Exhibit 10.12
UGS CAPITAL CORP.
UGS CAPITAL CORP. II
UGS CORP.
May 18, 2004
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▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Rollover Arrangements
Dear ▇▇. ▇▇▇▇▇▇:
When signed by you in the space indicated below, this letter will confirm our
irrevocable agreement that, if the transaction contemplated by the Stock
Purchase Agreement, dated as of March 12, 2004 (the "Purchase Agreement"), among
Electronic Data Systems Corporation, UGS Capital Corp. (formerly known as BSW
Holdings, Inc.) ("Capital Corp.") and UGS PLM Solutions Inc. (the "Company")
closes in accordance with the Purchase Agreement on or prior to June 30, 2004:
(a) you agree to forego the amounts set forth on Schedule 1 hereto
to which you would otherwise be entitled to be paid pursuant to your
letter agreement with the Company, dated on or about February 16, 2004
(the "Retention Incentive Agreement"); and
(b) in lieu thereof, Capital Corp., UGS Capital Corp. II ("Capital
Corp. II"), and UGS Corp. ("UGS Corp.") will make the following awards to
you as of the date of the closing of the transactions contemplated by the
Purchase Agreement pursuant to the Management Incentive Plan of Capital
Corp. and Capital Corp. II:
- a Restricted Stock Award of shares of "Class A Common
Stock" of Capital Corp. in the amount and subject to
vesting restrictions set forth on Schedule 2 hereto; and
- a cash award equal to 5% of the total amount your
foregone Retention Incentive payable in full within 14
days of the date of closing to defray most, if not all,
of the tax cost in connection with the Restricted Stock
Award; and
- a Stock Option Award for the option to purchase shares
of "Class L Common Stock" of Capital Corp. in the amount
and subject to vesting restrictions set forth on
Schedule 2 hereto; and
- a deferred cash award in an amount set forth on Schedule
2 payable by UGS Corp. at the time you exercise your
option to purchase shares of "Class L Common Stock" of
Capital Corp.; and
- a Stock Option Award for the option to purchase shares
of "Cumulative Preferred Stock" of Capital Corp. II in
the amount and subject to vesting restrictions set forth
on Schedule 2 hereto; and
- a deferred cash award in an amount set forth on Schedule
2 payable by UGS Corp. at the time you exercise your
option to purchase shares of "Cumulative Preferred
Stock" of Capital Corp. II.
Descriptions of the equity interests of Capital Corp. and Capital Corp. II
contained in this letter shall substantially conform to the descriptions thereof
in the confidential memorandum dated as of May 12, 2004. As a condition to your
receipt of the benefits of this letter, you agree to join the Stockholders
Agreement of Capital Corp. and Capital Corp. II on the closing date. Capital
Corp., Capital Corp. II, UGS Corp., and you agree that nothing in this letter,
or the awards made hereunder, is intended to or will affect your employment
status with the Company as an at-will employee. Capital Corp., Capital Corp. II,
UGS Corp., and you agree that this letter and your choice to forego the amounts
set forth in Schedule 1 hereto will not affect any of the rights and obligations
of the Company or you pursuant to the Retention Incentive Agreement with respect
to the cash amounts you chose not to forego as set forth in Schedule 1. Capital
Corp., Capital Corp. II, UGS Corp., and you further agree that nothing in this
letter is intended to or will affect any of the rights and obligations of the
Company or you pursuant to the Retention Incentive Agreement (a) if the closing
pursuant to the Purchase Agreement does not occur on or prior to June 30, 2004,
in which case this letter shall be null and void or (b) to the extent you have
not foregone 100% of your Retention Incentive hereby, in which case your
Retention Incentive Agreement shall apply to the portion of Retention Incentive
retained. All payments taxed at ordinary income rates are subject to
withholding.
If the foregoing is in accordance with your understanding, please sign this
letter and return it to Capital Corp.
