UNIGRAPHICS SOLUTIONS INC
S-8, 1998-06-23
PREPACKAGED SOFTWARE
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           As filed with the Securities and Exchange Commission on June 23, 1998
                                                    Registration No.  
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   -----------

                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                                   -----------

                           Unigraphics Solutions Inc.
             (Exact name of Registrant as specified in its charter)

                Delaware                                 75-2728894
      (State or Other Jurisdiction                    (I.R.S. Employer
    of Incorporation or Organization)               Identification Number)

          13736 Riverport Drive                            63034
       Maryland Heights, Missouri                        (Zip code)
 (Address of principal executive offices)

 
                 Unigraphics Solutions Inc. 1998 Incentive Plan
                            (Full title of the plan)

                                 John J. Mazzola
                           Unigraphics Solutions Inc.
                              13736 Riverport Drive
                        Maryland Heights, Missouri 63043
                     (Name and address of agent for service)

                                 (314) 344-5900
          (Telephone number, including area code, of agent for service)

                -------------------------------------------------
                                    Copy to:
                               David B. Hollander
                       Electronic Data Systems Corporation
                         5400 Legacy Drive, MS H3-3D-05
                             Plano, Texas 75024-3199
                                 (972) 604-6000
                -------------------------------------------------

<TABLE>
<CAPTION>
                         CALCULATION OF REGISTRATION FEE
=======================================================================================================================
<S><C>                                <C>               <C>                <C>                    <C>    
                                           Amount        Proposed Maximum     Proposed Maximum
      Title of Each Class of               to be          Offering Price          Aggregate            Amount of
    Securities to be Registered         Registered (1)     Per Share (2)    Offering Price (1)(2)  Registration Fee (2)
- -------------------------------------  ----------------  ----------------   ---------------------  --------------------
Class A Common Stock, par value $0.01
per share............................  1,300,000 shares       $14.00            $18,200,000             $5,369
=======================================================================================================================
(1)  There are also  registered  hereby such  indeterminate  number of shares of Class  A  Common  Stock  as may be 
     issuable  by  reason  of  operation  of anti-dilution provisions of the Incentive Plan described herein.
(2)  Calculated  pursuant to Rule 457(h) based on the initial  public  offering  price for the Class A Common Stock
     on June 17, 1998.
</TABLE>
================================================================================

<PAGE>


                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

         The document(s)  containing the information specified in Part I of Form
S-8  will be sent or given  to  participating  employees  as  specified  by Rule
428(b)(1)  under  the  Securities  Act of  1933,  as  amended  (the  "Act").  In
accordance  with  Rule  428 and the  requirements  of Part I of Form  S-8,  such
documents are not being filed with the Securities and Exchange  Commission  (the
"Commission")  either as part of this Registration  Statement or as prospectuses
or prospectus  supplements pursuant to Rule 424. The registrant shall maintain a
file of such  documents in  accordance  with the  provisions  of Rule 428.  Upon
request,  the registrant  shall furnish to the Commission or its staff a copy or
copies of any or all of the  documents  included in such file.  Such  documents,
taken together,  constitute a prospectus that meets the  requirements of Section
10(a) of the Act.


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

         The following documents heretofore filed by Unigraphics Solutions Inc.,
a Delaware  corporation  (the  "Company"),  with the Commission are incorporated
herein by reference:

         1.   The Company's latest prospectus filed with the Commission pursuant
              to Rule 424(b) under the Act on June 18, 1998 (the "Prospectus").

         2.   The section  entitled  "Description of Capital Stock" contained in
              the  Prospectus  filed  as  part  of  the  Company's  Registration
              Statement on Form S-1 (File No. 333-48261).

         In addition,  all  documents  filed by the Company with the  Commission
pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Securities  Exchange Act
of  1934,  as  amended  (the  "Exchange  Act"),  subsequent  to the date of this
Registration Statement and prior to the filing of a post-effective  amendment to
this  Registration  Statement that indicates that all securities  offered hereby
have been sold or that deregisters all securities then remaining  unsold,  shall
be deemed to be incorporated in this Registration  Statement by reference and to
be a part hereof from the date of filing of such documents.

         Any statement contained in this Registration Statement, in an amendment
hereto  or in a  document  incorporated  by  reference  herein  shall be  deemed
modified or superseded for purposes of this Registration Statement to the extent
that a statement  contained herein, in any subsequently filed supplement to this
Registration  Statement or any document that is also  incorporated  by reference
herein  modifies or  supersedes  such  statement.  Any  statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this Registration Statement.

Item 4.  Description of Securities.

         Not applicable.

                                      II-1
<PAGE>

Item 5.  Interests of Named Experts and Counsel.


     David B.  Hollander has rendered an opinion as to the legality of the Class
A Common Stock being registered  hereby.  Mr. Hollander is counsel to Electronic
Data  Systems  Corporation, the holder of a  majority of the outstanding capital
stock of the Company, and owns 2,000 shares of Class A Common Stock.


Item 6.  Indemnification of Directors and Officers.

         Section  145 of the  General  Corporation  Law of the State of Delaware
(the "DGCL")  provides that a Delaware  corporation may indemnify  directors and
officers and certain other individuals  against expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred  by any such  person in  connection  with any  threatened,  pending  or
completed action, suit or proceeding (other than an action by or in the right of
the  corporation)  in  which  such  person  is involved because such person is a
director of officer of the corporation,  if such person  acted in good faith and
in a manner that such person reasonably  believed to be in or not opposed to the
best interests of the corporation  and, with respect to any  criminal  action or
proceeding,  had no reasonable  cause to  believe  that  such  person's  conduct
was  unlawful.  No indemnification  shall  be  made to an  officer  or  director
or other  qualified individual  if  such  person  shall  have  been adjudged  to
be  liable  to the corporation  unless  such  person  acted in good faith and in
a manner that such person  reasonably  believed to be in  or not  opposed to the
best interest of the corporation and only to the extent  the Court  of  Chancery
of the  State of Delaware or the court in which such action or suit was brought,
determined that despite the  adjudication  of  liability  such  person is fairly
and reasonably entitled to such indemnification. If such person is successful on
the merits or otherwise in defense of any action, the Section 145 provides  that
such person shall be indemnified  against  expenses   including  attorneys' fees
actually and reasonably incurred by that person in connection therewith. Section
102(b)(7)  of the DGCL  provides  that the  liability  of a director  may not be
limited or eliminated for the breach of such  director's  duty of loyalty to the
corporation  or its  stockholders,  for  such  director's  intentional  acts  or
omissions not in good faith,  for such director's  concurrence in or vote for an
unlawful  payment of a dividend or unlawful  stock purchase or redemption or for
any improper personal benefit derived by the director from any transaction.

         The Company's Bylaws provide that the Company will indemnify any person
who was or is a party (or is threatened  to be made a party) to any  threatened,
pending or  completed  action,  suit or  proceeding,  whether  civil,  criminal,
administrative or investigative,  by reason of the fact that he or she is or was
or has agreed to serve at the request of the Company as a director or officer of
the  Company,  or is or was serving or has agreed to serve at the request of the
Company as a director  or officer  of another  corporation,  partnership,  joint
venture,  trust or other enterprise,  or by reason of any action alleged to have
been taken or omitted in such capacity.  The Company's  Bylaws  further  provide
that  the  Company  may  indemnify  any  person  who  was or is  a  party (or is
threatened to be made a party) to any threatened,  pending or completed  action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was or has agreed to become an  employee
or agent of the  Company,  or is or was  serving  or has  agreed to serve at the
request  of  the  Company  as an  employee  or  agent  of  another  corporation,
partnership,  joint  venture,  trust or other  enterprise,  or by  reason of any
action alleged to have been taken or omitted in such capacity.

