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Exhibit 10.1
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PERSONAL SERVICES AGREEMENT
THIS PERSONAL SERVICES AGREEMENT ("Agreement") is entered into between
UNIGRAPHICS SOLUTIONS INC. ("UGS" or "Company") and Anthony J. Affuso
("Executive"), to be effective July 15, 2000 ("Effective Date").
RECITALS
WHEREAS, UGS desires to employ Executive pursuant to the terms and
conditions and for the consideration set forth in this Agreement, and Executive
desires to enter the employ of UGS pursuant to such terms and conditions and for
such consideration; and
WHEREAS, The provisions of this Agreement are a condition of Executive's
being employed by UGS, of Executive's having access to confidential business and
technological information, and Executive's being eligible to receive certain
benefits at UGS. This Agreement is entered into, and is reasonably necessary,
to protect confidential information and customer relationships to which
Executive may have access, and to protect the goodwill and other business
interests of UGS; and
WHEREAS, The Compensation Committee of the UGS Board of Directors has
determined that it is in the best interests of the Company and its shareholders
to assure that, in the event of a Change of Control (as defined in Section 3.5
hereof), UGS will have the continued services of the Executive and the Executive
will be provided with the compensation and benefits provided herein; and
WHEREAS, The provisions of this Agreement are also a condition of
Executive's agreeing to provide personal services to UGS.
NOW, THEREFORE, in consideration of the mutual promises and covenants
agreed to herein, the receipt and sufficiency of which are hereby acknowledged,
UGS and Executive agree as follows:
Section 1. Employment Duties and Previous Agreements
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1.1 UGS agrees to employ Executive, and Executive agrees to be employed
by UGS, beginning as of the Effective Date and continuing throughout the Term as
specified in Section 3.1. Executive shall be employed in the position of
President and Chief Executive Officer or such other leadership position as shall
be determined by the Board of Directors. Executive shall faithfully and
diligently render such services and perform such related duties and
responsibilities as are customarily performed by a person holding such corporate
title and as otherwise may from time to time be reasonably assigned to
Executive. Executive shall comply with provisions of this Agreement and shall at
all times be subject to such UGS policies and procedures, including, but
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not limited to, the UGS Code of Conduct, as UGS may from time to time maintain,
modify, terminate and/or establish.
1.2 This Agreement supercedes and replaces any personal services
agreement or employment agreement in place between UGS and the Executive as of
the Effective Date.
Section 2. Compensation and Benefits
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2.1 Base Salary. For the Term of this Agreement, UGS shall pay
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Executive a base salary of not less than $380,000 per year (as may be increased
or decreased from time-to-time by UGS' Compensation Committee of the Board of
Directors or any successor body or person (the "Committee"). Such base salary
shall be paid semi-monthly and shall be subject to all applicable withholdings
and deductions.
2.2 Performance Bonuses. Executive shall be eligible to receive annual
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bonuses, pursuant to the following:
2.2.1 Executive shall be eligible for a performance bonus, if any,
as determined by the Committee. Any bonus amount awarded will be paid as
soon as practicable following the end of the Company's fiscal year. Any
such bonus will be based upon Executive's performance, as well as the
actual financial performance of UGS in relation to the approved business
plan and other factors specified by the Committee.
2.2.2 Executive shall be eligible to participate in any other UGS
executive bonus plan implemented during the Term and generally applicable
to other similarly situated executives.
2.2.3 All bonus payments specified in this Section 2.2 are
contingent upon Executive's not having been discharged for Cause (as such
term is defined in Section 3.2.3) by UGS or Executive's not having
voluntarily terminated his employment under Section 3.2.1 prior to each
particular payment having been made.
2.3 Annual and Long Term Incentives. Executive shall be eligible to
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receive annual and long-term incentive compensation under the Company's
incentive plans on the same basis as other similarly situated Executives.
2.4 EDS Incentive Awards. For so long as Executive is an employee of
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UGS, Executive shall continue to vest in any and all grants awarded through the
Effective Date to Executive under (i) the 1996 Incentive Plan of the Electronic
Data Systems Corporation or any predecessor plan and (ii) the EDS Performance
Share program. Notwithstanding anything to the contrary herein, upon the
Effective Date of this Agreement Executive shall not be eligible for any
additional awards under any EDS incentive plan.