Very truly yours,
UGS CAPITAL CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇
Title: Co-President
UGS CAPITAL CORP. II
/s/ ▇▇▇▇▇▇▇ ▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇
Title: Co-President
UGS CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇
Title: Co-President
The foregoing is hereby agreed to and accepted:
/s/▇▇▇▇ ▇▇▇▇▇▇
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Letter Agreement
SCHEDULE 1
Cash Retention Incentive Pursuant to Retention Incentive Agreement
PERCENTAGE OF RETENTION PAYMENT WITHIN 14 DAYS PAYMENT AT PAYMENT AT
INCENTIVE OF DATE OF CLOSING YEAR 1 YEAR 2 TOTAL
----------------------- ---------------------- ----------- ----------- -------------
Retention Incentive
Foregone 100% $250,000.00 $375,000.00 $375,000.00 $1,000,000.00
Retention Incentive
Retained 0% $ 0 $ 0 $ 0 $ 0
--- ----------- ----------- ----------- -------------
TOTAL RETENTION
INCENTIVE: 100% $250,000.00 $375,000.00 $375,000.00 $1,000,000.00
--- ----------- ----------- ----------- -------------
SCHEDULE 2
Rollover Awards
AMOUNT VESTING
(AFTER 5% -----------------------------
AWARD DEDUCTION) PRICE/SHARE CLOSING YEAR 1 YEAR 2 PAYMENT
-------------------------- ----------- ----------- --------- --------- --------- ----------------------------
Shares of Class A Common
Stock of Capital Corp. 76,000.00 $ 1 19,000.00 28,500.00 28,500.00 N/A
Options to Purchase Shares
of Class L Common Stock of 8,444.44 $ 81 2,111.11 3,166.66 3,166.67 N/A
Capital Corp.
Options to Purchase Shares
of Cumulative Preferred 1,900.00 $100 475.00 712.50 712.50 N/A
Stock of Capital Corp. II
Deferred Cash Bonus In proportion to Class L
(Class L Common Stock $684,000.00 N/A N/A N/A N/A Common Stock Option exercise
Options)
Deferred Cash Bonus In proportion to Cumulative
(Cumulative Preferred $190,000.00 N/A N/A N/A N/A Preferred Stock Option
Stock Options) exercise
Cash Award of 5% of Foregone Retention Incentive: $50,000.00
UGS CAPITAL CORP.
2004 MANAGEMENT INCENTIVE PLAN
THIS AWARD AND THE SHARES ISSUED HEREUNDER ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE
AND OTHER PROVISIONS AS SET FORTH IN THE STOCKHOLDERS
AGREEMENT AMONG UGS CAPITAL CORP., UGS CAPITAL CORP. II, UGS
HOLDINGS, INC., UGS CORP. AND CERTAIN STOCKHOLDERS OF UGS CAPITAL
CORP. AND UGS CAPITAL CORP. II, DATED AS OF MAY 24, 2004 (THE
"STOCKHOLDERS AGREEMENT").
UGS CAPITAL CORP. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF
YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR
AWARD AND ITS TAX CONSEQUENCES.THANK YOU.
UGS Capital Corp.
Attn: Board of Directors
Ladies and Gentlemen:
The undersigned (i) acknowledges receipt of an award (the "Award") of
restricted stock from UGS Capital Corp. (the "Company") under the UGS Capital
Corp. and UGS Capital Corp. II 2004 Management Incentive Plan (the "Plan"),
subject to the terms set forth below and in the Plan; (ii) further acknowledges
receipt of a copy of the Plan in effect as of the date hereof; and (iii) agrees
with the Company as follows:
1. Effective Date. This Agreement shall take effect as of May 27, 2004.
2. Shares Subject to Award. The Company hereby agrees to issue, and the
undersigned hereby agrees to accept in accordance with the terms
hereof, that total number of shares set forth in Schedule A (the
"Award Shares") of the Class A-4 Common Stock of the Company (the
"Restricted Stock"). Except as otherwise specifically provided
herein, the undersigned's rights to the Award Shares, whether vested
or unvested, are subject to the restrictions and other provisions
contained in the Plan and the Stockholders Agreement (both of which
are incorporated herein by reference) in addition to such other
restrictions, if any, as may be imposed by law. In the event of a
conflict between the Plan and the Stockholders Agreement, the
Stockholders Agreement shall control.
