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4.4. SR 02-01-2016 Request for Action To Mayor and City Council Item Number 4.4 Agenda Section Consent Meeting Date February 1, 2016 Prepared by Lauren Wipper, Human Resource Representative Tim Simon, Finance Director Item Description Human Resource Information System (HRIS) Software Agreement Reviewed by Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, the agreement with Ultimate Software Group, Inc. as a Human Resource Information System (HRIS), timekeeping, and payroll service provider. Background/Discussion The migration to an integrated HRIS system to manage human resources and personnel management processes has been a long-time administration goal. Many of our human resource processes are cumbersome, redundant, time-consuming, and subject to human error. The Council approved budgeted funds for a system in 2015; however, we found most HRIS systems to be third-party applications that were pieced together by the provider. We researched many and demoed five of these systems but were unable to find anything that suited all of our needs. We looked further and found two systems, ADP and UltiPro, which would incorporate all of the human capital components from online application processing, onboarding, asset management, timekeeping, electronic personnel evaluation, training documentation into one system. One caveat to their systems was that they were built off of their respective payroll systems. A staff committee met with representatives from both ADP and The Ultimate Software Group, the developers of UltiPro. We also spoke with other organizations that use each of these systems and visited the City of Eden Prairie who recently implemented UltiPro. Ultimate Software Group, Inc. has over 2,800 customers in 160 countries and a 95% customer retention rate in their 25-plus years in business. UltiPro is a cloud solution that provides web-based access to employees and managers as well as our HR and payroll administrators. They are offering a three-year contract, with no price increases. Ultimate Software ADP Implementation Costs $24,100 $14,000 Ongoing yearly Costs $50,400 $61,782 Financial Impact Full implementation is expected to take 20 weeks with a target date of July 1, 2016. The capital improvement plan (CIP) has a budget of $75,000 which accounted for the first year. With the current implementation timeline we expect the amount to be closer to $49,300. We will continue our contract with our current payroll and timekeeping providers until we are fully implemented with UltiPro. The elimination of these current contracts will result in an ongoing savings of approximately $10,000. After implementation, we will evaluate all the efficiencies gained and propose any other adjustments in the 2017 budget. Attachments  2016-2020 Capital Improvement Plan (Page 64)  Ultimate Software Group, Inc. UltiPro Agreement (reviewed by City attorney) 75,00075,000 75,000 75,000 75,00075,000 75,000 75,000 The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 1 of 19 3. Effective Date of the Agreement February 1 , 2016 \ap_4_\ The Ultimate Software Group, Inc. (“Ultimate Software”) makes available certain software for its customers to purchase as a service. The software and service are subject to the attached General Terms and Conditions and in Exhibits attached hereto all collectively hereinafter referred to as the “Agreement”. Ultimate Software and CUSTOMER (as outlined in Section 1 above) may each individually be referred to as a “Party” and may collectively be referred to as the “Parties”. 4. A. Subscription Offering (as defined below and in the General Terms and Conditions) and pricing: UltiPro Agreement Subscription Fee $24.00 per Compensated Employee per month Plus $4.00 per HR Only Employee per month Plus $1.00 per Terminated Web Employee per month UltiPro includes the following Software Modules only: UltiPro Core  Complete human resource and payroll administration delivered through the secure UltiPro portal which includes human resources, payroll administration, benefits administration, employee self-service, standard and adhoc reports library, customer specific interfaces for general ledger, and W-2 print services.  Role-based access for managers to view or update team information, review/approve employee requests or changes, and run key standard reports for better management decisions. Web services application allows customers to exchange trusted, real-time workforce data.  Federal, state, and local tax filing and deposit service, check printing service (live checks only), wage attachment service, and Affordable Care Act (ACA) Services pursuant to the Payment Services Exhibit I attached hereto.  Career Development which includes tools needed to chart employee professional growth and effectively manage development opportunities to help employees develop the skills, knowledge, and qualifications necessary to contribute to the company’s success.  Web-based open enrollment setup and reporting for administrators; web-based benefit elections and life event changes for employees.  Human resource record keeping only for CUSTOMER’s non-United States/Canadian persons who are not compensated or paid using the UltiPro software or services but are active in the UltiPro software for purposes of tracking demographic information.  *Access to an online human resource and benefits library containing human resource content and tools for two (2) users (currently powered by HR360). Additional HR360 user access may be purchased at a rate of $100.00 per annum per user. *The third party (currently HR360) shall be solely responsible for any such services and software, and CUSTOMER acknowledges that Ultimate Software has no responsibility or liability for the services, software, products, or performance provided by such third party. UltiPro Talent Acquisition (Recruiting and Onboarding) Automated recruiting and applicant tracking for processes such as posting open jobs, reviewing resumes, screening candidates, scheduling interviews, and more—from the central UltiPro portal. Automates and simplifies the process of bringing new employees into the organization. Helps manage logistical details— 1. CUSTOMER. Organization Name: City of Elk River Billing Address: 13065 Orono Parkway City: Elk River State: MN Zip: 55330 Phone: 763-635-1000 Fax: Contact Name: Lauren Wipper Title: Human Resources Representative Contact Email: LWipper@ElkRiverMN.gov Legal Name: City of Elk River State of Incorporation: MN 2. Number of Compensated Employees Minimum Number of HR Only Employees 200 0 The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 2 of 19 providing a desk, phone, computer, etc.