UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Check the appropriate box:

THE ULTIMATE SOFTWARE GROUP, INC.
(Name of Registrant as Specified In Its Charter)

   
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED MARCH 11, 2019

You are cordially invited to attend a special meeting of the stockholders of The Ultimate Software Group, Inc. (“Ultimate,” “we,” “us” or “our”), which will be held on [___], at [___], local time, at [_____].

At the special meeting, our stockholders will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger that we entered into on February 3, 2019, which we refer to as the “merger agreement,” providing for the acquisition of The Ultimate Software Group, Inc. by Unite Parent Corp. in a transaction that we refer to as the “merger.” If the merger agreement is adopted and the merger is completed, each share of our common stock (other than certain shares specified in the merger agreement) will be converted into the right to receive $331.50 per share in cash, without interest and subject to any required withholding taxes, representing a premium of approximately 32% over the trailing 30-day volume weighted average price of our common stock for the period ended February 1, 2019, the last trading day prior to the execution of the merger agreement.

The Ultimate board of directors unanimously recommends that our stockholders vote “FOR” the proposal to adopt the merger agreement and “FOR” the other matters to be considered at the special meeting.

The enclosed proxy statement describes the merger agreement, the merger and related matters, and attaches a copy of the merger agreement. We urge stockholders to read the entire proxy statement carefully, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important. The merger cannot be completed unless a majority of the outstanding shares of our common stock entitled to vote on the adoption of the merger agreement vote in favor of the proposal to adopt the merger agreement. If you fail to vote in person or by proxy, or fail to instruct your broker on how to vote, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

On behalf of the entire board of directors, I want to thank you for your continued support.

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger, the merger agreement or the other transactions contemplated thereby or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated [____], and is first being mailed to stockholders on or about [_____].

THE ULTIMATE SOFTWARE GROUP, INC.
   
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Meeting Agenda:

To consider and vote upon the following proposals:

The Ultimate Software Group, Inc. board of directors has unanimously determined that the merger is advisable, fair to, and in the best interests of, the Company and its stockholders, and unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Ultimate board of directors unanimously recommends that the stockholders of Ultimate vote (1) “FOR” the proposal to adopt the merger agreement, (2) “FOR” the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, and (3) “FOR” the proposal to approve the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies. If you sign, date and return your proxy card without indicating how you wish to vote on a proposal, your proxy will be voted “FOR” each of the foregoing proposals in accordance with the recommendation of the Ultimate board of directors.

Your vote is important, regardless of the number of shares of common stock you own. The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of common stock entitled to vote thereon and is a condition to the completion of the merger. The approval of the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the approval of the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies, each requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the special meeting and entitled to vote thereon, but approval of these two proposals is not a condition to the completion of the merger. If you fail to vote in person or by proxy, or fail to instruct your broker, bank or other nominee on how to vote, the shares of common stock that you own will not be counted as present at the special meeting for purposes of determining whether a quorum is present at the special meeting, which will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

Under Delaware law, stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of the Company as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for an appraisal before the vote on the proposal to adopt the merger agreement and comply with the other Delaware law procedures summarized in the accompanying proxy statement. See the section of this proxy statement entitled “Appraisal Rights.”

You may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

Only holders of record of Ultimate common stock as of the close of business on [         ], the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting.

Before voting your shares, we urge you to, and you should, read the entire proxy statement carefully, including its annexes and the documents incorporated by reference in the proxy statement. If you have any questions or need assistance in submitting a proxy or your voting instructions, please contact our proxy solicitor:

MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Call Toll-free: (800) 322-2885
(212) 929-5500 (Call Collect)
Email: proxy@mackenziepartners.com

TABLE OF CONTENTS

SUMMARY

This summary highlights selected information contained in this proxy statement, including with respect to the merger agreement and the merger. We encourage you to, and you should, read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement, as this summary may not contain all of the information that may be important to you in determining how to vote. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions under the section of this proxy statement entitled “Where You Can Find Additional Information.”

The Companies

The Ultimate Software Group, Inc.

With offices in the United States, Canada, France, Germany, England, and Singapore, The Ultimate Software Group, Inc. (referred to as “Ultimate,” the “Company,” “we,” “our” or “us”) (NASDAQ: ULTI) is a leading provider of cloud-based human capital management solutions—often referred to as human capital management (“HCM”)—and employee experience solutions. Ultimate’s UltiPro product suite is a comprehensive, engaging solution that has human resources (“HR”) and payroll at its core and includes benefits management, talent acquisition, talent management, time management, and global people management functionality available in 14 languages with 61 country-specific localizations. Ultimate also offers a-la-carte employee experience solutions, such as HR Service Delivery and “Perception,” an employee-sentiment analysis solution.

Ultimate’s solutions are delivered via software-as-a-service (“SaaS”), now more commonly known as cloud computing, to organizations with employees in the United States, Canada, Europe, Asia Pacific, and other global locations. At the close of 2018, we had more than 5,600 organizations as customers and more than 48 million people records in our cloud environment. We attained our leadership position, we believe, through our exclusive focus on solutions that help companies manage their employees in an engaging way. Key factors in our success have been our people-centric product design, cloud technology, and strong customer relationships nurtured by our services team and throughout the Ultimate organization.

Additional information about Ultimate is contained in its public filings, certain of which are incorporated by reference herein. See the sections of this proxy statement entitled “Where You Can Find Additional Information” and “The Companies — The Ultimate Software Group, Inc.”

Unite Parent Corp.

Unite Parent Corp., referred to as “Parent,” is a Delaware corporation that was formed on January 28, 2019, solely for the purpose of engaging in the transactions contemplated by the merger agreement, and has not engaged in any business activities other than in connection with its formation, the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger. See the section of this proxy statement entitled “The Companies — Unite Parent Corp.”

Unite Merger Sub Corp.

Merger Sub is a Delaware corporation and an indirect wholly owned subsidiary of Parent that was formed on January 28, 2019, solely for the purpose of engaging in the transactions contemplated by the merger agreement, and has not engaged in any business activities other than in connection with its formation, the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger. Upon completion of the merger, Merger Sub will merge with and into Ultimate and will cease to exist. See the section of this proxy statement entitled “The Companies — Unite Merger Sub Corp.”

Parent and Merger Sub were each formed by the H&F Entities (as defined in this proxy statement).

In connection with the transactions contemplated by the merger agreement, the H&F Entities, the Blackstone Entities, the GIC Entity, CPPIB and the JMI Entities (each as defined in this proxy statement) have committed to capitalize Parent, on the date of the closing of the merger, with an aggregate equity subscription of up to $8.133 billion, subject to the terms and conditions set forth in the equity commitment letters. See the section of this proxy statement entitled “The Companies.”

The Special Meeting

Date, Time and Place of the Special Meeting

The special meeting of stockholders of Ultimate (referred to in this proxy statement as the “special meeting”) will be held at [         ] on [            ], at [      ], local time.

Purposes of the Special Meeting

At the special meeting, Ultimate stockholders will be asked to consider and vote on the following proposals:

Our stockholders must adopt the merger agreement for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. See the sections of this proxy statement entitled “The Special Meeting” and “The Merger Agreement.”

We do not expect that any matters other than the proposals set forth above will be brought before the special meeting. If, however, such a matter is properly presented at the special meeting or any adjournment or postponement thereof, the persons appointed as proxies will have discretionary authority to vote the shares represented by duly executed proxies.

Record Date, Notice and Quorum

The holders of record of Ultimate common stock as of the close of business on [            ], the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. At the close of business on the record date, [            ] shares of Company common stock were outstanding and entitled to vote at the special meeting.

The presence at the special meeting, in person or represented by proxy, of the holders of a majority of the voting power of the shares of capital stock of the Company issued and outstanding on the record date will constitute a quorum for purposes of the special meeting. A quorum is necessary to transact business at the special meeting. If a quorum is not present at the special meeting, we expect that the special meeting will be adjourned to a later date.

Abstentions will be counted as shares present for purposes of determining the presence of a quorum. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your broker, bank or other nominee will not vote on your behalf with respect to any of the proposals, and your shares will not be counted as present at the special meeting for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

Required Vote

Each share of common stock outstanding at the close of business on the record date is entitled to one vote on each of the proposals to be considered at the special meeting.

For the Company to complete the merger, Ultimate stockholders holding a majority of the shares of Company common stock outstanding at the close of business on the record date and entitled to vote on the adoption of the merger agreement must vote “FOR” the proposal to adopt the merger agreement. An abstention with respect to the proposal to adopt the merger agreement, or a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf), will have the same effect as a vote “AGAINST” this proposal.

Approval of each of (1) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and (2) the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies, requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the special meeting and entitled to vote thereon, but is not a condition to the completion of the merger. An abstention with respect to either proposal will have the same effect as a vote “AGAINST” these proposals. A failure to return your proxy card or otherwise vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf) will have no effect on these proposals, assuming a quorum is present.

The Company’s directors and executive officers have informed us that they intend to vote their shares of Company common stock in favor of the proposal to adopt the merger agreement and the other proposals to be considered at the special meeting, although they have no obligation to do so. As of the record date, our directors and executive officers owned and were entitled to vote, in the aggregate, approximately [         ] shares of Company common stock, or approximately [         ]% of the outstanding shares of Company common stock entitled to vote at the special meeting.

Proxies; Revocation

Any Ultimate stockholder of record entitled to vote at the special meeting may submit a proxy by telephone or over the Internet, by returning the enclosed proxy card, or by attending the special meeting and voting in person. If your shares of common stock are held in “street name” by your broker, bank or other nominee, you should instruct your broker, bank or other nominee on how to vote your shares using the instructions provided by your broker, bank or other nominee.

Any proxy may be revoked at any time prior to its exercise by submitting a properly executed, later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Secretary at The Ultimate Software Group, Inc., 2000 Ultimate Way, Weston, Florida 33326, or by attending the special meeting and voting in person.

The Merger

You will be asked to consider and vote upon the proposal to adopt the merger agreement. A copy of the merger agreement is attached to this proxy statement as Annex A. The merger agreement provides, among other things, that at the effective time of the merger (referred to in this proxy statement as the “effective time”), Merger Sub will be merged with and into the Company, with the Company surviving the merger (referred to in this proxy statement as the “surviving corporation”). In the merger, each share of common stock, par value $0.01 per share, of the Company (referred to in this proxy statement as the “common stock,” the “Company common stock” or the “Ultimate common stock”) issued and outstanding immediately before the effective time (other than certain shares specified in the merger agreement) will be converted into the right to receive $331.50 per share in cash (referred to in this proxy statement as the “merger consideration”), without interest and subject to any required withholding taxes. Upon completion of the merger, the Company will be an indirect wholly owned subsidiary of Parent, the Company common stock will no longer be publicly traded and the Company’s existing stockholders will cease to have any ownership interest in the Company.

Treatment of Company Equity Awards

Treatment of Company Restricted Stock Awards and Company Restricted Stock Unit Awards. Each Company restricted stock award and each Company restricted stock unit award that is outstanding immediately prior to the effective time, whether granted prior to the date of the merger agreement or granted after the date of the merger agreement as permitted by the merger agreement, will, as of the effective time, become fully vested and nonforfeitable, and will be cancelled and converted automatically into the right to receive an amount in cash equal to the merger consideration in respect of each vested share of Company common stock subject to such restricted stock award or restricted stock unit award, subject to applicable tax withholding.

Treatment of Stock Options. The merger agreement provides that each Company stock option, whether vested or unvested, that is outstanding and unexercised immediately prior to the effective time will, as of the effective time, become fully vested (to the extent unvested) and be converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of the merger consideration over the exercise price per share of

such option, multiplied by (ii) the total number of shares of Company common stock subject to such Company stock option, subject to applicable tax withholding. The merger agreement provides that any Company stock option that has an exercise price per share of Company common stock that is greater than or equal to the merger consideration will be cancelled for no consideration. While the merger agreement provides for the foregoing treatment of each Company stock option that is outstanding immediately prior to the effective time, there are no Company stock options outstanding as of the date of this proxy statement or expected to be outstanding at the effective time.

Conditions to Completion of the Merger

Each party’s obligation to complete the merger is subject to the satisfaction or waiver at or prior to the effective time of the following conditions:

The respective obligations of Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver by Parent at or prior to the effective time of the following additional conditions:

The obligation of the Company to complete the merger is subject to the satisfaction or waiver by the Company at or prior to the effective time of the following additional conditions:

No party may rely, either as a basis for not completing the merger or any of the other transactions contemplated by the merger agreement or terminating the merger agreement and abandoning the merger, on the failure of a condition to closing set forth in the merger agreement to be satisfied if such failure was caused by such party’s failure to act in good faith or to use the efforts to cause the closing of the merger to occur as required by the merger agreement.

Recommendation of the Ultimate Board of Directors

After careful consideration, the Ultimate board of directors unanimously determined that the merger is advisable, fair to, and in the best interests of, the Company and its stockholders, and unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Ultimate board of directors unanimously recommends that Ultimate stockholders vote “FOR” the proposal to adopt the merger agreement at the special meeting and “FOR” the other proposals to be considered at the special meeting.

Reasons for the Merger

For a description of the reasons considered by the Ultimate board of directors in resolving to recommend in favor of the adoption of the merger agreement, see the section of this proxy statement entitled “The Merger — Reasons for the Merger; Recommendation of the Ultimate Board of Directors.”

Opinion of Financial Advisor to the Company

On February 3, 2019, at a meeting of the Company’s board of directors, Goldman Sachs rendered its oral opinion, subsequently confirmed in writing, that, as of February 3, 2019 and based upon and subject to the factors and assumptions set forth therein, the $331.50 in cash per share of the Company’s common stock to be paid to the holders of the Company’s common stock (other than Parent and its affiliates) pursuant to the merger agreement, was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated February 3, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Company’s board of directors in connection with its consideration of the merger. The Goldman Sachs opinion does not constitute a recommendation as to how any holder of the shares of the Company’s common stock should vote with respect to the merger or any other matter. Pursuant to an engagement letter between the Company and Goldman Sachs, the Company has agreed to pay Goldman Sachs a transaction fee that, based on information available as of the date of the announcement of the merger, is estimated to be approximately $72.1 million, all of which is contingent upon consummation of the merger.

Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendations of the Ultimate board of directors with respect to the merger, Ultimate’s stockholders should be aware that the directors and executive officers of Ultimate have certain interests, including financial interests, in the merger that may be different from, or in addition to, the interests of Ultimate’s stockholders generally, including the continued employment of certain executive officers following the closing of the merger and the right to continued indemnification and insurance coverage. The Ultimate board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement, and in making its recommendation that Ultimate’s stockholders vote in favor of the adoption of the merger agreement. These interests are described in more detail below, and certain of them are quantified in the narrative and the tables below. The transactions contemplated by the merger agreement will be a “change in control,” “change of control” or term of similar meaning for purposes of the Company’s executive compensation and benefit plans and agreements described in this proxy statement. See the section of this proxy statement entitled “Interests of the Company’s Directors and Executive Officers in the Merger.”

Limited Guarantees

Concurrently with the execution of the merger agreement, the H&F Entities, the Blackstone Entities, the GIC Entity, CPPIB and the JMI Entities (in such capacity, referred to in this proxy statement collectively as the “guarantors”) entered into limited guarantees (referred to in this proxy statement collectively as the “limited guarantees”), pursuant to which the guarantors agreed to guarantee, severally and not jointly or jointly and severally, on the terms and conditions set forth in the limited guarantees, Parent’s obligation to pay any termination fee, reimburse and indemnify the Company with respect to certain expenses in connection with the merger and pay certain other amounts, in an amount not to exceed $570 million in the aggregate. See the section of this proxy statement entitled “The Merger — Limited Guarantees.”

Financing

In connection with the execution of the merger agreement, the H&F Entities, the Blackstone Entities, the GIC Entity, CPPIB and the JMI Entities (in such capacity, referred to in this proxy statement collectively as the “equity financing sources”) have committed to capitalize Parent, on the date of the closing of the merger, with an aggregate equity subscription of up to $8.133 billion, subject to the terms and conditions set forth in equity commitment letters, each dated as of February 3, 2019 (each referred to in this proxy statement as an “equity commitment letter” and, collectively, the “equity commitment letters”).

In connection with the execution of the merger agreement, Parent entered into a commitment letter, dated February 3, 2019 and amended and restated on February 25, 2019 (referred to in this proxy statement as the “debt commitment letter”), with Credit Suisse AG (referred to in this proxy statement as “Credit Suisse”), Nomura Securities International, Inc. (referred to in this proxy statement as “Nomura”), Bank of America Merrill Lynch, Ares Capital Management LLC (referred to in this proxy statement as “Ares”) and GSO Capital Partners LP and its affiliates (collectively referred to in this proxy statement as “GSO”) (each of the foregoing, in certain cases, acting through its respective appropriate affiliates or branches) (collectively referred to in this proxy statement as the “commitment parties”), pursuant to which (x) Credit Suisse, Nomura, Bank of America Merrill Lynch and Ares committed, upon certain terms and subject to certain conditions, to (i) lend Merger Sub (and after giving effect to the merger, Ultimate as the surviving corporation) (referred to in this proxy statement as the “borrower”) $2.3 billion in aggregate principal amount in the form of senior secured first lien term loans in connection with the debt financing of the amounts payable pursuant to the merger agreement and the transactions contemplated thereby and (ii) make available to the borrower a senior secured first lien revolving credit facility in an aggregate principal amount of up to $200 million and (y) Ares and GSO have committed, upon certain terms and subject to certain conditions, to lend the borrower $900 million in aggregate principal amount in the form of senior secured second lien term loans in connection with the debt financing of the amounts payable pursuant to the merger agreement and the transactions contemplated thereby (such debt financing, collectively, is referred to in this proxy statement as the “debt financing”). We have agreed to use our reasonable best efforts to, and to cause our subsidiaries to use their reasonable best efforts to, and to use our reasonable best efforts to cause our and our subsidiaries’ representatives to, provide all cooperation reasonably requested by Parent in connection with the arrangement of the debt financing, subject to the terms set forth in the merger agreement.

For more information, see “The Merger Agreement — Debt Financing and Debt Financing Cooperation.”

Material U.S. Federal Income Tax Consequences of the Merger

The receipt of cash in exchange for shares of common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder (as defined in the section of this proxy statement entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger”) who receives cash in exchange for shares of common stock pursuant to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder’s adjusted tax basis in such shares. You should consult your own tax advisor regarding the particular tax consequences to you of the exchange of shares of common stock for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws). See the section of this proxy statement entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”

Regulatory Approvals

HSR Clearance. Under the HSR Act and related rules and regulations, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division of the United States Department of Justice (referred to in this proxy statement as the “Antitrust Division”) and the United States Federal Trade Commission (referred to in this proxy statement as the “FTC”) and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or termination of the applicable waiting period under the HSR Act. The Company and Parent filed their respective Notification and Report Forms with the Antitrust Division and the FTC on February 8, 2019, and received early termination of the HSR waiting period on February 26, 2019.

Germany Antitrust Clearance. Pursuant to the GWB, certain transactions, including the merger, may not be completed until filings are made with the Federal Cartel Office (referred to in this proxy statement as the

“FCO”) and the transactions are cleared by the FCO or the waiting period has expired under the GWB. German counsel filed with the FCO on behalf of Parent and the Company on February 25, 2019.

Commitments to Obtain Approvals. The Company and Parent are each required to use reasonable best efforts to take all actions necessary to complete the merger, including cooperating and doing all things necessary, proper or advisable to obtain regulatory approvals. This includes, if required by regulatory authorities, (1) agreeing to sell, divest or dispose of any assets or businesses of Parent, the Company, or their respective subsidiaries and (2) taking or agreeing to take other actions that after the closing date limit Parent’s or its subsidiaries’ (including the surviving corporation’s) freedom of action with respect to, or its ability to retain, one or more businesses, product lines or assets of Parent or its subsidiaries (including the surviving corporation). However, the Company will only be required to take or commit to take such actions if they are binding on the Company only if and when the closing of the merger occurs. See the section of this proxy statement entitled “The Merger Agreement — Efforts to Complete the Merger — Antitrust Matters.”

Appraisal Rights

Under Section 262 of the General Corporation Law of the State of Delaware (referred to in this proxy statement as the “DGCL”), Ultimate stockholders who do not vote for the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares in cash as determined by the Delaware Court of Chancery, but only if they comply fully with all of the applicable requirements of Section 262 of the DGCL, which are summarized in this proxy statement. Any appraisal amount determined by the court could be more than, the same as, or less than the value of the merger consideration. Any stockholder intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to the Company before the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Failure to follow exactly the procedures specified in Section 262 of the DGCL will result in the loss of appraisal rights. Because of the complexity of Section 262 of the DGCL relating to appraisal rights, if you are considering exercising your appraisal rights, we encourage you to seek the advice of your own legal counsel. The discussion of appraisal rights contained in this proxy statement is not a full summary of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL that is attached to this proxy statement as Annex C.

Delisting and Deregistration of Company Common Stock

If the merger is completed, the Company common stock will be delisted from the NASDAQ Global Select Market (referred to in this proxy statement as the “NASDAQ”) and deregistered under the U.S. Securities Exchange Act of 1934, as amended (referred to in this proxy statement as the “Exchange Act”).

Alternative Acquisition Proposals

The “Go-Shop” Period—Solicitation of Other Acquisition Proposals

Under the merger agreement, from the date of the merger agreement until 11:59 p.m., New York City time, on March 25, 2019 (referred to in this proxy statement as the “no-shop period start date”), the Company and its representatives have the right to (1) initiate or solicit, or knowingly facilitate or encourage, any inquiry and (2) engage in or otherwise participate in any discussions or negotiations regarding an acquisition proposal or inquiry or that would reasonably be expected to lead to an acquisition proposal, or, subject to the entry into, and in accordance with, an acceptable confidentiality agreement, provide any access to its properties, books or records or any non-public information to any person (and such person’s representatives and financing sources) relating to the Company or any of its subsidiaries in connection with the foregoing; provided that (i) the Company must provide to Parent any information relating to the Company or any of its subsidiaries that was not previously provided or made available to Parent substantially concurrently with (and in any event within 24 hours after) the time it is furnished to such person (and such person’s representatives and financing sources) and (ii) the Company and its subsidiaries are not permitted to pay, agree to pay or cause to be paid, or reimburse, agree to reimburse or cause to be reimbursed, the expenses of any such person in connection with any acquisition proposals or inquiries.

The “No-Shop” Period—No Solicitation of Other Acquisition Proposals

Under the merger agreement, from the no-shop period start date until the earlier to occur of (x) the termination of the merger agreement and (y) the effective time, the Company must not, and must cause its subsidiaries not

to, and must use its reasonable best efforts to cause its and their directors, officers, employees, other affiliates, investment bankers, attorneys, accountants and other advisors or representatives not to, directly or indirectly:

On the no-shop period start date, the Company must notify Parent in writing of the number of parties with which the Company entered into an acceptable confidentiality agreement and the number of parties that submitted an acquisition proposal after the execution of the merger agreement and prior to the no-shop period start date, which notice must include a summary of any pending acquisition proposals that were made in writing by any excluded party (as defined in this proxy statement) or any other acquisition proposal which the Company’s board of directors determined in good faith, after consultation with its financial advisor and outside legal counsel, warranted the Company’s board of directors’ further discussion.

Notwithstanding certain provisions of the merger agreement described above, at any time following the no-shop period start date and prior to the time the company stockholder approval is obtained, if Ultimate receives a written, unsolicited, bona fide acquisition proposal that did not result from a breach of the provisions of the merger agreement described above, then Ultimate and its representatives may contact the person or group of persons making the acquisition proposal to clarify the terms and conditions thereof so as to determine whether it constitutes or could reasonably be expected to result in a “superior proposal,” as described in the sections of this proxy statement entitled “The Merger Agreement — The ‘No-Shop’ Period — No Solicitation of Other Acquisition Proposals— Receipt of Acquisition Proposals”, and, if the Ultimate board of directors determines in good faith after consultation (1) with its financial advisor and outside legal counsel that the acquisition proposal constitutes, or would reasonably be expected to result in, a superior proposal and (2) with its outside legal counsel that failure to take the actions described below would be reasonably likely to be inconsistent with its fiduciary obligations under applicable law, then Ultimate and its representatives may:

Change in Board Recommendation

The Ultimate board of directors has unanimously recommended that Ultimate stockholders vote “FOR” the proposal to adopt the merger agreement. The merger agreement permits the Ultimate board of directors to effect a “change of recommendation” (as described in the section of this proxy statement entitled “The Merger Agreement — The ‘No-Shop’ Period — No Solicitation of Other Acquisition Proposals — Change in Board Recommendation”) in certain circumstances, as described below.