3. Meaning of Certain Terms. Except as otherwise defined herein, all
initially- capitalized terms used herein shall have the same meaning
as in the Plan and the Stockholders Agreement. The term "vest" as
used herein with respect to any Award Share means the lapsing of the
requirement under Section 5 below that the Award Share be forfeited
under certain circumstances.
4. Vesting of Shares. Any unvested Award Shares held by the undersigned
shall vest immediately if (i) the undersigned's Employment (as
defined in the Plan) is terminated by the Company without Cause (as
defined in Section 5 below), or (ii) a Change of Control occurs.
Otherwise, Award Shares shall vest in accordance with Schedule A.
5. Forfeiture Risk.
a. If the undersigned's Employment ceases for any reason other
than termination by the Company without Cause, any unvested
Award Shares shall be forfeited.
b. For this purpose, "Cause" means (a) material breach of any
agreement entered into between the undersigned and the
Company, (b) material misconduct, (c) material failure to
follow the Company's policies, directives or orders applicable
to Company employees holding comparable positions, (d)
intentional destruction or theft of Company property or
falsification of Company documents, (e) material failure or
refusal to faithfully, diligently and competitively perform
the usual and customary duties associated with the
undersigned's position, or (f) conviction of a felony or any
crime involving moral turpitude.
6. Company's Continuing Call Right. The Company shall have the right to
purchase the Award Shares in accordance with the terms of the
Stockholders Agreement whether or not the Shares are vested.
7. Transfers of Shares. Award Shares shall not be sold, transferred,
pledged, assigned or otherwise encumbered or disposed of except in
accordance with the Stockholders Agreement.
8. Legend / Certificate Retention. Award Shares shall bear such legends
as are required by the Stockholders Agreement and as may be
determined by the Administrator prior to issuance, and certificates
representing unvested Award Shares shall held by the Company if the
Administrator so specifies.
9. Dividends. No dividends shall be payable with respect to unvested
Award Shares but such dividends shall be paid, without interest,
only when, and if, said Award Shares become vested.
10. Certain Tax Matters. The undersigned expressly acknowledges the
following:
a. The Company has strongly recommended that the undersigned
consider making a so-called "83(b) election" with respect to
the Award Shares. The undersigned has been advised to confer
promptly with a professional tax adviser to consider whether
to make such election. Any such election, to be
effective, must be made in accordance with applicable
regulations and within thirty (30) days following the date of
"transfer" of the Shares (as determined under Section 83 of
the Internal Revenue Code). The undersigned hereby agrees that
if the undersigned makes an 83(b) election, the undersigned
will provide a copy of the election to the Company not later
than ten (10) days after filing the election with the Internal
Revenue Service.
b. The award or vesting of the Award Shares may give rise to
"wages" subject to withholding. The undersigned expressly
acknowledges and agrees that the undersigned's rights
hereunder are subject to the undersigned promptly paying to
the Company in cash (or by such other means as may be
acceptable to the Administrator in its discretion) all taxes
required to be withheld. The undersigned also authorizes the
Company or its subsidiaries to withhold such amount from any
amounts otherwise owed to the undersigned.
By acceptance of this Award, the undersigned agrees to hereby become a
party to, and be bound by the terms of, the Stockholders Agreement and the
Participation and Registration Rights Agreement among UGS Capital Corp., UGS
Capital Corp. II, UGS Holdings, Inc., UGS Corp. and certain stockholders of UGS
Capital Corp. and UGS Capital Corp. II, dated as of May 24, 2004, in each case
treating the undersigned as a "Manager" and the Award Shares as "Purchased and
Roll-Over Shares."