—that need to be completed before new employees arrive for the first day of work. Allows configuration of onboarding packages that walk new employees through the orientation process and required paperwork including required government and procedural forms (with electronic signatures). Validates new hire I-9 information through the U.S. Citizenship and Immigration Services and Department of Homeland Security's E-Verify® program. UltiPro Performance Management Web-based performance reviews and competency assessments for managers and employees. UltiPro Time Management Provides time reporting through various data collection methods, including time-clocks and web-based timesheets; allows supervisor administration through electronic approval of timesheets and time off requests; provides consistent application of company pay rules for overtime, holiday pay and differentials as well as equal enforcement of absence policies. Purchase of time-clocks is an additional charge and subject to terms of a separate Purchase Order. B. Flat Fee Activation $24,100.00 One Time Activation Fee shall be for the services as set forth in the UltiPro Services Activation & Deployment Overview which is incorporated by reference. C. Training—Web-based instructor led training and eLearning courseware is available for unlimited use at no charge. D. Interfaces—CUSTOMER specific interface files for General Ledger data export are included at no charge. Creation of additional interface files will be $2,000.00 per interface file format. E. Business Intelligence (“BI”) reporting tools include the functionality as indicated above plus the following included at no charge: BI Administrators—Two (2) named users designated as UltiPro Report Administrators with rights to create and manage content in Query Studio, Report Studio, Analysis Studio, and Event Studio. BI Authors—Eight (8) named users designated as UltiPro Authors with rights to create content in Query Studio and Report Studio. BI Consumers—Fifty (50) named users designated as UltiPro Consumers with rights to access the business intelligence portal, and view and execute content originating from any studio created by an author. This role does not allow the user to create content in Query Studio, Report Studio, Analysis Studio, or Event Studio. BI Recipients—All Compensated Employees (as defined in Section 1 of the General Terms and Conditions) are eligible to view saved or static report content and alerts generated from UltiPro BI that are made available outside of the business intelligence portal, or distributed through email. F. Additional Optional Consulting Services: (i) Consulting Services which are not included in the standard scope of services as set forth herein shall be performed pursuant to a mutually agreed upon Work Order between the Parties. (ii) Custom Cognos reports—$750.00 per report. (iii) Additional data conversion pricing for the following services: In the event CUSTOMER wants additional data conversion and/or interface files after the First Live Date, those services will be performed at a price to be agreed upon in writing at the time and will be billed as incurred. Optional Direct Deposit Advice (“DDA”) printing service—$0.50 per DDA Any Consulting Services or DDA printing services will be billed on a monthly basis as incurred. CUSTOMER is also responsible for Ultimate Software’s preapproved reasonable travel and expenses. Data Type to Convert Price Employee Status History - for each 7 Year period $5,000.00 Job History – for each 7 Year period $5,000.00 Review History – for each 7 Year period $5,000.00 Recruitment—candidate personal data; attachments— resume, cover letters, and requisitions. $5,000.00 The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 3 of 19 5. Payment Terms: A. One Time Activation Fee The amount due on the Effective Date of this Agreement $24,100.00 B. Subscription Fee 175 Compensated Employees x $24.00 = $4,200.00 x 3 months = $12,600.00 Plus 0 HR Only Employees x $0 = $0 x 3 months = $0 The Subscription Fees are due quarterly and invoiced thirty (30) days in advance of the quarter. The amount due ninety (90) days from the Effective Date of the Agreement is payment for the quarter commencing on the First Live Date. $12,600.00 Total Fees Due on the Effective Date of this Agreement (A) $24,100.00 IN WITNESS WHEREOF, the Parties hereby confirm and agree that the Agreement shall be effective as of the date set forth above and that all terms and conditions have been agreed upon. City of Elk River The Ultimate Software Group, Inc. Name: John Dietz\n1\ Name: \n3\ Title: Mayor \ Title: \t3\ Signature: \s1\ Signature: \s3\ Date: February 1, 2016\ Date: \d3\ City of Elk River Name: Tina Allard \n1\ Title: City Clerk \t1\ Signature: \s1\ Date: February 1, 2016 \d1\ The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 4 of 19 GENERAL TERMS AND CONDITIONS Preamble: This Agreement is effective as of the Effective Date outlined above between The Ultimate Software Group Inc. (“Ultimate Software”), a Delaware Corporation with offices at 2000 Ultimate Way, Weston, FL 33326 and the organization specified as CUSTOMER as referenced above. Ultimate Software is engaged in the business of providing software, support, activation, consulting, training and Software as a Service type (“SaaS”) services, and CUSTOMER wishes to use Ultimate Software’s UltiPro software, support, activation, consulting, training and SaaS services on a subscription basis (the “Subscription Offering”). In consideration of the covenants and agreements contained herein, CUSTOMER and Ultimate Software hereby agree as follows: 1. Fees and Payment Terms “Subscription Fees” – The Subscription Fee is quoted on a Per Employee Per Month (“PEPM”) basis. The computed monthly PEPM amount (number of Compensated Employees, HR Only Employees and Terminated Web Employees (all as defined below) multiplied by the applicable Subscription Fee) may increase or decrease if the number of Compensated Employees, HR Only Employees, or Terminated Web Employees increases or decreases but in no event shall the Subscription Fee calculated on less than one hundred seventy five (175) Compensated Employees. “Compensated Employees” are defined as persons employed by or being compensated by the CUSTOMER (i.e., persons receiving a check, advice of deposit, or otherwise compensated by CUSTOMER using the UltiPro software). “HR Only Employees” are defined as all persons who do not have a terminated status in the UltiPro software and are not Compensated Employees. “Terminated Web Employees” are defined as persons with a status of terminated who have access to the UltiPro portal at any time during a month. CUSTOMER acknowledges that it will use the software modules as set forth on Page 1, Section 4.A. of this Agreement for both human resource record keeping and payroll processing activities. Ultimate Software may utilize a script, program, sequence of instructions or functional equivalent to determine an accurate number of Compensated Employees, HR Only Employees, and Terminated Web Employees. Such internal electronic audit shall be conducted in conformity with the Confidential Information paragraph outlined in this Agreement. Commencing on the First Live Date and for a period of twenty-four (24) months thereafter, Ultimate Software agrees not to increase the Subscription Fees. Any increase thereafter shall not exceed ten percent (10%) per annum. CUSTOMER agrees to pay Ultimate Software for all fees due pursuant to this Agreement plus any applicable federal, state, and local taxes. All invoices and expense reimbursements are due within thirty (30) days of invoice date. All