Before the company stockholder approval is obtained, the Ultimate board of directors may (1) outside the context of an acquisition proposal, make a change of recommendation if, upon the occurrence of an intervening event (as described in the section of this proxy statement entitled “The Merger Agreement — The ‘No-Shop’ Period — No Solicitation of Other Acquisition Proposals”), the Ultimate board of directors determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be reasonably likely to be inconsistent with its fiduciary obligations under applicable law; or (2) if the Company receives, directly or indirectly through one or more of its representatives, either (x) after the date of the merger agreement and prior to the no-shop period start date from an excluded party (as defined in this proxy statement) an acquisition proposal or (y) after the no-shop period start date an unsolicited, written, bona fide acquisition proposal, in each case of clauses (x) and (y) that the Ultimate board of directors concludes in good faith, after consultation with its financial advisor and outside legal counsel, constitutes a superior proposal and such acquisition proposal did not result from a material breach by the Company of the provisions of the merger agreement described under the section of this proxy statement entitled “The Merger Agreement — The ‘No-Shop’ Period — No Solicitation of Other Acquisition Proposals” effect a change of recommendation and/or terminate the merger agreement in order to enter into an alternative acquisition agreement providing for such superior proposal, provided that in either case:

See the sections of this proxy statement entitled “The Merger Agreement — The ‘No-Shop’ Period — No Solicitation of Other Acquisition Proposals” and “The Merger Agreement — Change in Board Recommendation.”

Termination

The merger agreement may be terminated and the merger may be abandoned in the following circumstances:

Company Termination Fee

Ultimate will pay Parent a termination fee in an amount equal to $331 million (referred to in this proxy statement as the “company termination fee”) in the following circumstances:

board of directors (or any committee thereof)) after the date of the merger agreement and prior to the special meeting and has not been withdrawn at least two business days prior to the special meeting (and in the case of clause (1)(iii), prior to the breach that forms the basis of the termination); and

(provided that, for purposes of the provision referred to in this bullet point, the references to “20%” and “80%” in the definition of “acquisition proposal” set forth in the merger agreement and defined below are deemed to be references to “50%”).

Parent Termination Fee

Parent will pay Ultimate the parent termination fee in an amount equal to $550 million if the merger agreement is terminated by Ultimate because the marketing period has ended and all of the conditions to the obligation of Parent to complete the merger have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the merger, each of which is capable of being satisfied if the closing date were the date of such termination, and, solely with respect to the condition relating to the expiration or termination of the waiting period applicable to the completion of the merger under the HSR Act or the GWB, if the failure of such condition to be satisfied is primarily caused by a material breach by Parent or Merger Sub of any of their respective covenants or agreements set forth in the provisions of the merger agreement described in the section of this proxy statement entitled “The Merger Agreement — Efforts to Complete the Merger”); Parent and Merger Sub do not complete the merger on or prior to the date the closing is required to occur pursuant to the merger agreement; Ultimate has irrevocably confirmed in writing to Parent that it is ready, willing and able to complete the merger throughout the three-business-day period following delivery of such confirmation; and Parent and Merger Sub fail to complete the merger within three business days following delivery of such confirmation; provided that any purported termination of the merger agreement by either Ultimate or Parent because the merger has not been completed on or before the termination date will be deemed to be a termination on the grounds described in this paragraph if, at the time of such termination, Ultimate would have been entitled to terminate the merger agreement on the grounds described in this paragraph.

Market Price of the Company Common Stock

The Company common stock is listed on the NASDAQ under the symbol “ULTI.” The closing sale price of our common stock on February 1, 2019, the last trading day prior to the execution of the merger agreement, was $277.83 per share. On [         ], the most recent practicable date before the filing of this proxy statement, the closing price for our common stock was $[         ] per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting and the proposals to be voted on at the special meeting. These questions and answers may not address all of the questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully and in their entirety. You may obtain the documents incorporated by reference into this proxy statement without charge by following the instructions under the section of this proxy statement entitled “Where You Can Find Additional Information.”

Voting in Person

Shares of Common Stock Held by Record Holder

Shares of Common Stock Held in “Street Name”

MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Call Toll-free: (800) 322-2885
(212) 929-5500 (Call Collect)
Email: proxy@mackenziepartners.com

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This proxy statement, the documents incorporated by reference in this proxy statement and the documents we subsequently file with the SEC and incorporate by reference in this proxy statement may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our expectations or beliefs, including, but not limited to, our expectations concerning our operations and financial performance and condition, and our expectations regarding our ability to complete the merger and the timing of the merger, as well as our ability to realize the anticipated benefits from the merger. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict. Ultimate’s actual results could differ materially from those contained in the forward-looking statements due to risks and uncertainties associated with fluctuations in our quarterly operating results, concentration of our product offerings, development risks involved with new products and technologies, competition, our contractual relationships with third parties, contract renewals with business partners, compliance by our customers with the terms of their contracts with us, and other factors disclosed in Ultimate’s filings with the Securities and Exchange Commission. Risks and uncertainties related to the merger include, but are not limited to:

Other factors that may cause such differences include, but are not limited to, those described in the Company’s Form 10-K for the year ended December 31, 2018, as filed with the SEC, and in other reports filed by the Company with the SEC from time to time. See the section of this proxy statement entitled “Where You Can Find Additional Information.” Ultimate undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

THE COMPANIES

The Ultimate Software Group, Inc.

With offices in the United States, Canada, France, Germany, England, and Singapore, The Ultimate Software Group, Inc. (referred to as “Ultimate,” the “Company,” “we,” “our” or “us”) (NASDAQ: ULTI) is a leading provider of cloud-based human capital management solutions—often referred to as human capital management (“HCM”)—and employee experience solutions. Ultimate’s UltiPro product suite is a comprehensive, engaging solution that has human resources (“HR”) and payroll at its core and includes benefits management, talent acquisition, talent management, time management, and global people management functionality available in 14 languages with 61 country-specific localizations. Ultimate also offers a-la-carte employee experience solutions, such as HR Service Delivery and “Perception,” an employee-sentiment analysis solution.

Ultimate’s solutions are delivered via software-as-a-service (“SaaS”), now more commonly known as cloud computing, to organizations with employees in the United States, Canada, Europe, Asia Pacific, and other global locations. At the close of 2018, we had more than 5,600 organizations as customers and more than 48 million people records in our cloud environment. We attained our leadership position, we believe, through our exclusive focus on solutions that help companies manage their employees in an engaging way. Key factors in our success have been our people-centric product design, cloud technology, and strong customer relationships nurtured by our services team and throughout the Ultimate organization.

Ultimate’s principal executive offices are located at 2000 Ultimate Way, Weston, Florida 33326, and its telephone number is (954) 331-7000.

Additional information about Ultimate is contained in its public filings, certain of which are incorporated by reference herein. See the section of this proxy statement entitled “Where You Can Find Additional Information.”

Unite Parent Corp.

Parent is a Delaware corporation that was formed on January 28, 2019, solely for the purpose of engaging in the transactions contemplated by the merger agreement, and has not engaged in any business activities other than in connection with its formation, the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.

Parent’s principal executive offices are located at c/o Hellman & Friedman, 415 Mission Street, Suite 5700, San Francisco, California 94105 and its telephone number is (415) 788-5111.

Unite Merger Sub Corp.

Merger Sub is a Delaware corporation and an indirect wholly owned subsidiary of Parent that was formed on January 28, 2019, solely for the purpose of engaging in the transactions contemplated by the merger agreement, and has not engaged in any business activities other than in connection with its formation, the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger. Upon completion of the merger, Merger Sub will merge with and into Ultimate and will cease to exist.

Merger Sub’s principal executive offices are located at c/o Hellman & Friedman, 415 Mission Street, Suite 5700, San Francisco, California 94105 and its telephone number is (415) 788-5111.

Parent and Merger Sub were formed by (i) Hellman & Friedman Capital Partners VIII, L.P. and its affiliated investment funds (collectively referred to in this proxy statement as the “H&F Fund VIII Entities”) and (ii) Hellman & Friedman Capital Partners IX, L.P. and its affiliated investment funds (collectively referred to in this proxy statement as the “H&F Fund IX Entities” and, together with the H&F Fund VIII Entities, referred to in this proxy statement as the “H&F Entities”).

In connection with the transactions contemplated by the merger agreement, the H&F Entities, Blackstone Capital Partners VII L.P. and its affiliated investment funds (collectively referred to in this proxy statement as the “Blackstone Entities”), Vencap Holdings (1987) Pte. Ltd. (referred to in this proxy statement as the “GIC Entity”), Canada Pension Plan Investment Board (referred to in this proxy statement as “CPPIB”), and JMI Equity Fund IX-A, L.P. and its affiliated investment funds (collectively referred to in this proxy statement as the “JMI Entities”) have committed to capitalize Parent, on the date of the closing of the merger, with an aggregate

equity subscription of up to $8.133 billion, subject to the terms and conditions set forth in the equity commitment letters. For more information, please see the section of this proxy statement entitled “The Merger Agreement — Debt Financing and Debt Financing Cooperation”.

The H&F Entities are each affiliated with Hellman & Friedman (alternately referred to in this proxy statement as “H&F”). Hellman & Friedman is a leading private equity investment firm with offices in San Francisco, New York, and London. Since its founding in 1984, Hellman & Friedman has raised over $50 billion of committed capital. The firm focuses on investing in outstanding business franchises and serving as a value-added partner to management in select industries including software, financial services, business & information services, healthcare, internet & media, retail & consumer, and industrials & energy. For more information, please visit www.hf.com. The Blackstone Entities are each affiliated with The Blackstone Group L.P. (referred to in this proxy statement as “Blackstone”). Blackstone is an investment firm whose asset management businesses, with $472 billion in assets under management as of December 31, 2018, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. The GIC Entity is affiliated with GIC Pte. Ltd. (referred to in this proxy statement as “GIC”). GIC was established in 1981 to manage Singapore’s foreign reserves. The JMI Entities are each affiliated with JMI Equity (referred to in this proxy statement as “JMI Equity”). JMI Equity is a growth equity firm focused on investing in leading software companies. CPPIB is a professional investment management organization that invests funds not needed by the Canada Pension Plan to pay current benefits in the best interests of 20 million contributors and beneficiaries.

THE SPECIAL MEETING

We are furnishing this proxy statement to the Company’s stockholders as part of the solicitation of proxies by the Ultimate board of directors for use at the special meeting or any adjournment or postponement thereof. This proxy statement provides the Company’s stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting or any adjournment or postponement thereof.

Date, Time and Place of the Special Meeting

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Ultimate board of directors for use at the special meeting to be held at [         ], on [      ], at [      ], local time, or at any adjournment or postponement thereof.

For information regarding attending the special meeting, see “The Special Meeting — Voting; Proxies; Revocation — Attendance.”

Purposes of the Special Meeting

At the special meeting, Ultimate stockholders will be asked to consider and vote on the following proposals:

Our stockholders must adopt the merger agreement for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached to this proxy statement as Annex A, and certain provisions of the merger agreement are described in the section of this proxy statement entitled “The Merger Agreement.”

The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement. Accordingly, you may vote to adopt the merger agreement and vote not to approve the named executive officer merger-related compensation proposal and vice versa. Because the vote on the named executive officer merger-related compensation proposal is advisory only, it will not be binding on either Ultimate or Parent. Accordingly, if the merger agreement is adopted and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto under the applicable compensation agreements and arrangements, regardless of the outcome of the non-binding, advisory vote of Ultimate’s stockholders.

The Company does not anticipate calling a vote on the proposal to approve the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies, if the proposal to adopt the merger agreement is approved by the requisite number of shares of Ultimate common stock at the special meeting.

We do not expect that any matters other than the proposals set forth above will be brought before the special meeting. If, however, such a matter is properly presented at the special meeting or any adjournment or postponement thereof, the persons appointed as proxies will have discretionary authority to vote the shares represented by duly executed proxies.

This proxy statement and the enclosed form of proxy are first being mailed to our stockholders on or about [      ].

Record Date, Notice and Quorum

The holders of record of Ultimate common stock as of the close of business on [____], the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting.

At the close of business on the record date, [      ] shares of common stock were outstanding and entitled to vote at the special meeting.

The presence at the special meeting, in person or represented by proxy, of the holders of a majority of the shares of common stock issued and outstanding and entitled to vote at the special meeting at the close of business on the record date will constitute a quorum. Once a share is represented at the special meeting, it will be counted for purposes of determining whether a quorum is present at the special meeting. However, if a new record date is set for an adjourned special meeting, a new quorum will have to be established. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the special meeting. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your shares will not be counted as present at the special meeting for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

Required Vote

Each share of common stock outstanding at the close of business on the record date is entitled to one vote on each of the proposals to be considered at the special meeting.

For the Company to complete the merger, Ultimate stockholders holding a majority of the shares of common stock outstanding at the close of business on the record date and entitled to vote on the adoption of the merger agreement must vote “FOR” the proposal to adopt the merger agreement. An abstention with respect to the proposal to adopt the merger agreement, or a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf), will have the same effect as a vote “AGAINST” this proposal.

Approval of each of (1) the advisory (non-binding) proposal on certain compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger and (2) the adjournment proposal requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the special meeting and entitled to vote thereon, but is not a condition to the completion of the merger. An abstention with respect to either proposal will have the same effect as a vote “AGAINST” these proposals. A failure to return your proxy card or otherwise vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf), will have no effect on these proposals, assuming a quorum is present.

Stock Ownership and Interests of Certain Persons

Voting by the Company’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of the Company were entitled to vote approximately [      ] shares of common stock, or approximately [      ]% of the shares of common stock issued and outstanding on that date and entitled to vote at the special meeting. The Company’s directors and executive officers have informed us that they intend to vote their shares in favor of the proposal to adopt the merger agreement and the other proposals to be considered at the special meeting, although they have no obligation to do so.

Voting; Proxies; Revocation

Attendance

All holders of shares of common stock as of the close of business on [      ], the record date, including stockholders of record and beneficial owners of common stock registered in the “street name” of a broker, bank or other nominee, are invited to attend the special meeting.

To attend the special meeting in person, you must provide proof of ownership of Ultimate common stock as of the record date, such as an account statement indicating ownership on that date, and a form of personal identification for admission to the meeting. If you hold your shares in “street name,” and you also wish to be able to vote at the meeting, you must obtain a legal proxy, executed in your favor, from your bank, broker or other nominee.

Voting in Person

Stockholders of record will be able to vote in person at the special meeting. If you are not a stockholder of record, but instead hold your shares of common stock in “street name” through a broker, bank or other nominee, you must provide a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting. Attending the special meeting in person does not itself constitute a vote on any proposal.

Providing Voting Instructions by Proxy

To ensure that your shares of common stock are voted at the special meeting, we strongly recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

Shares of Common Stock Held by Record Holder

If you are a stockholder of record, you may provide voting instructions by proxy using one of the methods described below.

Submit a Proxy by Telephone or via the Internet. This proxy statement is accompanied by a proxy card with instructions for submitting voting instructions. You may vote by telephone by calling the toll-free number or via the Internet by accessing the Internet address specified on the enclosed proxy card. Your shares of common stock will be voted as you direct in the same manner as if you had completed, signed, dated and returned your proxy card, as described below.

Submit a Proxy Card. If you complete, sign, date and return the enclosed proxy card by mail so that it is received in time for the special meeting, your shares of common stock will be voted in the manner directed by you on your proxy card.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposal to adopt the merger agreement, the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, and the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. If you fail to return your proxy card or vote by telephone or via the Internet, and you are a holder of record on the record date, unless you attend the special meeting and vote in person, your shares of common stock will not be considered present at the special meeting for purposes of determining whether a quorum is present at the special meeting, which will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement and, assuming a quorum is present, will have no effect on the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, or the vote regarding the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies.

Shares of Common Stock Held in “Street Name”

If your shares of common stock are held by a broker, bank or other nominee on your behalf in “street name,” your broker, bank or other nominee will send you instructions as to how to provide voting instructions for your shares. Many brokerage firms and banks have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by a voting instruction form.

In accordance with applicable stock exchange rules, brokers, banks and other nominees that hold shares of common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to (1) the proposal to adopt the merger agreement, (2) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger, or (3) the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they cannot vote such shares with respect to these proposals. Therefore, unless you attend the special meeting in person with a properly executed legal proxy from your broker, bank or other nominee, your failure to provide instructions to your broker, bank or other nominee will result in your shares of Ultimate common stock not being present at the meeting and not being voted on any

of the proposals. As a result, a failure to vote your shares of common stock (including a failure to instruct your broker, bank or other nominee to vote shares held on your behalf) will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, but it will have no effect on the other proposals, assuming a quorum is present.

Revocation of Proxies

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it before it is voted. If you are a stockholder of record, you may revoke your proxy before the vote is taken at the special meeting by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the special meeting.

If you hold your shares in “street name” through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee in order to revoke your proxy or submit new voting instructions. If you hold your shares in “street name,” you may also revoke a prior proxy by voting in person at the special meeting if you obtain a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

Abstentions

An abstention occurs when a stockholder attends the special meeting, either in person or represented by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of common stock present or represented at the special meeting for purposes of determining whether a quorum has been achieved.

Abstaining from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, a vote “AGAINST” the advisory (non-binding) proposal on certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and a vote “AGAINST” the proposal regarding the adjournment of the special meeting.

Solicitation of Proxies

The Ultimate board of directors is soliciting your proxy, and the Company will bear the costs of this solicitation. We will reimburse brokerage firms and others for their reasonable expenses of forwarding solicitation material to beneficial owners of Ultimate’s outstanding common stock. The Company has retained MacKenzie Partners, a proxy solicitation firm, to assist the Ultimate board of directors in the solicitation of proxies for the special meeting, and we expect to pay MacKenzie Partners approximately $17,000, plus reimbursement of out-of-pocket expenses. We will also indemnify MacKenzie Partners against losses arising out of its provisions of the foregoing services on our behalf. Proxies may be solicited by mail, personal interview, e-mail, telephone or via the Internet or, without additional compensation, by certain of the Company’s directors, officers and employees.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement or in the absence of a quorum.

Holders of a majority of shares present in person or represented by proxy at the special meeting, whether or not constituting a quorum, and entitled to vote or, in the absence of a decision by the majority, the officer presiding over the meeting may adjourn the special meeting. Any adjournment may be made without notice (provided the adjournment is not for more than 30 days) by an announcement at the special meeting of the time, date and place of the adjourned meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting must be given to each stockholder of record entitled to vote at the meeting. In addition, at any time prior to convening the special meeting, the Ultimate board of directors may postpone the special meeting. Adjournments and postponements are subject to certain restrictions in the merger agreement, including that the special meeting may not be adjourned or postponed to a date that is more than five business days prior to the termination date (as defined below) without Parent’s prior written consent.

Other Information

You should not return your stock certificates or send in other documents evidencing ownership of common stock with the proxy card. If the merger is completed, if your shares of common stock are evidenced by stock certificates, the paying agent for the merger will send you a letter of transmittal and related materials and instructions for exchanging your shares of common stock evidenced by stock certificates for the merger consideration (without interest and subject to any required withholding taxes).

THE MERGER

The description of the merger in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger that is important to you. You are encouraged to read the merger agreement carefully and in its entirety.

Certain Effects of the Merger

Pursuant to the terms of the merger agreement, if the merger agreement is adopted by the Company’s stockholders and the other conditions to the closing of the merger are satisfied or waived, Merger Sub will be merged with and into the Company, with the Company surviving the merger as an indirect wholly owned subsidiary of Parent.

Upon the terms and subject to the conditions of the merger agreement, at the effective time, each share of common stock issued and outstanding immediately before the effective time (other than shares owned by the Company, Parent, Merger Sub or any wholly owned subsidiary of the Company or Parent, and shares that are owned by stockholders who have properly demanded and not withdrawn a demand for, or lost their right to, appraisal rights pursuant to Section 262 of the DGCL) will be converted into the right to receive the merger consideration of $331.50 per share in cash, without interest and subject to any required withholding taxes.

The Company common stock is currently registered under the Exchange Act and is listed on the NASDAQ under the symbol “ULTI.” As a result of the merger, the Company will cease to be a publicly traded company and will be indirectly wholly owned by Parent. Following the completion of the merger, the Company common stock will be delisted from the NASDAQ and deregistered under the Exchange Act, following which the Company will no longer be required to file periodic reports with the SEC with respect to its common stock in accordance with applicable law, rules and regulations.

Background of the Merger

The Ultimate board of directors and senior management regularly evaluate the Company’s business strategies, objectives and key initiatives in order to improve Ultimate’s core businesses and enhance stockholder value. They have considered numerous strategic options that may be available to the Company at any given time, focusing on, among other things, the business environment facing the Company and its industry as well as the Company’s business prospects—including resource requirements, the continuing need to invest in the business, competition and market forces, including those involved in operating as a public company—and have included consideration of capital structure, expansion opportunities through potential investments and business combination transactions and accelerating revenue growth through synergistic partnerships and distributions relationships. For purposes of conducting these reviews, and in the ordinary course of business, senior management of the Company has maintained regular dialogues with representatives of other industry participants, including certain strategic and financial sponsor parties, regarding trends and developments in the industries in which the Company operates. None of those discussions progressed beyond preliminary phases, nor did Ultimate enter into any acquisition-related non-disclosure or standstill agreements with such parties other than as discussed below.

As part of Ultimate’s board of directors and senior management keeping informed about industry opportunities, since approximately 2014, at Ultimate’s request, representatives of Goldman Sachs & Co. LLC (referred to in this proxy statement as “Goldman Sachs”) have periodically discussed with certain members of Ultimate’s senior management (including Scott Scherr, Ultimate’s President, Chief Executive Officer and Chairman of the board of directors, and Marc Scherr, Scott Scherr’s brother and Vice Chairman of Ultimate’s board of directors, who was previously Ultimate’s Chief Operating Officer) industry and capital markets trends and developments.

Like many participants in the human capital management (referred to in this proxy statement as “HCM”) sector, Hellman & Friedman, which owns a portfolio company in the HCM sector, maintains a regular dialogue with other industry participants. Prior to February 2018, a representative of Hellman & Friedman had, from time to time, reached out to Scott Scherr in hopes of meeting; however, no such meeting occurred.

In early February 2018, a representative of Hellman & Friedman contacted a representative of Goldman Sachs to request that representatives of Goldman Sachs ask Ultimate whether a representative of Ultimate would be

willing to meet with a representative of Hellman & Friedman. Representatives of Goldman Sachs informed Mitch Dauerman, currently Ultimate’s Executive Vice President in charge of Investor Relations, who at the time was the Company’s Chief Financial Officer, of Hellman & Friedman’s request.

On February 13, 2018, Mitch Dauerman and a representative of Hellman & Friedman met at an industry conference in San Francisco. At the meeting, the individuals provided high-level introductions to their respective organizations and shared their perspectives on the HCM sector generally. In addition, the representative of Hellman & Friedman explored whether Ultimate had any interest in exploring ways to work together, including through a “take-private” transaction. Following the discussion, Mitch Dauerman conveyed to the representative of Hellman & Friedman that Ultimate had no interest at the time in such a transaction, but that he was open to staying in touch.

On April 7, 2018, another representative of Hellman & Friedman reached out to Marc Scherr for an introductory meeting, which resulted in a meeting in New York City on April 11, 2018. At that meeting, the representative of Hellman & Friedman and Marc Scherr primarily discussed, among other things, the background, history, culture, values, vision and current and future leadership of their respective organizations as well as their perspectives on the HCM sector. The Hellman & Friedman representative and Marc Scherr discussed generally whether Hellman & Friedman could be helpful to Ultimate in any way, including whether Ultimate might have any interest in evaluating and/or discussing potential opportunities for a commercial or strategic partnership, collaboration, business combination or other strategic transaction between Ultimate and Hellman & Friedman or its portfolio company that is in the same industry as Ultimate. It was Marc Scherr’s view that Scott Scherr would not want to pursue any such transaction with Hellman & Friedman or its portfolio company, and the parties had no further conversations about this possibility at that time.

