EXHIBIT 10.1

LOGO [g56005img_001.jpg]

Rabbi Trust Agreement

for

MSC.Software Corporation

2005 Supplement Retirement and

Deferred Compensation Plan

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

           Page

Section 1.

   Establishment of Trust    1

Section 2.

   Payments to Plan Participants and Their Beneficiaries    2

Section 3.

   Trustee Responsibility Regarding Payments to Trust Beneficiary When Company
is Insolvent    3

Section 4.

   Payments to Company    4

Section 5.

   Investment Authority    4

Section 6.

   Disposition of Income    5

Section 7.

   Accounting by Trustee    5

Section 8.

   Responsibility of Trustee    6

Section 9.

   Compensation and Expenses of Trustee    7

Section 10.

   Resignation and Removal of Trustee    7

Section 11.

   Appointment of Successor    7

Section 12.

   Amendment or Termination    8

Section 13.

   Miscellaneous    8

Section 14.

   Effective Date    9

--------------------------------------------------------------------------------

Rabbi Trust Agreement

This Agreement, made this 1st day of January, 2005, by and between MSC.Software
Corporation (the “Company”) and its affiliates, and Wells Fargo Bank, N.A., (the
“Trustee”),

WITNESSETH:

WHEREAS, Company has adopted a non-qualified deferred compensation Plan entitled
MSC.Software Corporation 2005 Supplemental Retirement and Deferred Compensation
Plan (the “Plan”);

WHEREAS, Company wishes to establish a trust (hereinafter called “Trust”) and to
contribute to the Trust assets that shall be held therein, subject to the claims
of Company’s Insolvency, as herein defined, until paid to Plan participants and
their beneficiaries in such manner and at such times as specified in the Plan;

WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974;

WHEREAS, it is the intention of Company to make contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:

Section 1. Establishment of Trust.

(a) Company hereby deposits with Trustee in trust assets, which shall become the
principal of the Trust to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.

(b) The Trust hereby established shall be irrevocable by Company.

(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly. However, the Trustee does not warrant and shall not be
liable for any tax consequences associated with the Trust or participation in
the Plan.

 

1

--------------------------------------------------------------------------------

(d) The principal of the Trust, and any earnings thereon shall be held separate
and apart from other funds of Company and shall be used exclusively for the uses
and purposes of Plan participants and general creditors as herein set forth.
Plan participants and their beneficiaries shall have no preferred claim on, or
any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company’s general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.

(e) Company, in its sole discretion, may at any time, or from time to time, make
additional deposits of cash or other property, acceptable to the Trustee, in
trust with Trustee to augment the principal to be held, administered and
disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor
any Plan participant or beneficiary shall have any right to compel such
additional deposits.

Section 2. Payments to Plan Participants and Their Beneficiaries.

(a) Company shall deliver to Trustee a schedule (the “Payment Schedule”) that
indicates the amounts payable in respect of each Plan participant (and his or
her beneficiaries), that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which such amount is
to be paid (as provided for or available under the Plan, and the time of
commencement for payment of such amounts. Except as otherwise provided herein,
Trustee shall make payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. The Company shall make provision for the
reporting and withholding of any Federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities. The Trustee may forward amounts to be withheld from the
participants’ benefits to the Company for remittal to the appropriate taxing
authorities. The Trustee shall have no responsibility or liability for
determining and/or reporting any such taxes.

(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.

(c) Company may make payment of benefits directly to Plan participants or their
beneficiaries as they become due under the terms of the Plan. Company shall
notify Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to participants or their beneficiaries. In addition, if
the principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan, Company shall
make the balance of each such payment as it falls due. Trustee shall notify
Company where principal and earnings are not sufficient. The trustee shall not
be liable for the inadequacy of the Trust to pay all amounts due under the Plan,
unless such inadequacy is the direct result of trustee’s willful misconduct, bad
faith or negligence.

 

2

--------------------------------------------------------------------------------

Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When
Company is Insolvent.

(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if the Company is Insolvent. Company shall be considered
“Insolvent” for purposes of this Trust Agreement if (i) Company is unable to pay
its debts as they become due, or (ii) Company is subject to a pending proceeding
as a debtor under the United States Bankruptcy Code or any comparable state or
federal regulatory law.

(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.

(1) The Board of Directors and the Chief Executive Officer of Company shall have
the duty to inform Trustee in writing of Company’s Insolvency. If a person
claiming to be a creditor of Company alleges in writing to Trustee that Company
has become Insolvent, Trustee shall determine whether Company is Insolvent and,
pending such determination, Trustee shall discontinue payment of benefits to
Plan participants or their beneficiaries. Except as stated above, the Trustee
shall have no duty to determine whether the Company is Insolvent.