invoices and expense reimbursements not paid within thirty (30) days after the date such amounts are due and payable shall bear interest at a rate of one and one half percent (1.5%) per month. Payments may be wired to: Wells Fargo Bank, N.A. 350 East Las Olas Blvd., Suite 1800, Ft. Lauderdale, FL 33301 ABA#121000248 Account#2000029434105 Beneficiary Name: The Ultimate Software Group, Inc. Payment may be mailed to: The Ultimate Software Group, Inc. P.O. Box 930953 Atlanta, Georgia 31193-0953 2. Term and Termination This Agreement shall commence on the Effective Date and shall continue in effect from that date until thirty-six (36) months from the First Live Date (“Initial Term”) which, for all functionality and services being provided pursuant hereto, is defined as the first date when payroll processing commences for a Compensated Employee to receive a check or advice of deposit from the UltiPro software or the UltiPro software is used for human resource record keeping for an HR Only Employee. CUSTOMER may not cancel the Agreement during this Initial Term except as set forth below. This Agreement shall automatically renew for successive renewal terms of one (1) year each. The CUSTOMER may terminate this Agreement after the Initial Term by serving written notice of its intention at least ninety (90) days in advance of the termination. In the event of cancellation, Ultimate Software shall be entitled to compensation for any amounts due to it including, but not limited to, compensation for hours worked as well as outstanding expenses. Either Party shall have the right to terminate this Agreement upon thirty (30) days prior written notice upon any breach hereof by the other Party, provided the party in breach shall not have cured such breach during such thirty (30) day period. Upon termination of this Agreement, all rights granted to CUSTOMER will terminate and revert to Ultimate Software. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 5 of 19 Within five (5) business days of termination or expiration of this Agreement, Ultimate Software shall provide to CUSTOMER a copy of CUSTOMER’s database in a standard structured query language (“SQL”) server format via secured file transfer protocol (“SFTP”) server at a cost of $500.00 to be billed as incurred. 3. Service Level Objective for Production SaaS Services Ultimate Software’s service level objective for the production SaaS environment, including, but not limited to, access to UltiPro software programs and SaaS Services, is to make these services available a minimum of ninety nine and one-half percent (99.5%) of the time as measured over any three (3) consecutive months. In the event all users have no access to the UltiPro software and SaaS Services, these calls will receive the highest priority and Ultimate Software will make best efforts to return these calls within one (1) hour. 4. Proprietary Protection and Restrictions Ultimate Software has and shall have sole and exclusive ownership of all rights, title, and interest in the UltiPro software programs and all modifications and enhancements thereof (including ownership of all trade secrets copyrights, and intellectual property rights pertaining thereto). CUSTOMER is only permitted to use the UltiPro software or any services provided by Ultimate Software for its own employees and is not permitted to provide service bureau, data processing, time sharing services or to otherwise provide payroll or human resource record keeping for third parties. To the extent that any third party software is provided herein, CUSTOMER agrees that it shall only use such software in conjunction with the UltiPro software programs and SaaS services and CUSTOMER acknowledges that it is prohibited from engaging in, causing, assisting or permitting, the reverse engineering, disassembly, translation, adaption or recompilation of any such third party software and that it shall not attempt to obtain or create the source code from the object code of any such software provided to it pursuant to the Agreement, unless explicitly permitted by applicable and mandatory law. CUSTOMER acknowledges that it will not use the UltiPro software programs and SaaS services or any third party software for any illegal purpose or activity. Ultimate Software hereby represents and warrants to CUSTOMER that the services provided will not violate the patent, copyright, or other proprietary rights of any third party, and that Ultimate Software will defend, indemnify and hold harmless CUSTOMER from any claim of copyright, patent or similar infringement provided CUSTOMER notifies Ultimate Software in writing immediately upon notice of such claim and cooperates fully in the defense of such claim. Ultimate Software shall have full and exclusive control of any such defense and settlement of the claim. 5. UltiPro Product Support Services Ultimate Software shall maintain a National Customer Support Center (NCSC) capable of receiving telephone, fax, modem or Internet transmission reports of software irregularities. CUSTOMER may report software or operator problems and seek assistance in the use of the UltiPro software. Ultimate Software will maintain a product-trained and knowledgeable staff capable of rendering the services set forth in this Agreement. Ultimate Software will use all reasonable diligence to correct verifiable and reproducible errors when reported to the NCSC. Performance of UltiPro Product Support Services or other services is contingent upon all payments, due to Ultimate Software pursuant to this Agreement or any other agreement between the Parties, being paid in a timely manner. 6. SaaS Services and Responsibilities “SaaS Services” consist of providing the necessary network infrastructure, computer hardware, third party software, database administration services and connectivity point at the SaaS environment in accordance with Ultimate Software’s then standard SaaS procedures. CUSTOMER will be responsible to provide for the specified connectivity between the CUSTOMER’s location(s) to the Internet. CUSTOMER agrees that Ultimate Software will have no liability for and CUSTOMER will not be excused from any of its obligations under the Agreement as a result of the quality, speed or interruption of the communication lines from the CUSTOMER’s location(s) to the Internet. Provided CUSTOMER supplies the communication connectivity to the Internet, Ultimate Software shall provide the CUSTOMER access to the SaaS environment servers and the UltiPro software as needed with support personnel being available as stated under the UltiPro Product Support Services section above. 7. Audits Ultimate Software will have, at a minimum, an annual site audit of its facility’s Information Technology General Controls including, but not limited to, information security controls, performed by a recognized third-party audit firm based on the recognized audit standard SSAE 16 or equivalent. Upon request, Ultimate Software will make available to CUSTOMER for review annually, its SSAE 16 audit report or equivalent. CUSTOMER agrees to treat such audit reports as Confidential Information under this Agreement. Any control exceptions noted in the SSAE 16 or equivalent will be addressed in the report with management’s corrective action. