Exhibit 10.4

RESTRICTED STOCK AWARD AGREEMENT

The Ultimate Software Group, Inc.
2005 Equity and Incentive Plan

     This RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) made as of this
___day of ___, 20___, between The Ultimate Software Group, Inc., a Delaware
corporation (the “Company”), and ___(the “Grantee”), is made pursuant to the
terms of The Ultimate Software Group, Inc. 2005 Equity and Incentive Plan (the
“Plan”). Capitalized terms used herein but not defined shall have the meanings
set forth in the Plan.

     Section 1. Restricted Stock Award. The Company has granted to the Grantee a
Restricted Stock Award with respect to the number of shares of common stock of
the Company, par value $.01 per share (the “Common Stock”), specified in
Appendix A hereto (the “Restricted Shares”). Appendix A may be amended by the
Company from time to time to reflect additional grants of Restricted Stock
Awards following the date hereof. Each Restricted Stock Award identified in
Appendix A shall be subject to the conditions hereinafter provided and subject
to the terms and conditions set forth in the Plan, a copy of which the Grantee
acknowledges having received. (Each Restricted Stock Award identified in
Appendix A is hereinafter referred to as an “Award.”)

     Section 2. Vesting of Awards.

     (a) Vesting Schedule. Each Award shall become fully vested on the fourth
(4th) anniversary of the respective Dates of Grant thereof as set forth in
Appendix A, subject to the Grantee’s continued employment with the Company or
any Subsidiary on each such vesting date.

     (b) Full Accelerated Vesting. Notwithstanding the provisions of Section
2(a) hereof, upon (i) the Grantee’s termination of employment as a result of
death or Disability, or (ii) the occurrence of a Change in Control of the
Company while the Grantee is employed by the Company, the transfer restrictions
and forfeiture conditions imposed hereunder on any Restricted Shares shall
immediately lapse and all such unvested shares shall become fully and
immediately vested.

     (c) Partial Accelerated Vesting. Notwithstanding the provisions of Section
2(a) hereof, upon the Grantee’s termination of employment by the Company without
“Cause” (as defined below), the transfer restrictions and forfeiture conditions
imposed hereunder on any Restricted Shares shall immediately lapse as to 1/48th
(one forty-eighth) of the Restricted Shares subject to each Award hereunder for
each complete month of continued employment by the Grantee with the Company or
any Subsidiary following the applicable Dates of Grant, and such Restricted
Shares shall become immediately vested. For purposes hereof, termination for
“Cause” shall mean a termination of employment due to (i) embezzlement or
misappropriation of corporate funds, (ii) any acts of dishonesty resulting in
conviction for a felony, (iii) misconduct

 

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resulting in material injury to the Company, (iv) a significant violation of
Company policy, (v) willful refusal to perform, or substantial disregard of, the
duties properly assigned to the Grantee, or (vi) a significant violation of any
contractual, statutory or common law duty of loyalty to the Company.
Notwithstanding the foregoing, if the Grantee is a party to an employment or
similar agreement with the Company or any Subsidiary, the term “Cause” shall,
for the purposes of this Agreement, have the same meaning set forth in such
employment or similar agreement if and to the extent such term is defined
therein.

     Section 3. Termination of Employment. Except as provided in Sections 2(b)
and 2(c) hereof, if the Grantee’s employment with the Company or any Subsidiary
is terminated prior to the occurrence of any otherwise applicable vesting date
provided in Section 2 hereof, the Grantee shall (i) forfeit the Grantee’s
interest in the Restricted Shares that have not yet become vested, (ii) assign,
transfer, and deliver any certificates evidencing ownership of such shares to
the Company, and (iii) cease for all purposes to be a stockholder with respect
to such shares.

     Section 4. Rights as a Stockholder. Subject to the otherwise applicable
provisions of this Agreement, the Grantee will have all rights of a stockholder
with respect to the Restricted Shares granted to the Grantee hereunder,
including the right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto.

     Section 5. Restrictions on Transfer. Neither this Agreement nor any
Restricted Shares covered hereby may be sold, assigned, transferred, encumbered,
hypothecated or pledged by the Grantee, otherwise than to the Company, unless as
of the date of any such sale, assignment, transfer, encumbrance, hypothecation
or pledge, such Restricted Shares to be thus disposed of have become vested in
accordance with Section 2 hereof. The certificate or certificates representing
shares delivered pursuant to this Agreement shall bear a legend referring to the
nontransferability or assignability of such shares pursuant to this Section, and
a stop-transfer order against such certificate or certificates will be placed by
the Company with its transfer agents and registrars. At the discretion of the
Committee, in lieu of issuing a stock certificate to the Grantee, the Company
may hold the Restricted Shares in escrow during the period such shares remain
subject to the vesting restrictions and other restrictions provided hereunder.