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Section 3. Term and Termination
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3.1 Term. The initial term of this Agreement shall commence on the
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Effective Date and shall end on January 21, 2002, and shall thereafter be
automatically renewed for successive one (1) year terms (the initial term and
any subsequent renewal term are referred to as the "Term" in this Agreement)
unless either party gives written notification to the other party at least sixty
(60) days in advance of the expiration of the Term that further renewal shall
not be effected. Such notice to Executive must be delivered to Executive's
address then on record with UGS. Notice to UGS must be delivered to the Chief
Executive Officer at the designated headquarters of UGS.
3.1.1 Termination Date. Executive's termination of employment shall be
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effective on, as applicable, the date coincident with the occurrence of a
terminating event as described in this Article 3, the date specified in
the written notice provided under Sections 3.1, 3.2.1 or 3.2.2, or such
other date as determined by the Board of Directors or the Committee. The
effective date of Executive's termination of employment shall be the
"Termination Date."
3.2 Termination. Executive's employment under this Agreement may not
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be terminated by either party except as follows:
3.2.1 Executive's Voluntary Termination. Executive may
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terminate his employment with UGS at any time for any reason whatsoever by
giving 60 days' written notice to UGS. Upon Executive giving the requisite
notice of his intent to terminate his employment, the Company, at its sole
discretion, shall have the option of immediately accepting Executive's
resignation. Upon accepting Executive's resignation, the Company shall have
no further obligation to provide Executive with any benefits and/or
payments, except those required by law.
3.2.2 UGS Termination With Notice. Excluding for "Cause"
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terminations (the procedure for which is described below), UGS may
terminate Executive's employment at any time for any reason whatsoever by
giving 60 days' written notice to Executive. In lieu of providing
Executive with 60 days' written notice, the Company shall have the sole
discretion to immediately terminate Executive's employment, provided
Executive receives 60 days of full base salary, in addition to any bonus or
long term incentive compensation he would have received during the 60 days
following his termination.
3.2.3 Termination for Cause. UGS may terminate Executive's
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employment at any time for Cause, with or without notice. For purposes of
this Section, the term "Cause" shall mean (a) gross or habitual neglect of
duties or misconduct in the performance of the duties and services required
of Executive pursuant to this Agreement; (b) conduct of Executive which is
materially detrimental to UGS' reputation or business operations or its
ability to secure or renew future contracts; (c) Executive's conviction of
a felony or of a misdemeanor involving moral turpitude; (d) Executive's
breach of a material provision of this Agreement which remains uncorrected
for 30 days following
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written notice to the Executive by UGS of such breach; (e) continued
failure or refusal of Executive to faithfully, diligently and competently
perform the usual and customary duties of his employment; or (f) failure or
refusal of Executive to materially comply with the policies, standards and
regulations of UGS as from time to time may be made known to Executive.
3.2.4 Executive's Termination for Good Reason. Executive may
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terminate his employment with UGS at any time for Good Reason. The term "Good
Reason" shall mean:
(a) a material breach of a material provision of this
Agreement by the Company which breach remains uncorrected for 30 days
following written notice to UGS by Executive of such breach (such
written notice must detail the action or conduct allegedly
constituting Good Reason). If Executive fails to give such requisite
notice, or if UGS timely corrects such alleged breach, the action or
conduct shall not constitute Good Reason;
(b) a reduction by UGS in Executive's base salary as in
effect on the Effective Date by more than twenty five percent (25%);
(c) Executive's ineligibility to participate in bonus
and/or compensation programs (excluding those described in Paragraph
2.4) in which other similarly situated Executives are eligible to
participate;
(d) failure by the Company to provide Executive with
benefits (e.g., life insurance, medical, dental, accident, and
disability) that are available to other similarly situated executives;
(e) if a Change of Control occurs, the Company's requiring
Executive to be based at any office or location more than thirty five
(35) miles from the location at which he was based prior to the Change
of Control, except for travel reasonably required in the performance
of the Executive's responsibilities; or
(f) any failure by UGS to obtain the assumption of this
Agreement by any successor or assign of UGS.
3.2.5 Termination Upon Death or Incapacity. Executive's employment
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will also terminate immediately upon Executive's death or Disability. For
purposes of this Agreement, "Disability" shall mean the inability of the
Executive to perform his duties on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to Executive or Executive's
legal representative (such agreement as to acceptability is not to be
withheld unreasonably).