Very truly yours,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Dated: May 27, 2004
The foregoing Restricted Stock
Award Agreement is hereby accepted:
UGS Capital Corp.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
Roll-Over Restricted Stock Agreement
SCHEDULE A
Total number of Award Shares: 76,000.00
25% Shares vest on the date of the Award;
an additional 37.5% Shares vest on the one year anniversary of the date of the
Award and
an additional 37.5% Shares vest on the two year anniversary of the date of the
Award.
UGS CAPITAL CORP. AND UGS CAPITAL CORP. II
2004 MANAGEMENT INCENTIVE PLAN
THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER
PROVISIONS AS SET FORTH IN THE STOCKHOLDERS AGREEMENT AMONG UGS CAPITAL CORP.,
UGS CAPITAL CORP. II, UGS HOLDINGS, INC., UGS CORP. AND CERTAIN STOCKHOLDERS OF
UGS CAPITAL CORP. AND UGS CAPITAL CORP. II, DATED AS OF MAY 24, 2004 (THE
"STOCKHOLDERS AGREEMENT").
UGS CAPITAL CORP. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL
AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.
THANK YOU.
UGS CAPITAL CORP.
NON-QUALIFIED ROLL-OVER OPTION AND CONDITIONAL DEFERRED CASH AWARD
AGREEMENT
This Agreement evidences a stock option granted by UGS Capital Corp., a
Delaware corporation (the "Company") and a deferred cash award conditionally
payable by UGS Corp., a Delaware corporation and an indirect subsidiary of the
Company ("UGS Corp."), to the undersigned (the "Optionee"), pursuant to, and
subject to the terms of, the UGS Capital Corp. and UGS Capital Corp. II 2004
Management Incentive Plan (the "Plan"), which is incorporated herein by
reference and of which the Optionee hereby acknowledges receipt.
(a) Grant of Option. The Company grants to the Optionee as of May
27, 2004, an option (the "Option") to purchase, in whole or in part, on
the terms provided herein and in the Plan, that total number of shares set
forth in Schedule A (the "Option Shares") of Class L Common Stock of the
Company, par value $.001 per share, at an exercise price of eighty-one
dollars ($81.00) per share. The Option evidenced by this Agreement is
intended to be a non-qualified option and is granted to the Optionee in an
Employment capacity as an employee. The latest date on which this Option,
or any portion of it, may be exercised shall be May 27, 2014 (the "Final
Exercise Date).
(b) Meaning of Certain Terms. Except as otherwise defined herein,
all initially-capitalized terms used in this Agreement shall have the same
meaning as in the Plan and the Stockholders Agreement. As used herein with
respect to the Option, the term "vest" means to become exercisable in
whole or in specified part.
(c) Vesting of Option. The Option shall vest in full immediately if
(i) the undersigned's Employment (as defined in the Plan) is terminated by
the Company without Cause (as defined in Section 5 below), or (ii) a
Change of Control occurs. Otherwise, the Option shall vest in accordance
with Schedule A.
(d) Exercise of Option. Each election to exercise this Option shall
be in writing, signed by the Participant or the Participant's executor,
administrator, or legally appointed representative (in the event of the
Participant's incapacity) or the person or persons to whom this Option is
transferred by will or the applicable laws of descent and distribution
(collectively, the "Option Holder"), and received by the Company at its
principal office, accompanied by payment in full as provided in the Plan.
Subject to the further terms and conditions provided in the Plan, the
purchase price may be paid by delivery of cash or check acceptable to the
Administrator or by such other method provided under the Plan and
explicitly approved by the Administrator. In the event that this Option is
exercised by an Option Holder other than the Participant, the Company will
be under no obligation to deliver Shares hereunder unless and until it is
satisfied as to the authority of the Option Holder to exercise this
Option.
(e) Cessation of Employment. Unless the Administrator determines
otherwise, the following will apply if the Optionee's Employment ceases:
1. If the Optionee's Employment is terminated by the Company other than
for Cause (as defined below), the Option will vest fully.