         The indemnification referred to in the preceding paragraph will be from
and against expenses (including attorneys' fees),  judgments,  fines and amounts
paid in settlement  actually and reasonably incurred by the indemnitee or on his
or her behalf in connection with such action,  suit or proceeding and any appeal
therefrom. However, such indemnification will only be provided if the indemnitee
acted in good faith and in a manner he or she  reasonably  believed  to be in or
not  opposed to the best  interests  of 

                                      II-2
<PAGE>
the Company and, with respect to any criminal action, suit or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. Notwithstanding the
preceding two sentences,  in the case of an action or suit by or in the right of
the Company to procure a judgment in its favor (a) the indemnification  referred
to in this paragraph  will be limited to expenses  (including  attorneys'  fees)
actually and reasonably  incurred by such person in the defense or settlement of
such action or suit, and (b) no  indemnification  will be made in respect of any
claim,  issue or matter as to which  such person  will have been  adjudged to be
liable to the Company unless, and only to the extent that, the Delaware Court of
Chancery (or the court in which such action or suit was brought) determines upon
application  that,  despite the adjudication of liability but in view of all the
circumstances  of the case,  such  person is fairly and  reasonably  entitled to
indemnity for such expenses  which the Delaware Court of Chancery (or such other
court) deems proper. To the extent that a director,  officer,  employee or agent
of the Company has been  successful on the merits or otherwise in defense of any
action,  suit or proceeding  referred to above or in defense of any claim, issue
or matter therein,  he or she will be indemnified  against  expenses  (including
attorneys'  fees) actually and  reasonable  incurred by him or her in connection
therewith.  Expenses  incurred by a director or officer in  defending a civil or
criminal  action,  suit or proceeding  will be paid by the Company in advance of
the final  disposition  of such action,  suit or  proceeding  upon receipt of an
undertaking  by or on behalf of the  director or officer to repay such amount if
it  will  ultimately  be  determined  that  he or  she  is  not  entitled  to be
indemnified by the Company. Such expenses incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.

         The indemnification  described in the preceding two paragraphs will not
be deemed  exclusive  of any  other  rights to which  those  indemnified  may be
entitled  under any Bylaw,  agreement,  vote of  stockholders  or  disinterested
directors or otherwise, both as to action in his or her official capacity and as
to action in another  capacity while holding such office,  will continue as to a
person  who has ceased to be a  director,  officer,  employee  or agent and will
inure to the  benefit  of the  heirs,  executors  and  administrators  of such a
person.

         The Company will  maintain  insurance on behalf of any person who is or
was or has  agreed to serve at the  request  of the  Company  as a  director  or
officer of the Company,  or is or was serving at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against, and incurred by, him or
her or on his or her behalf in any such  capacity,  or arising out of his or her
status as such, whether or not the Company would have the power to indemnify him
or her against such  liability  under the  provisions  of the Bylaws;  provided,
however,   such  insurance  must  be  available  on  acceptable   terms,   which
determination shall be made by a vote of a majority of the Board of Directors.

         The  Company  has  entered   into   Indemnification   Agreements   (the
"Indemnification  Agreements")  with its  directors  and certain of its officers
(the  "Indemnitees").  Under the terms of the  Indemnification  Agreements,  the
Company  has  generally  agreed to  indemnify,  and  advance  expenses  to, each
Indemnitee to the fullest extent permitted by applicable law on the date of such
agreements and to such greater  extent as applicable law may thereafter  permit.
In addition, the Indemnification Agreements contain specific provisions pursuant
to which the Company has agreed to indemnify each  Indemnitee (i) if such person
is, by reason of his or her status as a director, nominee for director, officer,
agent or  fiduciary  of the  Company or of any other  corporation,  partnership,
joint venture,  trust, employee benefit plan or other enterprise with which such
person  was  serving  at the  request  of the  Company  (any such  status  being
hereinafter referred to as a "Corporate Status"),  made or threatened to be made
a party to any  threatened,  pending or  completed  action,  suit,  arbitration,
alternative  dispute  resolution  mechanism,  investigation  or other proceeding
(each,  a  "Proceeding"),  other  than a  Proceeding  by or in the  right of the
Company,  (ii) if such person is, by reason of his or her Corporate Status, made
or threatened to be made a party to any Proceeding brought by or in the right of
the Company to procure a judgment in its favor,  except that no  


                                      II-3
<PAGE>
indemnification  shall be made in respect of any claim,  issue or matter in such
Proceeding as to which such Indemnitee  shall have been adjudged to be liable to
the Company if applicable law prohibits such indemnification (unless and only to
the extent that a court  shall  otherwise  determine),  (iii)  against  expenses
actually  and  reasonably  incurred  by such  person or on his or her  behalf in
connection  with any  Proceeding to which such  Indemnitee  was or is a party by
reason  of  his  or  her  Corporate  Status  and in  which  such  Indemnitee  is
successful,  on the merits or  otherwise,  (iv)  against  expenses  actually and
reasonably  incurred by such person or on his or her behalf in connection with a
Proceeding  to the  extent  that  such  Indemnitee  is,  by reason of his or her
Corporate  Status,  a witness or otherwise  participates  in any Proceeding at a
time when such person is not a party in the Proceeding and (v) against  expenses
actually and reasonably incurred by such person in any judicial  adjudication of
or  any  award  in   arbitration   to  enforce  his  or  her  rights  under  the
Indemnification Agreements.

         Furthermore,  under the terms of the  Indemnification  Agreements,  the
Company has agreed to pay all reasonable expenses incurred by or on behalf of an
Indemnitee in connection with any Proceeding, whether brought by or in the right
of the Company or  otherwise,  in advance of any  determination  with respect to
entitlement  to  indemnification  and  within 15 days  after the  receipt by the
Company of a written  request  from such  Indemnitee  for such  payment.  In the
Indemnification  Agreements,  each  Indemnitee  has  agreed  that he or she will
reimburse  and repay the Company for any expenses so advanced to the extent that
it  shall  ultimately  be  determined  that  he or  she is  not  entitled  to be
indemnified by the Company against such expenses. The Indemnification Agreements
also include  provisions that specify the procedures and presumptions  which are
to be employed to determine whether an Indemnitee is entitled to indemnification
thereunder.  In some  cases,  the  nature  of the  procedures  specified  in the
Indemnification  Agreements  varies  depending  on whether  there has occurred a
"Change in  Control"  (as  defined  in the  Indemnification  Agreements)  of the
Company.

         The above discussion of the Company's Certificate of Incorporation  and
Bylaws,  the  Indemnification  Agreements  and  Section  145 of the  DGCL is not
intended to be exhaustive and is respectively  qualified in its entirety by such
documents and statute.