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3.3 Effects of Termination. The effects of termination of the
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employment relationship shall be as follows:
3.3.1 Termination of Benefits. In the event of Executive's
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voluntary termination of employment pursuant to Section 3.2.1 or the
termination of Executive's employment by UGS for Cause pursuant to Section
3.2.3, UGS shall have no further obligation to provide Executive with any
benefits and/or payments, except as required by law or the terms of a
controlling benefit or stock plan or policy and the payment of any salary,
bonus, or other compensation or benefits accrued to the Termination Date.
3.3.2 Death and Disability Benefits. In the event of the
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termination of the employment relationship by reason of death or Disability
pursuant to Section 3.2.5, UGS shall pay Executive his salary to the date
of his death or decision regarding Disability; and the right of Executive
or Executive's heirs to compensation thereafter shall be governed by the
applicable death, disability, pension, insurance or other written benefit
plans or policies.
3.3.3 Other Termination Benefit Entitlements. Except as
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otherwise provided in Section 3.4 with respect to Executive's termination in the
event of a Change of Control, if UGS terminates the employment of Executive with
notice as set forth in Sections 3.1 or 3.2.2, or Executive terminates the
employment relationship for Good Reason under Section 3.2.4, Executive will be
entitled to the following benefits:
(a) Full base salary and any bonus or long term
incentive compensation to which Executive is entitled through the
Termination Date.
(b) A severance payment, less all applicable
deductions, equal to (i) one times the Executive's annual base salary in
effect as of the Termination Date plus (ii) an amount equal to the
Executive's bonus target in effect for the fiscal year in which the
Termination Date falls, or if a bonus target has not yet been established,
an amount equal to 1.25 times the Executive's bonus target for the previous
fiscal year.
(c) Notwithstanding any provision to the contrary in
any applicable award agreement(s), continued vesting of any unvested UGS
stock options, other UGS stock awards, and EDS Incentive Plan awards
granted as of the Termination Date in accordance with the vesting schedules
set forth in the applicable award agreement(s) between the Executive and
UGS and/or EDS. This Agreement shall be deemed to amend any employee award
agreement to the extent required to comply with this Section 3.3.3(c).
(d) A cash payment to pay for twelve (12) months of
(i) Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
continuation health coverage for the Executive and his family, (ii)
premiums for basic employee life
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insurance coverage ($50,000), and (iii) premiums for long term
disability insurance providing income replacement of $7,000 per month.
(e) Reimbursement not to exceed $75,000 of the costs of existing
home sale (including payment of any real estate sales commission up to
six percent of the home sale price) and packing and shipping expenses
in accordance with Company's then-existing household goods shipping
policies for employees if within twelve (12) months of termination
under this Section 3.3.3, Executive relocates to a new work location
which is more than 35 miles from his primary work location on the
Termination Date.
(f) Reimbursement not to exceed $25,000 for outplacement
services provided by an outplacement service acceptable to UGS within
twelve (12) months of termination under this Section 3.3.3.
3.4 Termination as a Result of a Change of Control. UGS recognizes that
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the continuing possibility of a Change of Control of UGS is unsettling to
Executives of the Company. Therefore, the arrangements set forth below are
being made to help assure a continuing dedication by Executive to his duties to
the Company, notwithstanding the occurrence or potential occurrence of a Change
in Control. In particular, UGS believes it important, should the Company
receive proposals or inquiries from third parties with respect to its future, to
enable Executive, without being influenced by uncertainties of his own
situation, to assess and advise the Company whether such proposals would be in
the best interests of the Company and its shareholders and to take such other
action regarding such proposals as the Company might determine to be
appropriate. Accordingly, if between effective date (the "Change of Control
Date") of a Change of Control (as defined below) and 24 months following the
Change of Control Date, UGS gives notice under Section 3.1 that this Agreement
will not be extended for reasons other than Cause, gives notice of termination
under Section 3.2.2, or if Executive terminates for Good Reason, UGS shall
provide the Executive with the benefits as set forth below in this Section 3.4.
Notwithstanding any other provision of this Agreement, if a Change in Control
occurs and if the Executive's employment with the Company or any of its
subsidiaries is terminated by the Company less than six months prior to the date
on which the Change in Control occurs, and if it is demonstrated by the
Executive that such termination of employment by the Company (i) was at the
request of a third party which has taken steps reasonably calculated to result
in or effect the Change in Control or (ii) otherwise arose in connection with or
in anticipation of the Change in Control, then for all purposes of this
Agreement, such termination of employment shall be deemed to have occurred
within two years following such Change in Control provided that the obligations
contained in Section 3.1 to deliver a notice of termination shall not apply.
