutory or common law
duty of loyalty to the Company. Notwithstanding the foregoing, if the Participant is a party to
an employment or similar agreement with the Company or any Subsidiary, the term “Cause” shall, for
the purposes of this Agreement, have the same meaning set forth in such employment or similar
agreement if and to the extent such term is defined therein.
Section 4. Termination of Employment. In the event of the Participant’s
termination of employment for any reason other than as described in Section 3(b) hereof, and
subject to the provisions of Section 3(c) hereof, any portion of the Award that has not previously
become vested hereunder shall be forfeited and automatically cancelled, and, subject to the
provisions of Section 5(c) hereof, the Company shall refund to the Participant a cash amount equal
to the lesser of (i) the amount of the Performance Award in
respect of fiscal year ______ foregone
by the Participant as a condition to receiving the forfeited Elective Units (less all applicable
employment taxes withheld at the time of grant), and (ii) the Fair Market Value of the forfeited
Elective Units as of the effective date of such termination of employment.
Section 5. Payment of Award.
(a) General. Subject to the provisions of Section 5(c) hereof, payment with respect
to the vested Stock Units shall be made in shares of Common Stock within 30 days following the
earliest to occur of the following events: (i) the fifth (5th) anniversary of the Date of Grant as
set forth on Appendix A, subject to the provisions of Section 5(d) hereof, (ii) upon the
Participant’s “separation from service” (as described in Section 1 hereof), (iii) upon the
Participant’s death or Disability, and (iv) upon the effective date of a “change in control” (as
described in Section 1 hereof).
(b) Withholding. The Stock Units shall be paid to the Participant after deduction of
applicable withholding taxes in the amount determined by the Committee, which shall be withheld at
the applicable supplemental wage withholding rate, or such other rate as determined by the
Committee, provided that such amount shall not exceed the Participant’s estimated Federal, state
and local tax obligation with respect to payment of the Award. In lieu of the foregoing, the
Committee may allow the Participant to pay the applicable withholding taxes to the Company in cash
or such other form as approved by the Committee.
(c) Payments to “Specified Employees” Under Certain Circumstances. Notwithstanding
the provisions of Sections 4 and 5(a) hereof, if the Participant is deemed a “specified employee”
(as described in Section 1 hereof) at a time when such Participant
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becomes eligible for payments upon a “separation from service” (as described in Section 1 hereof)
with the Company or any Subsidiary, such payments shall be made to the Participant on the date that
is six (6) months following such “separation from service,” or upon the Participant’s death, if
earlier.
(d) Subsequent Payment Elections. Notwithstanding any other provision in this
Agreement to the contrary, in the case of a scheduled payment of the Stock Units in accordance with
Section 5(a)(i) hereof, the Participant may make an election to defer the payment of the Stock
Units if the change to the date of payment is in accordance with the following, as and to the
extent required under section 409A of the Code: (i) the subsequent election does not take effect
until at least 12 months following the date on which such election is made; (ii) the payment under
such subsequent election must be deferred for a period of not less than 5 years from the date such
payment would otherwise have been made; and (iii) such election must be made at least 12 months
prior to the date of the first scheduled payment.
Section 6. Restrictions on Transfer. No portion of the Award hereunder may be
sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to
the Company as a result of forfeiture of the Award as provided herein, unless and until the payment
of the Award in accordance with Section 5 hereof.
Section 7. Limitation of Rights. The Participant shall not have any
privileges of a stockholder of the Company with respect to the shares of Common Stock payable
hereunder, including without limitation any right to vote such shares or to receive dividends or
other distributions in respect thereof, until the date of the issuance to the Participant of a
stock certificate evidencing such Common Stock. Nothing in this Agreement shall confer upon the
Participant any right to continue as an employee of the Company or any Subsidiary or to interfere
in any way with any right of the Company to terminate the Participant’s employment at any time.
Section 8. Changes in Capitalization. The Award shall be subject to the
provisions of Section 4.2 of the Plan relating to adjustments for changes in corporate
capitalization.
Section 9. Notices. Any notice hereunder by the Participant shall be given to
the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the
Secretary of the Company. Any notice hereunder by the Company shall be given to the Participant in
writing and such notice shall be deemed duly given only upon receipt thereof at such address as the
Participant may have on file with the Company.
Section 10. Construction. This Agreement and the Award hereunder are granted
by the Company pursuant to the Plan and are in all respects subject to the terms and conditions of
the Plan. The Participant hereby acknowledges that a copy of the Plan has been delivered to the
Participant and accepts the Stock Units hereunder subject to all terms and provisions of the Plan,
which is incorporated herein by reference. In the event of a conflict or ambiguity between any
term or provision contained herein and a term or provision of the Plan, the Plan will govern and
prevail. The construction of and decisions under the Plan and this Agreement are vested in the
Committee, whose determinations shall be final, conclusive and binding upon the Participant.
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Section 11. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, excluding the choice of law rules thereof.
Section 12. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall constitute one and
the same instrument.
Section 13. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the legatees, distributees, and personal representatives of the Participant and the
successors of the Company.
Section 14. Entire Agreement. This Agreement and the Plan
constitute the entire agreement between the parties with respect to the subject matter hereof and
thereof, merging any and all prior agreements.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company and the Participant have executed this Award Agreement
effective as of the date first above written.
| THE ULTIMATE SOFTWARE GROUP, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| PARTICIPANT |
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| By: | ||||
| Name: | ||||
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Appendix A
| Number of Stock | ||||||
| Units Subject to | ||||||
| Source of Award | Date of Grant | Award | ||||
1.
|
Participant Deferral of 2005 Performance Award (the “Elective Units”) | |||||
2.
|
Company Match of Deferred Amount under 2005 Performance Award | |||||
A-1