Item 7.  Exemptions from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

         4(a)     Unigraphics Solutions Inc. 1998 Incentive Plan

         5        Opinion of David B. Hollander

         23(a)    Consent of KPMG Peat Marwick LLP

         23(b)    Consent of Ernst & Young LLP

         23(c)    Consent of David B. Hollander (included in Exhibit 5)

Item 9.  Undertakings

         (a)      The Company hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
         being made, a post-effective amendment to this Registration Statement:


                                      II-4
<PAGE>

                           (i)  To  include  any  prospectus required by Section
                  10(a)(3)  of  the  Securities  Act  of  1933, as  amended (the
                  "Act");

                           (ii) To reflect in the prospectus any facts or events
                  arising  after  the  effective   date  of  this   Registration
                  Statement  (or  the  most  recent   post-effective   amendment
                  thereof), which, individually or in the aggregate, represent a
                  fundamental  change  in the  information  set  forth  in  this
                  Registration Statement;

                           (iii)  To  include  any  material   information  with
                  respect to the plan of distribution  not previously  disclosed
                  in this Registration  Statement or any material change to such
                  information in this Registration Statement;

         Provided,  however,  that  paragraphs  (a)(1)(i) and  (a)(1)(ii) do not
         apply if the  information  required to be included in a  post-effective
         amendment by those  paragraphs  is contained in periodic  reports filed
         with or furnished to the Commission by the Company  pursuant to Section
         13 or  Section  15(d) of the  Exchange  Act that  are  incorporated  by
         reference in this Registration Statement.

                  (2) That, for the purpose of determining  any liability  under
         the Act, each such post-effective amendment shall be deemed to be a new
         registration  statement relating to the securities offered therein, and
         the offering of such  securities at that time shall be deemed to be the
         initial bona fide offering thereof.

                  (3) To remove from  registration by means of a  post-effective
         amendment any of the securities being registered which remain unsold at
         the termination of the offering.

         (b) The Company hereby undertakes that, for purposes of determining any
liability  under the Act, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,  each
filing of an employee  benefit plan's annual report pursuant to Section 15(d) of
the  Exchange  Act)  that is  incorporated  by  reference  in this  Registration
Statement  shall be deemed to be a new  registration  statement  relating to the
securities  offered  therein,  and the offering of such  securities at that time
shall be deemed to be the initial bona fide offering thereof.

         (c) Insofar as  indemnification  for liabilities  arising under the Act
may be permitted to directors,  officers and controlling  persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the  Commission  such  indemnification  is against public
policy as expressed  in the Act and is,  therefore  unenforceable.  In the event
that a claim  for  indemnification  against  such  liabilities  (other  than the
payment by the  Company of expenses  incurred or paid by a director,  officer or
controlling person of the Company in the successful defense of any action,  suit
or proceeding) is asserted by such  director,  officer or controlling  person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel  the matter has been  settled by  controlling  precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.


                                      II-5
<PAGE>


                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing a Registration Statement on Form S-8 and has duly
caused  this  Registration   Statement  to  be  signed  on  its  behalf  by  the
undersigned, thereunto  duly  authorized, in the  City of New York, State of New
York, on this 22nd day of June, 1998.



                                        UNIGRAPHICS SOLUTIONS INC.




                                        By:     /s/ John J. Mazzola
                                           -------------------------------------
                                                   John J. Mazzola
                                           President and Chief Executive Officer

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration Statement has been signed by the following persons on June 22, 1998
in the capacities indicated.


               Signature                                  Title
               ---------                                  -----

        /s/ John J. Mazzola                     President and Chief Executive
- ---------------------------------------         Officer (Principal Executive 
           John J. Mazzola                      Officer)


       /s/ Gary J. Fernandes                    Chairman and Director
- ---------------------------------------
          Gary J. Fernandes


         /s/ Gary B. Moore                      Vice Chairman and Director
- ---------------------------------------
            Gary B. Moore


       /s/ Douglas E. Barnett                   Vice President and Chief
- ---------------------------------------         Financial Officer (Principal
          Douglas E. Barnett                    Financial and Accounting 
                                                Officer)



                                                                    EXHIBIT 4(a)
                                                                    ------------

                           UNIGRAPHICS SOLUTIONS INC.
                               1998 INCENTIVE PLAN



1.    Plan.  This  Unigraphics  Solutions  Inc. 1998 Incentive Plan (the "Plan")
      has been  adopted  by Unigraphics  Solutions Inc., a Delaware  corporation
      (the "Company"), to be effective as of the Effective Date stated below for
      the purpose stated in paragraph 2 below.

2.    Objectives.  This Plan is designed to attract and retain key Employees (as
      hereinafter  defined),  to attract and retain  qualified  directors of the
      Company,  to encourage the sense of  proprietorship  of such employees and
      Directors,  and to  stimulate  the active  interest of such persons in the
      development  and  financial  success of the Company and its  Subsidiaries.
      These  objectives are to be  accomplished by making Awards (as hereinafter
      defined)  under  this  Plan  and  thereby   providing   Participants   (as
      hereinafter  defined)  with  a  proprietary  interest  in the  growth  and
      performance of the Company and its Subsidiaries.

3.    Definitions.  As used  herein,  the terms  set forth  below shall have the
      following respective meanings:

         "Annual  Director Award Date" means,  for each year beginning after the
      Effective  Date, the first  business day of the month next  succeeding the
      date upon which the annual meeting of  stockholders of the Company is held
      in such year.

         "Authorized Officer" means the Chairman of the Board of the Company (or
      any other senior  officer of the Company to whom the Chairman of the Board
      shall delegate the authority to execute any Award Agreement).

         "Award" means an Employee Award or a Director Award.

         "Award Agreement" means any Employee Award Agreement or Director  Award
      Agreement.

         "Board" means the Board of Directors of the Company.

         "Cash Award" means an award denominated in cash.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
      time.

         "Committee" means the Compensation Committee of the Board or such other
      committee of the Board as is  designated  by the Board to  administer  the
      Plan. If at any time no Committee  shall be in office,  then the functions
      of the Committee specified in the Plan shall be exercised by the Board.

         "Common  Stock"  means the  Class A Common  Stock,  par value  $.01 per
      share, of the Company.

         "Director" means an individual serving as a member of the Board.

         "Director Award" means the grant of a Director Option.

         "Director  Award  Agreement"  means a  written  agreement  between  the
      Company and a Participant who is a Nonemployee  Director setting forth the
      terms, conditions and limitations applicable to a Director Award.

         "Director  Options" means  Nonqualified  Options granted to Nonemployee
      Directors  pursuant to the applicable  terms,  conditions and  limitations
      specified in paragraph 9 hereof.

         "Disability"  means,  with  respect  to  a  Nonemployee  Director,  the
      inability to perform the duties of a Director  for a continuous  period of
      more than three months by reason of any medically determinable physical or
      mental impairment.


<PAGE>



         "Dividend  Equivalents"  means,  with  respect to shares of  Restricted
      Stock  that are to be  issued  at the end of the  Restriction  Period,  an
      amount equal to all  dividends  and other  distributions  (or the economic
      equivalent  thereof) that are payable to stockholders of record during the
      Restriction Period on a like number of shares of Common Stock.

         "Effective  Date" means the closing date of the initial public offering
      of the Common Stock.