     Section 6. Investment Representation. Upon acquisition of the Restricted
Shares at a time when there is not in effect a registration statement under the
Securities Act of 1933 relating to the Common Stock, the Grantee hereby
represents and warrants, and by virtue of such acquisition shall be deemed to
represent and warrant, to the Company that the Restricted Shares shall be
acquired for investment and not with a view to the distribution thereof, and not
with any present intention of distributing the same, and the Grantee shall
provide the Company with such further representations and warranties as the
Company may require in order to ensure compliance with applicable federal and
state securities, blue sky and other laws. No Restricted Shares shall be
acquired unless and until the Company and/or the Grantee shall have complied
with all applicable federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction, unless the Committee has received evidence satisfactory to
it that the Grantee may acquire such shares pursuant to an exemption from
registration under the applicable securities laws. Any determination in this
connection by the Committee shall be final, binding and conclusive. The Company
reserves the right to legend any

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certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.

     Section 7. Adjustments. All Awards hereunder shall be subject to the
provisions of Section 4.2 of the Plan relating to adjustments for
recapitalizations, reclassifications and other changes in the Company’s
corporate structure.

     Section 8. No Right of Continued Employment. Nothing in this Agreement
shall confer upon the Grantee any right to continue as an employee of the
Company or any Subsidiary or to interfere in any way with any right of the
Company to terminate the Grantee’s employment at any time.

     Section 9. Section 83(b) Election; Withholding. The Grantee may make an
election under Section 83(b) of the Code with respect to any grant of Restricted
Shares by filing a copy of such election with the Company within 30 days of the
Date of Grant. If the Grantee makes such an election, such grant of Restricted
Shares shall be conditioned upon the prompt payment by the Grantee to the
Company of an amount equal to the applicable federal, state and local income
taxes and other amounts required by law to be withheld (the “Withholding Taxes”)
in connection with such election. If the Grantee does not make an election under
Section 83(b) of the Code with respect to a grant of Restricted Shares, the
Grantee shall pay to the Company the Withholding Taxes upon the lapse of the
vesting restrictions, and the lapse of the restrictions shall be conditioned
upon the prior payment of the applicable Withholding Taxes by the Grantee.
Subject to the limitations of applicable law, the Grantee hereby consents to the
collection of the Withholding Taxes by the Company from the Grantee’s regular
paychecks to the extent necessary to satisfy the obligations of the Grantee
hereunder.

     Section 10. Notices. Any notice hereunder by the Grantee shall be given to
the Company in writing and such notice shall be deemed duly given only upon
receipt thereof by the Secretary of the Company. Any notice hereunder by the
Company shall be given to the Grantee in writing and such notice shall be deemed
duly given only upon receipt thereof at such address as the Grantee may have on
file with the Company.

     Section 11. Construction. This Agreement and the Awards hereunder are
granted by the Company pursuant to the Plan and are in all respects subject to
the terms and conditions of the Plan. The Grantee hereby acknowledges that a
copy of the Plan has been delivered to the Grantee and accepts the Restricted
Shares hereunder subject to all terms and provisions of the Plan, which is
incorporated herein by reference. In the event of a conflict or ambiguity
between any term or provision contained herein and a term or provision of the
Plan, the Plan will govern and prevail. The construction of and decisions under
the Plan and this Agreement are vested in the Committee, whose determinations
shall be final, conclusive and binding upon the Grantee and the Company.

     Section 12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, excluding the
choice of law rules thereof.

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     Section 13. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

     Section 14. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the legatees, distributees, and personal representatives of
the Grantee and the successors of the Company.

     Section 15. Entire Agreement. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter hereof
and thereof, merging any and all prior agreements.

[SIGNATURES ON FOLLOWING PAGE]

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

            THE ULTIMATE SOFTWARE GROUP, INC.
      By:   /s/         Name:           Title:        

            GRANTEE
      By:   /s/         Name:              

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Appendix A

                          Number of Shares Subject     Date of Grant     to
Award    
 
             
 
             
 
             
 
             

A-1