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 6 of 19 Ultimate Software will perform a network-level vulnerability assessment, once every twelve (12) months. This audit shall be performed by either a recognized third-party audit firm engaged by Ultimate Software or by Ultimate Software’s in-house information security team. 8. Sale, Assignment and Delay CUSTOMER’S rights may not be transferred, leased or assigned except in its entirety to (1) a successor in interest of CUSTOMER’S entire business which assumes the obligations of this Agreement (provided the successor is, after the transfer or assignment, similar in size and nature to CUSTOMER) or (2) any other party who is reasonably acceptable to Ultimate Software, who enters into a substitute version of this Agreement and who pays an administrative fee intended to cover attendant costs. Ultimate Software shall not be liable for any delays in the performance of any of its obligations hereunder due to causes beyond its reasonable control, including, but not limited to, fire, strike, war, riots, acts of civil or military, judicial actions, acts of God, or any other casualty or natural calamity. Ultimate Software reserves the right to commence charging the Subscription Fee to the CUSTOMER prior to the First Live Date if the CUSTOMER by its willful action, inaction or lack of cooperation causes the First Live Date to be delayed. 9. Confidential Information and Data Practices Each Party shall use reasonable care to keep all Confidential Information (nonpublic information of either Party) including all data created, collected, received, maintained or disseminated for any purpose in the course of this Agreement confidential but same shall be subject to and governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, any other applicable state statute, or any state rules adopted to implement the act, as well as federal regulations on data privacy. 10. Customer Data CUSTOMER shall retain ownership of the entire right, title and interest in and to all materials, data and information provided by CUSTOMER to Ultimate Software, including without limitation, the CUSTOMER data and CUSTOMER Confidential Information, and all intellectual property rights thereto. No ownership rights in such materials, data and information are transferred to Ultimate Software. 11. Ownership and Use of Intellectual Property During the term of this Agreement, as a result of Ultimate Software’s efforts under this Agreement, Ultimate Software may generate ideas, inventions, suggestions, copyrightable materials or other information (“Intellectual Property”). Ultimate Software shall have title to such Intellectual Property. To the extent such Intellectual Property is incorporated into work product to be produced by Ultimate Software and delivered to CUSTOMER under this Agreement, Ultimate Software grants and CUSTOMER hereby accepts a royalty- free, non-exclusive license to use all such Intellectual Property as incorporated into the Ultimate Software work product. 12. Limited Warranty ULTIMATE SOFTWARE WARRANTS THAT THE SERVICES RENDERED WILL CAUSE THE ULTIPRO SOFTWARE MODULES TO SUBSTANTIALLY PERFORM IN ACCORDANCE WITH THE ULTIMATE SOFTWARE ONLINE DOCUMENTATION. ULTIMATE SOFTWARE WILL MAKE ALL NECESSARY CORRECTIONS TO FULFILL THE FOREGOING WARRANTY WITHOUT ADDITIONAL COST TO THE CUSTOMER. EXCEPT FOR A BREACH OF SECTION 9 ENTITLED “CONFIDENTIAL INFORMATION AND DATA PRACTICES” RESULTING IN AN UNAUTHORIZED DISCLOSURE OF CUSTOMER’S CONFIDENTIAL INFORMATION, DURING THE TERM OF THIS AGREEMENT, THE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY FOR ANY MATERIAL BREACH OF ANY PROVISION OF THIS AGREEMENT OR FOR ANY WARRANTY SHALL NOT, UNDER ANY CIRCUMSTANCES, EXCEED THE AMOUNT OF THE SUBSCRIPTION FEE FOR THE TWELVE MONTH PERIOD PRIOR TO THE ALLEGED BREACH. REFERENCE TO BREACH OF THIS AGREEMENT SHALL INCLUDE ANY SUPPLEMENT, ADDITIONS OR AMENDMENTS TO THIS AGREEMENT. EXCEPT FOR A BREACH OF SECTION 9 ENTITLED “CONFIDENTIAL INFORMATION AND DATA PRACTICES” RESULTING IN AN UNAUTHORIZED DISCLOSURE OF CUSTOMER’S CONFIDENTIAL INFORMATION, IN NO EVENT SHALL ULTIMATE SOFTWARE BE LIABLE FOR ANY LOST REVENUES OR LOST PROFITS, OR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES OF ANY NATURE WHATSOEVER. THIS DAMAGE EXCLUSION IS INDEPENDENT OF ANY REMEDIES PROVIDED FOR HEREIN. ULTIMATE SOFTWARE HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ULTIMATE SOFTWARE DISCLAIMS ALL WARRANTIES AND RESPONSIBILITY FOR THIRD PARTY SOFTWARE WHICH SHALL BE THE SOLE OBLIGATION OF THE PROVIDER OF THE THIRD PARTY SOFTWARE. 13. Entire Agreement This Agreement, represents the entire understanding of the Parties with respect to its subject matter, and supersedes and extinguishes all prior oral or written communications between the Parties about its subject matter. No modification of this Agreement will be effective unless it is in writing, is signed by each Party. 14. Publicity Both Parties agree that Ultimate Software shall be entitled to refer to the existence of this Agreement, and the fact that CUSTOMER is a customer of Ultimate Software. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 7 of 19 15. Governing Law This Agreement shall be governed by and construed in accordance with the internal laws of the state of Minnesota and jurisdiction and venue for any action regarding this Agreement or for breach of it shall be in Sherburne County, Minnesota. The prevailing Party in any such action shall be entitled to recover its reasonable attorneys’ fees and costs from the non-prevailing Party. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 8 of 19 Exhibit I Payment Services Ultimate Software Responsibilities: 1. Prepare, deposit and file CUSTOMER’s payroll taxes for those federal, state, and local jurisdictions listed by CUSTOMER on the Company Tax Verification Report (provided to and filled out by CUSTOMER during the payroll implementation process) and any updates provided to Ultimate Software by the CUSTOMER. 2. Prepare a quarterly tax statement for each Federal Employer Identification Number (FEIN). This statement will include a summary of tax liabilities reported throughout the quarter, account reconciliation, and printed returns filed at quarter end. 3. Provide CUSTOMER with a Tax Representative. 4. Answer tax agency correspondence for tax deposits and returns filed by Ultimate Software. 5. File amended returns as required for returns processed by UltiPro Tax Filing Services. 6. Provide W2 agency filings. 7. Investment of Funds Ultimate Software has the obligation to pay CUSTOMER’s tax liabilities and wage attachments (to the extent that CUSTOMER has deposited funds with Ultimate Software). The funds held by Ultimate Software will be segregated from other funds of Ultimate Software, but may be commingled with funds of other tax filing customers. Ultimate Software will be entitled to receive all net income generated on any funds held pursuant hereto. 