         "Employee"  means an employee of the Company or any of its Subsidiaries
      or any corporation  which directly or indirectly owns shares  representing
      more than 50% of the combined voting power of the shares of all classes or
      series  of  capital  stock of the  Company  which  have the  right to vote
      generally  on  matters  submitted  to a vote  of the  stockholders  of the
      Company.

         "Employee Award" means the grant of any Option,  SAR, Stock Award, Cash
      Award or Performance  Award,  whether granted singly, in combination or in
      tandem,  to a Participant  who is an Employee  pursuant to such applicable
      terms,  conditions and limitations as the Committee may establish in order
      to fulfill the objectives of the Plan.

         "Employee  Award  Agreement"  means a  written  agreement  between  the
      Company  and a  Participant  who is an Employee  setting  forth the terms,
      conditions and limitations applicable to an Employee Award.

         "Exchange  Act" means the  Securities  Exchange Act of 1934, as amended
      from time to time.

         "Fair  Market  Value"  of a share  of  Common  Stock  means,  as of the
      Effective Date, the Price to Public of the Common Stock in connection with
      the initial public offering of the Common Stock, and, as of any subsequent
      date,  (i) if shares of Common  Stock are listed on a national  securities
      exchange, the mean between the highest and lowest sales price per share of
      Common  Stock on the  consolidated  transaction  reporting  system for the
      principal national securities exchange on which shares of Common Stock are
      listed on that date, or, if there shall have been no such sale so reported
      on that  date,  on the last  preceding  date on  which  such a sale was so
      reported,  (ii) if shares of Common Stock are not so listed but are quoted
      on the Nasdaq  National  Market,  the mean  between the highest and lowest
      sales  price per share of Common  Stock  reported  by the Nasdaq  National
      Market on that date, or, if there shall have been no such sale so reported
      on that  date,  on the last  preceding  date on  which  such a sale was so
      reported  or (iii) if shares  of Common  Stock are not so listed or quoted
      but are  traded  in the  over-the-counter  market,  the mean  between  the
      closing bid and asked price on that date,  or, if there are no  quotations
      available  for  such  date,  on the  last  preceding  date on  which  such
      quotations shall be available, as reported by the Nasdaq Stock Market, or,
      if not reported by the Nasdaq  Stock  Market,  by the  National  Quotation
      Bureau Incorporated.

         "Incentive  Option" means an Option that is intended to comply with the
      requirements set forth in Section 422 of the Code.

         "Nonemployee  Director" has the  meaning set forth  in  paragraph  4(b)
      hereof.

         "Nonqualified Stock  Option" means  an  Option that is not an Incentive
      Option.

         "Option"  means a right to  purchase  a  specified  number of shares of
      Common Stock at a specified price.

         "Participant"  means an  Employee or Director to whom an Award has been
      made under this Plan.

         "Performance  Award"  means an award  made  pursuant  to this Plan to a
      Participant who is an Employee that is subject to the attainment of one or
      more Performance Goals.

         "Performance  Goal" means a standard  established by the Committee,  to
      determine in whole or in part whether a Performance Award shall be earned.


                                       2
<PAGE>


         "Restricted Stock" means any Common Stock that is restricted or subject
      to forfeiture provisions.

         "Restriction  Period"  means a period of time  beginning as of the date
      upon which an Award of Restricted  Stock is made pursuant to this Plan and
      ending as of the date upon which the Common Stock subject to such Award is
      no longer restricted or subject to forfeiture provisions.

         "Rule 16b-3" means Rule 16b-3  promulgated  under the Exchange  Act, or
      any successor rule.

         "SAR"  means a right to  receive a  payment,  in cash or Common  Stock,
      equal to the excess of the Fair Market Value or other specified  valuation
      of a specified  number of shares of Common  Stock on the date the right is
      exercised  over a specified  strike price (in each case,  as determined by
      the Committee).

         "Stock  Award"  means an award in the form of shares of Common Stock or
      units denominated in shares of Common Stock.

         "Subsidiary" means (i) in the case of a corporation, any corporation of
      which the Company  directly or indirectly  owns shares  representing  more
      than 50% of the  combined  voting  power of the  shares of all  classes or
      series of capital stock of such  corporation  which have the right to vote
      generally  on  matters  submitted  to a vote of the  stockholders  of such
      corporation and (ii) in the case of a partnership or other business entity
      not  organized as a  corporation,  any such  business  entity of which the
      Company  directly or indirectly owns more than 50% of the voting,  capital
      or  profits  interests  (whether  in the  form of  partnership  interests,
      membership interests or otherwise).

4.    Eligibility.

      (a)  Employees. Employees eligible for Employee Awards under this Plan are
           those who hold positions of responsibility and whose performance,  in
           the judgment of the Committee,  can have a significant  effect on the
           success of the Company and its Subsidiaries, or whose services to the
           Company  can,  in  the  Committee's  sole  determination,  be  better
           recruited or retained through participation in the Plan.

      (b)  Directors. Directors eligible for Director Awards under this Plan are
           those who are not employees of the Company or any of its Subsidiaries
           or  any   corporation   which  directly  or  indirectly  owns  shares
           representing more than 50% of the combined voting power of the shares
           of all classes or series of capital  stock of the Company  which have
           the right to vote  generally  on matters  submitted  to a vote of the
           stockholders of the Company ("Nonemployee Directors").

5.   Common Stock  Available for Awards.  Subject to the provisions of paragraph
     15 hereof,  there shall be  available  for Awards  under this Plan, granted
     wholly or partly in Common Stock  (including  rights or options that may be
     exercised for or settled in Common Stock), an aggregate of 1,300,000 shares
     of Common  Stock,  of which an aggregate  of not more than  100,000  shares
     shall be available for Director Awards and the remainder shall be available
     for  Employee  Awards.  The  number of shares of Common  Stock that are the
     subject of Awards under this Plan, that are forfeited or terminated, expire
     unexercised,  are  settled  in cash in lieu of Common  Stock or in a manner
     such that all or some of the shares covered by an Award are not issued to a
     Participant  or are exchanged for Awards that do not involve  Common Stock,
     shall  again  immediately  become  available  for  Awards  hereunder.   The
     Committee  may  from  time  to  time  adopt  and  observe  such  procedures
     concerning  the counting of shares  against the Plan maximum as it may deem
     appropriate.  The Board and the  appropriate  officers of the Company shall
     from time to time take whatever  actions are necessary to file any required
     documents with  governmental  authorities,  stock exchanges and transaction
     reporting  systems to ensure that shares of Common Stock are  available for
     issuance pursuant to Awards.

                                        3
<PAGE>



6.    Administration.

     (a)  This Plan,  as it applies to  Participants  who are  Employees but not
          with respect to Participants who are Nonemployee  Directors,  shall be
          administered  by the  Committee.  To the extent  required in order for
          Employee  Awards to be exempt from  Section 16 of the  Exchange Act by
          virtue of the provisions of Rule 16b-3, the Committee shall consist of
          at least two  members  of the Board who meet the  requirements  of the
          definition of "Non-Employee Director" set forth in Rule 16b-3(b)(3)(i)
          promulgated under the Exchange Act.