Following the public announcement on May 1, 2018 of Mitch Dauerman transitioning from the position of Chief Financial Officer to Executive Vice President for Investor Relations, the representative of Hellman & Friedman who had met with Mitch Dauerman in February 2018 reached out to Mitch Dauerman to see if they could re-connect. They agreed to meet in San Francisco on May 8, 2018. During their meeting, Mitch Dauerman was asked by the Hellman & Friedman representative to arrange a meeting between Hellman & Friedman and Scott Scherr. Mitch Dauerman suggested that the best way for Hellman & Friedman to connect with Scott Scherr would be to meet at an upcoming industry conference in Boston.

On May 15, 2018, representatives of Hellman & Friedman attended the industry conference in Boston, but they were unable to meet with Scott Scherr aside from a very brief introduction during a broader conversation involving multiple conference participants. That evening, Mitch Dauerman, representatives of Hellman & Friedman and another conference attendee met informally. Given that a third party was in attendance and in light of the informal nature of the gathering, the participants did not engage in any substantive discussions with respect to Ultimate.

On or around May 17, 2018, Marc Scherr contacted a representative of Hellman & Friedman and indicated an openness to having discussions between the parties.

On June 26, 2018, Scott Scherr and a representative of Hellman & Friedman met in Southern California. At the meeting, the participants introduced themselves and their respective organizations and primarily discussed the background, history, culture, values, vision and current and future leadership of their respective organizations and shared their perspectives on the HCM sector. The Hellman & Friedman representative also inquired as to whether there were any potential opportunities in such sector and whether Hellman & Friedman could be helpful or relevant to Ultimate in that regard or otherwise, including whether Ultimate might have any interest in evaluating and/or discussing potential opportunities for a commercial or strategic partnership, collaboration, business combination or other strategic transaction between Ultimate and Hellman & Friedman. Scott Scherr and the Hellman & Friedman representative did not discuss the specifics of any potential transaction at that time, but they agreed to stay in contact generally.

On June 28, 2018, Marc Scherr contacted a representative of Hellman & Friedman and indicated that Ultimate would be open to meeting again later in the summer and continuing discussions regarding potential opportunities for collaboration.

Representatives of Hellman & Friedman later invited Scott Scherr and Mitch Dauerman to Hellman & Friedman’s New York offices on August 7, 2018, where they met with three representatives of Hellman &

Friedman. The purpose of this meeting was to provide Hellman & Friedman with an update on the latest developments with respect to Ultimate’s business and to discuss, among other things, areas where Hellman & Friedman could be helpful to Ultimate and whether there was any general interest in exploring a potential transaction between Hellman & Friedman and Ultimate, including a possible equity investment by Hellman & Friedman into Ultimate in the form of a private investment in Ultimate’s equity (commonly referred to as a PIPE) or a possible acquisition of Ultimate by Hellman & Friedman. No specific terms of any transaction were discussed. At this meeting, Scott Scherr told representatives of Hellman & Friedman that an important driver of Ultimate’s success has been its workplace culture, excellent employee relationships, and its ability to attract, hire and retain highly-qualified people. Scott Scherr conveyed in this meeting his belief that instrumental to the Company’s achievement and the fostering of its culture is the opportunity for its employees to share in the Company’s financial success as stockholders of the Company. He explained that Ultimate’s employees, including members of senior management, receive equity grants at the commencement of employment and at certain other times quarterly or annually, consistent with long-standing Company practice. Scott Scherr noted that equity participation constitutes an integral part of the compensation package of the Company’s employees and that if Ultimate were to participate in any transaction with Hellman & Friedman, the parties would need to find a way for Ultimate to continue granting equity to its employees, including members of senior management, after such transaction.

As a follow-up to the August 7, 2018 meeting, on August 22, 2018, a representative of Hellman & Friedman and Scott Scherr met in Florida. At the meeting, the representative of Hellman & Friedman informed Scott Scherr that Hellman & Friedman was not prepared to pursue a potential equity investment into Ultimate and/or other strategic relationship with Ultimate at that time. Towards the end of the meeting, the representative of Hellman & Friedman reiterated his deep respect and admiration for Ultimate and told Scott Scherr that, in the future after he retires from Hellman & Friedman, the Hellman & Friedman representative would seek to partner with great companies, such as Ultimate, by seeking to serve as a lead outside director on their boards of directors, supported by personal investments of up to $100 million to demonstrate his conviction in those companies’ visions. The representative of Hellman & Friedman indicated that he wished to stay in contact with Scott Scherr because Hellman & Friedman continued to hold Ultimate in very high regard and hoped that an opportunity to collaborate might arise in the future.

The same representative of Hellman & Friedman with whom Scott Scherr met on August 22, 2018 later reached out to Scott Scherr to check in, and met again with Scott Scherr in California on November 3, 2018. At the meeting, the Hellman & Friedman representative and Scott Scherr discussed, among other things, whether there was an interest in further exploring a potential transaction between Ultimate and Hellman & Friedman.

At Scott Scherr’s suggestion, on December 4, 2018, a representative of Hellman & Friedman met with Adam Rogers, Chief Technology Officer of Ultimate, who is also Scott Scherr’s son-in-law. At that meeting, the two individuals discussed possible methods for financing certain of Ultimate’s potential acquisition opportunities. They also discussed, in general terms not specific to Ultimate, the mechanics of PIPEs and “take-private” transactions.

A few weeks later, on December 17, 2018, a representative of Hellman & Friedman spoke with Scott Scherr to inquire, among other things, about the possibility of a PIPE investment by Hellman & Friedman in Ultimate and/or other potential transaction between Ultimate and Hellman & Friedman.

On December 21, 2018, the same representative of Hellman & Friedman who had spoken with Scott Scherr on December 17, 2018 spoke again with Scott Scherr by telephone. During that conversation, the representative asked how Hellman & Friedman could be helpful to Ultimate, including whether, consistent with their prior discussion, Ultimate would like to explore the possibility of a PIPE investment by Hellman & Friedman in Ultimate and/or other potential strategic transaction involving Hellman & Friedman. In addition, the representative from Hellman & Friedman discussed Hellman & Friedman’s interest in conducting a preliminary due diligence review of Ultimate to determine the potential feasibility of a PIPE investment or an acquisition of Ultimate at a price that would be compelling for Ultimate’s stockholders. After discussing with members of Ultimate’s senior management team, Scott Scherr declined the PIPE investment offer, but certain members of senior management continued to consider the merits of pursuing a “take-private” transaction. Scott Scherr determined that it was worth pursuing certain preliminary due diligence around the concept of a “take-private” transaction and having Hellman & Friedman conduct a preliminary due diligence review to determine the feasibility of a “take-private” transaction involving Hellman & Friedman.

Between December 26 and 31, 2018, Mitch Dauerman and a representative of Hellman & Friedman discussed a process for the parties to enter into a non-disclosure agreement and a process for Hellman & Friedman to begin due diligence of Ultimate in order for Hellman & Friedman to determine the potential feasibility of a “take-private” transaction. The parties did not discuss any pricing or other deal terms at this stage, but both parties understood that they were exploring the possibility of a “take-private” transaction.

On December 31, 2018, Ultimate and Hellman & Friedman entered into a non-disclosure agreement containing customary provisions, including a standstill provision that prohibited Hellman & Friedman from, among other things, offering to purchase shares of, or offering to acquire, Ultimate for two years, except when invited to do so by Ultimate’s board of directors or any authorized committee thereof.

In early January 2019, the Company’s senior management and representatives of Hellman & Friedman continued to discuss Hellman & Friedman’s potential interest in acquiring the Company. In early January, representatives of Hellman & Friedman met with senior management of Ultimate in Florida to discuss the due diligence process and materials that Hellman & Friedman would require to conduct its analysis. The Company began to review and make available to Hellman & Friedman certain due diligence materials with respect to the Company. The parties arranged for in-person management presentations and due diligence meetings to be held in Florida between January 9 and 11, 2019.

On January 8, 2019, after a conversation among Scott Scherr, Marc Scherr and Mitch Dauerman, Mitch Dauerman called a representative of Hellman & Friedman, at Scott Scherr’s request, to convey Scott Scherr’s belief that it was only worthwhile for Hellman & Friedman to continue conducting due diligence if Hellman & Friedman believed that it could potentially offer a purchase price per share equal to at least the amount of Ultimate’s all-time high share price.

In preparation for a January 9, 2019 meeting (described below), a representative of Hellman & Friedman communicated with Mitch Dauerman to gain a preliminary understanding of Ultimate’s existing equity participation program in order to determine whether the existing equity plan construct could be maintained in the surviving company, in the event a transaction were to occur.

On January 9, 2019, Scott Scherr, Marc Scherr and a representative of Hellman & Friedman met and discussed, among other things, Ultimate’s equity participation program so that Hellman & Friedman could understand how it had worked historically, how it had been implemented and how employee equity would be treated in any acquisition of Ultimate. In connection with the meeting, Scott Scherr and Marc Scherr provided a summary of Ultimate’s equity participation program and explained that all outstanding equity grants would, in accordance with their terms, vest fully in such a transaction. As part of that discussion, Scott Scherr reiterated his belief that it would be critical to the success of Ultimate following any such transaction that Ultimate continue to maintain its broad-based equity participation program for employees. The representative of Hellman & Friedman, in turn, explained how an equity program would typically work for a private company, with such equity being granted in the form of stock options to a more concentrated group of employees, with periodic vesting to achieve long-term alignment with the private company’s equity holders. The parties discussed various forms that a broad-based equity participation program for employees (including senior management) could take in the event a transaction were to be consummated. Such forms included: granting an aggregate number of restricted stock units (with ratable three-year vesting) consistent with the grants for the 12 months preceding a potential transaction, with aggregate award amounts to be revisited for the years thereafter; awarding a one-time grant of restricted stock units to employees in order to replace the equity that would automatically accelerate in a potential transaction; and establishing an option pool to be granted to a more concentrated group of employees and executives than the group that could be eligible to receive restricted stock units. In addition, they discussed whether, in the event a transaction were to be consummated, employees could be provided a periodic opportunity to sell their shares of common stock received upon vesting of restricted stock units granted by the surviving company. No other specific terms of the potential equity program or specific allocations to any individuals were discussed, and no specific allocations to any groups of employees were agreed. No agreements with respect to a potential equity program of the surviving company, in the event a transaction were to be consummated, were reached. Later that day, Adam Rogers and Mitch Dauerman joined the meeting. Mitch Dauerman shared with representatives of Hellman & Friedman the Company’s FY 2018-2022 Management Projections (as defined in the section of this proxy statement entitled “—Certain Financial Projections Prepared by the Management of Ultimate”), as prepared by the senior management of Ultimate.

Between January 10 and 13, 2019, Marc Scherr and a representative of Hellman & Friedman had follow-up conversations to clarify the terms of the January 9 discussion described above. As part of those conversations, the parties discussed whether, in the event a transaction were to be consummated, the surviving company could grant an aggregate dollar value (in lieu of an aggregate number) of restricted stock units and whether, in the event a transaction were to be consummated, the surviving company could establish an option pool of up to 1.5% of the fully diluted stock of the surviving company that could be granted to a more concentrated group of employees and executives than the group that could be eligible to receive restricted stock units. No other specific terms of the potential equity program or specific allocations to any individuals were discussed, and no specific allocations to any groups of employees were agreed. No agreements were reached with respect to a potential equity program of the surviving company, in the event a transaction were to be consummated. No other parties participated in this discussion besides Marc Scherr and the representative of Hellman & Friedman.

On January 11, 2019, Scott Scherr and Marc Scherr made separate telephone calls to each of Ultimate’s five non-management directors (i.e., the members of the board of directors other than Scott Scherr and Marc Scherr) to inform them that the Company had recently entered into a non-disclosure agreement with Hellman & Friedman and that senior management of the Company had begun to participate in a due diligence process for Hellman & Friedman’s potential “take-private” of the Company. Scott Scherr and Marc Scherr informed each non-management director that he should anticipate being asked in the near future to participate in discussions regarding a potential transaction with Hellman & Friedman.

On January 12, 2019, a representative of Hellman & Friedman spoke with Marc Scherr by telephone and informed him that, based on Hellman & Friedman’s preliminary due diligence, subject to arranging a sufficient amount of equity financing from potential co-investors, Hellman & Friedman was prepared to use good faith efforts to pursue a potential acquisition of Ultimate that would be for a cash purchase price per share that would be compelling to its stockholders.

On January 13, 2019, a special meeting of the non-management directors of the Ultimate board of directors was held, which was attended by representatives of Stroock & Stroock & Lavan LLP (referred to in this proxy statement as “Stroock”), the Company’s outside legal counsel. Due to Scott Scherr’s and Marc Scherr’s roles as Ultimate executive officers and their involvement in the conversations with Hellman & Friedman regarding a potential equity participation program that would involve grants to employees (including senior management) of equity in a surviving corporation, Scott Scherr and Marc Scherr, as management directors, did not attend the meeting. During the meeting, members of Ultimate’s senior management team (not including Scott Scherr or Marc Scherr) described to the five non-management directors Hellman & Friedman’s indications of interest and potentially forthcoming formal offer regarding a potential acquisition of the Company in connection with the exploratory conversations and meetings described above. The non-management directors were informed that Blackstone and GIC may be involved in this proposed transaction as well. Representatives of Stroock discussed the fiduciary duties of Ultimate’s directors under Delaware law in connection with their evaluation of such interest and a potentially forthcoming offer. The five non-management directors determined at this meeting, after discussion with counsel, that the non-management directors would oversee the potential transaction but not form a formal special committee to do so. The non-management directors based their decision on several considerations, including the fact that they constituted a majority of the board and each of them wanted to participate in the conversations regarding a potential “take-private” transaction, as well as the additional expense associated with forming a special committee, which would require separate legal and financial advisors. Near the end of this January 13 meeting, the Company’s management was asked to leave the meeting, at which point the non-management directors discussed with representatives of Stroock details regarding potential timing of the proposed transaction, possible decisions that the non-management directors may need to make in connection therewith and their responsibility to consider the proposed transaction without input as to merger consideration or other deal terms from the Company’s senior management (including Scott Scherr and Marc Scherr). The non-management directors discussed the importance of minimizing any risk of a market leak concerning a proposed transaction, given the adverse impact that prior rumors of a potential transaction involving the Company have had on the Company and the potential adverse impact that such a leak could have on the Company’s business, including its relationships with customers. After this discussion, representatives of Stroock were asked to leave the meeting. During an executive session, the five non-management directors discussed and decided, based on their determination that Stroock and Goldman Sachs would be able to provide them with independent expert advice, to engage Stroock as Ultimate’s special counsel and to engage Goldman Sachs as Ultimate’s financial advisor.

On the evening of January 13, 2019, two members of the Company’s senior management (not including Scott Scherr or Marc Scherr), a representative of Stroock and three of the non-management directors participated in a conference call with three representatives of Goldman Sachs. During this call, the representatives of Goldman Sachs described to the other participants certain considerations and process points that could be important during the board of directors’ consideration of a “take-private” offer from Hellman & Friedman, such as the preparation of financial projections, the consideration of alternatives to a transaction with Hellman & Friedman, and the board of directors’ role in the overall process. The representatives of Goldman Sachs informed the other conference call participants that Goldman Sachs had cleared conflicts. The representatives of Goldman Sachs agreed to work with the Company’s counsel to provide Goldman Sachs’ standard disclosure letter to Ultimate’s board of directors. On January 13, 2019, after the call concluded, at the direction of the non-management directors, Mitch Dauerman provided representatives of Goldman Sachs with the FY 2018-2022 Management Projections.

Between January 13 and 18, 2019, the following potential equity sources signed joinders to the December 31, 2018 non-disclosure agreement between Ultimate and Hellman & Friedman: Blackstone Management Partners, L.L.C. (an affiliate of Blackstone), GIC Special Investments Pte. Ltd. (an affiliate of GIC), CPPIB and JMI Management, Inc. (an affiliate of JMI Equity). Each potential equity source agreed, pursuant to its joinder agreement, to comply with the terms of the non-disclosure agreement between Ultimate and Hellman & Friedman applicable to a “representative” (as such term is defined in the non-disclosure agreement).

During the weeks of January 14, 2019 and January 21, 2019, representatives of Hellman & Friedman and the Company continued to meet in person in Florida and by telephone as part of Hellman & Friedman’s diligence review of the Company. Representatives of Blackstone, GIC, CPPIB and JMI Equity also participated in certain of these diligence meetings. Beginning on January 15, 2019, representatives of Goldman Sachs also attended each diligence meeting and each meeting of the board of directors of Ultimate.

On January 15, 2019, a special meeting of the Ultimate board of directors was held, which was attended by all seven directors and representatives of Stroock and Goldman Sachs, as well as members of Ultimate’s senior management team. Representatives of Goldman Sachs and the Company’s senior management reported on continuing discussions with Hellman & Friedman regarding its interest in a potential acquisition of Ultimate. Representatives of Goldman Sachs also provided a summary of the FY 2018-2022 Management Projections, which had been prepared by the senior management of Ultimate. With members of senior management of the Company present, the Ultimate board of directors discussed with representatives of Stroock and Goldman Sachs the possible options for performing a “market check” of a potential transaction with Hellman & Friedman, including the possibility of conducting a pre-signing market check, a post-signing go-shop process or a hybrid of the two. Without coming to any conclusion as to which of the foregoing process options would be preferable and acknowledging the viability of each one, they discussed the opportunities and risks associated with each, as well as the possibility of declining to participate in any transaction and to continue to pursue a standalone path. At the direction of Ultimate’s board of directors, representatives of Goldman Sachs presented examples of other recent “take-private” transactions, including with respect to companies that are comparable in size and/or industry to Ultimate, and the processes that had been employed to conduct a market check or go-shop process in those transactions. Among the information presented were statistics concerning the length of a go-shop period, the size of the termination fee payable by a seller that terminates its merger agreement during a go-shop period, and a seller’s reporting obligations to a buyer during a go-shop period. While acknowledging that postponing a decision would shorten the window of time in which any pre-signing market check could be conducted, the directors determined at the January 15 board meeting, following a discussion with representatives of Stroock and Goldman Sachs, that it would be premature to decide on any process option prior to receiving a written proposal from Hellman & Friedman. The directors did, however, continue to express the importance of minimizing any risk of a market leak of details concerning the proposed transaction. At the end of the meeting, the non-management directors were offered an opportunity to discuss the matters presented with only Stroock and Goldman Sachs representatives present. The non-management directors declined this opportunity to evaluate the business issues at hand, determining that it was premature to do so without a firm proposal from Hellman & Friedman providing for a compelling offer price, and expressed a preference to wait until further developments occurred in the meetings between Hellman & Friedman and the Company.

Beginning on January 16, 2019, representatives of Simpson Thacher & Bartlett LLP (referred to in this proxy statement as “Simpson”), as counsel to Hellman & Friedman, participated telephonically in the diligence

meetings. Representatives of Hellman & Friedman attended portions of the enterprise and mid-market annual sales meetings and were introduced to certain members of the Company’s senior management team. Topics discussed included legal diligence, product development services, security and privacy, enterprise and mid-market sales and the FY 2018-2022 Management Projections for Ultimate, prepared by the senior management of Ultimate. During this week, Mitch Dauerman and Felicia Alvaro, the Company’s Chief Financial Officer, revised the FY 2018-2022 Management Projections to extend the five-year projections into ten-year projections in preparation for review and consideration by the Company’s board of directors and Goldman Sachs. In the course of extending the projections at this time, Felicia Alvaro and Mitch Dauerman incorporated the actual financial results reported for the second half of the 2018 fiscal year.

On January 20, 2019, Hellman & Friedman delivered a written proposal to the Ultimate board of directors that included an offer to purchase the Company for $315 per share in cash, which purchase price would, according to the proposal letter, be financed by $3.1 billion in funded debt financing and $7.2 billion in equity capital from a combination of Hellman & Friedman funds and its co-investors, Blackstone, GIC and CPPIB, even though the proposal letter was signed only by Hellman & Friedman. In the proposal letter, Hellman & Friedman noted its ability to sign a definitive merger agreement by February 3, 2019, prior to Ultimate’s scheduled quarterly earnings call on February 5, 2019. The purchase price per share set forth in the January 20 letter was based upon (i) the number of fully diluted outstanding shares of the Company’s common stock, as derived from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, plus (ii) an additional 500,000 shares underlying restricted stock awards and restricted stock unit awards that were scheduled to be granted in February 2019 to Ultimate’s employees, senior management and non-management directors in the ordinary course (referred to in this proxy statement as the “February 2019 Ordinary Course Grants”). On January 18, 2019, the last trading day before the January 20 offer, the closing market price for the Company’s common stock was $268.45 per share.

On January 21, 2019, a special meeting of the non-management directors of the Ultimate board of directors was held, which was attended by the five non-management directors and representatives of Stroock and Goldman Sachs, as well as members of Ultimate’s senior management team (not including Scott Scherr or Marc Scherr). A representative of Goldman Sachs described the terms of Hellman & Friedman’s January 20 proposal letter and reviewed Goldman Sachs’ preliminary analysis of Hellman & Friedman’s January 20 proposal, which analysis was based upon the FY 2018-2022 Management Projections that had been prepared by Ultimate’s senior management. Representatives of Goldman Sachs noted that the $7.2 billion equity contribution was sizeable on its own for a proposal made by financial sponsors, and also particularly as a percentage of the total debt and equity financing for the proposed transaction. Representatives of Goldman Sachs also noted that the proposed consortium of co-investors, with the exception of CPPIB, were already working together in the HCM sector. The non-management directors discussed, with representatives of Stroock and Goldman Sachs present, whether pursuing a pre-signing market check, a post-signing go-shop process, a hybrid of the market check and go-shop process or no transaction would be the preferred course of action to maximize shareholder value. The non-management directors also discussed the fact that any one of the foregoing options could be an effective means by which to satisfy the fiduciary duties owed by them to Ultimate’s stockholders. The non-management directors considered at length Hellman & Friedman’s proposed signing date of February 3, 2019, and discussed the advantages and disadvantages of that date being less than two weeks away. The advantages included greater certainty of reaching a deal with Hellman & Friedman before its appetite for a transaction or broader market conditions could change, lower risk of market leaks and the ability to announce the transaction at or prior to the time of the quarterly earnings call already scheduled for February 5, 2019 without concern for how information discussed on the earnings call could affect Ultimate’s stock price. The disadvantages included the difficulty of conducting a meaningful pre-signing market check in a short amount of time. The non-management directors continued to consider the circumstances of other recent “take-private” transactions that employed a market check, a go-shop process or hybrid approach. At this meeting, the directors determined that representatives of Goldman Sachs should communicate to Hellman & Friedman that (i) the $315 cash per share offer was too low, (ii) any revised proposal must demonstrate the commitment not only of Hellman & Friedman but also the debt commitment parties and the equity co-investors and (iii) the non-disclosure agreement between Ultimate and Hellman & Friedman must be amended to prevent Hellman & Friedman from approaching any new debt or equity financing sources without Ultimate’s prior consent, in order to leave open the possibility of competing bids to acquire the Company. Representatives of Goldman Sachs later communicated these points to a representative of Hellman & Friedman on January 21, 2019. Towards the end of this January 21 meeting, the

members of Ultimate’s senior management team were asked to leave the meeting, at which time the non-management directors discussed with representatives of Stroock and Goldman Sachs the role of senior management in the potential transaction as well as a plan to exclude senior management (including Scott Scherr and Marc Scherr) from portions of any future meeting of the board of directors at which the directors discuss and make decisions regarding Hellman & Friedman’s offer as well as possible alternatives to such offer.

During the week of January 21, 2019, representatives of Ultimate continued to conduct multiple due diligence calls and in-person diligence meetings with representatives of Hellman & Friedman and its equity co-investors. Representatives of Goldman Sachs also attended these meetings. On January 24, 2019, Hellman & Friedman and Ultimate amended their non-disclosure agreement (which amendment also applied to the aforementioned parties that had signed joinders) to limit potential debt and financing sources to those parties that Hellman & Friedman had contacted prior to January 22, 2019.

On January 24, 2019, Mitch Dauerman and Felicia Alvaro delivered the Company’s preliminary ten-year projections (which would later be approved by the board of directors as the Management Long-Term Projections) to representatives of Goldman Sachs and all seven members of the Company’s board of directors.

