Exhibit 10.2
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
The Ultimate Software Group, Inc.
Amended and Restated 2005 Equity and Incentive Plan
     This Award Agreement (the “Agreement”) made as of this ___ day of
__________________, 20___, between The Ultimate Software Group, Inc., a Delaware
corporation (the “Company”), and __________________ (the “Optionee”), is made
pursuant to the terms of The Ultimate Software Group, Inc. Amended and Restated
2005 Equity and Incentive Plan (the “Plan”). Capitalized terms used herein but
not defined shall have the meanings set forth in the Plan.
     Section 1. Grant of Option. The Company has granted to the Optionee a
non-qualified stock option for the purchase of the number of shares of common
stock of the Company, par value $.01 per share (the “Common Stock”), specified
in Appendix A hereto (the “Option Shares”). Appendix A may be amended by the
Company from time to time to reflect additional grants, or the exercise of an
option, 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.”)
     Section 2. Exercise Price. The exercise price per share of each Option
shall be the Fair Market Value of a share of the Common Stock on the Date of
Grant (as defined in the Plan) (the “Option Price”) as set forth on Appendix A
hereto.
     Section 3. Vesting of Options.
     (a) Vesting Schedule. Each Option shall vest and become exercisable in
equal annual installments, each of which shall relate to 25% of the number of
shares of Common Stock subject to such Option, on the respective Dates of Grant
thereof set forth in Appendix A and each of the first three anniversaries
thereof, subject to the Optionee’s continued employment with the Company or any
Subsidiary on each such vesting date.
     (b) Acceleration Events. Notwithstanding the foregoing, each Option shall
become fully and immediately vested and exercisable upon (i) the Optionee’s
termination of employment as a result of death or Disability, or (ii) the
occurrence of a Change in Control of the Company, provided that the respective
Option remains outstanding immediately prior to the effective date of the Change
in Control.
     Section 4. Option Term. Option Shares that become vested pursuant to
Section 3 hereof may be purchased at any time on or after the date of such
vesting and prior to the expiration of the term of the Option to which they
relate (each, an “Option Term”). An Option Term shall expire on the day prior to
the tenth anniversary of the applicable Date of Grant, unless earlier

 

--------------------------------------------------------------------------------

 

terminated in accordance with the terms of the Plan or upon termination of the
Optionee’s employment with the Company or any Subsidiary (“Termination of
Employment”) in accordance with Section 5 hereof. Upon the expiration of an
Option Term, any unexercised Option Shares underlying such expiring Option shall
be cancelled and shall be of no further force or effect.
     Section 5. Termination of Employment.
     (a) General. Subject to the provisions of Sections 5(b) and 5(c) hereof, in
the event of a Termination of Employment for any reason prior to the date that
all Option Shares become vested in accordance with Section 3 hereof, the
Optionee shall forfeit the Optionee’s interest in any Option Shares that have
not yet become vested, which shall be cancelled and be of no further force or
effect. In the event of a Termination of Employment for any reason following
vesting, the Optionee shall retain the right to purchase any Option Shares that
have previously become vested until the expiration of 90 days following the
effective date of such Termination of Employment (or the expiration of the
applicable Option Term, if earlier); provided, however, that such 90-day period
may be extended (but not beyond the applicable Option Term) upon determination
of the Committee.
     (b) Cause. Notwithstanding the provisions of Section 5(a) hereof, in the
event of a Termination of Employment for “Cause” (as defined below), the
Optionee’s right to purchase any Option Shares, whether or not vested, shall
immediately terminate and all rights thereunder shall cease. 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 Optionee, or (vi) a significant violation of any contractual,
statutory or common law duty of loyalty to the Company. Notwithstanding the
foregoing, if the Optionee 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.
     (c) Death or Disability. Notwithstanding the provisions of Section 5(a)
hereof, in the event of a Termination of Employment as a result of death or
Disability, all unvested Options hereunder shall become fully and immediately
vested and exercisable in accordance with Section 3(b) hereof, and the Optionee,
or the Optionee’s legal representative, shall retain the right to purchase the
Option Shares in accordance with the terms hereof until the expiration of
12 months following the date of such Termination of Employment (or the
expiration of the applicable Option Term, if earlier); provided, however, that
such 12-month period may be extended (but not beyond the applicable Option Term)
upon determination of the Committee.
     Section 6. Procedure for Exercise.
     (a) Notice of Exercise. An Option may be exercised, in whole or in part,
and whole Option Shares may be purchased, at any time during the term thereof by
notice to the

2

--------------------------------------------------------------------------------

 