8. Wage Attachments Ultimate Software will prepare and deposit CUSTOMER’s wage attachment liabilities for those federal, state, and local payment processing units and any individual third party to which an employee of CUSTOMER owes a debt and has agreed or is compelled by appropriate governmental authority to resolve via attachment of employee’s wages. Ultimate Software will make available a report of wage attachment activity to CUSTOMER summarizing funds collection and disbursement transactions completed. Ultimate Software is not obligated to commence providing the Payment Services until Ultimate Software has received all information necessary to disburse wage attachment liabilities. Ultimate Software is not responsible for providing additional administrative services, including, but not limited to, agency research, account reconciliation, wage attachment data input and adjustments. CUSTOMER is solely responsible for the setup of the wage attachments in the UltiPro software in accordance with the UltiPro online documentation and Ultimate Software is not responsible for same. Ultimate Software is not responsible for any pre-existing errors or similar matters arising prior to commencement of these services by Ultimate Software or for any errors that may occur in the event the CUSTOMER fails to provide Ultimate Software with all necessary, complete, and accurate information. 9. Check Printing Ultimate Software will print checks, and if the option pursuant to the Agreement is selected, direct deposit advices for CUSTOMER based on the information from each completed payroll as set forth in the Data Remittance section below. Ultimate Software shall be responsible for providing printed checks and optional direct deposit advices to the commercial overnight carrier provided by CUSTOMER. 10. Reporting for Cash Collection One (1) business day prior to the applicable check date, Ultimate Software shall make available payment service data to CUSTOMER which is applicable to any given payroll closed within the defined parameters as set forth herein, to allow CUSTOMER to generate reports based on such data at the open of normal business hours. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 9 of 19 CUSTOMER responsibilities: 1. Data remittance CUSTOMER will complete its payroll before 12:00 noon (CUSTOMER’s local time), no less than two (2) business days prior to the applicable check date(s). CUSTOMER acknowledges that the data and all information from the completed payroll from UltiPro software will be the basis for the Payment Services as provided for herein. CUSTOMER acknowledges and agrees that Ultimate Software will conduct an internal electronic audit of CUSTOMER’s masterfile(s) database in order to review and export data, on an as needed basis, in order to prepare quarterly or annual tax filings for CUSTOMER. 2. Funds collection One (1) business days prior to the payroll check date(s) for tax liabilities not requiring a “next day” payment date, Ultimate Software will initiate an automated clearing house (“ACH”) debit from the CUSTOMER’s designated bank account for the total tax liabilities and wage attachments associated with the given pay period. For any tax liability within a given pay period requiring a “next day” payment, Ultimate Software will initiate a reverse wire from the CUSTOMER’s designated bank account for the total tax liabilities associated with the CUSTOMER’s payroll. At the times specified above, Ultimate Software will collect funds to cover the total payroll tax liability (to include any applicable penalties and interest, etc.) of CUSTOMER. Ultimate Software will direct the transfer of funds from CUSTOMER’s designated bank account to Ultimate Software’s account by electronic funds transfer. CUSTOMER agrees to maintain good and sufficient collected funds in the CUSTOMER’s designated bank account to cover all funding transactions to be made under this Payment Services Exhibit. In the event CUSTOMER fails to maintain such good and sufficient collected funds, Ultimate Software may terminate performance of the Payment Services only upon notice to CUSTOMER and charge CUSTOMER for any applicable fees, penalties, and interest. 3. Record of Tax Disbursement and Wage Attachments Ultimate Software will not be liable for any invalidity or inaccuracy caused by CUSTOMER unless CUSTOMER so notified Ultimate Software within one (1) business day of CUSTOMER’s completion of payroll for the applicable check date or within ten (10) days of quarterly records from Ultimate Software. Upon Ultimate Software making available to CUSTOMER any and all records of tax disbursements prepared and wage attachments by Ultimate Software pursuant to this Payment Services Exhibit, CUSTOMER will examine all records for validity and accuracy according to CUSTOMER’s records. CUSTOMER will immediately notify Ultimate Software of any inaccuracies or inconsistencies. The specific record retention schedules established by governmental entities applicable to CUSTOMER are the responsibility of CUSTOMER and are not the responsibility of Ultimate Software or the services being provided under this Agreement. Ultimate Software has no responsibility or liability for maintaining or retaining said records for CUSTOMER. CUSTOMER agrees to timely execute any and all documents presented by Ultimate Software in order to effectuate carrying out the Payment Services. Ultimate Software, in its discretion, may terminate the Payment Services only in the event CUSTOMER fails to execute such documents when requested by Ultimate Software. CUSTOMER agrees that it will timely respond to any and all requests made by Ultimate Software. Ultimate Software may amend or update the terms of this Payment Services Exhibit only as reasonably determined by Ultimate Software or as mandated by any governmental agency or taxing authority provided same does not adversely impact CUSTOMER’s normal business operations and in such an event, then CUSTOMER shall have the option to reject this change, in good faith, within thirty (30) days of receipt of notice of such change by providing written notice to Ultimate Software. Upon such rejection, Ultimate Software shall have the option to not make said change or terminate this Payment Services Exhibit only. CUSTOMER agrees to cooperate and diligently perform its responsibilities as set forth in this Payment Services Exhibit and acknowledges that failure to do so may result in additional fees or costs to CUSTOMER. Ultimate Software shall provide CUSTOMER with ten (10) days advanced written notice of its intent to charge such additional fees and/or costs, and CUSTOMER shall have the opportunity to cure same during such ten (10) day period. 4. Tax Information Acknowledgment: As required by the Internal Revenue Service, the following information must be disclosed to taxpayers that utilize a third party to perform tax filing services on its behalf: CUSTOMER acknowledges that it is responsible for the timely filing of employment tax returns and the timely payment of employment taxes for its employees, notwithstanding, that CUSTOMER has authorized Ultimate Software to file the returns and make the payments on its behalf. The Internal Revenue Service recommends enrollment in the U.S. Treasury Department’s Electronic Federal Tax Payment System (EFTPS) to monitor your account and ensure that timely tax payments are being made. Enrollment in the EFTPS may be done online at www.eftps.gov, or call (800) 555-4477 for an enrollment form. State tax authorities generally offer similar means to verify tax payments. Contact the appropriate state offices directly for details. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 10 of 19 ACA Services ACA Toolkit - Included for all customers at no additional cost:  Eligibility ‘lookback’ calculations  Enrollment based on eligibility  Post exchange notices to employee document area  Obtain and track employee consent to view 1095-C forms electronically  Generate completed 1094-C and 1095-C forms  Import template for 1095-C data (if not available in UltiPro)  Generate required 1095-Cs for those who are not active employees (i.e., COBRA, retirees)  Download 1095-C via employee self service  Generate electronic file in IRS approved format  Self Service printing and distribution of 1095-C forms  Self Service electronic filing to the IRS  Comprehensive reporting and access to data about eligibility, penalty exposure, and offer of coverage Data remittance CUSTOMER will provide the required ACA Data to Ultimate Software pursuant to the Ultimate Software ACA standard guidelines as provided to CUSTOMER. CUSTOMER acknowledges that the ACA data and all ACA information from the UltiPro software will be the basis for the services as provided for herein. ACA Distribution Services  Includes all items listed in ACA Toolkit  Printing 1095-C forms and mailing them to customers’ employees—CUSTOMER is responsible for the cost of shipping and handling  Electronic filing of 1094-C and 1095-C forms to the IRS on CUSTOMER’s behalf  Quarterly reporting of employee consent to view 1095-C forms electronically  Monthly ACA data exception reporting Assumptions:  Prior to performing the ACA Services, CUSTOMER must provide Ultimate Software all required ACA data and such data must be entered into and validated within the UltiPro Software.  Ultimate Software will not be liable for any invalidity or inaccuracy caused by CUSTOMER unless CUSTOMER so notified Ultimate Software within one (1) business day of Ultimate Software making available to CUSTOMER any and all ACA regulatory forms and filings CUSTOMER will examine them for their validity and accuracy according to CUSTOMER’s records. CUSTOMER will immediately notify Ultimate Software of any inaccuracies.  CUSTOMER is responsible for all shipping charges, whether billed by Ultimate Software as a pass through expense or direct billed to CUSTOMER via its own carrier. CUSTOMER shall have the option to use their own Federal Express or United Parcel Services account number.  CUSTOMER agrees that it will timely respond to any and all requests made by Ultimate Software. Ultimate Software may amend or update the terms of this Exhibit for ACA Services as reasonably determined by Ultimate Software. To the extent practical, Ultimate Software shall provide CUSTOMER with ninety (90) days advanced written notice of any such change.  The specific record retention schedules established by governmental entities applicable to CUSTOMER are the responsibility of CUSTOMER and are not affected by the Agreement or this Exhibit. Ultimate Software has no responsibility or liability for maintaining or retaining said records for CUSTOMER.  CUSTOMER agrees to timely execute any and all required documents presented by Ultimate Software in order to effectuate carrying out the ACA Services. Ultimate Software in its discretion may terminate the ACA Services in the event CUSTOMER fails to execute such when requested by Ultimate Software. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 11 of 19 UltiPro Services  Activation and Deployment Overview                                                          The Ultimate Software Group, Inc. 2000 Ultimate Way Weston, Florida 33326 Phone: 800-432-1729 Fax: 954-331-7300 www.ultimatesoftware.com The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 12 of 19   TABLE OF CONTENTS 1 WELCOME TO ULTIMATE SOFTWARE 2 INTRODUCTION TO ULTIPRO ACTIVATION SERVICES 2.1 DEPLOYMENT STRATEGY 2.2 PROJECT MANAGEMENT PROCESSES 2.3 DEPLOYMENT LIFECYCLE 2.4 PROJECT TEAM COMPOSITION 2.5 ITERATIVE SOFTWARE CONFIGURATION 2.6 TRAINING AND KNOWLEDGE TRANSFER   The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 13 of 19 Welcome to Ultimate Software Thank you for selecting Ultimate Software as your human capital management (HCM) partner. We are excited to have the opportunity to work with you and your project team to implement your UltiPro solution. At Ultimate, we take pride in our company, culture, solutions, and the services we deliver to our customers. We have an unwavering commitment to excellence that will ensure a successful deployment and continued support of the UltiPro solutions your organization has chosen to take advantage of. By selecting UltiPro, you have chosen an award winning HCM solution. Now, we are excited to show you why we are the best service team in the industry. The UltiPro service team has completed hundreds of successful deployments. Our project successes are credited to Ultimate’s proven activation and deployment methodology and our disciplined approach to project execution. As you read this document and participate in your UltiPro deployment, you will learn that we have assembled industry accepted tools and techniques to create a proven and effective activation methodology. Using best practices and our proprietary activation methodology, we are able to ensure a successful deployment and enable the fastest return on your investment in UltiPro. Once again, thank you and welcome! We are looking forward to a long and successful partnership. About this Guide The purpose of this document is to provide you with an overview of the activation methodology Ultimate Software uses to deploy UltiPro. An activation methodology is a collection of best practices, policies, procedures, tools, and templates used to implement products and services. The activation and deployment methodology described in this document is based on methodology that is generally accepted by HCM and project management experts. Additionally, this guide can also be used as a training tool for your project team. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 14 of 19   Introduction to UltiPro Activation Services   Deployment Strategy The deployment of a human capital management software solution is a complex endeavor that must be guided by strategic objectives. Ultimate’s activation and deployment strategy is designed to reduce overall project complexity and ensure our customers achieve the following common goals:  Realize a rapid return on investment  Provide a lower total cost of ownership  Deliver sophisticated solutions to small and mid-market organizations  Enable Employee and Manager Self-Service and self-configuration  Command a high user adoption rate across the solution To achieve the goals listed above, we have engineered a best practice product deployment schedule and a software configuration sequence for each product. The product deployment schedule depicts the best practice sequence and duration to deliver each product that can be purchased from Ultimate Software. This sequence and durations can be tailored to meet your specific business needs. The best practice product deployment schedule is as follows:  Core UltiPro HR/ payroll contract date + 16 weeks  Time Management contract date + 16 weeks  Life Events contract date + 18 weeks  Recruiting contract date + 18 weeks  Onboarding contract date + 18 weeks  Performance Management contract date + 20 weeks  Benefits Open Enrollment seasonal  Compensation Management seasonal The software configuration sequence for each solution details logical segments of full functioning software that supports your business processes. Each segment is referred to as configuration iteration. Each iteration consists of the following steps:  Collecting and profiling relevant data elements  Analyzing the data elements  Configuring features and functions  Unit testing Each iteration is segmented in to a manageable but meaningful set of features. For example, your first deployment iteration consists of the project team configuring all required components to calculate a gross hours to net paycheck for all employees. All iterations are easily recognized by human resource and payroll professionals. For clarification, please refer to the figure below. It shows a sample of the overall product deployment schedule, product offering, and configuration iterations: The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 15 of 19    Deploying UltiPro in this iterative and incremental manner minimizes the amount of change introduced to your technical systems and business processes at points in time, therefore reducing your change management risk exposure. This approach also allows your project team and end users to understand and effectively use one component before introducing the next component. The initial UltiPro deployment will focus on transferring your existing products, features, processes, and data in place with your legacy provider’s system to UltiPro. These components are typically payroll processing centric (and if applicable, time and attendance). Upon request, however, the scope of the initial deployment can be extended to include human resources data elements. Once the activation team has migrated your legacy provider’s components to UltiPro, the team will continue to optimize the solution by adding new products, features, and data in order to the complete the solution. Components that should be considered for subsequent deployments include Recruiting, Onboarding, Performance Management, Advanced Employee and Manager Self-Service, additional employee data conversion items that are not stored in your legacy system, Benefits Open Enrollment, and Compensation Management. Ultimate will partner with you to develop the right product deployment sequence for your organization. The UltiPro Activation methodology is composed of business methods, tools, processes, best practices, policies and standards. This document does not detail the entire methodology but does, however, provide a comprehensive overview of the following key components: Project Management Processes, Project Team Composition, Deployment Life Cycle, Iterative Configuration, Training and Knowledge Transfer. All of these items are co-dependent; therefore, a change to one of these items will result in a change to all items. Ultimate Software provides general project oversight for the duration of the project through a Regional Manager or Project Manager dependent on size and complexity. Your Regional Manager or Project Manager will partner with your project lead to manage these types of changes and the overall project risk. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 16 of 19   Project Management Processes Defining the scope is the process of reviewing all contract documents and confirming deliverables the project team will complete. The scope is defined with the Scope Confirmation Document during the planning phase. This is a project initiation activity. Planning for resources is the process of assembling the project team. It is imperative that the proper resources with the right skills are available for specific tasks when needed. The resource plan is a combination of the roles and responsibilities detailed in the kick off presentation and the milestone schedule. This is a project initiation activity. Developing the project schedule is the process of creating a list of tasks and placing them in sequence with due dates. The project schedule also includes identifying critical tasks and milestones so the project team knows where to focus their efforts and can track their progress. The project schedule is documented in the Project Workbook. This is a project execution activity. Creating and maintaining the action log is the process of creating then maintaining a list of open action items that have been identified but not resolved. The Action Log is documented in the Project Workbook. This is a project execution activity. Facilitating status meetings is the process of scheduling and executing recurring team meetings to review the project schedule, action log, and project risks. The purpose of the meeting is to present an overall status to the team. This process does not include working sessions to address open items. Working sessions to resolve items will be scheduled outside of the status meetings. This is a project control activity. Conducting quality assurance tests is the process where project team members execute test plans against your configuration to verify that all components execute and record transactions successfully. Quality assurance tests include unit testing, system testing, and user acceptance testing. This is a project control activity. Managing change is the process of identifying, approving, and authorizing new scope to the existing project once the product deployment schedule has been agreed to and documented in the Scope Confirmation Document. A change must be material to invoke the change control process. All immaterial changes will be managed through the action log. This is a project control activity. Closing the project is the process of confirming that all project deliverables included in the Scope Confirmation Document have been delivered and accepted by an authorized team member. It also includes a lessons learned session that is optional for project team members to attend, but critical for Ultimate Software so that we may work even better on future projects. This is a project close activity. The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 17 of 19 Deployment Lifecycle The deployment lifecycle provides a road map that generally describes how the project will progress from the start to finish. The project team follows this roadmap to transition your existing HCM functions from your legacy provider to UltiPro. It also includes details about the iterative progressions of design, configure, test and deploy. The deployment lifecycle description provides you and your team with enough information to estimate your team’s level of effort and time required throughout the project. Plan This project phase is designed