Also on January 24, 2019, a special meeting of the Ultimate board of directors was held, which was attended initially by all seven directors and representatives of Stroock and Goldman Sachs, as well as members of Ultimate’s senior management team. The Company’s senior management reported on the internally-prepared preliminary ten-year projections for Ultimate (which would later be approved by the board of directors as the Management Long-Term Projections) and representatives of Goldman Sachs reviewed its preliminary financial analysis of Ultimate, which was based upon the preliminary ten-year projections for Ultimate that had been prepared by the senior management of Ultimate (which would later be approved by the board of directors as the Management Long-Term Projections). After the two management directors and other members of the Company’s senior management left the meeting, the five non-management directors revisited and discussed, with representatives of Stroock and Goldman Sachs, the process options available for pursuing a potential sale of the Company, which included a pre-signing market check, a post-signing go-shop process, a hybrid of a market check and go-shop process or declining to engage in any transaction. At this time, the non-management directors discussed the benefits and risks of postponing by a couple of weeks the proposed February 3, 2019 signing of a definitive merger agreement. The benefits included making time for the board of directors to oversee a fulsome pre-market check. The risks included the increased risk of a market leak as well as potential changes in the capital markets that could affect Ultimate’s stock price or threaten the availability of any deal, whether with Hellman & Friedman or another party. The non-management directors determined that, given the importance of avoiding a market leak, they should not, at this time, direct representatives of Goldman Sachs to conduct a pre-signing market check. After a lengthy discussion and in light of the non-management directors’ determination that Hellman & Friedman’s proposed $315 per share price was not acceptable, the non-management directors did not decide during this meeting which of the foregoing process options they would ultimately pursue and expressed a desire to continue weighing their options among the viable process alternatives until they better understood the terms that Hellman & Friedman might accept with respect to any post-signing go-shop process to be memorialized in a definitive merger agreement.

Also on January 24, 2019, representatives of Simpson sent an initial draft of a merger agreement to representatives of Stroock. The initial draft contemplated a 30-day go-shop period with substantial periodic reporting during the go-shop period, a company termination fee equal to 2.0% of the proposed aggregate merger consideration if occurring during the go-shop period, a company termination fee equal to 3.5% of the proposed aggregate merger consideration if occurring after the go-shop period, and a parent termination fee equal to 3.5% of the proposed aggregate merger consideration. The initial draft also included Company-favorable terms with respect to closing conditions and obligations of Parent to consummate the merger, which terms provided the Company with increased certainty that a closing would occur. See the section of this proxy statement entitled “—Reasons for the Merger; Recommendation of the Ultimate Board of Directors.”

On January 25, 2019, Marc Scherr and a representative of Hellman & Friedman spoke by telephone about the members of Ultimate’s senior management team. The representative of Hellman & Friedman wanted to learn about each member of Ultimate’s leadership team in order to assess the role various members might play at Ultimate if a merger were to be completed.

During the week of January 28, 2019, representatives of Ultimate continued to conduct multiple due diligence calls and in-person diligence meetings with representatives from Hellman & Friedman and its equity co-investors. Representatives of Goldman Sachs also attended these meetings.

On January 28, 2019, Hellman & Friedman delivered a revised written proposal to the Ultimate board of directors. The revised proposal included an offer to purchase the Company for $322.50 per share in cash, which purchase price would be financed by $3.2 billion in funded debt financing and $7.6 billion in equity capital from a combination of Hellman & Friedman funds and its co-investors, Blackstone, GIC, CPPIB and JMI Equity. As compared to the proposed purchase price in Hellman & Friedman’s January 20 proposal letter, the purchase price per share in the January 28 letter was based upon a larger number of fully diluted outstanding shares of the Company’s common stock and a revised number of restricted stock awards and restricted stock unit awards to be included in the February 2019 Ordinary Course Grants, which was greater by approximately 19,000 than the number on which the January 20 proposal was based, each as provided by senior management of Ultimate to Hellman & Friedman on January 24, 2019. The revised proposal letter was accompanied by draft debt commitment letters and signed letters of support from the proposed equity co-investors, and it reaffirmed the parties’ ability to sign a definitive merger agreement by February 3, 2019. On January 28, 2019, the closing market price for the Company’s common stock was $273.41 per share.

Later in the day on January 28, 2019, a special meeting of the Ultimate board of directors was held, which was attended initially by all seven directors and representatives of Stroock and Goldman Sachs, as well as members of Ultimate’s senior management team. A representative of Goldman Sachs described the terms of Hellman & Friedman’s January 28 revised proposal letter and reviewed Goldman Sachs’ preliminary financial analysis of the Company and Hellman & Friedman’s revised proposal, which analysis was based upon the preliminary ten-year projections that had been prepared by Ultimate’s senior management (which would later be approved by the board of directors as the Management Long-Term Projections). Representatives of Goldman Sachs also described a potential go-shop process. A representative of Stroock described the terms of the draft merger agreement. After Scott Scherr, Marc Scherr and other members of the Company’s senior management left the meeting at the non-management directors’ request, the five non-management directors revisited and discussed, with representatives of Stroock and Goldman Sachs, the process alternatives available for pursuing the potential sale of the Company—which included a pre-signing market check, a post-signing go-shop process, a hybrid of the market check and go-shop process or declining to participate in any transaction—as well as a formal response to Hellman & Friedman’s revised proposal letter. At this time, the non-management directors did not make a decision with respect to which process alternative to choose because, although they believed a go-shop process might be the best option to address concerns regarding the risk of market leaks, stock market volatility and deal certainty, the terms of the go-shop provision in the draft of the merger agreement had not yet been agreed between the parties, and accordingly, the non-management directors did not know how favorable those go-shop terms would be to Ultimate. The non-management directors determined that they were only prepared to pursue a go-shop process as their means of fulfilling their fiduciary duties if they obtained Company-favorable go-shop terms with respect to the duration of the go-shop period, the size of the termination fee during the go-shop period and the Company’s reporting obligations to Parent during the go-shop period. The non-management directors did, however, acknowledge that a pre-signing market check would not be feasible if they agreed to proceed with Hellman & Friedman toward a February 3, 2019 execution of a definitive merger agreement. Also at this time, the non-management directors declined to make a decision with respect to a formal response to Hellman & Friedman’s January 28 proposal because the January 28 proposal had been delivered to the non-management directors shortly before this special meeting, and they wanted to give further thought to the proposal and any potential counter-proposal.

On January 29, 2019, a special meeting of the Ultimate board of directors was held, which was attended initially by all seven directors and representatives of Stroock and Goldman Sachs, as well as members of Ultimate’s senior management team. After a brief update by Ultimate’s senior management on the status of ongoing due diligence calls between Company representatives and Hellman & Friedman representatives, Scott Scherr, Marc Scherr and other members of the Company’s senior management left the meeting at the request of the non-management directors. Representatives of Goldman Sachs then reviewed with the non-management directors its preliminary financial analysis of the Company and Hellman & Friedman’s revised proposal from January 28, which was based upon the preliminary ten-year projections that had been prepared by Ultimate’s senior management (which would later be approved by the board of directors as the Management Long-Term Projections). Representatives of Goldman Sachs also further described a potential go-shop process. The five

non-management directors discussed, with representatives of Stroock and Goldman Sachs, a potential response to Hellman & Friedman’s revised proposal letter and instructed representatives of Goldman Sachs to deliver to Hellman & Friedman the following counter-proposal: (i) a $350 price per share, based upon the number of fully diluted outstanding shares of the Company’s common stock and the number of shares underlying the February 2019 Ordinary Course Grants, each as provided by Ultimate’s senior management; (ii) a 60-day go-shop period without periodic reporting to Hellman & Friedman during the go-shop period; (iii) a company termination fee equal to 1.0% of the proposed aggregate merger consideration if occurring during the go-shop period; (iv) a company termination fee equal to 2.5% of the proposed aggregate merger consideration if occurring after the go-shop period; and (v) a parent termination fee equal to 7.0% of the proposed aggregate merger consideration. Taking into account the risks of potential market leaks and stock market volatility, as well as concerns about maintaining Hellman & Friedman’s continued interest in pursuing a “take-private” transaction with Ultimate and the Company-favorable terms in the merger agreement draft provided by Hellman & Friedman’s counsel that provided the Company with greater certainty that a closing would occur if the merger agreement were signed, the non-management directors determined that it was in the stockholders’ best interest to attempt to reach an agreement with Hellman & Friedman by February 3, 2019 and that if Ultimate were to ultimately transact with Hellman & Friedman and enter into a definitive merger agreement by February 3, 2019, they would pursue a pure go-shop process post-signing, rather than a pre-signing market check or hybrid approach.

On January 30, 2019, representatives of Goldman Sachs communicated Ultimate’s counter-proposal to representatives of Hellman & Friedman and its financial advisor, Qatalyst Partners LP (referred to in this proxy statement as “Qatalyst”), and representatives of Stroock reflected this counter-proposal to representatives of Simpson in a revised draft of the merger agreement.

On January 31, 2019, the Company’s senior management made available to representatives of Hellman & Friedman in the Company’s virtual data room to which Hellman & Friedman had access a copy of the preliminary ten-year projections that had been prepared by Ultimate’s senior management (which would later be approved by the board of directors as the Management Long-Term Projections).

On February 1, 2019, a member of Ultimate’s senior management, with the approval of the non-management directors, executed an engagement letter formalizing Goldman Sachs’ engagement to act as financial advisor to the board of directors in connection with a potential transaction. In addition, representatives of Goldman Sachs provided a letter to the Company that disclosed certain relationships between Goldman Sachs and Parent and its affiliates, Hellman & Friedman, Blackstone, GIC, CPPIB, and JMI Equity and their respective affiliates and portfolio companies and confirmed that nothing (including the matters set forth in such letter) would limit Goldman Sachs’ ability to fulfill its responsibilities as financial advisor to the Company in connection with its engagement. The section “—Opinion of Financial Advisor to the Company” beginning on page 47 of this proxy statement, describes certain financial advisory and/or underwriting services Goldman Sachs has provided to Parent and its affiliates, Hellman & Friedman, Blackstone, GIC, CPPIB, and JMI Equity and their respective affiliates and portfolio companies for the two-year period ended February 3, 2019. The Ultimate board of directors considered the engagement letter and concluded that the matters disclosed therein would not impact Goldman Sachs’ ability to act effectively as financial advisor to the Company or the Company’s decision to continue to retain Goldman Sachs.

On February 1, 2019, Hellman & Friedman delivered a revised written proposal to the Ultimate board of directors in response to the board of directors’ counter-proposal delivered on January 30, 2019. The revised proposal included: (i) an offer to purchase the Company for $329 per share in cash, which purchase price would be financed by $3.2 billion in funded debt financing and $7.8 billion in equity capital from a combination of Hellman & Friedman funds and its co-investors, Blackstone, GIC, CPPIB, and JMI Equity; (ii) a 35-day go-shop period; (iii) a company termination fee equal to 1.75% of the proposed aggregate merger consideration if occurring during the go-shop period; (iv) a company termination fee equal to 3.25% of the proposed aggregate merger consideration if occurring after the go-shop period; and (v) a parent termination fee equal to 3.75% of the proposed aggregate merger consideration. The purchase price per share in the February 1 letter was based upon the number of fully diluted outstanding shares of the Company’s common stock, and the number of restricted stock awards and restricted stock unit awards to be issued as part of the February 2019 Ordinary Course Grants, each as provided by Ultimate’s senior management to Hellman & Friedman on January 24, 2019. On February 1, 2019, the closing market price for the Company’s common stock was $277.83 per share.

Also on February 1, 2019, the Ultimate board of directors retained Young Conaway Stargatt & Taylor, LLP as Delaware counsel to the board of directors, including both management and non-management directors.

On the evening of February 1, 2019, a special meeting of the non-management directors of the Ultimate board of directors was held, which was attended by the five non-management directors and representatives of Stroock and Goldman Sachs. Representatives of Goldman Sachs described the terms of Hellman & Friedman’s February 1 revised proposal letter and reviewed Goldman Sachs’ preliminary financial analysis of the Company and Hellman & Friedman’s February 1 proposal, which analysis was based upon the preliminary ten-year projections that had been prepared by Ultimate’s senior management (which would, later during this meeting, be approved by the board of directors as the Management Long-Term Projections). Representatives of Goldman Sachs also informed the board of directors of the potential for an imminent market leak regarding the potential transaction with Hellman & Friedman because Goldman Sachs’ press office had received a series of calls that day (a Friday) from a reporter who did not name Ultimate but inquired about an upcoming “take-private” transaction in the software industry. The five non-management directors discussed, with representatives of Stroock and Goldman Sachs, a formal response to Hellman & Friedman’s revised proposal letter and instructed representatives of Goldman Sachs to deliver to Hellman & Friedman the following counter-proposal: (i) a $339 price per share, based upon the number of fully diluted outstanding shares of the Company’s common stock, as provided by Ultimate’s senior management to Hellman & Friedman on January 24, 2019, (ii) a 50-day go-shop period; (iii) a company termination fee equal to 1.0% of the proposed aggregate merger consideration if occurring during the go-shop period; (iv) a company termination fee equal to 3.0% of the proposed aggregate merger consideration if occurring after the go-shop period; and (v) a parent termination fee equal to 6.5% of the proposed aggregate merger consideration. The non-management directors reviewed and discussed with representatives of Goldman Sachs the projections of the future financial and operational performance of Ultimate for the years 2019 through 2028 prepared by Ultimate’s senior management, as presented consistently over the course of several meetings of the board of directors dating back to the meeting held on January 24, 2019. At this meeting, the non-management directors approved the ten-year projections as the Management Long-Term Projections (as defined in the section of this proxy statement entitled “—Certain Financial Projections Prepared by the Management of Ultimate”) and representatives of Goldman Sachs and Hellman & Friedman were subsequently informed that the preliminary ten-year projections previously made available to representatives of each of Goldman Sachs and Hellman & Friedman had been approved by the non-management directors as the Management Long-Term Projections.

Representatives of Goldman Sachs communicated Ultimate’s counter-proposal to representatives of Hellman & Friedman and its financial advisor, Qatalyst, on the morning of February 2, 2019.

Later in the day on February 2, 2019, Hellman & Friedman contacted representatives of Goldman Sachs to communicate what Hellman & Friedman characterized as its best and final offer.

On the night of February 2, 2019, a special meeting of the non-management directors of the Ultimate board of directors was held, which was attended by the five non-management directors and representatives of Stroock and Goldman Sachs. Representatives of Goldman Sachs informed the non-management directors that Hellman & Friedman had submitted an offer, which Hellman & Friedman had characterized as its best and final offer, as follows: (i) a $331.50 price per share, (ii) a 50-day go-shop period, (iii) a company termination fee equal to 1.0% of the proposed aggregate merger consideration if occurring during the go-shop period, (iv) a company termination fee would equal 3.0% of the proposed aggregate merger consideration if occurring after the go-shop period, and (v) a parent termination fee equal to $550 million. At the meeting, representatives of Goldman Sachs reviewed its preliminary financial analysis of the Company and Hellman & Friedman’s February 2 proposal, which analysis was based upon the Management Long-Term Projections. The purchase price per share in the February 2 proposal was based upon a revised number of fully diluted outstanding shares of the Company’s common stock and a revised number of restricted stock awards and restricted stock unit awards to be included in the February 2019 Ordinary Course Grants, which was greater by approximately 5,000 than the number on which the February 1 proposal was based, each as provided by senior management of Ultimate to Hellman & Friedman on February 2, 2019. A representative of Stroock informed the board of directors that, with respect to the terms of the proposed merger agreement, Hellman & Friedman would prohibit Ultimate from incurring indebtedness in excess of $52.5 million between signing and closing, without Parent’s prior consent, which would prevent Ultimate from obtaining a revolving credit facility that Ultimate had been negotiating without receiving such consent. The five non-management directors discussed the matters presented and reached a decision to recommend to Ultimate’s full board of directors (including Scott Scherr and Marc Scherr) to accept Hellman &

Friedman’s February 2 offer. The non-management directors considered that Hellman & Friedman’s proposed $550 million parent termination fee was not as high as the non-management directors’ February 1 counter-proposal for a parent termination fee equal to 6.5% of the proposed aggregate merger consideration. After discussion with representatives of Goldman Sachs and Stroock, the non-management directors concluded that a parent termination fee of $550 million was sufficiently high to disincentivize Hellman & Friedman and the other co-investors from failing to consummate the proposed transaction. Integral to the non-management directors’ decision to accept Hellman & Friedman’s February 2 offer were the favorable go-shop terms included in the offer, which included a 50-day go-shop period and a 1.0% termination fee during the go-shop period. The go-shop period was among the longest periods and the termination fee during the go-shop period was among the lowest fees (expressed as a percentage of the aggregate merger consideration), in each case, as compared to the examples previously presented to the board of directors, at the board of directors’ request, by representatives of Goldman Sachs in the course of the non-management directors’ consideration of the proposed transaction. Later in the meeting, the two management directors and certain other members of the Company’s senior management joined the meeting to discuss the aforementioned changes to the number of fully diluted outstanding shares of the Company’s common stock and negotiations to obtain a revolving credit facility after signing the merger agreement without obtaining Parent consent.

On February 3, 2019, a special meeting of the Ultimate board of directors was held, which was attended by all seven directors and representatives of Stroock and Goldman Sachs. Representatives of Goldman Sachs and Stroock updated the board of directors on the status of negotiations with Hellman & Friedman. Representatives of Stroock reviewed the final terms of the proposed transaction documents, including the merger agreement, the related equity and debt commitment letters, the limited guarantees and the proposed amendment to Ultimate’s shareholder rights plan. At this meeting, representatives of Goldman Sachs reviewed its financial analysis of the $331.50 in cash per share of the Company’s common stock to be paid to the holders of the Company’s common stock (other than Parent and its affiliates) pursuant to the merger agreement. Representatives of Goldman Sachs then rendered its oral opinion, subsequently confirmed in writing, that, as of February 3, 2019 and based upon and subject to the factors and assumptions set forth therein, the $331.50 in cash per share of the Company’s common stock to be paid to the holders of the Company’s common stock (other than Parent and its affiliates) pursuant to the merger agreement, was fair from a financial point of view to such holders.

After careful consideration and discussion, and taking into consideration the matters discussed during the February 3, 2019 meeting and the prior meetings of the Ultimate board of directors, including the factors described under the section of this proxy statement entitled “—Reasons for the Merger; Recommendation of the Ultimate Board of Directors,” the Ultimate board of directors unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement, determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of Ultimate and its stockholders, directed that the adoption of the merger agreement and the approval of the transactions contemplated thereby be submitted to a vote at a meeting of the stockholders of Ultimate, and recommended that the stockholders of Ultimate approve the adoption of the merger agreement and approve the transactions contemplated thereby.

On the evening of February 3, 2019, following the meeting of the Ultimate board of directors, the parties executed and delivered the merger agreement and related transaction documents. On the morning of February 4, 2019, Ultimate and Hellman & Friedman publicly announced their entry into the merger agreement via a joint press release.

On February 4, 2019, at the direction of Ultimate’s board of directors, representatives of Goldman Sachs began contacting potential counterparties that might consider entering into an alternative transaction with Ultimate in connection with the go-shop period. As of the date of drafting of this proxy statement, at the direction of Ultimate’s board of directors, representatives of Goldman Sachs have contacted seven strategic parties and nine financial sponsors and have been contacted by four strategic parties and two financial sponsors in connection with the go-shop period.

As of the date of drafting of this proxy statement, three of the financial sponsors have executed non-disclosure agreements with Ultimate. Ultimate’s senior management has made available to each of the three financial sponsors that have executed non-disclosure agreements financial and business information of Ultimate in the

Company’s virtual data room to which each such party has access. Also as of the date of drafting of this proxy statement, two of the three financial sponsors that have executed a non-disclosure agreement with Ultimate have indicated to representatives of Goldman Sachs that they do not intend to pursue an alternative transaction.

As of the date of drafting of this proxy statement, the go-shop period continues in effect. It will expire at 11:59 p.m. (Eastern Time) on March 25, 2019.

In connection with the preparation of this proxy statement, the Company sought, and Parent granted, in each case pursuant to the terms of the merger agreement, a waiver of the 20-business day deadline for filing the preliminary proxy statement, which waiver extended the deadline from March 5, 2019 until March 11, 2019.

Reasons for the Merger; Recommendation of the Ultimate Board of Directors

In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Ultimate board of directors consulted with Ultimate management and its financial advisor. The Ultimate board of directors also consulted with its outside legal counsel regarding its fiduciary duties, the terms and conditions of the merger agreement and other related matters. The Ultimate board of directors unanimously determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of the Company and its stockholders, and unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement. Accordingly, on February 3, 2019, the Ultimate board of directors unanimously resolved to recommend that the stockholders of Ultimate approve the adoption of the merger agreement and approve the transactions contemplated thereby.

In the course of reaching its recommendation, the Ultimate board of directors considered a number of positive factors relating to the merger agreement and the merger, each of which the Ultimate board of directors believed supported its decision, including the following:

In the course of reaching its recommendation, the Ultimate board of directors also considered certain risks and potentially adverse factors relating to the merger agreement and the merger, including:

The foregoing discussion of the information and factors considered by the Ultimate board of directors includes the material factors considered by the Ultimate board of directors but is not intended to be exhaustive and does not necessarily include all of the factors considered by the Ultimate board of directors. In view of the complexity and variety of factors considered in connection with its evaluation of the merger agreement and the merger, the Ultimate board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The above factors are not presented in any order of priority. The explanation of the factors and reasoning set forth above contain forward-looking statements that should be read in conjunction with the section of this proxy statement entitled “Cautionary Statement Concerning Forward-Looking Statements.”

The Ultimate board of directors unanimously resolved to recommend that the stockholders of Ultimate approve the adoption of the merger agreement and approve the transactions contemplated thereby (including the other proposals set forth in this proxy statement) based upon the totality of information it considered.

Certain Financial Projections Prepared by the Senior Management of Ultimate

FY 2018-2022 Management Projections

Ultimate does not generally publish its business plans and strategies or make external disclosures of its anticipated financial position or results of operations other than for providing, from time to time, estimates of certain expected financial results and operational metrics in its regular quarterly earnings press releases and other investor materials. Ultimate is especially wary of making financial projections for extended earnings periods due to the unpredictability of the underlying assumptions and estimates. However, in connection with Ultimate’s ordinary course efforts to support certain internally targeted financial metrics for future years, Ultimate’s senior management prepared, in mid-2018, internal financial forecasts for fiscal years 2018 through 2022 (referred to in this proxy statement as the “FY 2018-2022 Management Projections”) that were not intended for public disclosure. The FY 2018-2022 Management Projections were not prepared in connection with or in response to Hellman & Friedman’s proposal to acquire Ultimate, and were the projections that members of Ultimate’s senior management believed provided a reasonable basis for Ultimate’s future performance based on facts known at such time.

Management Long-Term Projections

In January 2019, to assist Ultimate’s board of directors in evaluating the proposed merger agreement with Hellman & Friedman, senior management utilized the FY 2018-2022 Management Projections to forecast future years extending through 2028. Senior management refined the internally-used FY 2018-2022 Management Projections based on actual financial results reported for the second half of the 2018 fiscal year and used those projections as a basis for extending the forecasted period through 2028. When determining this longer-term financial outlook for the Company’s business, senior management made assumptions concerning anticipated

growth in the Company’s operating margins and cash flows. Historically, the Company’s financial performance was impacted by its growth in recurring revenues, which included increasing sales targets on a year-over-year basis. In senior management’s view, such sales growth typically includes upfront customer acquisition costs that are recognized in the beginning of a customer’s relationship with Ultimate, which upfront costs could impede expansion of the Company’s operating margins. By assuming a slowdown in growth of sales and related revenues in future years, the Company’s financial forecasts reflect expansion in its operating margin and cash flows due to expected decreased operating expenses.

These financial projections for the projected period of 2019 through 2028 (referred to in this proxy statement as the “Management Long-Term Projections” and, for purposes of the section of this proxy statement entitled “— Opinion of Financial Advisor to the Company,” the “Forecasts”) were developed by Ultimate’s senior management on a standalone basis, without giving effect to the merger or the other transactions contemplated by the merger agreement, or any changes to Ultimate’s operations or strategy that may be implemented after the consummation of the merger, including any costs incurred in connection with the merger and the other transactions contemplated by the merger agreement. Furthermore, the Management Long-Term Projections do not take into account the effect of any failure of the transactions contemplated by the merger agreement to be completed and should not be viewed as accurate or continuing in that context. In the view of Ultimate’s senior management, the Management Long-Term Projections have been reasonably prepared by its senior management on bases reflecting the best currently available estimates and judgments of senior management of the future financial performance of Ultimate and other matters covered thereby.