2. To the extent the Option is neither vested prior to cessation of
Employment nor vested upon cessation in accordance with (a) above, the Option
will be forfeited immediately by the Optionee and will terminate.
3. Subject to (d) below, to the extent the Option is vested prior to
cessation of Employment or becomes vested upon cessation in accordance with (a)
above, the Option will remain exercisable for the shorter of (i) a period of 60
days or (ii) the period ending on the Final Exercise Date, and will thereupon
terminate.
4. The Option will immediately terminate on cessation of Employment if the
Administrator in its sole discretion determines that such cessation has resulted
for reasons that cast such discredit on the Optionee as to justify immediate
forfeiture of the Option.
5. As used herein, "Cause" is defined as (a) material breach of any
agreement entered into between the Optionee and the Company, (b) material
misconduct, (c) material failure to follow the Company's policies, directives or
orders applicable to Company employees holding comparable positions, (d)
intentional destruction or theft of Company property or falsification of Company
documents, (e) material failure or refusal to faithfully, diligently and
competitively perform the usual and customary duties associated with your
position, or (f) conviction of a felony or any crime involving moral turpitude.
(f) Share Restrictions, etc. The Optionee's rights to Option Shares
are subject to the restrictions and other provisions contained in the Plan
and the Stockholders Agreement in addition to such other restrictions, if
any, as may be imposed by law. In the event of a conflict between the Plan
and the Stockholders Agreement, the Stockholders Agreement shall control.
(g) Legends, etc. Option Shares issued upon exercise shall bear such
legends as are required by the Stockholders Agreement and as may be
determined by the Administrator prior to issuance.
(h) Transfer of Option. This Option is not transferable by the
Optionee other than in accordance with the Stockholders Agreement.
(i) Withholding. The exercise of the Option will give rise to
"wages" subject to withholding. The Optionee expressly acknowledges and
agrees that the Optionee's rights hereunder, including the right to be
issued Shares upon exercise, are subject to the Optionee promptly paying
to the Company in cash (or by such other means as may be acceptable to the
Administrator in its discretion) all taxes required to be withheld. The
Optionee also authorizes the Company or its subsidiaries to withhold such
amount from any amounts otherwise owed to the Optionee.
(j) Conditional Deferred Cash Award. The Company shall cause UGS
Corp. to pay a conditional deferred cash Award to the Optionee in
conjunction with the exercise of this Option. The conditional deferred
cash Award will be paid only if, when, and to the extent that, the Option
is exercised, and if the Option is forfeited as provided in Section 5
above, the deferred cash award shall be forfeited. The total amount of
cash that will be paid if the Option is exercised in full is set forth in
Schedule B. The amount of cash that will be payable upon any partial
exercise of the Option shall be determined by multiplying the amount set
forth in Schedule B by a fraction, the numerator of which is the number of
Option Shares as to which the Option is then being exercised and the
denominator of which is the total number of Option Shares as to which the
Option was granted.
By acceptance of this Option and conditional deferred cash award, the
undersigned agrees to hereby become a party to, and be bound by the terms of,
the Stockholders Agreement and the Participation and Registration Rights
Agreement among UGS Capital Corp., UGS Capital Corp. II, UGS Holdings, Inc., UGS
Corp. and certain stockholders of UGS Capital Corp. and UGS Capital Corp. II,
dated as of May 24, 2004, in each case treating the undersigned as a "Manager"
and the Option Shares as "Purchased and Roll-Over Shares."
Executed as of the 27th day of May, 2004.
UGS Capital Corp. UGS Capital Corp.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
UGS Corp. UGS Corp.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
Optionee /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Rollover Class Option Agreement
SCHEDULE A
VESTING SCHEDULE
Total number of Option Shares: 8,444.44
25%Shares are exercisable on or after the grant of the Option;
an additional 37.5% Shares are exercisable on and after the one year anniversary
of the grant of the Option; and
an additional 37.5% Shares are exercisable on and after the two year
anniversary of the grant of the Option.