     (b)  Subject to the provisions hereof,  insofar as this Plan relates to the
          Employee Awards, the Committee shall have full and exclusive power and
          authority  to  administer  this Plan and to take all actions  that are
          specifically  contemplated  hereby or are necessary or  appropriate in
          connection  with  the  administration  hereof.  Insofar  as this  Plan
          relates to Employee  Awards,  the  Committee  shall also have full and
          exclusive  power to  interpret  this  Plan and to  adopt  such  rules,
          regulations  and  guidelines for carrying out this Plan as it may deem
          necessary  or proper,  all of which  powers  shall be exercised in the
          best  interests of the Company and in keeping with the  objectives  of
          this Plan.  The  Committee  may,  in its  discretion,  provide for the
          extension of the  exercisability of an Employee Award,  accelerate the
          vesting or exercisability of an Employee Award, eliminate or make less
          restrictive any restrictions contained in an Employee Award, waive any
          restriction  or other  provision of this Plan or an Employee  Award or
          otherwise  amend or modify an  Employee  Award in any  manner  that is
          either (i) not adverse to the  Participant to whom such Employee Award
          was granted or (ii)  consented to by such  Participant.  The Committee
          may  correct  any  defect or supply  any  omission  or  reconcile  any
          inconsistency  in this Plan or in any Employee Award in the manner and
          to the extent the  Committee  deems  necessary or desirable to further
          the  purposes  of the  Plan.  Any  decision  of the  Committee  in the
          interpretation  and  administration  of this Plan shall lie within its
          sole and  absolute  discretion  and  shall be  final,  conclusive  and
          binding on all  parties  concerned.  The  functions  of the  Committee
          specified in the Plan shall be  exercised by the Board,  if and to the
          extent  that  no  Committee  exists  which  has  the  authority  to so
          administer  the Plan or the extent that the Committee is not comprised
          solely  of   Non-Employee   Directors   for  purposes  of  Rule  16b-3
          promulgated under the Exchange Act.


     (c)  No member of the  Committee  or  officer  of the  Company  to whom the
          Committee has delegated authority in accordance with the provisions of
          paragraph 7 of this Plan shall be liable for anything  done or omitted
          to be done by him or her,  by any  member of the  Committee  or by any
          officer  of the  Company in  connection  with the  performance  of any
          duties under this Plan,  except for his or her own willful  misconduct
          or as expressly provided by statute.

7.    Delegation of Authority. The Committee may delegate to the Chairman of the
      Board and to other  senior  officers of the Company its duties  under this
      Plan  pursuant to such  conditions  or  limitations  as the  Committee may
      establish,  except that the  Committee  may not delegate to any person the
      authority  to grant  Awards  to, or take other  action  with  respect  to,
      Participants  who are subject to Section 16 of the Exchange Act or Section
      162(m) of the Code.

8.    Employee Awards.

     (a)  The Committee  shall determine the type or types of Employee Awards to
          be made  under  this  Plan and shall  designate  from time to time the
          Employees who are to be the  recipients of such Awards.  Each Employee
          Award may be  embodied  in an Employee  Award  Agreement,  which shall
          contain such terms,  conditions and limitations as shall be determined
          by the  Committee  in its sole  discretion  and shall be signed by the
          Participant  to whom the Employee  Award is made and by an  Authorized
          Officer for and on behalf of the Company.  Employee Awards may consist
          of those  listed in this  paragraph  8(a)  hereof  and may be  granted
          singly, in combination or in tandem.  Employee Awards may also be made
          in  combination   or  in  tandem  with,  in  replacement   of,  or  as
          alternatives  to,  grants  or  rights  under  this  Plan or any  other
          employee plan of the Company or any of its Subsidiaries, including the
          plan of any acquired

                                       4
<PAGE>


          entity;  provided  that no Option  may be issued in  exchange  for the
          cancellation  of an Option with a lower  exercise  price.  An Employee
          Award may provide for the grant or issuance of additional, replacement
          or  alternative  Employee  Awards  upon the  occurrence  of  specified
          events,  including the exercise of the original Employee Award granted
          to a  Participant.  All or part of an Employee Award may be subject to
          conditions  established by the Committee,  which may include,  but are
          not  limited  to,  contin-  uous  service  with  the  Company  and its
          Subsidiaries,  achievement of specific business objectives,  increases
          in specified  indices,  attainment of specified growth rates and other
          comparable  mea-  surements of  performance.  Upon the  termination of
          employment  by a  Participant  who is an  Employee,  any  unexercised,
          deferred,  unvested or unpaid  Employee Awards shall be treated as set
          forth in the applicable Employee Award Agreement.

          (i)  Stock Option.  An Employee Award may be in the form of an Option.
               An Option awarded pursuant to this Plan may consist of an Incen-
               tive Option or a Nonqualified Option. The price  at  which shares
               of Common  Stock may be purchased  upon the exercise of an Incen-
               tive  Option shall be not less than  the Fair Market Value of the
               Common  Stock on the date of grant.  The price at which shares of
               Common Stock may be purchased upon the exercise of a Nonqualified
               Option shall be not less than, but may  exceed, the  Fair  Market
               Value of the Common  Stock on the date of  grant.  Subject to the
               foregoing provisions, the  terms,  conditions and limitations ap-
               plicable to any Options awarded pursuant to this Plan,  including
               the term of any Options and the date or dates upon which they be-
               come  exercisable,  shall be  determined by the Committee.

          (ii) Stock Appreciation Right. An Employee Award may be in the form of
               an SAR. The terms,  conditions and limitations applicable to  any
               SARs  awarded  pursuant  to  this Plan, including the term of any
               SARs and  the  date  or  dates  upon  which  they  become exerci-
               sable, shall be determined by the Committee.

         (iii) Stock  Award.  An Employee  Award may be in  the form of a  Stock
               Award. The terms,  conditions and  limitations  applicable to any
               Stock Awards granted  pursuant to this  Plan shall be  determined
               by the Committee.

          (iv) Cash Award. An Employee Award may be in the form of a Cash Award.
               The terms,  conditions  and limitations  applicable  to  any Cash
               Awards  granted  pursuant to this Plan shall be determined by the
               Committee.

           (v) Performance Award. Without limiting the type or number of Employ-
               ee  Awards that  may be made under the other  provisions of  this
               Plan,  an Employee  Award  may  be  in the form of a  Performance
               Award.  A Performance Award shall be paid,  vested  or  otherwise
               deliverable  solely on  account of the attainment of one or  more
               pre-established, objective  Performance Goals  established by the
               Committee prior to the earlier to occur of (x) 90 days after  the
               commencement  of the  period  of  service  to  which  the Perfor-
               mance  Goal  relates  and  (y) the  elapse of  25% of the  period
               of  service  (as scheduled  in good faith at the time the goal is
               established), and in any event while the outcome is substantially
               uncertain.  A  Performance  Goal is  objective if a third   party
               having  knowledge of the  relevant facts could determine  whether
               the goal is met. Such a  Performance  Goal may be based on one or
               more  business criteria that apply to the individual, one or more
               business units of the Company, or the Company as a whole, and may
               include  one or more of the  following:  increased  revenue,  net
               income,  stock price, market share, earnings  per  share,  return
               on  equity,  return on assets or decrease in costs. Unless other-
               wise stated,  such a Performance Goal need not  be based  upon an
               increase or positive result under a particular business criterion
               and could include,  for  example,   maintaining  the  status  quo
               or limiting economic losses (measured, in each case, by reference
               to specific business criteria).  In interpreting Plan  provisions
               applicable to Performance Goals and Performance Awards, it is the
               intent of the Plan to  conform  with the standards of Section 162
               (m) of the Code  and Treasury  Regulations ss. 1.162-27(e)(2)(i),
               and the Committee in establishing such goals and interpreting the
               Plan shall be guided by such provisions.  Prior to the payment of
               any compensation  based on  the achievement of Performance Goals,
               the Committee

                                       5
<PAGE>


               must certify in writing that applicable Performance Goals and any
               of the material terms thereof  were, in fact,  satisfied. Subject
               to the  foregoing  provisions,  the terms, conditions and limita-
               tions  applicable to any Performance Awards made pursuant to this
               Plan shall be determined by the Committee.