(2) Unless Trustee has actual knowledge of Company’s Insolvency, or has received
notice from Company or a person claiming to be a creditor alleging that Company
is Insolvent, Trustee shall have no duty to inquire whether Company is
Insolvent. Trustee may in all events rely on such evidence concerning Company’s
solvency as may be furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning Company’s solvency.

(3) If at any time Trustee has determined that Company is Insolvent, Trustee
shall discontinue payments to Plan participants or their beneficiaries and shall
hold the assets of the Trust for the benefit of Company’s general creditors.
Nothing in this Trust Agreement shall in any way diminish any rights of the Plan
participants or their beneficiaries to pursue their rights as general creditors
of Company with respect to benefits due under the Plan or otherwise.

(4) Trustee shall resume the payment of benefits to Plan participants or their
beneficiaries in accordance with Section 2 of this Trust Agreement only after
Trustee has determined that Company is not Insolvent (or is no longer
Insolvent).

(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Company in lieu of the payments provided
for hereunder during any such period of discontinuance.

 

3

--------------------------------------------------------------------------------

Section 4. Payments to Company.

Except as provided in Section 3 hereof, Company shall have no right or power to
direct Trustee to return to Company or to divert to others any of the Trust
assets before all payment of benefits have been made to Plan participants and
their beneficiaries pursuant to the terms of the Plan.

Section 5. Investment Authority.

(a) The Company may from time to time issue directions to the Trustee
instructing the Trustee how to invest the Trust. Prior to issuing any such
directions, the Company shall certify to the Trustee the person(s) at the
Company who have the authority to issue such directions. If such directions are
issued, the Trustee shall have no fiduciary responsibility or liability over the
investment of the Trust except to follow the directions issued.

(b) Except as provided in paragraph (a), in the administration of the Trust, the
Trustee shall have the following powers:

(1) To hold and control the assets in the Trust;

(2) To sell, exchange, assign, transfer, and convey any security or property
held in the Trust, at public or private sale, at such time and price and upon
such terms and conditions (including credit) as directed by the Investment
Manager;

(3) To invest and reinvest assets of the Trust (including accumulated income) as
directed by the Investment Manager;

(4) To notify the Company of any vote on any stock or securities held in the
Trust, as all voting rights with respect to Trust assets will be exercised by
Company;

(5) To consent to and participate in any plan for the liquidation,
reorganization, consolidation, or merger of any corporation, any security of
which is held in the Trust;

(6) To sell or exercise any “rights” issued on any securities held in the Trust;

(7) To cause all or any part of the assets of the Trust to be held in the name
of the Trustee (which in such instance need not disclose its fiduciary capacity)
or, as permitted by laws, in the name of any nominee, and to acquire for the
Trust any investment in bearer form, but the books and records of the Trust
shall at all times show that all such investments are part of the Trust and the
Trustee shall hold evidence of title to all such investments;

(8) To make such distributions to Participants (as such term is defined in the
Plan) in accordance with the provisions of this Trust Agreement; and

 

4

--------------------------------------------------------------------------------

(9) From time to time the Company may appoint one or more investment managers
who shall have investment management and control over all or a portion of the
assets of the Trust (“Investment Managers”). The Company shall notify the
Trustee of the appointment of the Investment Manager. In the event more than one
Investment Manager is appointed, the Company shall determine which assets shall
be subject to management and control by each Investment Manager and shall also
determine the proportion in which funds withdrawn or disbursed shall be charged
against the assets subject to each Investment Manager’s management and control.
As shall be provided in any contract between an Investment Manager and the
Company, such Investment Manager shall hold a revocable proxy with respect to
all securities which are held under the management of such Investment Manager
pursuant to such contract and such Investment Manager shall report the voting of
all securities subject to such proxy on an annual basis to the Company. In the
event that the Company does not appoint an Investment Manager as provided in
this Section 5(i), references in this Trust Agreement to “Investment Manager”
shall mean the Company.

Section 6. Disposition of Income.

During the term of this Trust, all income received by the Trust, net of expenses
and taxes, shall be accumulated and reinvested.

Section 7. Accounting by Trustee.

Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements, and all other transactions required to be made, including such
specific records as shall be agreed upon in writing between Company and Trustee.
Within 60 days following the close of each calendar year and within 90 days
after the removal or resignation of Trustee, Trustee shall deliver to Company a
written account of its administration of the Trust during such year or during
the period from the close of the last preceding year to the date of such removal
or resignation, setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being show separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.

 

5

--------------------------------------------------------------------------------

Section 8. Responsibility of Trustee.

(a) Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims; provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity with the
terms of the Plan or this Trust and is given in writing by Company. In the event
of a dispute between Company and a third party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.

(b) If Trustee undertakes or defends any litigation arising in connection with
this Trust, Company agrees to indemnify Trustee against Trustee’s costs,
expenses and liabilities (including, without limitation, reasonable attorneys’
fees and expenses) relating thereto and to be primarily liable for such
payments, unless the litigation is a result of the Trustee’s negligence, bad
faith or willful misconduct. If Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, Trustee may obtain payment from the
Trust.

(c) Trustee may consult with legal counsel (who may also be counsel for Company
generally) with respect to any of its duties or obligations hereunder.

(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.

(e) Trustee shall have, without exclusion, all powers conferred on Trustees by
applicable law, unless expressly provided otherwise herein; provided, however,
that if an insurance policy is held as an asset of the Trust, Trustee shall have
no power to name a beneficiary of the policy other than the Trust, to assign the
policy (as distinct from conversion of the policy to a different form) other
than to a successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy. The Trustee shall not be liable for the failure
or omission of any insurance company for any reason to pay any benefits or
furnish any services under the policies or contracts.

(f) However, notwithstanding the provisions of Section 8(e) above, Trustee may
loan to Company the proceeds of any borrowing against an insurance policy held
as an asset of the Trust.

(g) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

(h) The Company shall indemnify and hold the Trustee harmless for any claims
arising from its administration of the Trust, provided the Trustee acted in good
faith in

 

6

--------------------------------------------------------------------------------

the discharge of its duties under the Trust. The Trustee shall not be liable for
any action taken or omitted, or for any loss or depreciation of value of the
Trust where the Trustee has exercised good faith and diligence in the exercise
of its duties.

Section 9. Compensation and Expenses of Trustee.

Company shall pay all administrative and Trustee’s fees and expenses.

Section 10. Resignation and Removal of Trustee.

(a) Trustee may resign at any time by written notice to Company, which shall be
effective 30 days after receipt of such notice unless Company and Trustee agree
otherwise.

(b) Trustee may be removed by Company on 30 days notice or upon shorter notice
accepted by Trustee.

(c) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 90 days after receipt of notice of
resignation, removal or transfer, unless Company extends the time limit.

(d) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraph(s) (a) or (b) of this section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.

Section 11. Appointment of Successor.

(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee, who shall have
all of the rights and powers of the former Trustee, including ownership rights
in the Trust assets. The former Trustee shall execute any instrument necessary
or reasonably requested by Company or the successor Trustee to evidence the
transfer.

(b) The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to Sections
7 and 8 hereof. The successor Trustee shall not be responsible for and Company
shall indemnify and defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.

 

7

--------------------------------------------------------------------------------

Section 12. Amendment or Termination.

(a) This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable.

(b) The Trust shall not terminate until the date on which Plan participants and
their beneficiaries are no longer entitled to benefits pursuant to the terms of
the Plan. Upon termination of the Trust any assets remaining in the Trust shall
be returned to Company.

(c) Upon written approval of participants or beneficiaries entitled to payment
of benefits pursuant to the terms of the Plan, Company may terminate this Trust
prior to the time all benefit payments under the Plan have been made. All assets
in the Trust at termination shall be returned to Company.

Section 13. Miscellaneous.

(a) Any provision of this Trust Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating the remaining
provisions hereof.

(b) Benefits payable to Plan participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.

(c) This Trust Agreement shall be governed by and construed in accordance with
the laws of the State of Minnesota.

(d) The Trustee shall be entitled to rely on the accuracy of any information
furnished to it by the Company or any other party from whom the Trustee is
entitled to any information.

 

8

--------------------------------------------------------------------------------

Section 14. Effective Date.

The effective date of this Trust Agreement shall be January 1, 2005.

IN WITNESS WHEREOF, the Company and the Trustee have caused this Agreement to be
executed by individuals thereunto duly authorized as of the day and year first
above written.

 

MSC.Software Corporation     Wells Fargo Bank, N.A. By         

By

     Title:   Vice President, Human Resources     Title:   Vice President,
Relationship Manager By         

By

     Title         

Title

    

 

9