SCHEDULE B
CONDITIONAL DEFERRED CASH AWARD
Total amount of conditional deferred cash award: $684,000.00
UGS CAPITAL CORP. AND UGS CAPITAL CORP. II
2004 MANAGEMENT INCENTIVE PLAN
THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER
PROVISIONS AS SET FORTH IN THE STOCKHOLDERS AGREEMENT AMONG UGS CAPITAL CORP.,
UGS CAPITAL CORP. II, UGS HOLDINGS, INC., UGS CORP. AND CERTAIN STOCKHOLDERS OF
UGS CAPITAL CORP. AND UGS CAPITAL CORP. II, DATED AS OF MAY 24, 2004 (THE
"STOCKHOLDERS AGREEMENT").
UGS CAPITAL CORP. II STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN
LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX
CONSEQUENCES. THANK YOU.
UGS CAPITAL CORP. II
NON-QUALIFIED ROLL-OVER OPTION AND CONDITIONAL DEFERRED CASH AWARD
AGREEMENT
This Agreement evidences a stock option granted by UGS Capital Corp. II, a
Delaware corporation (the "Company") and a deferred cash award conditionally
payable by UGS Corp., a Delaware corporation and an indirect subsidiary of the
Company ("UGS Corp."), to the undersigned (the "Optionee"), pursuant to, and
subject to the terms of, the UGS Capital Corp. and UGS Capital Corp. II 2004
Management Incentive Plan (the "Plan"), which is incorporated herein by
reference and of which the Optionee hereby acknowledges receipt.
1. Grant of Option. The Company grants to the Optionee as of May 27, 2004,
an option (the "Option") to purchase, in whole or in part, on the terms provided
herein and in the Plan, that total number of shares set forth in Schedule A (the
"Option Shares") of Cumulative Preferred Stock of the Company, par value $.001
per share, at an exercise price of one-hundred dollars ($100.00) per share. The
Option evidenced by this Agreement is intended to be a non-qualified option and
is granted to Optionee in an Employment capacity as an employee. The latest date
on which this Option, or any portion of it, may be exercised shall be May 27,
2014 (the "Final Exercise Date).
2. Meaning of Certain Terms. Except as otherwise defined herein, all
initially-capitalized terms used in this Agreement shall have the same meaning
as in the Plan and the Stockholders Agreement. As used herein with respect to
the Option, the term "vest" means to become exercisable in whole or in specified
part.
3. Vesting of Option. The Option shall vest in full immediately if (i) the
undersigned's Employment (as defined in the Plan) is terminated by the Company
without Cause (as defined in Section 5 below), or (ii) a Change of Control
occurs. Otherwise, the Option shall vest in accordance with Schedule A.
4. Exercise of Option. Each election to exercise this Option shall be
in writing, signed by the Participant or the Participant's executor,
administrator, or legally appointed representative (in the event of the
Participant's incapacity) or the person or persons to whom this Option is
transferred by will or the applicable laws of descent and distribution
(collectively, the "Option Holder"), and received by the Company at its
principal office, accompanied by payment in full as provided in the Plan.
Subject to the further terms and conditions provided in the Plan, the purchase
price may be paid by delivery of cash or check acceptable to the Administrator
or by such other method provided under the Plan and explicitly approved by the
Administrator. In the event that this Option is exercised by an Option Holder
other than the Participant, the Company will be under no obligation to deliver
Shares hereunder unless and until it is satisfied as to the authority of the
Option Holder to exercise this Option.
5. Cessation of Employment. Unless the Administrator determines
otherwise, the following will apply if the Optionee's Employment ceases:
(a) If the Optionee's Employment is terminated by the Company other than
for Cause (as defined below), the Option will vest fully.
(b) To the extent the Option is neither vested prior to cessation of
Employment nor vested upon cessation in accordance with (a) above,
the Option will be forfeited immediately by the Optionee and will
terminate.