      (b)  Notwithstanding  anything to the contrary contained in this Plan, the
           following  limitations  shall  apply  to  any  Employee  Awards  made
           hereunder:

           (i) no  Participant  may be  granted,  during  any  one-year  period,
               Employee  Awards   consisting  of  Options   or   SARs  that  are
               exercisable for more than 200,000 shares of Common Stock; 

          (ii) no  Participant  may  be granted,  during  any  one-year  period,
               Employee  Awards  consisting  of shares  of Common Stock or units
               denominated  in  such  shares   (other than any  Employee  Awards
               consisting  of  Options or  SARs)  covering  or  relating to more
               than  100,000  shares of  Common Stock (the  limitation set forth
               in this  clause (ii),  together  with the limitation set forth in
               clause (i) above, being  hereinafter collectively  referred to as
               the "Stock Based Awards Limitations"); and

         (iii) no Participant  may  be  granted  Employee  Awards  consisting of
               cash or  in  any other form permitted under this Plan (other than
               Employee  Awards  consisting  of  Options  or  SARs or  otherwise
               consisting  of shares  of  Common Stock or units  denominated  in
               such shares) in  respect of  any one-year  period  having a value
               determined on the date of grant in excess of $2,000,000.

9.    Director Awards. Each Nonemployee Director of the Company shall be granted
      Director  Awards in  accordance  with this  paragraph 9 and subject to the
      applicable  terms,  conditions and  limitations set forth in this Plan and
      the applicable Director Award Agreement.  Notwithstanding  anything to the
      contrary  contained herein,  Director Awards shall not be made in any year
      in which a sufficient  number of shares of Common Stock are not  available
      to make such Awards under this Plan.

     (a)  Automatic Director Options. On the date of his or her initial election
          to the Board, each Nonemployee Director shall be automatically awarded
          a Director  Option that  provides  for the  purchase of 3000 shares of
          Common Stock.  In addition,  on each Annual  Director Award Date, each
          Nonemployee  Director shall automatically be granted a Director Option
          that provides for the purchase of 3000 shares of Common Stock.  In the
          event that a Nonemployee  Director is elected after the Effective Date
          otherwise than by election at an annual meeting of stockholders of the
          Company, on the date of his or her election, such Nonemployee Director
          shall automatically be granted a Director Option that provides for the
          purchase  of a number of shares of  Common  Stock  (rounded  up to the
          nearest  whole  number)  equal to the  product  of (i) 3000 and (ii) a
          fraction  the  numerator  of which is the number of days  between  the
          election of such  Nonemployee  Director and the next scheduled  Annual
          Director Award Date (or, if no such date has been scheduled, the first
          anniversary of the immediately  preceding  Annual Director Award Date)
          and the denominator of which is 365. Each Director Option shall have a
          term of ten years from the date of grant,  notwithstanding any earlier
          termination of the status of the holder as a Nonemployee Director. The
          purchase  price of each  share of Common  Stock  subject to a Director
          Option  shall be equal to the Fair Market Value of the Common Stock on
          the  date of  grant.  All  Director  Options  shall  vest  and  become
          exercisable  in  increments of one-third of the total number of shares
          of Common  Stock that are subject  thereto  (rounded up to the nearest
          whole  number)  on the first and second  anniversaries  of the date of
          grant and of all  remaining  shares of Common  Stock that are  subject
          thereto on the third  anniversary  of the date of grant.  All unvested
          Director  Options  shall  be  forfeited  if the  Nonemployee  Director
          resigns as a Director  without  the consent of a majority of the other
          Directors.

     (b)  Elective  Director  Options.  In  addition  to  the  Director  Options
          automatically awarded pursuant to the immediately preceding paragraph,
          a Nonemployee Director may make an annual election to receive, in lieu
          of all or any portion of the  Director's  fees he would  otherwise  be
          entitled  to receive  in cash  during  the next year  (including  both
          annual retainer and meeting fees),  Director  Options that provide for
          the purchase of a number of shares of Common Stock  (rounded up to the
          nearest whole number) equal to the

                                       6
<PAGE>


          product of (x) three times (y) a fraction the  numerator  of  which is
          equal  to  the  dollar  amount of fees the Nonemployee Director elects
          to forego  in the next year in exchange for  Director  Options and the
          denominator  of which  is equal to the Fair Market Value of the Common
          Stock on the  effective  date of  the election.  Each annual  election
          made by  a Nonemployee  Director  pursuant to this paragraph 9(b), (i)
          shall take  the form of a written  document signed by such Nonemployee
          Director  and filed with the  Secretary  of  the  Company,  (ii) shall
          designate  the  dollar  amount of  the fees the  Nonemployee  Director
          elects to forego in  the next year in exchange  for  Director  Options
          and (iii) to  the extent  provided by the Committee in order to ensure
          that the  Award of the  Director  Options is exempt from Section 16 by
          virtue of  Rule 16b-3, shall be irrevocable and shall be made prior to
          the  date  as of  which  such  Award   of  Director  Options  is to be
          effective.  An  Award   of  Director  Options  at  the  election  of a
          Nonemployee  Director shall  be effective on the next Annual  Director
          Award Date.

          Any Award of Director  Options  shall be embodied in a Director  Award
          Agreement,  which  shall contain the terms, conditions and limitations
          set forth  above and  shall be signed by the  Participant  to whom the
          Director Options are  granted and by an Authorized  Officer for and on
          behalf of the Company.

10.  Payment of Awards.

     (a)  General. Payment of Employee Awards may be made in the form of cash or
          Common  Stock,  or  a  combination   thereof,  and  may  include  such
          restrictions as the Committee shall determine,  including, in the case
          of Common Stock,  restrictions on transfer and forfeiture  provisions.
          If  payment  of an  Employee  Award is made in the form of  Restricted
          Stock,  the  Employee  Award  Agreement  relating to such shares shall
          specify  whether they are to be issued at the  beginning or end of the
          Restriction  Period.  In the event that shares of Restricted Stock are
          to  be  issued  at  the  beginning  of  the  Restriction  Period,  the
          certificates  evidencing  such  shares (to the extent that such shares
          are so evidenced) shall contain  appropriate  legends and restrictions
          that describe the terms and conditions of the restrictions  applicable
          thereto. In the event that shares of Restricted Stock are to be issued
          at the end of the Restricted  Period, the right to receive such shares
          shall be evidenced by book entry  registration or in such other manner
          as the Committee may determine.