The Ultimate Projections

The FY 2018-2022 Management Projections and the Management Long-Term Projections (referred to in this proxy statement together as the “Ultimate Projections”) are included herein because (1) the Ultimate Projections were made available to representatives of Hellman & Friedman by Ultimate’s senior management in connection with its due diligence review, as described in the section of this proxy statement entitled “— Background of the Merger;” (2) the FY 2018-2022 Management Projections were made available to representatives of Goldman Sachs by Ultimate senior management, in connection with Goldman Sachs being engaged as the Company’s financial advisor, and the Management Long-Term Projections were made available to representatives of Goldman Sachs by Ultimate senior management and were approved by the Company’s board of directors for use in connection with its financial analysis, each as described in the sections of this proxy statement entitled “— Opinion of Financial Advisor to the Company” and “— Background of the Merger;” and (3) the Ultimate Projections were made available to the board of directors in connection with its consideration of the merger and other strategic alternatives available to the Company, as described in the section of this proxy statement entitled “— Background of the Merger.” The inclusion of the Ultimate Projections in this proxy statement should not be regarded as an indication that the Ultimate board of directors, Goldman Sachs, Ultimate or its management, Hellman & Friedman, Parent, Merger Sub or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results or an accurate prediction of future results, and the Ultimate Projections should not be relied on as such. For the avoidance of doubt, the FY 2018-2022 Management Projections do not constitute any part of the “Forecasts” reviewed by representatives of Goldman Sachs in connection with rendering its fairness opinion and performing its related financial analyses, nor were the FY 2018-2022 Management Projections approved by the Company’s board of directors for use in connection with Goldman Sachs’ financial analysis, in each case as described in the section of this proxy statement entitled “— Opinion of Financial Advisor to the Company.”

The Ultimate Projections and the underlying assumptions upon which the Ultimate Projections were based are subjective in many respects, and subject to multiple interpretations and frequent revisions attributable to the dynamics of Ultimate’s industry and based on actual experience and business developments. The Ultimate Projections, while presented with numerical specificity, reflect numerous assumptions with respect to company performance, industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond Ultimate’s control. Multiple factors, including those described in the section of this proxy statement entitled “Cautionary Statement Concerning Forward-Looking Statements” could cause the Ultimate Projections or the underlying assumptions to be inaccurate. As a result, there can be no assurance that the Ultimate Projections will be realized or that actual results will not be significantly higher or lower than projected. Because the Ultimate Projections cover multiple years, such information by its nature becomes less

reliable with each successive year. The Ultimate Projections do not take into account any circumstances or events occurring after the date on which they were prepared, including the merger or, in the case of the FY 2018-2022 Management Projections, the financial results ultimately obtained in fiscal year 2018. Economic and business environments can and do change quickly, which adds an additional significant level of uncertainty as to whether the results portrayed in the Ultimate Projections will be achieved. As a result, the inclusion of the Ultimate Projections in this proxy statement does not constitute an admission or representation by Ultimate, Goldman Sachs or any other person that the information is material. Ultimate made no representation to Parent, Merger Sub or any other person, in the merger agreement or otherwise, concerning the Ultimate Projections. The summary of the Ultimate Projections is not provided to influence Ultimate stockholders’ decisions regarding whether to vote for the merger or any other proposal. The financial projections should be evaluated, if at all, in conjunction with the historical financial statements and other information contained in Ultimate’s public filings with the SEC.

The Ultimate Projections were not prepared with a view toward public disclosure or toward compliance with the published guidelines of the SEC regarding projections or GAAP (as defined below), or the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information. Neither KPMG LLP (referred to in this proxy statement as “KPMG”), Ultimate’s independent registered public accounting firm, nor any other accounting firm, has examined, compiled or performed any procedures with respect to the Ultimate Projections. There can be no assurance that the Ultimate Projections will be realized or that actual results will not be significantly higher or lower than forecasted.

The following table presents a summary of the FY 2018-2022 Management Projections:

FY 2018-2022 Management Projections

For the avoidance of doubt, the information presented above in respect of the fiscal years 2018, 2019, 2020, 2021 and 2022 constitutes the FY 2018-2022 Management Projections but does not form any part of the Management Long-Term Projections presented below.

The following table presents a summary of the Management Long-Term Projections:

Management Long-Term Projections

Gross profit, operating income and operating margin contained in the Ultimate Projections are “non-GAAP financial measures,” which are financial performance measures that are not calculated in accordance with accounting principles generally accepted in the United States (referred to in this proxy statement as “GAAP”). These non-GAAP financial measures should not be viewed as a substitute for GAAP financial measures, and may be different from non-GAAP financial measures used by other companies. Furthermore, there are limitations inherent in non-GAAP financial measures, because they exclude charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP. The summary of the information above is included solely to give stockholders access to the information that was made available to representatives of Hellman & Friedman, representatives of Goldman Sachs and Ultimate’s board of directors, and is not included in this proxy statement in order to influence any stockholder to make any investment decision with respect to the merger, including whether or not to seek appraisal rights with respect to the shares of Ultimate common stock.

The Ultimate Projections do not take into account the possible financial and other effects on Ultimate of the merger and do not attempt to predict or suggest future results following the merger. The Ultimate Projections do not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with completing the merger, the effect on Ultimate of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but that were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the Ultimate Projections do not take into account the effect on Ultimate of any possible failure of the merger to occur.

For the foregoing reasons, and considering that the special meeting will be held several months after the Ultimate Projections were prepared, as well as the uncertainties inherent in any forecasting information, readers of this proxy statement are cautioned not to place unwarranted reliance on the Ultimate Projections set forth above. No one has made or makes any representation to any investor or stockholder regarding the information included in the Ultimate Projections. Ultimate urges all Ultimate stockholders to review its most recent SEC filings for a description of its reported financial results. See the section of this proxy statement entitled “—Where You Can Find Additional Information.”

In addition, the Ultimate Projections have not been updated or revised to reflect information or results after the date they were prepared or as of the date of this proxy statement; no part of the FY 2018-2022 Management Projections constitutes any part of the “Forecasts” reviewed by representatives of Goldman Sachs in connection with rendering its fairness opinion and performing its related financial analyses; the FY 2018-2022 Management Projections were not approved by the Company’s board of directors for use in connection with Goldman Sachs’ financial analysis; and except as required by applicable securities laws, Ultimate does not intend to update or otherwise revise the Ultimate Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the underlying assumptions are shown to be in error.

Opinion of Financial Advisor to the Company

On February 3, 2019, at a meeting of the Company’s board of directors, Goldman Sachs rendered its oral opinion, subsequently confirmed in writing, that, as of February 3, 2019 and based upon and subject to the factors and assumptions set forth therein, the $331.50 in cash per share of the Company’s common stock to be paid to the holders of the Company’s common stock (other than Parent and its affiliates) pursuant to the merger agreement, was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated February 3, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Company’s board of directors in connection with its consideration of the merger. The Goldman Sachs opinion does not constitute a recommendation as to how any holder of the shares of the Company’s common stock should vote with respect to the merger or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

For information regarding preparation of the Forecasts, see the section of this proxy statement entitled “— Certain Financial Projections Prepared by the Senior Management of Ultimate.”

Goldman Sachs also held discussions with members of the senior management of the Company regarding their assessment of the past and current business operations, financial condition, and future prospects of the Company; reviewed the reported price and trading activity for the Company’s common stock; compared certain financial and stock market information for the Company with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the software industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

For purposes of rendering its opinion, Goldman Sachs, with the consent of the Company, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the consent of the Company that the Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of the Company or any of its subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the transaction contemplated by the merger agreement will be obtained without any adverse effect on the expected benefits of the transaction contemplated by the merger agreement in any way meaningful to its analysis. Goldman Sachs has also assumed that the transaction contemplated by the merger agreement will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’ opinion does not address the underlying business decision of the Company to engage in, or the relative merits of, the transaction contemplated by the merger agreement as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. Prior to the execution of the merger agreement, Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, the Company or any other alternative transaction. Subsequent to the delivery of Goldman Sachs' opinion, dated February 3, 2019, and the execution of the merger agreement, at the direction of the Company’s board of directors and pursuant to the “go shop” provision in the merger agreement, representatives of Goldman Sachs commenced contacting specified potential counterparties to an alternative transaction with the Company, as described in the section of this proxy statement entitled “—Background of the Merger”. Goldman Sachs’ opinion addresses only the fairness from a financial point of view, as of the date of the opinion, of the $331.50 in cash per share of the Company’s common stock to be paid to the holders (other than Parent and its affiliates) of the Company’s common stock pursuant to the merger agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the merger agreement or the transactions contemplated by the merger agreement or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the transaction contemplated by the merger agreement,

the fairness of the transaction contemplated by the merger agreement to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons, in connection with the transaction contemplated by the merger agreement, whether relative to the $331.50 per share of the Company’s common stock in cash to be paid to the holders (other than Parent and its affiliates) of the Company’s common stock pursuant to the merger agreement or otherwise. Goldman Sachs’ opinion does not express any opinion as to the solvency or viability of the Company or Parent to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to it as of, the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to the Company in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before February 1, 2019, the last trading day before the public announcement of the transaction contemplated by the merger agreement and is not necessarily indicative of current market conditions.

Financial Analyses of the Company

Illustrative Discounted Cash Flow Analysis

Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on the Company. Using discount rates ranging from 8.00% to 9.00%, reflecting estimates of the Company’s weighted average cost of capital, Goldman Sachs discounted to present value as of December 31, 2018: (i) estimates of unlevered free cash flow for the Company for the years 2019 to 2028 as reflected in the Forecasts and (ii) a range of illustrative terminal values for the Company, which were calculated by applying perpetuity growth rates ranging from 3.5% to 4.5%, to a terminal year estimate of the free cash flow to be generated by the Company, as reflected in the Forecasts (which analysis implied exit terminal year unlevered free cash flow multiples ranging from 14.3x to 22.6x). Goldman Sachs derived such range of discount rates by application of the Capital Asset Pricing Model (“CAPM”), which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs using its professional judgment and expertise and taking into account the Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs derived ranges of illustrative enterprise values for the Company by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for the Company the net debt of the Company as of December, 31, 2018, as provided by the management of the Company to derive a range of illustrative equity values for the Company. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of the Company’s common stock, as provided by the management of the Company, to derive a range of illustrative values per share of the Company’s common stock ranging from $232 to $365, rounded to the nearest dollar.

Illustrative Present Value of Future Share Price Analysis

Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of the Company’s common stock, which is designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of such company’s financial multiples. For this analysis, Goldman Sachs used the Forecasts for each of the fiscal years 2019 to 2023. Goldman Sachs first calculated the implied enterprise values for the Company as of December 31 for each of the fiscal years 2019 to 2021, by applying enterprise value to two-year forward unlevered free cash flow multiples, which are referred to

in this section entitled “—Opinion of Financial Advisor to the Company” as “EV/UFCF”, of 25.0x to 30.0x to two-year forward unlevered free cash flow estimates for the Company for each of the fiscal years 2019 to 2021. These illustrative multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current EV/UFCF multiples for the Company and growth-adjusted EV/UFCF multiples for the Company and selected publicly traded companies in the software industry with operations that, for the purpose of analysis, may be considered similar to certain operations of the Company. Goldman Sachs then subtracted the amount of the Company’s forecasted net debt for each of the fiscal years 2019 to 2021, as provided by the management of the Company, as of the relevant year-end per the Forecasts, from the respective implied enterprise values in order to derive a range of illustrative equity values for the Company for each of the fiscal years 2019 to 2021. Goldman Sachs then divided the results by the projected year-end fully diluted outstanding shares of the Company’s common stock, as reflected in the Forecasts to derive a range of implied future share prices.

Goldman Sachs then discounted the December 31, 2019 to December 31, 2021 implied future share price values back to December 31, 2018 using an illustrative discount rate of 8.3%, reflecting an estimate of the Company’s cost of equity. Goldman Sachs derived such discount rate by application of the CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values of $226 to $350 per share of the Company’s common stock, rounded to the nearest dollar.

Goldman Sachs also performed an illustrative present value of future share price analysis, by calculating the implied enterprise values for the Company as of December 31 for each of the fiscal years 2019 to 2021, by applying enterprise value to next twelve month (“NTM”) revenue multiples, which are referred to in this section entitled “—Opinion of Financial Advisor to the Company” as “EV/NTM revenue”, of 5.75x to 6.75x to NTM revenue estimates for the Company for each of the fiscal years 2019 to 2021. For this analysis, Goldman Sachs used the Forecasts for each of the fiscal years 2019 to 2023. These illustrative multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account historical EV/NTM revenue multiples for the Company. Goldman Sachs then subtracted the amount of the Company’s forecasted net debt for each of the fiscal years 2019 to 2021, as provided by the management of the Company, as of the relevant year-end per the Forecasts, from the respective implied enterprise values in order to derive a range of illustrative equity values for the Company for each of the fiscal years 2019 to 2021. Goldman Sachs then divided the results by the projected year-end fully diluted outstanding shares of the Company’s common stock, as reflected in the Forecasts to derive a range of implied future share prices.

Goldman Sachs then discounted the December 31, 2019 to December 31, 2021 implied future share price values back to December 31, 2018 using an illustrative discount rate of 8.3%, reflecting an estimate of the Company’s cost of equity. This analysis resulted in a range of implied present values of $267 to $375 per share of the Company’s common stock, rounded to the nearest dollar.

Premia Analysis

Goldman Sachs reviewed and analyzed, using publicly available information, the acquisition premia for all-cash acquisition transactions announced during the time period from January 2016 through December 2018 involving a public company based in the United States as the target where the disclosed enterprise values for the transaction were greater than $500 million. This analysis excluded transactions with premia greater than 100% or less than 0%, using information obtained from Factset. For the entire period, using publicly available information, Goldman Sachs calculated the median, 25th percentile and 75th percentile premiums of the price paid in the transactions relative to the target’s closing stock price 30 days prior to announcement of the transaction. This analysis indicated a median premium of 32.0% across the period. This analysis also indicated a 25th percentile premium of 20.5% and 75th percentile premium of 47.2% across the period. Using this analysis, Goldman Sachs applied a reference range of illustrative premiums of 20.5% to 47.2% to the undisturbed closing price per share of the Company’s common stock of $235.50 as of January 3, 2019 and calculated a range of implied equity values per share of the Company’s common stock of $284 to $347, rounded to the nearest dollar.

Historical Stock Trading Analysis

Goldman Sachs reviewed the historical trading prices and volumes for the Company’s common stock for the 52-week period ended February 1, 2019, the last trading day prior to public announcement of the transaction. In addition, Goldman Sachs analyzed the $331.50 in cash per share of the Company’s common stock to be paid to

the holders of the Company’s common stock pursuant to the merger agreement in relation to (i) the closing price of the Company’s common stock on February 1, 2019, (ii) the high closing price of the Company’s common stock for the 52-week period ended on February 1, 2019, and (iii) the volume weighted average prices (the “VWAP”) of the Company’s common stock during the 30 trading day period ended on February 1, 2019.

This analysis indicated that the price per share to be paid to the holders of the Company’s common stock pursuant to the merger agreement represented:

Selected Transactions Analysis

Goldman Sachs analyzed certain publicly available information relating to selected transactions in the software industry since October 2011.

For each of the selected transactions, Goldman Sachs calculated and compared the implied EV/NTM revenue multiple of the applicable target company based on the total consideration paid in the transaction as a multiple of the target company’s NTM revenue based on Institutional Brokers’ Estimate System (“IBES”) estimates at the time each such selected transaction was announced. While none of the companies that participated in the selected transactions are directly comparable to the Company, the companies that participated in the selected transactions are companies with operations that, for the purpose of analysis, may be considered similar to certain of the Company’s results, market size and product profile.

The following table presents the results of this analysis:

Based on the results of the foregoing calculations and Goldman Sachs’ analyses of the various transactions and its professional judgment, Goldman Sachs applied a reference range of EV/NTM revenue multiples of 5.3x (reflecting the minimum EV/NTM revenue multiple referenced above) to 9.6x (reflecting the maximum EV/NTM revenue multiple referenced above) to the Company’s NTM revenue as of December 31, 2018, as reflected in the Forecasts, to derive a range of implied enterprise values for the Company. Goldman Sachs then subtracted from the range of implied enterprise values the net debt of the Company as of December 31, 2018, as

provided by the management of the Company, to derive a range of illustrative equity values for the Company. Goldman Sachs divided the results by the number of fully diluted outstanding shares of the Company’s common stock, as provided by the management of the Company, to derive a range of implied values per share of the Company’s common stock of $222 to $396, rounded to the nearest dollar.

General

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to the Company or the merger.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the Company’s board of directors that, as of February 3, 2019 and based upon and subject to the factors and assumptions therein, the $331.50 in cash per share of the Company’s common stock to be paid to the holders (other than Parent and its affiliates) of the Company’s common stock pursuant to the merger agreement was fair from a financial point of view to such holders. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of the Company, Parent, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The consideration to be paid to holders of the Company’s common stock was determined through arm’s-length negotiations between the Company and Parent and was approved by the Company’s board of directors. Goldman Sachs provided advice to the Company during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to the Company or the Company’s board of directors or that any specific amount of consideration constituted the only appropriate consideration for the transaction contemplated by the merger agreement.

As described above, Goldman Sachs’ opinion to the Company’s board of directors was one of many factors taken into consideration by the Company’s board of directors in making its determination to approve the transaction contemplated by the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests, or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Parent, and any of their respective affiliates and third parties, including H&F, Blackstone, GIC, CPPIB and JMI Equity, each an affiliate of Parent, and their respective affiliates and portfolio companies, or any currency or commodity that may be involved in the transaction contemplated by the merger agreement. Goldman Sachs acted as financial advisor to the Company in connection with, and participated in certain of the negotiations leading to, the transaction contemplated by the merger agreement. During the two year period ended February 3, 2019, the Investment Banking Division of Goldman Sachs has not been engaged by the Company or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs has provided certain financial advisory and/or underwriting services to H&F and/or its affiliates and portfolio companies from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as joint bookrunner with respect to the public offering by Change Healthcare Holdings Inc., a portfolio company of funds affiliated with H&F, of its 5.750% Senior

Unsecured Notes due 2025 (aggregate principal amount $1,000,000,000) in February 2017; as joint lead arranger with respect to a bank loan (aggregate principal amount $3,186,000,000) for Pharmaceutical Product Development, Inc., a portfolio company of funds affiliated with H&F, in May 2017; as financial advisor to Verisure Holdings AB (“Verisure”), a portfolio company of funds affiliated with H&F, with respect to its divestiture in August 2017; as joint bookrunner with respect to the public offering by Multiplan, Inc. (“Multiplan”), a portfolio company of funds affiliated with H&F, of its 8.500% Senior PIK Notes due 2022 (aggregate principal amount $1,300,000,000) in November 2017; as joint bookrunner with respect to the public offering by Hellman & Friedman (UK), an affiliate of H&F, of its Floating Notes due 2025 and Floating Notes due 2023 (aggregate principal amount $1,847,000,000) in March 2018; and as joint lead agent with respect to a bank loan (aggregate principal amount $800,000,000) for Verisure in November 2018. During the two year period ended February 3, 2019, based solely on Goldman Sachs’ books and records, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division directly to H&F and/or to its affiliates and portfolio companies (which may include companies that are not controlled by H&F) of approximately $86,300,000. Goldman Sachs also has provided certain financial advisory and/or underwriting services to Blackstone and/or its affiliates and portfolio companies from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as joint lead arranger with respect to a bank loan (aggregate principal amount $2,270,000,000) for Michaels Stores, Inc., a portfolio company of funds affiliated with Blackstone, in March 2017; as joint lead agent with respect to a bank loan (aggregate principal amount $2,925,000,000) for Avaya Inc., a portfolio company of funds affiliated with Blackstone, in December 2017; as lender with respect to the collateralized mortgage back securities (aggregate principal amount $1,400,000,000) for Blackstone Real Estate Advisors LP, an affiliate of Blackstone, in February 2018; as joint bookrunner with respect to the public offering by Hilton Domestic Operating Company Inc., a portfolio company of funds affiliated with Blackstone, of its 5.125% Senior Notes due 2026 (aggregate principal amount $1,500,000,000) in April 2018; as financial advisor to Ipreo Holdings LLC, a portfolio company of funds affiliated with Blackstone, with respect to its sale in August 2018; and as financial advisor to Gianni Versace SpA, a portfolio company of funds affiliated with Blackstone, with respect to its sale in December 2018. During the two year period ended February 3, 2019, based solely on Goldman Sachs’ books and records, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division directly to Blackstone and/or to its affiliates and portfolio companies (which may include companies that are not controlled by Blackstone) of approximately $278,300,000. Goldman Sachs also has also provided certain financial advisory and/or underwriting services to GIC and/or its affiliates and portfolio companies from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as lead agent/arranger with respect to a bank loan (aggregate principal amount $1,709,000,000) for eircom Group plc (“Eircom”), a portfolio company of funds affiliated with GIC, in March 2017; as lead agent/arranger with respect to a bank loan (aggregate principal amount $3,165,000,000) for Multiplan, a portfolio company of funds affiliated with GIC, in June 2017; as book manager with respect to the public offering by Multiplan of its 8.500% Senior PIK Notes (aggregate principal amount $1,300,000,000) in November 2017; as financial advisor to Eircom with respect to its sale in December 2017; as book manager with respect to the public offering by FirstEnergy Corporation, a portfolio company of funds affiliated with GIC, of its 4.100% Senior Unsecured Notes (aggregate principal amount $1,709,000,000) in May 2018; and as lead agent/arranger with respect to a bank loan (aggregate principal amount $275,000,000) for U.S. Anesthesia Partners, Inc., a portfolio company of funds affiliated with GIC, in November 2018. During the two year period ended February 3, 2019, based solely on Goldman Sachs’ books and records, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division directly to GIC and/or to its affiliates and portfolio companies (which may include companies that are not controlled by GIC) of approximately $22,600,000. During the two year period ended February 3, 2019, the Investment Banking Division of Goldman Sachs has not been engaged by JMI Equity and/or its affiliates and portfolio companies to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs has also provided certain financial advisory and/or underwriting services to the Republic of Singapore, the parent of GIC, and/or its agencies, and instrumentalities and their respective affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation. Goldman Sachs also has provided certain financial advisory and/or underwriting services to CPPIB and/or its affiliates and portfolio companies from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as joint bookrunner with respect to the public

offering by Quintiles IMS Holdings, Inc., a portfolio company of funds affiliated with CPPIB, of its 2.875% Notes due 2025 (aggregate principal amount $500,000,000) in September 2017; as co-manager with respect to the public offering by CPPIB of its 2.750% Notes due 2027 (aggregate principal amount $1,000,000,000) in October 2017; as joint bookrunner with respect to the public offering by Cablevision Systems Corporation, an affiliate of Altice USA, Inc. (“Altice”), a portfolio company of funds affiliated with CPPIB, of its 5.375% Notes due 2028 (aggregate principal amount $1,000,000,000) in January 2018; as joint lead agent with respect to a bank loan (aggregate principal amount $9,250,000,000) for Refinitiv, a portfolio company of funds affiliated with CPPIB, in September 2018; as joint lead agent with respect to a bank loan (aggregate principal amount $1,275,000,000) for Altice in October 2018; and as financial advisor to Altamira Asset Management Holdings, a portfolio company of funds affiliated with CPPIB, with respect to the sale of a stake in Altamira in December 2018. During the two year period ended February 3, 2019, based solely on Goldman Sachs’ books and records, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division directly to CPPIB and/or to its affiliates and portfolio companies (which may include companies that are not controlled by CPPIB) of approximately $92,000,000. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to the Company, Parent and their respective affiliates, H&F, Blackstone, GIC, the Republic of Singapore and its agencies and instrumentalities, CPPIB and JMI Equity and their respective affiliates and portfolio companies for which the Investment Banking Division of Goldman Sachs may receive compensation. Affiliates of Goldman Sachs also may have co-invested with H&F, Blackstone, GIC, CPPIB or JMI Equity or their respective affiliates from time to time and may have invested in limited partnership units of affiliates of H&F, Blackstone or JMI Equity from time to time and may do so in the future.