Company in the form required by the Committee, together with payment of the
aggregate Option Price therefor and any applicable withholding taxes.
     (b) Payment of Option Price. Payment of the Option Price shall be made:
(i) in cash or by cash equivalent acceptable to the Committee, (ii) by payment
in shares of Common Stock that have been held by the Optionee for at least six
months (or such other period as the Committee may deem appropriate for purposes
of applicable accounting rules), valued at the Fair Market Value of such shares
on the date of exercise, (iii) through an open-market, broker-assisted
transaction, or (iv) by a combination of the foregoing methods. In addition and
at the time of exercise, if and to the extent required by applicable law, the
Optionee shall remit to the Company under procedures specified by the Company
all required Federal, state and local withholding tax amounts in any manner as
permitted above for payment of the Option Price.
     (c) 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 of Common Stock 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
Common 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.
     Section 7. Investment Representation. Upon the exercise of an Option at a
time when there is not in effect a registration statement under the Act relating
to the shares of Common Stock, by virtue of such exercise, the Optionee shall be
deemed to represent and warrant to the Company that the shares of Common Stock
shall be acquired for investment and not with a view to the distribution
thereof, and not with any present intention of distributing the same, and the
Optionee shall provide the Company with such further representations and
warranties as the Company may require in order to ensure compliance with
applicable Federal and state securities, blue sky and other laws. No shares of
Common Stock shall be acquired unless and until the Company and/or the Optionee
shall have complied with all applicable Federal or state registration, listing
and/or qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction, unless the Committee has received
evidence satisfactory to it that the Optionee may acquire such shares pursuant
to an exemption from registration under the applicable securities laws. Any
determination in this connection by the Committee shall be final, binding and
conclusive. The Company reserves the right to legend any certificate for shares
of Common Stock, conditioning sales of such shares upon compliance with
applicable federal and state securities laws and regulations.
     Section 8. Limitation of Rights. The Optionee shall not have any privileges
of a stockholder of the Company with respect to any Option Shares, including
without limitation any

3

--------------------------------------------------------------------------------

 

right to vote such Option Shares or to receive dividends or other distributions
in respect thereof, until the date of the issuance to the Optionee of a stock
certificate evidencing the Common Stock. Nothing in this Agreement or an Option
shall confer upon the Optionee any right to continued employment with the
Company or to interfere in any way with the right of the Company to terminate
the Optionee’s employment at any time.
     Section 9. Adjustments. All Options granted hereunder shall be subject to
the provisions of Section 4.2 of the Plan relating to adjustments for
recapitalizations, reclassifications and other changes in the Company’s
corporate structure.
     Section 10. Transfer Restrictions. No Option may be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way by the Optionee,
except by will or by the laws of descent and distribution; provided, however,
that the Optionee may, during the Optionee’s lifetime and subject to 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 the Optionee’s “family members” (as
defined in a manner consistent with the rules applicable to registration
statements on Form S-8 promulgated under the Securities Act of 1933), which
include certain trusts and other entities established for the benefit of the
Optionee and/or the Optionee’s family members. Subsequent transfers of an Option
shall be prohibited other than by will or the laws of descent and distribution
upon the death of the transferee. In the event that an Optionee becomes legally
incapacitated, an Option shall be exercisable by the Optionee’s legal guardian,
committee or legal representative. If the Optionee dies, an Option shall
thereafter be exercisable by the legatee of such Option under the Optionee’s
will or by the Optionee’s estate in accordance with the Optionee’s will or the
laws of descent and distribution, in each case in the same manner and to the
same extent that such Option was exercisable by the Optionee on the date of the
Optionee’s death. An Option shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of an Option contrary to the provisions hereof, and the levy
of any execution, attachment or similar process upon an Option, shall be null
and void and without effect.
     Section 11. Notices. Any notice hereunder by the Optionee 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 Optionee in writing and such notice shall be
deemed duly given only upon receipt thereof at such address as the Optionee may
have on file with the Company.
     Section 12. Construction. All Options hereunder are granted pursuant to the
Plan and are in all respects subject to the terms and conditions of the Plan.
The Optionee hereby acknowledges that a copy of the Plan has been delivered to
the Optionee and accepts the Options 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 are vested in the Committee, whose
determinations shall be final, conclusive and binding upon the Optionee.

4

--------------------------------------------------------------------------------

 

     Section 13. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Delaware, without giving effect to
the choice of law principles thereof.
     Section 14. 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 15. 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.
     Section 16. 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]

5

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement effective as of the date first above written.

            THE ULTIMATE SOFTWARE GROUP, INC.

      By:           Name:           Title:               OPTIONEE
            Signature of Optionee               Print Name:      

6

--------------------------------------------------------------------------------

 

Appendix A

              Number of Shares     Date of Grant   Subject to Option   Option
Price
 
       
 
       

A-1