     (b)  Deferral.  With the approval of the Committee,  payments in respect of
          Employee Awards may be deferred, either in the form of installments or
          a  future  lump-sum   payment.   The  Committee  may  permit  selected
          Participants  to  elect  to  defer  payment  of some or all  types  of
          Employee  Awards in  accordance  with  procedures  established  by the
          Committee.  Any deferred payment of an Employee Award, whether elected
          by the  Participant or specified by the Employee Award Agreement or by
          the Committee, may be forfeited if and to the extent that the Employee
          Award Agreement so provides.

     (c)  Dividends  and Interest.  Rights to dividends or Dividend  Equivalents
          may be extended to and made part of any Employee  Award  consisting of
          shares of Common Stock or units denominated in shares of Common Stock,
          subject to such terms,  conditions and  restrictions  as the Committee
          may establish.  The Committee may also establish  rules and procedures
          for the  crediting of interest on deferred  cash payments and Dividend
          Equivalents for Employee  Awards  consisting of shares of Common Stock
          or units denominated in shares of Common Stock.

     (d)  Substitution  of  Awards.  At  the  discretion  of  the  Committee,  a
          Participant  who  is  an  Employee  may  be  offered  an  election  to
          substitute an Employee  Award for another  Employee  Award or Employee
          Awards of the same or different type.

11.  Stock  Option  Exercise.  The price at which  shares of Common Stock may be
     purchased  under an Option shall be paid in full at the time of exercise in
     cash or, if elected by the optionee,  the optionee may purchase such shares
     by means of tendering Common Stock or surrendering another Award, including
     Restricted Stock,  valued at Fair Market Value on the date of exercise,  or
     any combination  thereof.  The Committee shall determine acceptable methods
     for Participants who are Employees to tender Common Stock or other Employee
     Awards; provided that any Common Stock that is or was the subject of an

                                       7
<PAGE>


     Employee  Award  may  be so  tendered  only  if it  has  been  held  by the
     Participant  for six months.  The Committee  may provide for  procedures to
     permit the exercise or purchase of such Awards by use of the proceeds to be
     received  from the sale of Common  Stock  issuable  pursuant to an Employee
     Award. Unless otherwise provided in the applicable Award Agreement,  in the
     event  shares of  Restricted  Stock are tendered as  consideration  for the
     exercise of an Option,  a number of the shares  issued upon the exercise of
     the  Option,  equal to the  number of shares of  Restricted  Stock  used as
     consideration  therefor,  shall be subject to the same  restrictions as the
     Restricted Stock so submitted as well as any additional  restrictions  that
     may be imposed by the Committee.

12.  Tax  Withholding.  The  Company  shall have the right to deduct  applicable
     taxes from any Employee Award payment and withhold, at the time of delivery
     or  vesting  of  cash or  shares  of  Common  Stock  under  this  Plan,  an
     appropriate  amount  of cash or  number  of  shares  of  Common  Stock or a
     combination  thereof for  payment of taxes  required by law or to take such
     other  action as may be  necessary in the opinion of the Company to satisfy
     all  obligations  for  withholding  of such taxes.  The  Committee may also
     permit withholding to be satisfied by the transfer to the Company of shares
     of Common Stock  theretofore owned by the holder of the Employee Award with
     respect to which  withholding  is  required.  If shares of Common Stock are
     used to satisfy tax  withholding,  such shares shall be valued based on the
     Fair Market  Value when the tax  withholding  is  required to be made.  The
     Committee  may provide for loans,  on either a short term or demand  basis,
     from the Company to a Participant  who is an Employee to permit the payment
     of taxes required by law.

13.  Amendment,  Modification,  Suspension or Termination.  The Board may amend,
     modify,  suspend  or  terminate  this Plan for the  purpose  of  meeting or
     addressing  any  changes  in legal  requirements  or for any other  purpose
     permitted by law,  except that (i) no amendment  or  alteration  that would
     adversely  affect the rights of any Participant  under any Award previously
     granted  to such  Participant  shall be made  without  the  consent of such
     Participant,  and (ii) no amendment or alteration  shall be effective prior
     to its  approval  by the  stockholders  of the  Company to the extent  such
     approval is then  required  pursuant to Rule 16b-3 in order to preserve the
     applicability  of any  exemption  provided  by such rule to any Award  then
     outstanding  (unless  the holder of such Award  consents)  or to the extent
     stockholder   approval   is   otherwise   required  by   applicable   legal
     requirements.

14.  Assignability. Unless otherwise determined by the Committee and provided in
     the  Award  Agreement,  no Award  or any  other  benefit  under  this  Plan
     constituting  a  derivative  security  within the meaning of Rule  16a-1(c)
     under the Exchange Act shall be assignable or otherwise transferable except
     by will or the laws of descent and  distribution or pursuant to a qualified
     domestic  relations order as defined by the Code or Title I of the Employee
     Retirement Income Security Act, or the rules thereunder.  The Committee may
     prescribe and include in applicable Award Agreements other  restrictions on
     transfer.  Any attempted  assignment of an Award or any other benefit under
     this Plan in violation of this paragraph 14 shall be null and void.

15.  Adjustments.

     (a)  The existence of outstanding Awards shall not affect in any manner the
          right or power of the Company or its stockholders to make or authorize
          any or all adjustments,  recapitalizations,  reorganizations  or other
          changes in the  capital  stock of the  Company or its  business or any
          merger  or  consolidation  of the  Company,  or any  issue  of  bonds,
          debentures,  preferred or prior  preference stock (whether or not such
          issue is prior to, on a parity with or junior to the Common  Stock) or
          the dissolution or liquidation of the Company, or any sale or transfer
          of all or any part of its assets or business,  or any other  corporate
          act or proceeding of any kind,  whether or not of a character  similar
          to that of the acts or proceedings enumerated above.

     (b)  In the event of any subdivision or consolidation of outstanding shares
          of Common Stock, declaration of a dividend payable in shares of Common
          Stock or other  stock  split,  then (i) the number of shares of Common
          Stock  reserved  under this Plan,  (ii) the number of shares of Common
          Stock covered by


                                       8
<PAGE>


          outstanding Awards in the form of Common Stock or units denominated in
          Common  Stock,  (iii) the  exercise  or other price in respect of such
          Awards,  (iv) the  appropriate  Fair  Market  Value  and  other  price
          determinations  for such  Awards,  (v) the  number of shares of Common
          Stock covered by Director  Options  automatically  granted pursuant to
          paragraph 9 hereof,  and (vi) the Stock Based Awards Limitations shall
          each  be  proportionately  adjusted  by  the  Board  to  reflect  such
          transaction.  In the event of any other  recapitalization  or  capital
          reorganization  of the  Company,  any  consolidation  or merger of the
          Company  with  another  corporation  or entity,  the  adoption  by the
          Company of any plan of  exchange  affecting  the  Common  Stock or any
          distribution  to holders of Common  Stock of  securities  or  property
          (other than  normal  cash  dividends  or  dividends  payable in Common
          Stock), the Board shall make appropriate adjustments to (i) the number
          of  shares  of Common  Stock  covered  by Awards in the form of Common
          Stock or units denominated in Common Stock, (ii) the exercise or other
          price in respect of such  Awards,  (iii) the  appropriate  Fair Market
          Value and other price  determinations for such Awards, (iv) the number
          of shares of Common Stock  covered by Director  Options  automatically
          granted pursuant to paragraph 9 hereof, and (v) the Stock Based Awards
          Limitations  to  give  effect  to  such  transaction   shall  each  be
          proportionately  adjusted  by the Board to reflect  such  transaction;
          provided that such adjustments  shall only be such as are necessary to
          maintain the  proportionate  interest of the holders of the Awards and
          preserve, without exceeding, the value of such Awards. In the event of
          a corporate merger,  consolidation,  acquisition of property or stock,
          separation,   reorganization  or  liquidation,   the  Board  shall  be
          authorized to issue or assume Awards by means of a substitution of new
          Awards, as appropriate,  for previously issued Awards or an assumption
          of previously issued Awards as part of such adjustment.