Benefits to which Executive shall be entitled are:
3.4.1 Full base salary and any bonus or long term incentive
compensation to which the Executive is entitled through the Termination
Date.
3.4.2 A severance payment, less all applicable deductions, equal to
(i) two times the Executive's annual base salary in effect as of the
Termination Date plus (ii) an
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amount equal to two times the Executive's bonus target in effect for the
fiscal year in which the Termination Date falls, or if a bonus target has
not yet been established, an amount equal to two times the Executive's
bonus target for the previous fiscal year.
3.4.3 Notwithstanding any provision to the contrary in any applicable
award agreement(s), continued vesting of any unvested UGS stock options,
other UGS stock awards, and EDS Incentive Plan awards granted as of the
Termination Date in accordance with the vesting schedules set forth in the
applicable award agreement(s) between the Executive and UGS and/or EDS.
This Agreement shall be deemed to amend any employee award agreement to the
extent required to comply with this Section 3.4.3.
3.4.4 A cash payment to pay for twelve (12) months of (i)
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
continuation health coverage for the Executive and his family, (ii)
premiums for basic employee life insurance coverage ($50,000), and (iii)
premiums for long term disability insurance providing income replacement of
$7,000 per month.
3.4.5 Reimbursement not to exceed $75,000 of the costs of existing
home sale (including payment of any real estate sales commission up to six
percent of the home sale price) and packing and shipping expenses in
accordance with Company's then-existing household goods shipping policies
for employees if within twelve (12) months of termination under this
Section 3.4, Executive relocates to a new work location which is more than
35 miles from his primary work location on the Termination Date.
3.4.6 Reimbursement not to exceed $25,000 for outplacement services
provided by an outplacement service acceptable to UGS within twelve (12)
months of termination under this Section 3.4.
3.5 Change of Control Conditions Precedent and Definition. No
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compensation shall be payable under Section 3.4 unless and until (a) there shall
have been a Change of Control in UGS while the Executive is still an employee of
UGS or was an employee within six (6) months of the Change of Control Date if
the second to the last sentence of Section 3.4 applies and (b) the Executive's
employment by the Company thereafter shall have been terminated in accordance
with Sections 3.1, 3.2.2 or 3.2.4. Under this Agreement, "Change of Control" of
UGS means a change in control of the Company occurring after the Effective Date
of this Agreement of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), whether or not the Company is then subject to
such reporting requirement; provided however, that, without limiting the
generality of the foregoing, a Change in Control shall be deemed to have
occurred (irrespective of the applicability of the initial clause of this
definition) if at any time after the Effective Date (a) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding (i)
any employee benefit plan of the Company or of any subsidiary of the Company,
and (ii) any entity organized, appointed or established by the Company pursuant
to the terms of any such plan) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the
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Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company's then outstanding
securities without the prior approval of at least two-thirds of the members of
the whole board in office immediately prior to such person attaining such
percentage interest; (b) the Company is a party to a merger, consolidation,
share exchange, sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the board in office immediately prior to such
transaction or event constitute less than a majority of the whole board
thereafter; or (c) during any period of two consecutive years, individuals who
at the beginning of such period constituted members of the board (including for
this purpose any new member whose election or nomination for election by the
Company's stockholders was approved by at least two-thirds of the members of the
whole board then still in office who were members of the board at the beginning
of such period) cease for any reason to constitute a majority of the whole
board. Notwithstanding the foregoing, a Change in Control shall not be deemed to
have occurred solely as a result of Electronic Data Systems Corporation (or a
successor corporation) remaining or becoming the beneficial owner of 50% or more
of the combined voting power of the Company's then outstanding securities.
3.6 Excess Parachute Payment Limit. Notwithstanding anything contained in
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this Agreement to the contrary, in the event that any payment (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
or replaced (the "Code")), or distribution to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise in connection with, or arising out of,
his or her employment with the Company (a "Payment" or "Payments"), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, interest and penalties collectively referred to as the "Excise
Tax"), then the amount of Payments under this Agreement, when added to all other
Payments to which Executive is entitled, shall be reduced to one dollar ($1.00)
less than three hundred percent (300%) of Executive's Base Amount (as
hereinafter defined) in accordance with Section 280G of the Code. For purposes
of this Section, Executive's "Base Amount" is his average annual taxable
compensation received from the Company for the five (5) calendar years (or such
lesser number which comprises the entire number of years of his employment with
the Company) preceding the calendar year in which a change in the ownership or
effective control of the Company or a change in the ownership of a substantial
portion of the Company's assets occurs (within the meaning of Section 280G(b)(2)
of the Code) occurs.