(c) Subject to (d) below, to the extent the Option is vested prior to
cessation of Employment or becomes vested upon cessation in
accordance with (a) above, the Option will remain exercisable for
the shorter of (i) a period of 60 days or (ii) the period ending on
the Final Exercise Date, and will thereupon terminate.
(d) The Option will immediately terminate on cessation of Employment if
the Administrator in its sole discretion determines that such
cessation has resulted for reasons that cast such discredit on the
Optionee as to justify immediate forfeiture of the Option.
(e) As used herein, "Cause" is defined as (a) material breach of any
agreement entered into between the Optionee and the Company, (b)
material misconduct, (c) material failure to follow the Company's
policies, directives or orders applicable to Company employees
holding comparable positions, (d) intentional destruction or theft
of Company property or falsification of Company documents, (e)
material failure or refusal to faithfully, diligently and
competitively perform the usual and customary duties associated with
your position, or (f) conviction of a felony or any crime involving
moral turpitude.
6. Share Restrictions, etc. The Optionee's rights to Option Shares are
subject to the restrictions and other provisions contained in the Plan and the
Stockholders Agreement in addition to such other restrictions, if any, as may be
imposed by law. In
the event of a conflict between the Plan and the Stockholders Agreement, the
Stockholders Agreement shall control.
7. Legends, etc. Option Shares issued upon exercise shall bear such
legends as are required by the Stockholders Agreement and as may be
determined by the Administrator prior to issuance.
8. Transfer of Option. This Option is not transferable by the Optionee
other than in accordance with the Stockholders Agreement.
9. Withholding. The exercise of the Option will give rise to "wages"
subject to withholding. The Optionee expressly acknowledges and
agrees that the Optionee's rights hereunder, including the right to
be issued Shares upon exercise, are subject to the Optionee promptly
paying to the Company in cash (or by such other means as may be
acceptable to the Administrator in its discretion) all taxes
required to be withheld. The Optionee also authorizes the Company or
its subsidiaries to withhold such amount from any amounts otherwise
owed to the Optionee.
10. Conditional Deferred Cash Award. The Company shall cause UGS Corp.
to pay a conditional deferred cash Award to the Optionee in
conjunction with the exercise of this Option. The conditional
deferred cash Award will be paid only if, when, and to the extent
that, the Option is exercised, and if the Option is forfeited as
provided in Section 5 above, the deferred cash award shall be
forfeited. The total amount of cash that will be paid if the Option
is exercised in full is set forth in Schedule B. The amount of cash
that will be payable upon any partial exercise of the Option shall
be determined by multiplying the amount set forth in Schedule B by a
fraction, the numerator of which is the number of Option Shares as
to which the Option is then being exercised and the denominator of
which is the total number of Option Shares as to which the Option
was granted.
By acceptance of this Option and conditional deferred cash award, the
undersigned agrees to hereby become a party to, and be bound by the terms of,
the Stockholders Agreement and the Participation and Registration Rights
Agreement among UGS Capital Corp., UGS Capital Corp. II, UGS Holdings, Inc., UGS
Corp. and certain stockholders of UGS Capital Corp. and UGS Capital Corp. II,
dated as of May 24, 2004, in each case treating the undersigned as a "Manager"
and the Option Shares as "Purchased and Roll-Over Shares."
Executed as of the 27th day of May, 2004.
UGS Capital Corp. II UGS Capital Corp. II
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Executive Vice President
UGS Corp. UGS Corp.
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Executive Vice President
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Rollover Midco Option Agreement
SCHEDULE A
VESTING SCHEDULE
Total number of Option Shares: 1,900.00
25% Shares are exercisable on or after the grant of the Option;
an additional 37.5% Shares are exercisable on and after the one year anniversary
of the grant of the Option; and
an additional 37.5% Shares are exercisable on and after the two year anniversary
of the grant of the Option.
Rollover Midco Option Agreement
SCHEDULE B
CONDITIONAL DEFERRED CASH AWARD
Total amount of conditional deferred cash award: $190,000.00
Rollover Midco Option Agreement