The Company’s board of directors selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transactions contemplated by the merger agreement. Pursuant to a letter agreement, dated February 1, 2019, the Company engaged Goldman Sachs to act as its financial advisor in connection with the transaction contemplated by the merger agreement. The engagement letter between the Company and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $72.1 million, all of which is contingent upon consummation of the merger. In addition, the Company has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Limited Guarantees

Concurrently with the execution of the merger agreement, the guarantors entered into limited guarantees, pursuant to which they agreed to guarantee, severally and not jointly or jointly and severally, on the terms and conditions set forth in the limited guarantees, Parent’s obligation to pay any termination fee, reimburse and indemnify the Company with respect to certain expenses in connection with the merger and pay certain other amounts, in an amount not to exceed $570 million in the aggregate.

Subject to certain terms and conditions, each of the limited guarantees will terminate upon the earliest to occur of (1) the closing of the merger and payment of the merger consideration in accordance with the merger agreement, (2) receipt in full in cash by the Company of the payment obligations of Parent that are the subject of the limited guarantee, or (3) the earlier of (a) the valid termination of the merger agreement in any circumstance other than one in which Parent is or may be obligated to pay any of the obligations that are the subject of the limited guarantee and (b) the date that is the three-month anniversary of the date of the termination of the merger agreement in any circumstance in which Parent is or may be obligated to pay any of the obligations that are the subject of the limited guarantee (unless a claim for payment of any of such obligations is presented by the Company to Parent, Merger Sub or the guarantor on or prior to such three-month anniversary).

Financing

In connection with the execution of the merger agreement, the equity financing sources have committed to capitalize Parent, on the date of the closing of the merger, with an aggregate equity subscription of up to $8.133 billion, subject to the terms and conditions set forth in the equity commitment letters.

In connection with the execution of the merger agreement, Parent entered into and subsequently amended and restated the debt commitment letter with the commitment parties, pursuant to which (x) Credit Suisse, Nomura, Bank of

America Merrill Lynch and Ares (each of the foregoing, in certain cases, acting through its respective appropriate affiliates or branches) have committed, upon certain terms and subject to certain conditions, to (i) lend the borrower $2.3 billion in aggregate principal amount of senior secured first lien term loans in connection with the debt financing of the amounts payable pursuant to the merger agreement and the transactions contemplated thereby and (ii) make available to the borrower a senior secured first lien revolving credit facility in an aggregate principal amount of up to $200 million and (y) Ares and GSO have committed, upon certain terms and subject to certain conditions, to lend the borrower $900 million in aggregate principal amount of senior secured second lien term loans in connection with the debt financing of the amounts payable pursuant to the merger agreement and the transactions contemplated thereby. We have agreed to use our reasonable best efforts to, and to cause our subsidiaries to use their reasonable best efforts to, and to use our reasonable best efforts to cause our and our subsidiaries’ representatives to, provide all cooperation reasonably requested by Parent in connection with the arrangement of the debt financing, subject to the terms set forth in the merger agreement. For more information, see “The Merger Agreement — Debt Financing and Debt Financing Cooperation.”

Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendations of the Ultimate board of directors with respect to the merger, Ultimate’s stockholders should be aware that the directors and executive officers of Ultimate have certain interests, including financial interests, in the merger that may be different from, or in addition to, the interests of Ultimate’s stockholders generally, including the continued employment of certain executive officers following the closing of the merger and the right to continued indemnification and insurance coverage. The Ultimate board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement, and in making its recommendation that Ultimate’s stockholders vote in favor of the adoption of the merger agreement. These interests are described in more detail below, and certain of them are quantified in the narrative and the tables below. The transactions contemplated by the merger agreement will be a “change in control,” “change of control” or term of similar meaning for purposes of the Company’s executive compensation and benefit plans and agreements described below.

Certain Assumptions

Except as otherwise specifically noted, for purposes of quantifying the potential payments and benefits described in this section, the following assumptions were used:

Outstanding Equity Compensation

Each Company restricted stock award and each Company restricted stock unit award that is outstanding immediately prior to the effective time, whether granted prior to the date of the merger agreement or granted after the date of the merger agreement as permitted by the merger agreement, will, as of the effective time, become fully vested and nonforfeitable, and will be cancelled and converted automatically into the right to receive an amount in cash equal to the merger consideration in respect of each vested share of Company common stock subject to such restricted stock award or restricted stock unit award, subject to applicable tax withholding. While the merger agreement also provides for treatment of each Company stock option that is outstanding immediately prior to the effective time, there are no Company stock options outstanding as of the date of this proxy statement or expected to be outstanding at the effective time.

The Company requested, and Parent approved, the scheduled grant of up to 532,069 restricted stock awards and restricted stock unit awards to be made consistent with past practice following the signing of the merger agreement to Ultimate’s employees, senior management and non-management directors. The Company also requested, and Parent approved, the communication of grants of up to 25,000 restricted stock awards and restricted stock unit awards per calendar quarter to potential new hires of the Company, which grants (if any) would be made at or shortly after the closing of the merger.

If the merger is consummated, the awards granted consistent with past practice on or after the date of the merger agreement, like all other outstanding awards, will, as of the effective time, become fully vested and nonforfeitable, and will be cancelled and converted automatically into the right to receive an amount in cash equal to the merger consideration in respect of each vested share of Company common stock subject to such restricted stock award or restricted stock unit award, subject to applicable tax withholding. The estimated aggregate value of the unvested equity awards granted as part of the February 2019 Ordinary Course Grants (as such term is defined in the section of this proxy statement entitled “—Background of the Merger”) that will become vested at the effective time is approximately $173.8 million. If the merger is not consummated, the awards granted as part of the February 2019 Ordinary Course Grants will continue to be subject to the terms and vesting periods set forth in the Company’s equity and incentive plan (as defined below).

Quantification of Equity Compensation

See the section entitled “— Quantification of Potential Payments and Benefits to the Company’s Named Executive Officers in Connection with the Merger” for an estimate of the value of the unvested equity awards held by each of the Company’s named executive officers that will become vested at the effective time. Based on the assumptions described above under “— Certain Assumptions,” (i) the estimated aggregate value of the unvested equity awards held by the Company’s six executive officers who are not named executive officers that will become vested at the effective time is $65,999,992.50, which includes restricted stock awards that the Company requested, and Parent approved, to be granted consistent with past practice on or after the date of the merger agreement, as described in the section of this proxy statement entitled “—Outstanding Equity Compensation,” with an estimated aggregate value of $24,862,500 and (ii) the estimated aggregate value of the unvested equity awards held by the Company’s five non-employee directors that will become vested at the effective time is $10,410,757.50, which includes restricted stock unit awards that the Company requested, and Parent approved, to be granted consistent with past practice on or after the date of the merger agreement, as described in the section of this proxy statement entitled “—Outstanding Equity Compensation,” with an estimated aggregate value of $757,477.50. For more information on equity holdings of the Company’s non-employee directors and named executive officers, see the table entitled “Security Ownership of Certain Beneficial Owners and Management.”

Change in Control Equity and Incentive Plan

Pursuant to the Company’s Amended and Restated 2005 Equity and Incentive Plan, dated May 16, 2016 (referred to in this proxy as the “equity and incentive plan”), the Company has entered into several restricted stock award agreements and restricted stock unit award agreements (referred to in this proxy statement collectively as “EIP Agreements”) with twelve executive officers, including each named executive officer.

Under each EIP Agreement, upon the occurrence of a qualifying change in control (as such term is defined in the equity and incentive plan and which includes the merger) of the Company while the applicable officer is employed by the Company or any subsidiary, the officer is entitled to the acceleration of the equity awards discussed above.

Agreements with Parent

Communications between representatives of the Company and representatives of Hellman & Friedman relating to equity arrangements and the Company’s equity program for employees (including members of the Company’s senior management) are described in the section of this proxy statement entitled “— Background of the Merger”.

As of the date of this proxy statement, none of our executive officers has entered into any agreement, arrangement or understanding with Parent or any of its affiliates regarding post-closing employment or compensation arrangements, or the opportunity to purchase or otherwise participate in the equity of Parent or any of its affiliates. Further discussions between Parent and our executive officers with respect to such matters may occur, and agreements, arrangements or understandings with respect to such matters may be reached prior to or following the closing of the merger.

Indemnification and Insurance

Pursuant to the terms of the merger agreement, the Company directors and executive officers will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies following the merger. Such indemnification and insurance coverage is further described in the section entitled “The Merger Agreement — Indemnification and Insurance.”

Quantification of Potential Payments and Benefits to the Company’s Named Executive Officers in Connection with the Merger

The information set forth in the table below is intended to comply with Item 402(t) of the SEC’s Regulation S-K, which requires disclosure of information about certain compensation for each named executive officer of the Company that is based on, or otherwise relates to, the merger. The amounts shown in the table below are estimates based on multiple assumptions that may or may not actually occur or be accurate on the relevant date, including the assumptions described below and in the footnotes to the table, and do not reflect certain compensation actions that may occur before completion of the merger. For purposes of calculating such amounts, the following assumptions were used:

Material U.S. Federal Income Tax Consequences of the Merger

The following is a discussion of the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of common stock whose shares are exchanged for cash pursuant to the merger. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (referred to in this proxy statement as the “Code”), applicable U.S. Treasury Regulations, judicial opinions and administrative rulings and published positions of the Internal Revenue Service (referred to in this proxy statement as the “IRS”), each as in effect as of the date hereof. These authorities are subject to change or differing interpretations, possibly with a retroactive basis, and any such change or interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and

Education Reconciliation Act of 2010, nor does it address any tax considerations under state, local or foreign laws or U.S. federal laws other than those pertaining to the U.S. federal income tax.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of common stock that is for U.S. federal income tax purposes:

This discussion applies only to U.S. holders of shares of common stock who hold such shares as a capital asset under the Code (generally, property held for investment). Further, this discussion does not purport to address all aspects of U.S. federal income taxation that may be relevant to a U.S. holder in light of its particular circumstances, or that may apply to U.S. holders subject to special treatment under U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or foreign currencies, traders in securities who elect to apply the mark-to-market method of accounting, holders subject to the alternative minimum tax, U.S. holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, tax-qualified retirement plans, banks and other financial institutions, mutual funds, certain former citizens or former long-term residents of the United States, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes or other flow-through entities (and investors therein), S corporations, real estate investment trusts, regulated investment companies, U.S. holders who hold shares of common stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction, a holder required to accelerate the recognition of any item of gross income with respect to our common stock as a result of such income being recognized on an applicable financial statement, and U.S. holders who acquired their shares of common stock through the exercise of employee stock options or other compensation arrangements). This discussion also does not address the U.S. federal income tax consequences to holders of shares of common stock who exercise appraisal rights in connection with the merger under the DGCL.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partners and the activities of the partnership. If you are, for U.S. federal income tax purposes, a partner in a partnership holding shares of common stock, you should consult your tax advisor.

Holders of common stock are urged to consult their own tax advisors to determine the particular tax consequences to them of the merger, including the applicability and effect of the alternative minimum tax, the unearned income Medicare contribution tax and any other U.S. federal, or state, local, foreign or other tax laws.

The receipt of cash by U.S. holders in exchange for shares of common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of common stock pursuant to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder’s adjusted tax basis in such shares (which generally will equal the price the U.S. holder paid for such shares).

Any such gain or loss will be long-term capital gain or loss if a U.S. holder’s holding period in the shares of common stock surrendered in the merger is greater than one year as of the date of the merger. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. holder acquired different blocks of common stock at different times and different prices, such U.S. holder must determine its adjusted tax basis, gain or loss and holding period separately with respect to each block of common stock.

Information Reporting and Backup Withholding

Payments made in exchange for shares of common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 24% for payments made before January 1, 2026). To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return to the applicable withholding agent a properly completed and executed IRS Form W-9, certifying that such U.S. holder is a U.S. person, that the taxpayer identification number provided is correct, and that such U.S. holder is not subject to backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

Regulatory Approvals

HSR Act and U.S. Antitrust Matters

Under the HSR Act and related rules and regulations, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division and the FTC and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or termination of the applicable waiting period under the HSR Act. The Company and Parent filed their respective Notification and Report Forms with the Antitrust Division and the FTC on February 8, 2019 and received early termination of the HSR waiting period on February 26, 2019.

At any time before or after the expiration of the statutory waiting periods under the HSR Act, the Antitrust Division or the FTC may take action under the antitrust laws, including seeking to enjoin the completion of the merger, to rescind the merger or to conditionally permit completion of the merger subject to regulatory conditions or other remedies.

GWB and Germany Antitrust Matters

Pursuant to the GWB, certain transactions, including the merger, may not be completed until filings are made with the FCO and the transactions are cleared by the FCO or the waiting period has expired under the GWB. German counsel filed with the FCO on behalf of Parent and the Company on February 25, 2019.

Foreign Antitrust Matters

In addition, non-U.S. regulatory bodies and U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. There can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

Commitments to Obtain Approvals

The Company and Parent are each required to use reasonable best efforts to take all actions necessary to complete the merger, including cooperating and doing all things necessary, proper or advisable to obtain regulatory approvals. This includes, if required by regulatory authorities, (1) agreeing to sell, divest or dispose of any assets or businesses of Parent, the Company, or their respective subsidiaries and (2) taking or agreeing to take other actions that after the closing date limit Parent’s or its subsidiaries’ (including the surviving corporation’s) freedom of action with respect to, or its ability to retain, one or more businesses, product lines or assets of Parent’s or its subsidiaries (including the surviving corporation). However, the Company will only be required to take or commit to take such actions if they are binding on the Company only if and when the closing of the merger occurs. See the section of this proxy statement entitled “The Merger Agreement — Efforts to Complete the Merger — Antitrust Matters.”

There can be no assurance that regulatory authorities will not impose conditions on the completion of the merger or require changes to the terms of the transaction.

Rights Plan Amendment

On February 3, 2019, prior to execution and delivery of the merger agreement, in connection with the transactions contemplated by the merger agreement, Ultimate entered into an amendment (referred to in this proxy statement as the “rights agreement amendment”) to the Amended and Restated Rights Agreement (referred to in this proxy statement as the “rights agreement”), dated as of October 19, 2018, by and between Ultimate and Computershare Trust Company, N.A., a federally chartered trust company, as rights agent. The rights agreement amendment provides, among other things, that the rights agreement will not apply to the merger or any of the other transactions contemplated by the merger agreement and, subject to the occurrence of the effective time of the merger, will terminate immediately prior to the effective time of the merger.

The foregoing summary of the rights agreement amendment and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the rights agreement amendment attached hereto as Annex D and incorporated herein by reference.

Delisting and Deregistration of Company Common Stock

If the merger is completed, the Company common stock will be delisted from the NASDAQ and deregistered under the Exchange Act.

THE MERGER AGREEMENT

The following is a summary of the material provisions of the merger agreement, a copy of which is attached to this proxy statement as Annex A and which is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

The following summary of the merger agreement, and the copy of the merger agreement attached as Annex A to this proxy statement, are intended to provide information regarding the terms of the merger agreement and are not intended to provide any factual information about Ultimate or modify or supplement any factual disclosures about Ultimate in its public reports filed with the SEC. In particular, the merger agreement and the related summary are not intended to be, and should not be relied upon as, disclosures regarding the actual state of any facts and circumstances relating to Ultimate. The merger agreement contains representations and warranties by and covenants of Ultimate, Parent and Merger Sub, and they were made only for purposes of the merger agreement and as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in Ultimate’s public disclosures. The representations, warranties and covenants in the merger agreement and any descriptions thereof should be read in conjunction with the disclosures in Ultimate’s periodic and current reports, proxy statements and other documents filed with the SEC. See the section of this proxy statement entitled “Where You Can Find Additional Information.” Moreover, the description of the merger agreement below does not purport to describe all of the terms of such agreement and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Annex A and is incorporated herein by reference.

Additional information about Ultimate may be found elsewhere in this proxy statement and Ultimate’s other public filings. See the section of this proxy statement entitled “Where You Can Find Additional Information.”

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

At the effective time of the merger, Merger Sub will merge with and into Ultimate, and the separate corporate existence of Merger Sub will cease. The Company will be the surviving corporation in the merger and will continue its corporate existence as a Delaware corporation and an indirect wholly owned subsidiary of Parent. At the effective time, the certificate of incorporation of the Company, as the surviving corporation, will be amended and restated in its entirety to be in the form of the certificate of incorporation of Merger Sub, except that the name of the surviving corporation will be “The Ultimate Software Group, Inc.” At the effective time, the bylaws of the surviving corporation will be amended and restated in their entirety to be in the form of the bylaws of Merger Sub, except that the name of the surviving corporation will be “The Ultimate Software Group, Inc.”

The individuals holding positions as directors of Merger Sub immediately prior to the effective time will become the directors of the Company, as the surviving corporation, and the current directors of the Company will cease to be directors of the Company as of the effective time. The individuals holding positions as officers of the Company immediately prior to the effective time will become the officers of the surviving corporation.

When the Merger Becomes Effective

The closing of the merger will take place (1) at 9:00 a.m., New York City time, no later than the third business day following the satisfaction or waiver of all of the conditions set forth in the merger agreement (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of those conditions at the closing), unless the marketing period (as defined below) has not ended on or prior to the time the closing would have otherwise been required to occur, in which case the closing will not take

place until the earlier of (i) a business day during the marketing period specified by Parent on at least three business days’ written notice to the Company and (ii) the first business day following the final day of the marketing period (subject in each case to the satisfaction or (to the extent permitted by applicable law) waiver of all of the conditions set forth in the merger agreement (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of those conditions at the closing) as of the date determined pursuant to this clause (i) or (ii)), or (2) at another date and time mutually agreed upon in writing between the Company and Parent. For purposes of the merger agreement, “business day” refers to any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in New York, New York.

On the closing date, the Company and Parent will file a certificate of merger with the Secretary of State of the State of Delaware. The merger will become effective at the time when the certificate of merger has been duly filed with the Secretary of State of the State of Delaware, or at such later time as may be agreed by the parties in writing and specified in the certificate of merger.

For purposes of the merger agreement, “marketing period” means the first period of 15 consecutive business days commencing on or after the no-shop period start date (as defined below) throughout which (1) Parent must have the required financial information (as defined below) (which must be the same information throughout the period), (2) the conditions to Parent’s obligation to effect the merger (set forth in sections 6.1 and 6.2 of the merger agreement) must have been satisfied (other than the conditions relating to stockholder approval and those conditions that by their nature are to be satisfied at the closing of the merger), assuming that the closing date were to be scheduled for any time during such 15 consecutive business-day period, or (to the extent permitted by applicable law) waived, and (3) during the last three business days of such 15 consecutive business-day period, the conditions relating to stockholder approval must have been satisfied; provided, however, that (i) July 5, 2019, will not constitute a business day for purposes of the 15 consecutive business-day period (although such exclusion will not restart such period), and (ii) the marketing period will be deemed not to have commenced if, after the date of the merger agreement and prior to the completion of such 15 consecutive business-day period, (A) the independent auditors of the Company will have withdrawn their audit opinion with respect to any year-end audited financial statements of the Company and its subsidiaries included in the required financial information, in which case the marketing period will be deemed not to commence unless and until such independent auditors or another nationally recognized independent accounting firm reasonably acceptable to Parent have issued an unqualified audit opinion with respect to such financial statements or (B) any of the financial statements of the Company and its subsidiaries included in the required financial information will have been restated or the Company will have determined or publicly announced that a restatement of any financial statements of the Company and its subsidiaries included in the required financial information is required, in which case the marketing period will be deemed not to commence unless and until such restatement has been completed and the required financial information has subsequently been amended and delivered to Parent or the Company has determined in writing or publicly announced, as applicable, that no such restatement will be required. However, that if the Company in good faith reasonably believes that it has provided the required financial information, it may deliver to Parent a written notice to that effect (stating the date upon which it believes it completed such delivery or provided such access to required financial information), in which case (subject to satisfaction of any other conditions, and compliance with the terms of each other provision, of this definition (including the requirement that required financial information be the same information throughout the period)) such 15 consecutive business-day period referred to above will be deemed to have commenced on the date such notice is delivered to Parent unless Parent in good faith reasonably believes the Company has not provided the required financial information or that clauses (2) or (3) of this definition have not been satisfied and, within three business days after the Company’s giving of such notice, gives a written notice to the Company to that effect (stating with specificity any elements of noncompliance and/or nonsatisfaction). Notwithstanding anything in this definition to the contrary, the marketing period will end on any date earlier than the date indicated in the definition above if the debt financing is consummated and the full proceeds thereof received on such earlier date.

For purposes of the merger agreement, “required financial information” means certain financial statements of the Company and its consolidated subsidiaries required by the debt commitment letter.

Effect of the Merger on the Common Stock

At the effective time, each share of Company common stock issued and outstanding immediately before the effective time (other than (1) shares held by the Company in treasury or by Parent or Merger Sub (referred to in this proxy statement as “cancelled shares”), (2) shares held by any wholly owned subsidiary of the Company or any wholly owned subsidiary of Parent (other than Merger Sub) (referred to in this proxy statement as “converted shares”) and (3) shares held by stockholders of the Company who have not voted in favor of, or consented in writing to, the adoption of the merger agreement and who have properly exercised appraisal rights with respect to their shares in compliance with Section 262 of the DGCL (referred to in this proxy statement as “dissenting shares,” and the shares referred to in clauses (1), (2) and (3), “excluded shares”)) will automatically be cancelled and converted into the right to receive the merger consideration, upon surrender of certificates or book-entry shares. The merger consideration will be $331.50 per share in cash, without interest and subject to any required withholding taxes.

At the effective time, each of the cancelled shares will automatically be cancelled without payment of any consideration and will cease to exist. In addition, at the effective time, each of the converted shares held by a wholly owned subsidiary of the Company or Parent (other than Merger Sub) will automatically be converted into shares of common stock, par value $0.01 per share, of the surviving corporation, such that each such subsidiary’s ownership percentage of the surviving corporation immediately after the effective time will equal its ownership percentage in the Company immediately prior to the effective time.

At the effective time, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the effective time will be converted into one fully paid and nonassessable share of common stock, par value $0.01 per share, of the surviving corporation.

Treatment of Company Equity Awards

Treatment of Company Restricted Stock Awards and Company Restricted Stock Unit Awards. Each Company restricted stock award and each Company restricted stock unit award that is outstanding immediately prior to the effective time, whether granted prior to the date of the merger agreement or granted after the date of the merger agreement as permitted by the merger agreement, will, as of the effective time, become fully vested and nonforfeitable, and will be cancelled and converted automatically into the right to receive an amount in cash equal to the merger consideration in respect of each vested share of Company common stock subject to such restricted stock award or restricted stock unit award, subject to applicable tax withholding.

Treatment of Stock Options. The merger agreement provides that each Company stock option, whether vested or unvested, that is outstanding and unexercised immediately prior to the effective time will, as of the effective time, become fully vested (to the extent unvested) and be converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of the merger consideration over the exercise price per share of such option, multiplied by (ii) the total number of shares of Company common stock subject to such Company stock option, subject to applicable tax withholding. The merger agreement provides that any Company stock option that has an exercise price per share of Company common stock that is greater than or equal to the merger consideration will be cancelled for no consideration. While the merger agreement provides for the foregoing treatment of each Company stock option that is outstanding immediately prior to the effective time, there are no Company stock options outstanding as of the date of this proxy statement or expected to be outstanding at the effective time.

Payment for Common Stock in the Merger

At or prior to the effective time, Parent will deposit, or cause to be deposited, with a paying agent in trust for the benefit of holders of shares cash sufficient to pay the aggregate merger consideration.

As soon as reasonably practicable (and no later than three business days) after the effective time, Parent will cause the paying agent to mail to each holder of record of a certificate or certificates that immediately prior to the effective time represented outstanding shares of Company common stock (other than excluded shares) (1) a letter of transmittal and (2) instructions for effecting the surrender of such certificates to the paying agent in exchange for payment of the merger consideration (without interest and subject to any required withholding taxes). Upon surrender to the paying agent of certificates, together with the letter of transmittal, duly completed and validly executed, and such other customary documents as may be reasonably required, the holder of such

certificates will be entitled to receive payment of the merger consideration which the holder is entitled to pursuant to the merger agreement in respect of each share formerly represented by such certificate (without interest and after giving effect to any required tax withholding).