3.6.1 Excess Parachute Payment Dispute Resolution. UGS shall notify
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the Executive in writing within ten (10) days after a notice of termination
is given by the Company or the Executive, of the amounts of payments to be
made by UGS under this Agreement, together with any other payments made or
to be made by the Company to the Executive, that constitute "parachute
payments" (as such terms are defined in Section 280G of the Internal
Revenue Code) and the excess payments and of the amount of the reduction,
if any, required by Section 3.6. Within thirty (30) days after the notice
of termination is given, the Executive shall notify the Company in writing
whether or not he agrees with the Company's calculation of the amount of
parachute payments and excess parachute payments, and the amount of any
reduction. If the executive does not agree with UGS' calculations, the
Executive shall inform the Company of the amounts he
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believes to be the correct amounts. If UGS and the Executive cannot
agree within forty five (45) days after the notice of termination is
given on the amount of parachute payments and excess parachute payments,
and on the amount of any reduction, the calculation of such amounts (and
reduction) shall be made by independent tax counsel selected by the
Company's independent auditors. Such determination shall be completed
within fifteen (15) days after it is submitted to such independent
counsel and shall be conclusive and binding on the parties.
3.7 Net Payments. Any amounts required to be paid by UGS to Executive
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under this Section 3 shall be paid net of applicable federal, state and local
tax withholding
3.8 Payment Date. Any amounts required to be paid by UGS to Executive
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under this Section 3 shall be paid in cash in a lump sum on the tenth (10th) day
after the Termination Date. If it is later determined, under the procedure set
forth in Section 3.6.1, that the amount of any reduction is less than that
initially determined by UGS, the Company shall pay the difference to the
Executive in cash within five (5) days after the amount of an reduction is
finally determined. If it is later determined, under the procedures set forth in
Section 3.6.1, that the amount of any reduction is more than that initially
determined by UGS, the Executive shall repay the difference to the Company
within five (5) days after the amount of any reduction is finally determined.
Section 4. Executive's Non-Competition and Non-Solicitation Obligations
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4.1 Executive's Services for Exclusive Benefit of UGS. While employed
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by UGS, Executive shall devote Executive's full business time and best efforts
to the performance of his duties and responsibilities hereunder and shall not
engage in any other employment or business venture without the prior, written
consent of the President and Chief Executive Officer of UGS.
4.2 Surviving Covenants. If Executive's employment at UGS is
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terminated by either UGS or Executive for any reason except Executive's death,
all covenants set forth in this Section 4 shall survive such termination. While
employed by UGS and for a period of twelve (12) months thereafter, Executive
shall not directly or indirectly, individually or as an employee, contractor,
consultant, partner, officer, director or stockholder (other than as a holder of
less than five percent of the equity of a publicly traded company) or in any
other capacity, engage in any of the following conduct:
4.2.1 Non-Compete and Proprietary Rights. Perform duties as or for
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a Competitor as defined in Section 4.6 below of UGS (i) which are in the
industry(ies) in which Executive performed services for UGS in the most
recent five years of Executive's UGS employment and which are the same or
substantially similar to the duties performed by Executive at UGS; or (ii)
which involve the use of any Confidential Information or Innovations (as
defined in Section 5.8, below) which Executive has received, obtained or
acquired during, or as a consequence of, Executive's employment with UGS.
4.3 Impermissible Conduct Without Proper Approval. During the time of
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Executive's employment with UGS and for a period of twelve (12) months
thereafter, without the express,
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prior written consent of an UGS officer, Executive shall not engage in any of
the following conduct:
4.3.1 Hiring Away UGS Employees. Hire, attempt to hire, or assist
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any other person or entity in hiring or attempting to hire any current
employee of UGS or any person who was a UGS employee during the prior six-
month period; or
4.3.2 Competition. Solicit, divert, or take away, in competition
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with UGS, the business or patronage of any current UGS customer or any
prospective customer with which Executive has had business contact during
his employment at UGS. This restriction shall not apply to any person or
entity who is no longer a customer or prospective customer at the time of
any such solicitation by Executive.