16.  Restrictions. No Common Stock or other form of payment shall be issued with
     respect to any Award  unless the Company  shall be  satisfied  based on the
     advice  of its  counsel  that  such  issuance  will be in  compliance  with
     applicable  federal  and state  securities  laws.  It is the  intent of the
     Company  that this Plan  comply  with Rule  16b-3  with  respect to persons
     subject to Section 16 of the Exchange Act unless otherwise  provided herein
     or in an Award Agreement,  that any ambiguities or  inconsistencies  in the
     construction  of this Plan be interpreted to give effect to such intention,
     and that if any  provision  of this Plan is found  not to be in  compliance
     with  Rule  16b-3,  such  provision  shall be null  and void to the  extent
     required  to  permit  this Plan to comply  with  Rule  16b-3.  Certificates
     evidencing  shares of Common Stock delivered under this Plan (to the extent
     that such  shares are so  evidenced)  may be subject to such stop  transfer
     orders and other restrictions as the Committee may deem advisable under the
     rules,  regulations  and other  requirements of the Securities and Exchange
     Commission,  any securities  exchange or transaction  reporting system upon
     which  the  Common  Stock is then  listed  or to which it is  admitted  for
     quotation and any applicable federal or state securities law. The Committee
     may cause a legend or legends to be placed upon such  certificates (if any)
     to make appropriate reference to such restrictions.

17.  Unfunded Plan.  Insofar as it provides for Awards of cash,  Common Stock or
     rights thereto, this Plan shall be unfunded.  Although bookkeeping accounts
     may be established  with respect to Participants  who are entitled to cash,
     Common Stock or rights  thereto under this Plan, any such accounts shall be
     used merely as a bookkeeping convenience. The Company shall not be required
     to segregate any assets that may at any time be represented by cash, Common
     Stock or rights thereto,  nor shall this Plan be construed as providing for
     such  segregation,  nor shall the  Company,  the Board or the  Committee be
     deemed to be a trustee of any cash,  Common  Stock or rights  thereto to be
     granted under this Plan.  Any liability or obligation of the Company to any
     Participant  with  respect  to an  Award of cash,  Common  Stock or  rights
     thereto  under  this  Plan  shall be  based  solely  upon  any  contractual
     obligations that may be created by this Plan and any Award  Agreement,  and
     no such  liability  or  obligation  of the  Company  shall be  deemed to be
     secured by any pledge or other  encumbrance on any property of the Company.
     Neither the Company  nor the Board nor the  Committee  shall be required to
     give any security or bond for the performance of any obligation that may be
     created by this Plan.

18.  Governing  Law.  This Plan and all  determinations  made  and actions taken
     pursuant  hereto,  to the  extent  not  otherwise  governed   by  mandatory
     provisions  of the Code or the securities laws of the United States,  shall
     be governed  by and construed in  accordance  with the laws of the State of
     Delaware.

                                       9


                                                                    EXHIBIT 5
                                                                    ---------

                                  June 22, 1998


Unigraphics Solutions Inc.
13736 Riverport Drive
Maryland Heights, Missouri  63043

Gentlemen:

         As Counsel -  Corporate  Acquisitions  and Finance of  Electronic  Data
Systems  Corporation,  the holder of a majority of the outstanding capital stock
of Unigraphics  Solutions Inc., a Delaware  corporation  ("the  Company"),  I am
familiar with the Registration  Statement on Form S-8 being filed by the Company
pursuant  to the  Securities  Act of 1933,  as  amended  (the  "Act"),  with the
Securities and Exchange Commission,  relating to 1,300,000 shares (the "Shares")
of Class A Common Stock,  par value $.01 per share,  of the Company  pursuant to
the Unigraphics Solutions Inc. 1998 Incentive Plan (the "Plan").

         In connection with the foregoing matters, I have examined originals, or
copies  certified or  otherwise  identified  to me, of corporate  records of the
Company  and  other  documents,  records  and  instruments  as a basis  for this
opinion.

         Based on the foregoing, I am of the opinion that:

         1. The Shares authorized for issuance pursuant to the Plan as currently
in effect have been duly authorized for issuance by the Company.

         2. The Shares,  when issued  pursuant  to the Plan in  accordance  with
Delaware  law and upon  payment  of  adequate  consideration  therefor,  will be
validly issued, fully paid and nonassessable.

         The foregoing opinion is limited to the General  Corporation Law of the
State  of  Delaware,  and I  express  no  opinion  as to the  laws of any  other
jurisdiction.

         I hereby  consent  to the  filing of this  opinion  as Exhibit 5 to the
above-mentioned Registration Statement. In giving such consent, I do not thereby
admit that I am in the  category  of persons  whose  consent is  required  under
Section 7 of the Act.

                                   Very truly yours,


                                   /s/ David B. Hollander
                                   ------------------------------------------
                                   David B. Hollander
                                   Counsel - Corporate Acquisitions & Finance


                                                                  EXHIBIT 23(a)
                                                                  -------------


                         Consent of Independent Auditors



The Board of Directors
Unigraphics Solutions Inc.:

We consent  to the use of our  reports  dated  March 6,  1998,  relating  to the
balance sheets of  Unigraphics  Solutions Inc. as of December 31, 1996 and 1997,
and the related statements of stockholder's equity/net investment and cash flows
for each of the years in the three-year  period ended December 31, 1997, and the
related consolidated  financial statement schedule,  which reports appear in the
Registration  Statement  on Form S-1 of  Unigraphics  Solutions  Inc.  (File No.
333-48261) incorporated herein by reference.


/s/ KPMG PEAT MARWICK LLP

St. Louis, Missouri
June 23, 1998

                                                                  EXHIBIT 23(b)
                                                                  -------------



                         Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form
S-8)  pertaining to the  Unigraphics  Solutions  Inc. 1998 Incentive Plan of our
report dated February 28, 1998 (except for Note 2, as to which the date is March
2, 1998) with respect to the  statements  of assets sold and revenues and direct
expenses of Intergraph Corporation's Solid Edge and Engineering Modeling Systems
Software Product Lines included in Amendment No. 3 to the Registration Statement
(Form S-1 No. 333-48261) and related Prospectus of Unigraphics Solutions Inc.


                                                /s/ Ernst & Young LLP

Birmingham, Alabama
June 23, 1998




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