No holder of book-entry shares of Company common stock will be required to deliver a certificate or letter of transmittal to the paying agent to receive the merger consideration in the merger (without interest and subject to any required withholding taxes). In lieu thereof, the registered holder of each book-entry share of Company common stock will automatically upon the effective time be entitled to receive, and, upon receipt by the paying agent of an “agent’s message” in customary form (or such other evidence, if any, as the paying agent may reasonably request), Parent will or will cause the surviving corporation to cause the paying agent to pay and deliver in exchange therefor as soon as reasonably practicable after the effective time, the merger consideration (without interest and after giving effect to any required tax withholding).

Representations and Warranties

The merger agreement contains representations and warranties of the Company, subject to certain exceptions in the merger agreement, in the company disclosure schedule delivered in connection with the merger agreement and in the Company’s public filings, as to, among other things:

The merger agreement also contains representations and warranties of Parent and Merger Sub, subject to certain exceptions in the merger agreement and the parent disclosure schedule delivered in connection with the merger agreement, as to, among other things:

Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a “company material adverse effect” or “parent material adverse effect” qualification, as discussed below.

For purposes of the merger agreement, a “company material adverse effect” means any fact, circumstance, change, event, occurrence or effect that (1) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the financial condition, business or results of operations of the Company and its subsidiaries, taken as a whole, or (2) materially impairs, materially delays or prevents, or would reasonably be expected to materially impair, materially delay or prevent, the Company from completing the merger. However, for the purposes of clause (1), none of the following, and no effect arising out of, relating to or resulting from the following, will constitute or be taken into account in determining whether a company material adverse effect has occurred or would reasonably be expected to occur:

outbreaks of hostilities, sabotage or terrorism, or escalations or worsening thereof, (d) weather, pandemics, earthquakes, hurricanes, tornados, natural disasters, climatic conditions or other force majeure events, whether or not weather-related, (e) regulatory and political conditions or developments, (f) any change resulting or arising from the identity of, or any facts or circumstances relating to, Parent, Merger Sub or their respective affiliates, (g) any legal proceedings made or brought by any current or former stockholders of the Company (on their own behalf or on behalf of the Company), but in any event only in their capacities as current or former stockholders, or otherwise under the DGCL or other applicable law, or other litigation (except, solely with respect to such other litigation, with respect to the Company’s representations and warranties and the related losing condition relating to consents and approvals relating to the execution, delivery and performance of the merger agreement and the absence of certain violations), arising out of or related to the merger agreement or the transactions contemplated thereby, (h) actions or omissions of the Company or any of its subsidiaries requested or consented to in writing by Parent or expressly required by the merger agreement, (i) any decline in the market price, or change in trading volume of the common stock of the Company (or the volatility thereof) or (j) any failure to meet any internal or public projections, forecasts or estimates of revenue, earnings, cash flow or cash position or other metrics; or

However, with respect to the matters described in the first bullet point above and in clauses (a), (c), (d) and (e) of the second bullet point above, such facts, circumstances, changes, events occurrences or effects may be taken into account to the extent that they have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, in relation to others in the industries of the Company and its subsidiaries, but only to the extent of the incremental disproportionate impact on the Company and its subsidiaries. In addition, the underlying cause of any decline, change or failure referred to in clauses (i) and (j) of the second bullet point above may be taken into account unless the underlying clause is otherwise excluded by the merger agreement. For purposes of the merger agreement, a “parent material adverse effect” means any fact, circumstance, change, event occurrence or effect that, individually or in the aggregate, materially impairs, materially delays or prevents, or would reasonably be expected to materially impair, materially delay or prevent, Parent or Merger Sub from completing the merger.

Conduct of Business Pending the Merger

The merger agreement provides that, from and after the date of the merger agreement and prior to the effective time or termination of the merger agreement, except with Parent’s prior written consent (which may not be unreasonably withheld, delayed or conditioned), as required by applicable law, as expressly contemplated by the merger agreement or as set forth in the company disclosure schedule to the merger agreement, the Company will, and will cause its subsidiaries to, carry on its business in all material respects in the ordinary course of business and use commercially reasonable efforts to preserve its business organization intact and maintain existing relations with key customers, suppliers and other third parties with whom the Company and its subsidiaries have significant business relationships, and will not and will cause its subsidiaries not to, take any of the following actions:

shares of capital stock or equity interests to the Company or any of its wholly owned subsidiaries and (3) the grant of any liens to secure obligations of the Company or any of its subsidiaries in respect of any indebtedness permitted under the eighth bullet point in this section;

In addition, the Company, Parent and Merger Sub have agreed that, except as contemplated by the merger agreement, they will not, and will not permit their respective subsidiaries to, take any action that could reasonably be expected to prevent or to impede, interfere with, hinder or delay in any material respect the completion of the merger and the other transactions contemplated by the merger agreement.

Access

Subject to certain exceptions and limitations, from and after the date of the merger agreement and prior to the effective time or earlier termination of the merger agreement, upon reasonable prior written notice, the Company is required to, and required to cause its subsidiaries to, afford to Parent, Merger Sub and each of their representatives (including, to the extent requested by Parent, the debt commitment parties) reasonable access, during normal business hours, to the Company’s officers, employees, properties, offices and other facilities, books, contracts and records, provided that (1) the foregoing will not require the Company or its subsidiaries to permit access to (a) any inspection or information that would violate any of its confidentiality obligations in effect as of the date of the merger agreement, (b) any information subject to attorney-client privilege or other privilege or trade secret protection or the work product doctrine, (c) information that, in the Company’s reasonable opinion, would result in a breach of a contract to which the Company or any of its subsidiaries were bound as of February 3, 2019, or (d) information related to the Company’s sale process, including any information related to the negotiation and execution of the merger agreement or to transactions potentially

competing with or alternative to the transactions contemplated by the merger agreement or proposals from other third parties relating to any competing or alternative transactions (including acquisition proposals (as defined below)) and the actions of the Company’s board of directors (or any committee thereof) with respect to any of the foregoing; (2) any such investigation must be conducted in a manner so as not to unreasonably interfere with the normal business operations of the Company or its subsidiaries or otherwise result in any undue burden with respect to the prompt and timely discharge of their respective employees’ normal duties; and (3) no investigation pursuant to this section will affect or be deemed to modify any representation or warranty made by the Company in the merger agreement; provided that the Company will use its reasonable best efforts to allow for any access or disclosure in a manner that does not result in the effects in the foregoing clauses (1)(a)-(c), including by making appropriate substitute arrangements.

In addition, the Company and Parent are required to promptly notify the other (1) of any notice or communication received from any governmental entity in connection with the transactions contemplated by the merger agreement or from any person alleging that such person’s consent is or may be required in connection with the transactions contemplated by the merger agreement, if such communication or failure to obtain such consent would reasonably be expected to be material to the Company, the surviving corporation or Parent, (2) of any actions commenced against the Company, Parent or any of their affiliates in connection with, arising from or relating to the merger agreement or the transactions contemplated by the merger agreement or (3) if the Company or Parent becomes aware of the occurrence or non-occurrence of any event that, individually or in the aggregate, would reasonably be expected to cause any condition to the merger or the transactions contemplated by the merger agreement not to be satisfied.

The “Go-Shop” Period — Solicitation of Other Acquisition Proposals

Under the merger agreement, from the date of the merger agreement until the no-shop period start date, the Company and its representatives have the right to (1) initiate or solicit, or knowingly facilitate or encourage, any inquiry and (2) engage in or otherwise participate in any discussions or negotiations regarding an acquisition proposal or inquiry or that would reasonably be expected to lead to an acquisition proposal, or, subject to the entry into, and in accordance with, an acceptable confidentiality agreement, provide any access to its properties, books or records or any non-public information to any person (and such person’s representatives and financing sources) relating to the Company or any of its subsidiaries in connection with the foregoing; provided that (i) the Company must provide to Parent any information relating to the Company or any of its subsidiaries that was not previously provided or made available to Parent substantially concurrently with (and in any event within 24 hours after) the time it is furnished to such person (and such person’s representatives and financing sources) and (ii) the Company and its subsidiaries are not permitted to pay, agree to pay or cause to be paid, or reimburse, agree to reimburse or cause to be reimbursed, the expenses of any such person in connection with any acquisition proposals or inquiries.

The “No-Shop” Period — No Solicitation of Other Acquisition Proposals

Under the merger agreement, from the no-shop period start date until the earlier to occur of the termination of the merger agreement and the effective time, the Company must not, and must cause its subsidiaries, and must use its reasonable best efforts to cause its and their directors, officers, employees, other affiliates, investment bankers, attorneys, accountants and other advisors or representatives not to, directly or indirectly:

Pursuant to the merger agreement, an “acquisition proposal” means any inquiry, proposal or offer from any person (other than Parent and its subsidiaries) relating to, in a single transaction or series of transactions:

On the no-shop period start date, the Company must notify Parent in writing of the number of parties with which the Company entered into an acceptable confidentiality agreement and the number of parties that submitted an acquisition proposal after the execution of the merger agreement and prior to the no-shop period start date, which notice must include a summary of any pending acquisition proposals that were made in writing by any excluded party (as defined below) or any other acquisition proposal which the Company’s board of directors determined in good faith, after consultation with its financial advisor and outside legal counsel, warranted the Company’s board of directors’ further discussion.

Pursuant to the merger agreement, an “excluded party” means any person from whom the Company or any of its representatives has received a written bona fide acquisition proposal after the execution of the merger agreement and prior to the no-shop period start date, which written acquisition proposal the Company’s board of directors has determined in good faith prior to the start of the no-shop period start date (after consultation with its outside counsel and its financial advisor) is or would reasonably be expected to lead to a superior proposal (as defined below); provided, however, that a person will immediately cease to be an excluded party (and the provisions of the merger agreement applicable to excluded parties will cease to apply with respect to such person) if (A) such acquisition proposal made by such person prior to the start of the no-shop period start date is withdrawn or (B) such acquisition proposal, in the good faith determination of the Company’s board of directors (after consultation with its outside counsel and its financial advisor), no longer is or would no longer be reasonably expected to lead to a superior proposal.

Existing Discussions or Negotiations

Pursuant to the merger agreement, the Company has agreed to, and to cause its subsidiaries and its and its subsidiaries’ directors, officers and employees to, and to instruct its affiliates and other representatives to, (1) on the no-shop period start date, immediately cease all solicitations, discussions and negotiations with any other persons (other than Parent and its representatives and any excluded party and its representatives) that may be ongoing with respect to an acquisition proposal and request that each such person (other than Parent and its

representatives and any excluded party and its representatives) promptly return or destroy all confidential information furnished to such person by or on behalf of the Company in connection with any acquisition proposal and (2) not terminate, amend, release or modify any provision of any standstill agreement, except that the Company will not be required to enforce, and will be permitted to waive, any provision of any standstill or confidentiality agreement solely to the extent that such provision prohibits or purports to prohibit a confidential acquisition proposal being made to the Company or the Company’s board of directors (or any committee thereof).

Receipt of Acquisition Proposals

At any time following the no-shop period start date and prior to the time the company stockholder approval is obtained, if the Company, directly or indirectly through one or more of its representatives, receives a written, unsolicited, bona fide acquisition proposal that did not result from a breach of the provisions of the merger agreement described above, then the Company and its representatives may contact the person or group of persons making the acquisition proposal to clarify the terms and conditions thereof so as to determine whether it constitutes or could reasonably be expected to result in a superior proposal and, if the Company’s board of directors determines in good faith after consultation (1) with its financial advisor and outside legal counsel that the acquisition proposal constitutes, or would reasonably be expected to result in, a superior proposal and (2) with its outside legal counsel that failure to take the actions described below would be reasonably likely to be inconsistent with its fiduciary obligations under applicable law, then the Company and its representatives may:

Pursuant to the merger agreement, a “superior proposal” means a bona fide written acquisition proposal that the Company’s board of directors has determined in its good faith judgment, after consultation with its financial advisor and outside legal counsel, and taking into consideration, among other things, all legal, financial, regulatory, timing and other aspects and risks of the proposal (including required conditions) and the person making the proposal and all of the other terms, conditions and other aspects of such acquisition proposal and the merger agreement that the Company’s board of directors deems relevant, to be more favorable to the Company’s stockholders from a financial point of view than the transactions contemplated by the merger agreement (including, if applicable, any revisions to the merger agreement made or proposed in writing by Parent pursuant to the merger agreement); provided, that for purposes of the definition of “superior proposal,” the references to “20%” and “80%” in the definition of acquisition proposal will be deemed to be references to “50%.”

Change in Board Recommendation

The Company’s board of directors has unanimously recommended that the Company’s stockholders vote “FOR” the proposal to adopt the merger agreement and the transactions contemplated thereby.

Except as expressly permitted by the merger agreement, neither the Company’s board of directors (nor any committee thereof) may:

The actions described in the bullet points above are referred to in this proxy statement as a “change of recommendation,” except that any “stop-look-and-listen” or similar communication described below or the failure by the Company’s board of directors to take a position with respect to an acquisition proposal referred to in the fourth bullet point above or a tender offer or exchange offer referred to in the fifth bullet point above will not be deemed a change of recommendation if the communication is made or the position is taken prior to the tenth business day after the commencement of the tender offer or exchange offer or Parent’s written request following the public disclosure of the acquisition proposal, as applicable (or such earlier time as referenced above).

However, before the company stockholder approval is obtained, the Company’s board of directors may (1) make a change of recommendation contemplated by the first and second bullet points above if, upon the occurrence of an intervening event (as defined below), the Company’s board of directors determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be reasonably likely to be inconsistent with its fiduciary obligations under applicable law or (2) if the Company receives, directly or indirectly through one or more of its representatives, either (x) after the date of the merger agreement and prior to the no-shop period start date from an excluded party an acquisition proposal or (y) after the no-shop period start date an unsolicited, written, bona fide acquisition proposal, in each of the case of clauses (x) and (y), that the Company’s board of directors concludes in good faith, after consultation with its financial advisor and outside legal counsel, constitutes a superior proposal and such acquisition proposal did not result from a material breach by the Company of the provisions of the merger agreement described under the section of this proxy statement entitled “The Merger Agreement — The ‘No-Shop’ Period — No Solicitation of Other Acquisition Proposals”, effect a change of recommendation and/or terminate the merger agreement in order to enter into an alternative acquisition agreement providing for such superior proposal, provided that in either case:

of recommendation continues to be a superior proposal or (2) in the case of an intervening event, the failure of the Company’s board of directors to make a change of recommendation would continue to be reasonably likely to be inconsistent with its fiduciary obligations under applicable law.

Any amendment to the financial terms or any other material change to the terms of a superior proposal requires the Company to deliver a new notice of change of recommendation and to comply with the requirements in the bullets above, provided that the subsequent notice period will only be three business days instead of five business days.

Under the merger agreement, an “intervening event” means a material event, occurrence, development or change in circumstances with respect to the Company and its subsidiaries, taken as a whole, that occurred or arose after the date of the merger agreement, which was unknown to, nor reasonably foreseeable by, the Company’s board of directors as of the date of the merger agreement and becomes known to or by the Company’s board of directors before the time stockholder approval is obtained, provided that the following do not constitute, and will not be considered in determining whether there has been, an intervening event: (1) the receipt, existence of or terms of an inquiry or acquisition proposal or any matter relating thereto or consequence thereof and (2) changes in the market price or trading volume of the shares of the Company or the fact that the Company meets or exceeds internal or published projections, budgets, forecasts or estimates of revenues, earnings or other financial results for any period (provided that the underlying causes of such change or fact will not be excluded by clause (2)).

The merger agreement does not prohibit the Company or the Company’s board of directors (or any committee thereof) from (1) complying with its disclosure obligations under applicable law or the NASDAQ, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the Exchange Act (or any similar communication to stockholders) or (2) making any “stop-look-and-listen” communication to stockholders of the Company pursuant to Rule 14d-9(f) under the Exchange Act (or any similar communications to stockholders, including any similar communication in response to an acquisition proposal that is not a tender offer or exchange offer), provided that (i) except as provided in the next sentence, any disclosure made as permitted under clause (1) (other than any “stop-look-and-listen” or similar communication) that relates to an acquisition proposal will be deemed a change of recommendation unless the Company’s board of directors expressly publicly reaffirms the company recommendation in connection with such disclosure and (ii) neither the Company nor the Company’s board of directors (nor any committee thereof) will be permitted to recommend any acquisition proposal (including that the Company’s stockholders tender any securities in connection with any tender offer or exchange offer that is an acquisition proposal) or otherwise make a change of recommendation with respect thereto, except as permitted as described above. Any “stop-look-and-listen” or similar communication permitted under clause (2) above made prior to the tenth business day after the commencement of such tender offer or exchange offer (or, if earlier, no fewer than two business days prior to the date on which the special meeting is scheduled to be held) will not constitute a change of recommendation or otherwise constitute a basis for Parent to terminate the merger agreement.

The Company must promptly (and in any event within 24 hours) notify Parent in writing if any acquisition proposal or inquiry (including any request for non-public information in connection therewith) is received by the Company, any of its subsidiaries or any of its representatives, indicating (except to the extent prohibited by any applicable law or contract in effect as of the date of the merger agreement) the identity of the person or group of persons making the acquisition proposal, inquiry or request and the material terms and conditions of any such acquisition proposal (including, if applicable, copies of any written inquiries and any proposed agreements related thereto). The Company must (1) promptly (and in any event within 24 hours) notify Parent in writing (a) if the Company determines to begin providing non-public information or to engage in negotiations or discussions concerning an acquisition proposal and (b) thereafter of any change to the financial and other material terms and conditions of any acquisition proposal, and (2) otherwise keep Parent reasonably informed of the status and material terms of any such inquiry, acquisition proposal, discussions or negotiations on a reasonably current basis, including by providing a copy of all proposals, offers or drafts of proposed agreements. The Company and its subsidiaries may not enter into any confidentiality or similar agreement that would prohibit them from providing such information to Parent.

The Special Meeting

The Company has agreed to take all action necessary to convene a meeting of the holders of the Company’s common stock (which meeting, together with any adjournment or postponement, is referred to in this proxy statement as the “special meeting”) as promptly as reasonably practicable after the SEC confirms that it has no further comments on the proxy statement or after the SEC fails to provide to the Company or its outside counsel any comments, objections or requests with respect to the proxy statement, to consider and vote upon the adoption of the merger agreement; provided that the Company may postpone or adjourn the special meeting with Parent’s written consent (which may not be unreasonably withheld, conditioned or delayed), for the absence of a quorum, to allow reasonable additional time to solicit additional proxies if the Company has not received proxies representing a sufficient number of shares of common stock to adopt the merger agreement, whether or not a quorum is present, if required by applicable law, or to allow reasonable time additional for the filing and dissemination of any supplemental or amended disclosure if, in the good faith judgment of the Company’s board of directors (after consultation with outside legal counsel), the failure to do so would be reasonably likely to be inconsistent with its fiduciary obligations under applicable law. However, unless agreed by Parent, the special meeting will not be postponed or adjourned to a date that is more than five business days prior to the termination date (as defined below).

Subject to the Company’s board of directors’ right to make a change of recommendation, as described in the section of this proxy statement entitled “— Change in Board Recommendation,” the Company’s board of directors must include the company recommendation in this proxy statement and must use its reasonable best efforts to lawfully obtain the company stockholder approval, including actively soliciting proxies in favor of the adoption of the merger agreement at the special meeting.

In the event that the Company’s board of directors makes a change of recommendation, the Company will be required to submit the merger agreement to holders of the Company’s common stock to obtain the company stockholder approval at the special meeting unless the merger agreement is terminated in accordance with its terms. In addition, the Company is not permitted to submit to the vote of its stockholders any other acquisition proposal unless the merger agreement is terminated in accordance with its terms.

Debt Financing and Debt Financing Cooperation

In connection with the execution of the merger agreement, Parent entered into, delivered and subsequently amended and restated and re-delivered the debt commitment letter with the commitment parties, pursuant to which (x) Credit Suisse, Nomura, Bank of America Merrill Lynch and Ares (each of the foregoing, in certain cases, acting through its respective appropriate affiliates or branches) have committed, upon certain terms and subject to certain conditions, to (i) lend the borrower $2.3 billion in aggregate principal amount of senior secured first lien term loans in connection with the debt financing of the amounts payable pursuant to the merger agreement and the transactions contemplated thereby and (ii) make available to the borrower a senior secured first lien revolving credit facility in an aggregate principal amount of up to $200 million and (y) Ares and GSO have committed, upon certain terms and subject to certain conditions, to lend the borrower $900 million in aggregate principal amount of senior secured second lien term loans in connection with the debt financing of the amounts payable pursuant to the merger agreement and the transactions contemplated thereby (such financing, collectively, is referred to in this proxy statement as the “debt financing”) and (2) redacted copies of the related fee letters.

Parent and Merger Sub have agreed to use reasonable best efforts to take, or cause to be taken, all actions and to use reasonable best efforts to do, or cause to be done, all things necessary, proper or advisable to obtain the proceeds of the debt financing and any replacement debt financing on the terms and conditions described in the debt commitment letter or replacement debt financing documents, as applicable, as promptly as possible, taking into account the expected timing of the marketing period but in any event prior to the date upon which the merger is required to be completed pursuant to the terms of the merger agreement. The Company is required to use reasonable best efforts to, and to cause its subsidiaries to use their reasonable best efforts to, and to use its reasonable best efforts to cause its and its subsidiaries’ representatives to, provide all cooperation reasonably requested by Parent necessary and customary for the arrangement of the debt financing, subject to certain limitations.

Employee Matters

During the period commencing on the closing date and ending on the first anniversary thereof, Parent has agreed to, or cause its applicable subsidiary to, provide each continuing employee of the Company and its subsidiaries with (i) a base salary or regular hourly wage (whichever is applicable) and a short-term cash incentive compensation opportunity, that, in each case, is not less than the base salary or regular hourly wage and short-term cash incentive compensation opportunity in effect for, or available to, the applicable continuing employee as of immediately prior to the effective time, and (ii) other compensation opportunities (excluding any equity award or other long-term compensation opportunities) and employee benefits (excluding any severance-related benefits) that are, in each case, substantially similar in the aggregate to the other compensation (excluding any equity award or other long-term compensation opportunities) and employee benefits (excluding any severance-related benefits), respectively, provided or available to the applicable continuing employee as of immediately prior to the effective time.

During the period commencing on the closing date and ending on the first anniversary thereof, the surviving corporation will provide each continuing employee whose employment is terminated by Parent or one of its subsidiaries with severance benefits and on terms and conditions, in each case, that are no less favorable than the severance benefits and protections provided to each such continuing employee as of immediately prior to the effective time as set forth in the company disclosure schedule to the merger agreement.

Parent has agreed to cause any employee benefit plans of Parent and its subsidiaries in which the continuing employees are entitled to participate after the closing date to take into account for purposes of eligibility, vesting and benefit accruals (other than benefit accruals under any defined benefit pension plan or as would result in a duplication of benefits), service prior to the effective time by such employees to the Company and its subsidiaries (and any predecessors) as if such service were with Parent or its subsidiaries.

In addition, with respect to any employee benefit plans maintained by Parent and its subsidiaries for the benefit of the continuing employees following the closing date Parent has agreed to, and to cause the surviving corporation and its subsidiaries to, (i) waive any eligibility requirements or pre-existing condition limitations or waiting period requirements with respect to any such plan providing medical, dental, pharmaceutical or vision benefits to any continuing employee to the same extent waived under the analogous Company benefit plan prior to the closing date, and (ii) give effect, in determining any deductible, co-insurance and maximum out-of-pocket limitations, to any eligible expenses paid by such employees during the calendar year in which the effective time occurs (or such later date on which a continuing employee commences participation in any new plan of the surviving corporation and its subsidiaries) under analogous Company benefit plans.

Efforts to Complete the Merger

The Company, Parent and Merger have agreed to, and to cause their respective subsidiaries to, each use its reasonable best efforts to promptly take, or cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with the other in doing (and, in the case of Parent, to use reasonable best efforts to cause its equity financing sources for the merger and their affiliates to assist and cooperate as necessary or appropriate with the other parties), all things necessary, proper or advisable under the merger agreement or applicable law or otherwise complete and make effective the transactions contemplated by the merger agreement as soon as practicable, including to (1) obtain from any governmental entities and any third parties any actions, non-actions, clearances, waivers, consents, approvals, expirations or terminations of waiting periods, permits or orders required to be obtained by the Company, Parent, or any of their respective affiliates in connection with the authorization, execution, delivery and performance of the merger agreement and the completion of the transactions contemplated by the merger agreement, (2) make all registrations, filings, notifications or submissions which are necessary or advisable with respect to the merger agreement and transactions contemplated thereby under (i) any applicable federal or state securities law, (ii) the HSR Act, the GWB and any other applicable regulatory law and (iii) any other applicable law, (3) defend against any lawsuits or other legal proceedings, whether judicial or administrative, challenging the merger agreement or the transactions contemplated thereby and (4) execute and deliver any additional instruments necessary to complete the transactions contemplated by the merger agreement. However, the Company and its subsidiaries will not be required to pay prior to the effective time any fee, penalty or other consideration to any third party to obtain consent or approval required for the completion of the merger under any contract. Further, without Parent’s prior written consent, neither the Company nor its subsidiaries may pay or commit to pay any third party whose

consent or approval is being solicited any amount of cash or other consideration, or make any commitment or incur any liability or other obligation in connection therewith, in each case other than fees for the filings described in clause (2) above and certain other agreed costs and expenses.