4.4 Automatic Extension of Restrictive Period. Executive agrees that if
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he acts in violation of Section 4.2 or Section 4.3 of this Agreement, the number
of days that such violation exists will be added to any period of limitations on
the specific activities.
4.5 Executive's Acknowledgment of Reasonableness of Limitations. Executive
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acknowledges that the limitations set forth in Section 4 of this Agreement, are
reasonable and necessary to protect the valid business interests and goodwill of
UGS. Executive further acknowledges that UGS is engaged in the business of
providing computer-aided design, engineering, and manufacturing products and
services as well as associated product data management products and services to
customers located throughout the United States and the world, and that UGS
actively solicits business and services customers throughout this territory.
4.6 Competitor Defined. As used in this Section 4, the term "Competitor"
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means an individual, business or any other entity or enterprise engaged in, or
having publicly announced its intent to engage in business that is substantially
similar to UGS' business, or the business of UGS' subsidiaries, partners, or
joint ventures.
Section 5.UGS' Proprietary Rights and Confidential Information
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5.1 Prohibited Use of Confidential Information or Innovations After
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Termination. If Executive's employment at UGS is terminated by either UGS or
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Executive for any reason (including Executive's death), this Section 5 shall
survive such termination. Both during and after the term of Executive's
employment, Executive will not, directly or indirectly, use or disclose any
Confidential Information or Innovations, without the express, prior written
consent of an UGS officer, except as may be necessary to perform Executive's
duties for the benefit of UGS during Executive's employment with UGS. The
restrictions set forth in this Section 5.1 will last throughout Executive's
employment with UGS and for a period of 5 years following the termination of
Executive's employment, with the exception of trade secrets, trademarks,
copyrights and patents, for which the restrictions herein regarding disclosure
or use shall last in perpetuity or for such other maximum period as the law
allows.
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5.2 Return of UGS Property. Upon termination of Executive's employment
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Executive will promptly return to UGS any and all UGS property in his possession
and/or control, including, but not limited to, UGS hardware, software,
documents, information and materials of any nature pertaining to Executive's
work with UGS, or relating to the business of UGS. Furthermore, Executive will
not take any software, documents or materials or copies thereof containing
Confidential Information or Innovations.
5.3 Disclosure of Innovations. Executive will promptly disclose to
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UGS, or its designees, in writing, all Innovations that Executive, alone or
jointly with others, creates or first reduces to practice during the period of
Executive's employment with UGS.
5.4 UGS' Ownership of Proprietary Rights. Executive hereby assigns and
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agrees to assign to UGS, its successors and assigns, Executive's entire
right, title and interest in and to: (a) any worldwide patents, patent
applications, copyrights, trade secrets and other intellectual property rights
in any Innovations; and (b) any Moral Rights that Executive may have in or with
respect to any Innovations. Executive also waives and agrees never to assert
any Moral Rights Executive may have in or with respect to any Innovations, even
after termination of Executive's employment with UGS.
5.5 Protection of Proprietary Rights. Executive shall do all lawful
--------------------------------
things to assist UGS in obtaining and enforcing patents, copyrights, trade
secret rights, and other legal protections of UGS' Innovations in any country.
Executive will execute any documents that UGS may reasonably request for use in
obtaining or enforcing such patents, copyrights, trade secret rights and other
legal protections. Executive's obligations under this Section will continue
beyond the termination of Executive's employment with UGS.
5.6 Use of Executive's Likeness. Executive authorizes UGS to use,
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reuse, and to reasonably grant others the right to use and reuse, without
additional compensation, Executive's name, photograph, likeness (including
caricature), voice, and biographical information, and any reproduction or
simulation thereof, in any media now known or hereafter developed, for valid
business purposes of UGS.
5.7 Executive Acknowledgment of Reasonable Limitations. Executive
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acknowledges that the limitations set forth in Section 5 of this Agreement are
reasonable and necessary to protect the valid business interests and goodwill of
UGS. Executive further acknowledges that UGS is in an industry in which both
the creation and use of information and innovation is critical to business
success, and that the protection of that information/innovation is a valid
interest of UGS. Executive further acknowledges that signing this Agreement is
required for his having access to UGS' confidential business and technological
information.