to introduce all project team members to the project and its scope. It is also intended to establish general work agreements that are acceptable to all project team members. Prototype This phase is designed to profile your configuration through review of existing reports, analyze requirements to develop a solution design, and configure the solution. This is inclusive of all UltiPro solutions intended to be deployed on your first live date. This phase will also provide unit testing to ensure that each iteration delivers a fully configured component of the system. Validate This phase is designed to provide comprehensive testing for all components that will be deployed on first live date. Deploy This phase is designed to finalize configuration and data in order to execute a first live payroll process. * Optimize This phase is designed to implement additional products and services purchased but deferred to a later deployment date. Execution during this phase is critical in achieving the full value from the unified solution. Layering in additional features, functions, and product on top of your core UltiPro solution produces the highest efficiency yields and the largest return on your investment.   The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 18 of 19   The following figure depicts the high-level deployment lifecycle:     Project Team Composition The project team is assembled using team members from your company and Ultimate Software or an Ultimate Software Activation Partner. The project team exists for the duration of the project. Prior to the end of the project, an ongoing support team will also be introduced. All project tasks are completed through our virtual (offsite) deployment model. All activation and deployment resources are available virtually. Additionally, your team is not required to travel to Ultimate Software for any part of the activation process. Unless otherwise agreed to in an authorized work order, Ultimate Software’s team members will not travel to your locations to complete the project. If onsite work is preferred or required, please discuss this exception with the Ultimate Software Regional Manager. We have consulting service solutions that are not included with the infrastructure and activation fee, but can be purchased as a value added service. The day-to-day project coordination effort will be facilitated by the UltiPro Consultant or Project Manager and your project leader. UltiPro Consultants and/or Project Managers are ultimately responsible for project deliverables and the timeliness of these deliverables. They will also facilitate the change control process and engage executive leadership from our respective organizations as needed. The Regional Manager will be the single point of coordination and escalation for all Ultimate Software resources throughout your deployment. The UltiPro Consultant or Project Manager will work with your project leader to provide project leadership to your team members.           The Ultimate Software Group, Inc. UltiPro Agreement rev 08.2015 Page 19 of 19 The following table is provided to list the roles required for the project: Project Team Customer Team Ultimate Software Team Executive Sponsor Regional Manager/Project Manager Project Leader UltiPro Consultant Payroll Subject Matter Expert Time Management Consultant Human Resources Subject Matter Expert Talent Management Consultant Benefits Administrator Benefits Consultant Iterative Software Configuration As previously described, the UltiPro Services team uses a modified agile software configuration approach. By definition this approach is iterative in nature. The process begins with your strategic goals, our best practice product deployment schedule, our product configuration sequence, and your existing system’s configuration profile as a baseline. Doing so provides the project team with a tremendous amount of insight to your software requirements. It also creates momentum on the project and ensures that our incremental approach allows the project team to be mindful of the long term goals of the solution. As described above, each configuration iteration provides a full-functioning UltiPro component. These components serve as a prototype that the project team can perform unit tests on and approve for production. We believe that the use of prototypes during configuration is the best way to ensure that we can meet your requirements with the least amount of resource investment and rework from both of our teams. To arrive at each prototype, we will begin by profiling your requirements by reviewing reports and documentation that you can provide to us that describes how you use that component. For example, payroll registers offer us a tremendous amount of insight in to how your payroll system is currently configured. From this we can determine which earning codes, deduction codes, locations, and taxes code that need to be configured along with several attributes of these codes. Once we have profiled the component, we will analyze the data provided to offer advice and suggestions on how to best configure these components within UltiPro. Once we have agreed upon a design, your consultants will configure a prototype for acceptance. At the core of our iterative software configuration is our desire to collaborate with you and to provide you with a hands-on approach to configure the solution. We believe that this method will produce a product that is more closely aligned with your business process, will be higher in quality, and will enable your team to learn your UltiPro solutions as we configure them. Training and Knowledge Transfer We believe that effective training and knowledge transfer are the keys to high user adoption rates. Not having your team effectively trained can quickly erode any benefits received from the solution. Training that results in self-sufficient administrators, managers, and employees increases the efficiency of the solution and your business processes. Our training portfolio includes Web-based instructor led training and online tutorials. You can register for virtual instructor led training through the Training page of the Customer Success Portal. These classes are scheduled regularly and are best attended from the trainees work location. The online tutorials can be viewed at any time by the trainee through the product itself. These online tutorials can be played and replayed as often as the trainee desires at no additional cost. All courses are role specific and have a practical application for each role. Ultimate’s training model includes a role-based learning plan for you. Each role within your organization has a specific set of courses required at specific points in the activation process. Having role-based training classes ensures your team members are trained on the processes they will use in their day-to-day interactions with the system. Timing this training is key. We aim to provide the training with as little time between training delivery date and system usage as possible. This ensures your users have an opportunity to reinforce the training through real-life application before they begin to lose the skills gained in training.