The Company, Parent and Merger Sub must (1) subject to any restrictions under any regulatory law, promptly notify each other of any communication to that party from any governmental entity with respect to the merger agreement and the transactions and other agreements contemplated by the merger agreement and permit the other parties to review in advance any proposed material communication to any governmental entity, (2) unless required by applicable law, not agree to participate in any meeting or teleconference with any governmental entity in respect of any filing, investigation or other inquiry with respect to the merger agreement and the transactions and other agreements contemplated by the merger agreement unless it consults with the other parties in advance and, to the extent permitted by such governmental entity, gives the other parties the opportunity to attend and participate thereat, (3) subject to any restrictions under any regulatory law, furnish the other parties with copies of all correspondence, filings and communications (and memoranda setting forth the substance thereof) between it and its subsidiaries and their respective representatives on the one hand, and any governmental entity or members of its staff on the other hand, with respect to the merger agreement and the transactions and other agreements contemplated by the merger agreement (excluding documents and communications subject to the attorney client privilege or other privilege or trade secret protection or the work product doctrine), and (4) furnish the other parties with such necessary information and reasonable assistance as such other parties may reasonably request in connection with their preparation of necessary filings, registrations or submissions of information to any governmental entity in connection with the merger agreement and the transactions and other agreements contemplated by the merger agreement, including any filings necessary or appropriate under the provisions of any regulatory law; provided that the Company, Parent and Merger Sub may each reasonably designate competitively sensitive material as “outside counsel only material.” Materials provided to the other party or its counsel pursuant to the foregoing may be redacted to remove references concerning the valuation of the Company, privileged communications or other competitively sensitive material.

Antitrust Matters

The Company, Parent and Merger Sub have agreed to make, or to cause to be made, an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by the merger agreement as promptly as practicable after the date of the merger agreement (and in any event, within five business days), and to make, or cause to be made, all filings and authorizations, if any, required under the GWB or any other applicable regulatory law as promptly as reasonably practicable and supply as promptly as reasonably practicable any additional information and material that may be requested by a governmental entity pursuant to any regulatory law. In furtherance of the foregoing, the Company, Parent and Merger Sub must request and use reasonable best efforts to obtain early termination of the waiting period under the HSR Act, and no party may agree to extend any waiting period under any regulatory law applicable to, or commit not to complete any of the transactions contemplated by, the merger agreement without the prior written consent of all other parties to the merger agreement.

The Company will (and will cause its subsidiaries to), Parent will (and will cause its subsidiaries to) and Merger Sub will use its reasonable best efforts to resolve any objections that may be asserted with respect to the transactions contemplated under the merger agreement under any regulatory law. If any action, including any action by a private party, is instituted (or threatened to be instituted) challenging the transactions contemplated by the merger agreement as violative of any regulatory law, the Company will (and will cause its subsidiaries to), Parent will (and will cause its subsidiaries to) and Merger Sub will cooperate in all respects and use its reasonable best efforts to contest and resist any such action and have vacated, lifted, reversed or overturned any order (whether temporary, preliminary or permanent) that is in effect and that restricts, prevents or prohibits completion of the transactions contemplated by the merger agreement, including by pursuing all reasonable avenues of administrative and judicial appeal. The Company, Parent and Merger Sub must, and the Company and Parent must cause their respective subsidiaries to, (1) negotiate, commit to and effect, by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of any assets or businesses of Parent or any of its subsidiaries, or of the Company or any of its subsidiaries, and (2) otherwise take or commit to take any actions that after the closing date limit Parent’s or its subsidiaries’ (including the surviving corporation’s) freedom of action with respect to, or its ability to retain, one or more businesses, product lines or assets of Parent or any of its subsidiaries (including the surviving corporation), in each case as may be required in order to avoid the entry

of, or to effect the dissolution of, any order which would otherwise have the effect of preventing the closing of the merger, materially delaying the closing or delaying the closing beyond the termination date. However, the Company will only be required to take or commit to take any such action, or agree to any such condition or restriction, if such action, commitment, agreement, condition or restriction is binding on the Company only if and when the closing of the merger occurs.

Indemnification and Insurance

From and after the effective time, Parent and the surviving corporation must, jointly and severally, indemnify and hold harmless, to the fullest extent permitted under applicable law, each present and former director and officer of the Company and its subsidiaries and each fiduciary of a company benefit plan (collectively referred to in this proxy statement, together with such person’s heirs, executors or administrators, as the “indemnified parties”), against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement incurred in connection with any actual or threatened action, whether civil, criminal, administrative or investigative, arising out of, related to or in connection with any action or omission occurring or alleged to have occurred whether prior to or at the effective time (including in connection with such indemnified parties’ service as a director or officer of the Company or any of its subsidiaries or a fiduciary of a company benefit plan or services performed by such persons at the request of or for the benefit of the Company or its subsidiaries), whether asserted or claimed prior to, at or after the effective time, including, in connection with (1) the transactions contemplated by the merger agreement and (2) actions to enforce the provision of the merger agreement described here or any other indemnification, exculpation or advancement right of any indemnified party. For a period of six years from and after the effective time, Parent is required, unless otherwise prohibited by applicable law, to cause the certificate of incorporation and bylaws of the surviving corporation to contain provisions no less favorable to the indemnified parties with respect to indemnification, exculpation from liabilities and rights to advancement of expenses than those set forth as of the date of the merger agreement in the certificate of incorporation and bylaws of the Company, and not to amend, repeal or otherwise modify those provisions in a manner that would adversely affect the rights of any indemnified party. In addition, from and after the effective time, each of Parent and the surviving corporation must advance costs and expenses (including attorneys’ fees) as incurred by any indemnified party promptly (and in any event within 10 days) after receipt by Parent of a written request for such advance to the fullest extent permitted under applicable law, provided that any person to whom expenses are advanced provides an undertaking to repay the advances if it is ultimately determined by final adjudication that such person is not entitled to indemnification.

In addition, prior to the effective time, the Company must obtain and fully pre-pay the premium for (and, following the effective time, the surviving corporation must, and Parent must cause the surviving corporation to, maintain with reputable and financially sound carriers) the extension of (1) the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies and (2) the Company’s existing fiduciary liability insurance policies (referred to in this proxy statement as “D&O insurance”), in each case for a claims reporting or discovery period (whichever is greater) of six years from and after the effective time with respect to any claim arising from facts or events that existed or occurred at or prior to the effective time with terms, conditions, retentions, coverage limits and limits of liability that are at least as favorable as the coverage provided under the Company’s existing policies in effect on the date of the merger agreement, or the surviving corporation will, and Parent will cause the surviving corporation to, maintain the D&O insurance for such six-year period or purchase comparable insurance as the D&O insurance for such six-year period with terms, conditions, retentions and limits of liability that are at least as favorable as the coverage provided under the Company’s existing policies as of the date of the merger agreement. In no event will the Company or the surviving corporation be required to expend for any such policies pursuant to the foregoing an annual premium amount in excess of 300% of the current aggregate annual premium paid by the Company for such insurance and, if the annual premiums of such insurance coverage exceeds such maximum amount, the Company or the surviving corporation will obtain a policy with the greatest coverage available for such maximum amount.

Coordination on Transaction Litigation

The Company, Parent and Merger Sub have agreed, subject to the preservation of attorney-client or other applicable privilege, trade secret protection and the provisions of the merger agreement governing the use and disclosure of confidential information, to keep the other party reasonably informed on a current basis with respect to any actions commenced against it or any of its affiliates arising from or relating to the merger

agreement or the transactions contemplated by the merger agreement (referred to in this proxy statement as “transaction litigation”), to reasonably consult with the other party and give consideration to the other’s advice regarding transaction litigation, and to give the other party the opportunity to participate in the defense, settlement or prosecution of any transaction litigation, provided that the Company will in any event control any such defense, settlement or prosecution. The Company, Parent and Merger Sub have agreed not to settle any transaction litigation without the written consent of the other party (which may not be unreasonably withheld, conditioned or delayed).

Other Covenants and Agreements

The merger agreement also contains additional covenants, including covenants relating to (1) the filing of this proxy statement, (2) public announcements with respect to the transactions contemplated by the merger agreement, (3) other actions related to takeover statutes, rights plans and reporting requirements under Section 16 of the Exchange Act, (4) satisfaction, prior to the closing of the merger, of certain existing obligations to issue common stock and (5) the conduct prior to the effective time of Parent and Merger Sub.

Conditions to Completion of the Merger

Each party’s obligation to complete the merger is subject to the satisfaction or waiver at or prior to the effective time of the following conditions:

The respective obligations of Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver by Parent at or prior to the effective time of the following additional conditions:

The obligation of the Company to complete the merger is subject to the satisfaction or waiver by the Company at or prior to the effective time of the following additional conditions:

No party may rely, either as a basis for not completing the merger or any of the other transactions contemplated by the merger agreement or terminating the merger agreement and abandoning the merger, on the failure of a condition to closing set forth in the merger agreement to be satisfied if such failure was caused by such party’s failure to act in good faith or to use the efforts to cause the closing of the merger to occur as required by the merger agreement.

Termination

The merger agreement may be terminated and the merger may be abandoned in the following circumstances:

respect to the condition relating to the expiration or termination of the waiting period applicable to the completion of the merger under the HSR Act or the GWB, if the failure of such condition to be satisfied is primarily caused by a material breach by Parent or Merger Sub of any of their respective covenants or agreements set forth in the provisions of the merger agreement described in the section of this proxy statement entitled “The Merger Agreement — Efforts to Complete the Merger”); Parent and Merger Sub do not complete the merger on or prior to the date the closing is required to occur pursuant to the merger agreement; the Company has irrevocably confirmed in writing to Parent that it is ready, willing and able to complete the merger throughout the three-business-day period following delivery of such confirmation; and Parent and Merger Sub fail to complete the merger within three business days following delivery of such confirmation;

Company Termination Fee

The Company will pay Parent the company termination fee in an amount equal to $331 million in the following circumstances:

(1) the merger agreement is terminated by (i) either the Company or Parent because the merger has not been completed on or before the termination date, (ii) either the Company or Parent because the company stockholder approval has not been obtained or (iii) Parent as a result of a breach by the Company of any representation, warranty, covenant or agreement in the merger agreement, which breach (x) gives rise to the failure of a condition to the obligations of Parent and Merger Sub to

complete the merger related to the Company’s representations, warranties, covenants and agreements in the merger agreement and (y) is either not capable of being cured before the termination date or is not cured before the earlier of 30 business days following receipt of written notice from Parent of such breach or the termination date, and in case of each of clause (i) and (iii) above, at the time of the termination, the company stockholder approval has not been obtained, and

(2) any person has publicly proposed, announced or made an acquisition proposal (or in the case of clause (1)(iii), an acquisition proposal has been made to the Company’s management or the Company’s board of directors (or any committee thereof)) after the date of the merger agreement and prior to the special meeting and has not been withdrawn at least two business days prior to the special meeting (and in the case of clause (1)(iii), prior to the breach that forms the basis of the termination), and

(3) within 12 months after the termination, the Company completes an acquisition proposal or enters into a definitive agreement for an acquisition proposal that is subsequently completed (even if after such 12-month period),

(provided that, for purposes of the provision referred to in this bullet point, the references to “20%” and “80%” in the definition of “acquisition proposal” are deemed to be references to “50%”);

In no event will the Company be required to pay the company termination fee on more than one occasion or be subject to monetary damages for a willful and material breach by the Company of its obligations under the merger agreement in an amount in excess of $550 million (referred to in this proxy statement as the “company damage cap”) in the aggregate (including any payment of the company termination fee). In addition, in no event will Parent and Merger Sub be entitled to (1) payment of monetary damages prior to the termination of the merger agreement or in amounts in excess of the company damage cap, (2) payment of both monetary damages and the company termination fee in a combined amount in excess of the company damage cap or (3) both (a) payment of any monetary damages and/or the company termination fee and (b) a grant of specific performance of the merger agreement or any other equitable remedy against the Company that results in the closing of the merger.

Parent Termination Fee

Parent will pay the Company the parent termination fee in an amount equal to $550 million if the merger agreement is terminated by the Company because the marketing period has ended and all of the conditions to the obligation of Parent to complete the merger have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the merger, each of which is capable of being satisfied if the closing date were the date of such termination, and, solely with respect to the condition relating to the expiration or termination of the waiting period applicable to the completion of the merger under the HSR Act or the GWB, if the failure of such condition to be satisfied is primarily caused by a material breach by Parent or Merger Sub of any of their respective covenants or agreements set forth in the provisions of the merger agreement described in the section of this proxy statement entitled “— Efforts to Complete the Merger”); Parent and Merger Sub do not complete the merger on or prior to the date the closing is required to occur pursuant to the merger agreement; the Company has irrevocably confirmed in writing to Parent that it is ready, willing and able to complete the merger on and throughout the three-business-day period following delivery of such confirmation; and Parent and Merger Sub fail to complete the merger within three business days following delivery of such confirmation; provided that any purported termination of the merger agreement by either the Company or Parent because the merger has not been completed on or before the termination date will be deemed to be a termination on the grounds described in this paragraph if, at the time of such termination, the Company would have been entitled to terminate the merger agreement on the grounds described in this paragraph.

In no event will Parent be obligated to pay the parent termination fee on more than one occasion or be subject to monetary damages for a willful and material breach by Parent or Merger Sub of their obligations under the merger agreement in an amount in excess of the parent termination fee in the aggregate. In addition, in no event will the Company be entitled to (1) payment of monetary damages prior to the termination of the merger agreement or in amounts in excess of the parent termination fee, (2) payment of both monetary damages and the parent termination fee in a combined amount in excess of the parent termination fee or (3) both (a) payment of any monetary damages and/or the parent termination fee and (b) a grant of specific performance of the merger agreement or any other equitable remedy against Parent or Merger Sub that results in the closing of the merger.

Limitation on Remedies

In the event of the termination of the merger agreement and the abandonment of the merger in accordance with the provisions described in the section of this proxy statement entitled “— Termination,” the merger agreement will become void and of no effect with no liability to any person on the part of the Company, Parent or Merger Sub or their respective affiliates, directors, officers, employees or stockholders, except that no such termination will relieve (1) the Company of any liability to pay the company termination fee or Parent of any liability to pay the parent termination fee, in each case to the extent required pursuant to the merger agreement, or (2) the Company, Parent or Merger Sub of any liability for any willful and material breach of the merger agreement prior to such termination, subject to the other limitations set forth in the merger agreement. In addition, certain sections of the merger agreement, including among others sections relating to termination, termination fees and expenses and confidentiality, will survive termination.

As noted above, in no event will the Company be required to pay the company termination fee on more than one occasion or be subject to monetary damages for a willful and material breach by the Company of its obligations under the merger agreement in an amount in excess of the company damage cap in the aggregate (including any payment of the company termination fee). In addition, in no event will Parent and Merger Sub be entitled to (1) payment of monetary damages prior to the termination of the merger agreement or in amounts in excess of the company damage cap, (2) payment of both monetary damages and the company termination fee in a combined amount in excess of the company damage cap or (3) both (a) payment of any monetary damages and/or the company termination fee and (b) a grant of specific performance of the merger agreement or any other equitable remedy against the Company that results in the closing of the merger.

As noted above, in no event will Parent be obligated to pay the parent termination fee on more than one occasion or be subject to monetary damages for a willful and material breach by Parent or Merger Sub of their obligations under the merger agreement in an amount in excess of the parent termination fee in the aggregate. In addition, in no event will the Company be entitled to (1) payment of monetary damages prior to the termination of the merger agreement or in amounts in excess of the parent termination fee, (2) payment of both monetary damages and the parent termination fee in a combined amount in excess of the parent termination fee or (3) both (a) payment of any monetary damages and/or the parent termination fee and (b) a grant of specific performance of the merger agreement or any other equitable remedy against Parent or Merger Sub that results in the closing of the merger.

Expenses

Except as otherwise provided in the merger agreement or each limited guarantee, whether or not the merger is completed, all costs and expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring such expense, except that all filing fees under the HSR Act in connection with the transactions contemplated by the merger agreement will be borne by Parent.

Amendment and Modification

Subject to the provisions of applicable law, at any time prior to the effective time, the merger agreement may be amended, modified or waived if the amendment, modification or waiver is in writing and signed, in the case of an amendment or modification, by Parent, Merger Sub and the Company, or in the case of a waiver, by the party against whom the waiver is to be effective, except that (1) after receipt of the company stockholder approval, no amendment may be made which by applicable law requires further approval by the holders of the Company’s common stock without obtaining that further approval and (2) the provisions of the merger agreement to which the lenders under the debt commitment letter and their respective representatives are third party beneficiaries may not be amended in any way adverse to such lenders or their representatives without the prior written consent of such lenders.

Jurisdiction; Specific Enforcement

Under the merger agreement, each of the parties has agreed that it will bring any action or proceeding in respect of any claim arising out of or relating to the merger agreement or the transactions contemplated by the merger agreement exclusively in the Court of Chancery of the State of Delaware or, if that court lacks or declines to accept jurisdiction, another federal or state court located in the State of Delaware. However, each of the parties

has agreed that it will not be permitted to bring or support any action or claim against the lenders party to the debt commitment letter or their representatives arising out of or relating to the merger agreement or any of the transactions contemplated by the merger agreement in any forum other than any state or federal court sitting in the Borough of Manhattan in the City of New York.

Each of the parties has agreed that if for any reason any of the provisions of the merger agreement are not performed in accordance with their specific terms or are otherwise breached or threatened to be breached, irreparable damage would occur for which monetary damages would not be an adequate remedy. Accordingly, in addition to any other available remedies a party may have in equity or at law, each party will be entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement. Notwithstanding the foregoing, (i) the Company will be entitled to specific performance of Parent’s and Merger Sub’s obligations pursuant to the merger agreement and the equity commitment letters to complete the merger only if all of the conditions to Parent’s obligation to effect the merger (set forth in sections 6.1 and 6.2 of the merger agreement) have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the merger, provided that those conditions would be satisfied if the closing were on such date), Parent and Merger Sub fail to complete the closing by the date the closing is required to have occurred pursuant to the merger agreement, Parent’s debt financing has been funded or will be funded at the closing if Parent’s equity financing is funded at the closing, and the Company has irrevocably confirmed in a written notice to Parent that the closing will occur if Parent’s equity financing and debt financing are funded and specific performance is granted; and (ii) the Company will be entitled to specific performance requiring Parent and Merger Sub to enforce the terms of the debt commitment letter and the obligations of the lenders to fund the debt financing only if all of the conditions to Parent’s obligation to effect the merger (set forth in sections 6.1 and 6.2 of the merger agreement) have been satisfied (other than those conditions that by their nature are to be satisfied at the closing of the merger, provided that those conditions would be satisfied if the closing were on such date), Parent and Merger Sub fail to complete the closing by the date the closing is required to have occurred pursuant to the merger agreement, all of the conditions (other than those conditions that by their nature are to be satisfied at the closing of the merger under the debt commitment letter, provided that those conditions would be satisfied if the closing were on such date) to the consummation of the debt financing provided for in the debt commitment letter have been satisfied, and the Company has irrevocably confirmed in a written notice to Parent that the closing will occur if Parent’s equity financing and debt financing are funded and specific performance is granted. Pursuant to the merger agreement, each of the parties has agreed that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that there is adequate remedy at law or that an award of specific performance is not an appropriate remedy.

ADVISORY VOTE ON NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION

As required by Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, Ultimate is providing its stockholders with a separate advisory (non-binding) vote to approve certain compensation that may be paid or become payable to its named executive officers in connection with the merger, as described in the table in the section of this proxy statement entitled “The Merger — Interests of the Company’s Directors and Executive Officers in the Merger — Quantification of Potential Payments and Benefits to the Company’s Named Executive Officers in Connection with the Merger,” including the footnotes to the table and related narrative discussion beginning on page 55 of this proxy statement.

The Ultimate board of directors unanimously recommends that the stockholders of Ultimate approve the following resolution:

“RESOLVED, that the compensation that may be paid or become payable to Ultimate’s named executive officers in connection with the merger, and the agreements or understandings pursuant to which such compensation may be paid or become payable, in each case, as disclosed pursuant to Item 402(t) of Regulation S-K in the table in the section of this proxy statement entitled “The Merger — Interests of the Company’s Directors and Executive Officers in the Merger — Quantification of Potential Payments and Benefits to the Company’s Named Executive Officers in Connection with the Merger,” including the footnotes to the table and the related narrative discussion, is hereby APPROVED.”

The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement. Accordingly, you may vote to adopt the merger agreement and vote not to approve the named executive officer merger-related compensation proposal and vice versa. Because the vote on the named executive officer merger-related compensation proposal is advisory only, it will not be binding on either Ultimate or Parent. Accordingly, if the merger agreement is adopted and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto under the applicable compensation agreements and arrangements, regardless of the outcome of the non-binding, advisory vote of Ultimate’s stockholders.

The above resolution approving the merger-related compensation of Ultimate’s named executive officers on an advisory (non-binding) basis requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

The Ultimate board of directors unanimously recommends that the stockholders of Ultimate vote “FOR” the named executive officer merger-related compensation proposal.

VOTE ON ADJOURNMENT

The Company’s stockholders are being asked to approve a proposal that will give the Ultimate board of directors authority to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement, if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. If this adjournment proposal is approved, the special meeting could be adjourned by the Ultimate board of directors to any date (subject to certain restrictions in the merger agreement, including that the special meeting may not be held, without Parent’s consent, on a date that is more than five business days prior to the termination date). In addition, the Ultimate board of directors could postpone the special meeting before it commences. If the special meeting is adjourned for the purpose of soliciting additional proxies, stockholders who have already submitted their proxies will be able to revoke them at any time before their use. If you sign and return a proxy and do not indicate how you wish to vote on any proposal, or if you sign and return a proxy and you indicate that you wish to vote in favor of the proposal to adopt the merger agreement but do not indicate a choice on the adjournment proposal, your shares of common stock will be voted in favor of the adjournment proposal.

The Company does not anticipate calling a vote on this proposal if the proposal to adopt the merger agreement is approved by the requisite number of shares of Ultimate common stock at the special meeting.

The vote on the adjournment proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement. Accordingly, you may vote to approve the proposal to adopt the merger agreement and vote not to approve the adjournment proposal and vice versa.

Approval of the adjournment proposal requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

The Ultimate board of directors unanimously recommends that the stockholders of Ultimate vote “FOR” the adjournment proposal, if a vote on the adjournment proposal is called.

MARKET PRICE OF THE COMPANY COMMON STOCK

Ultimate’s common stock is traded on the NASDAQ under the symbol “ULTI.” On [      ], there were approximately [      ] holders of record of our common stock. Certain shares of our common stock are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

The following table sets forth for the periods indicated the high and low sales prices per share for our common stock on the NASDAQ. The table also provides information as to dividends declared per share of our common stock.

The closing sale price of our common stock on February 1, 2019, the last trading day prior to the execution of the merger agreement, was $277.83 per share. On [      ], the most recent practicable date before the filing of this proxy statement, the closing price for our common stock was $[      ] per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Except as noted below, the following table sets forth the amount and percent of shares of our common stock that as of February 15, 2019, are deemed under the rules of the SEC to be “beneficially owned” by each member of the Ultimate board of directors, by each of our named executive officers, by all of our directors and executive officers as a group, and by any person or “group” (as that term is used in the Exchange Act) known to us to be a “beneficial owner” of more than 5% of the outstanding shares of our common stock as of that date. The information concerning the beneficial ownership of our directors and officers is based solely on information provided by those individuals. Unless otherwise stated, the beneficial owner has sole voting and investment power over the listed common stock or shares such power with his or her spouse.