5.8 Definitions. As used in this Section 5, "Confidential Information
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means all business information, technological information, intellectual
property, trade secrets and other information belonging to UGS, its parent,
subsidiaries or affiliates or relating to UGS' business, technology, customers,
vendors, or any other party with whom UGS agrees to hold information of such
party in confidence, which is not generally available to the public. Also, as
used in this
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Section 5, "Innovations" means all developments, improvements, designs, original
works of authorship, formulas, processes, software programs, databases and trade
secrets that relate to any services, product, systems or other business(es) of
UGS, whether or not patentable, copyrightable or protectable as trade secrets,
that Executive, alone or jointly with others, creates or first reduces to
practice during the period of Executive's employment with UGS. Furthermore,
"Moral Rights" means any right to claim authorship of a work of authorship, to
object to or prevent the modification of any such work of authorship, or to
withdraw from circulation or control the publication or distribution of any such
work of authorship. For purposes of all provisions in this Section 5, "UGS" mean
UGS, its parent, subsidiaries or affiliates.
Section 6. Miscellaneous
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6.1 Exclusion of Property of Others. Executive will not bring to UGS
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or use in the performance of his duties any documents or materials of a former
employer that are not generally available to the public or that have not been
legally transferred to UGS.
6.2 Agreement to Testing for Controlled Substances. Executive
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understands and agrees that, from time to time, Executive may be tested to
detect the presence or absence of any illegal drugs or controlled substances and
that the results of any such tests shall be released to UGS.
6.3 Successors and Assigns. This Agreement shall be binding upon and
-----------------------
inure to the benefit of any other person, association, or entity which may
hereafter acquire or succeed to all or substantially all of the business or
assets of UGS by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise, in the same manner and to the same extent that UGS
would be obligated under this Agreement if no succession had taken place.
Executive's rights and obligations under this Agreement are personal and such
rights, benefits, and obligations of Executive shall not be voluntarily or
involuntarily assigned, alienated, or transferred by Executive, whether by
operation of law or otherwise, without the prior, written consent of an officer
of UGS.
6.4 Authorization to Deduct Amounts Owed. Upon Executive's separation
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from employment, UGS is authorized to deduct from Executive's final wages or
other monies due Executive any debts or amounts owed to UGS by Executive.
6.5 Enforcement to Full Extent Permissible. If the scope of any
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provision contained in this Agreement is too broad to permit enforcement of such
provision to its full extent, then such provision shall be enforced to the
maximum extent permitted by law, and the parties hereby consent that such
provision may be reformed or modified accordingly, and enforced as reformed or
modified, in any proceeding brought to enforce such provision.
6.6 Extraordinary Relief and Remedies. Executive understands and agrees
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that UGS would be irreparably damaged and that money damages cannot fully
compensate UGS in the event that the provisions of Sections 4 or 5 of this
Agreement are violated, and agrees that UGS shall be entitled (in addition to
any other remedy to which it may be entitled, at law or in equity)
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to an injunction or injunctions to redress breaches of this Agreement and to
specifically enforce the terms and provisions hereof.
6.7 Severability. Each provision of this Agreement will be interpreted
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in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision, to the extent of such prohibition or invalidity,
shall be deemed not to be a part of this Agreement, and shall not invalidate the
remainder of such provision or the remaining provisions of this Agreement.
6.8 Jurisdiction. Any action or proceeding arising out of or relating
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to this Agreement may be commenced in any court of competent jurisdiction in St.
Louis County, Missouri, and shall be governed by and interpreted under the laws
of Missouri.
6.9 Modification or Amendment. This Agreement may not be modified or
--------------------------
amended except by a written instrument executed by Executive and an authorized
officer of UGS.
IN WITNESS WHEREOF, Unigraphics Solutions Inc., Electronic Data Systems
Corporation, and Executive have executed this Personal Service Agreement to be
effective as of the Effective Date.
Agreed to this 15th day of July, 2000 by and among:
EXECUTIVE
By: /s/ Anthony J. Affuso
---------------------------
Anthony J. Affuso
Agreed to By UNIGRAPHICS SOLUTIONS INC.
Electronic Data Systems Corporation
For Purposes of Sections 2.4, 3.3.3(c),
and 3.4.3 only
By: /s/ Jeffrey M. Heller By: /s/ Jeffrey M. Heller
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Jeffery M. Heller Jeffery M. Heller
President and Chief Operating Officer, Chairman of the Board,
Electronic Data Systems Corporation Unigraphics Solutions Inc.
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