Exhibit 10.4


 


MSC.SOFTWARE CORPORATION


PERFORMANCE STOCK UNIT AWARD AGREEMENT


 


THIS PERFORMANCE
STOCK UNIT AWARD AGREEMENT (this “Award
Agreement”) by and between MSC.SOFTWARE
CORPORATION, a Delaware corporation (the “Corporation”),
and Glenn R. Wienkoop (the “Grantee”)
evidences the performance stock unit award (the “Award”)
granted by the Corporation to the Grantee as to the number of stock units first
set forth below.


 


	
  Number
  of Stock Units:(1)

  	
  40,000

  	
  Effective
  Date:  August 15,
  2005

  
	
   

  
	
  Vesting(1),(2)  The
  Award shall vest as provided in
  Section 2 below.

  



 


The
Award is subject to the Terms and Conditions of Performance Stock Unit Award
(the “Terms”) attached to this Award
Agreement (incorporated herein by this reference).  The Award has been granted to the Grantee in
addition to, and not in lieu of, any other form of compensation otherwise
payable or to be paid to the Grantee.  The
Award is in full satisfaction of the Corporation’s obligation to grant
performance stock units to the Grantee pursuant to that certain letter
agreement, dated on or about July 27, 2005, providing for the terms and
conditions of Grantee’s employment by the Corporation.  The parties agree to the terms of the Award
set forth herein.  The Grantee
acknowledges receipt of a copy of the Terms.


 


	
  “GRANTEE”

  	
  MSC.SOFTWARE
  CORPORATION,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
  /s/GLENN R. WIENKOOP

  	
   

  	
   

  
	
  Glenn R. Wienkoop

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN A. MONGELLUZZO

  	
   

  
	
   

  	
  Name: John A. Mongelluzzo

  
	
   

  	
  Title:  Sr. Vice President,
  Business 

  
	
   

  	
  Administration, Corporate Secretary and

  
	
   

  	
  General Counsel

  
						



 










(1)  Subject to adjustment under
Section 8 of the Terms.


(2)  Subject to early termination
under Section 7 of the Terms.


 





















 


TERMS AND CONDITIONS OF PERFORMANCE STOCK UNIT
AWARD


 


1.             Performance Stock Units.  As used herein, a “Performance Stock
Unit” is a non-voting unit of measurement which is deemed for
bookkeeping purposes to be equivalent in value to one outstanding share of
Common Stock of the Corporation.  The Performance
Stock Units shall be used solely as a device for the determination of any
payment to eventually be made to the Grantee if and when such Performance Stock
Units vest pursuant to Section 2.


 


The Performance
Stock Units create no fiduciary duty to the Grantee and shall create only a
contractual obligation on the part of the Corporation to make payments, subject
to vesting and the other terms and conditions hereof, as provided in Section 6
below.  The Performance Stock Units shall
not be treated as property or as a trust fund of any kind.  No assets have been secured or set aside by
the Corporation with respect to the Award and, if amounts become payable to the
Grantee pursuant to this Award Agreement, the Grantee’s rights with respect to
such amounts shall be no greater than the rights of any general unsecured creditor
of the Corporation.


 


2.             Vesting.  Subject to adjustment as provided herein, the
Performance Stock Units subject to the Award shall vest upon the earlier to
occur of


 


(i)            the
date following the date on which the closing price or last price, as applicable,
per share of the Common Stock reported on the composite tape for securities
listed on either the New York Stock Exchange or the NASDAQ National Market has
equaled or exceeded $20.00 for each of the thirty (30) consecutive trading days
on which the Common Stock is actively traded preceding such date; or


 


(ii)           the
date immediately preceding a Company Sale (as defined below) in which the value
of the per-share consideration received by the holders of the Corporation’s
Common Stock in respect of such Company Sale equals or exceeds $20.00;


 


provided, however, that any Performance Stock Units
that have not vested pursuant to the foregoing clause (i) as of the close
of trading on the thirtieth (30th) trading day following the second
anniversary of the Effective Date, or pursuant to the foregoing clause (ii) as
of the second anniversary of the Effective Date shall automatically terminate
as of such second anniversary date.  For
purposes of clarity, the Performance Stock Units may not vest pursuant to the
foregoing clause (i) based on the price of the Common Stock on any
securities exchange other than the New York Stock Exchange or the NASDAQ
National Market.


 


For
purposes of this Award Agreement, “Company Sale”
means any of the following:


 


(i)            approval
by the stockholders of the Corporation of an agreement to merge or consolidate,
or otherwise reorganize, with or into one or more entities that are not
Subsidiaries (as defined below) or other affiliates, as a result of which less
than 50% of the outstanding voting securities of the surviving or resulting
entity immediately after the reorganization are, or will be, owned, directly or
indirectly, by stockholders of the Corporation immediately before such
reorganization (assuming for purposes of such determination that there is no
change in the record ownership of the Corporation’s securities from the record
date for such approval


 





















 


until such
reorganization and that such record owners hold no securities of the other
parties to such reorganization, but including in such determination any
securities of the other parties to such reorganization held by affiliates of
the Corporation);


 


(ii)           approval
by the stockholders of the Corporation of the sale of substantially all of the
Corporations’ business and/or assets to a person or entity that is not a
Subsidiary (as defined below); or


 


(iii)          any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder)
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
more than 30% of the combined voting power of the Corporation’s then
outstanding securities entitled to then vote generally in the election of
directors of the Corporation.


 


For
purposes of this Award Agreement, “Subsidiary”
means any corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned, directly or indirectly, by the
Corporation.


 


3.             Continuance of Employment.  The vesting schedule requires continued
employment through each applicable vesting date as a condition to the vesting
of the applicable installment of the Award and the rights and benefits under
this Award Agreement.  Employment for
only a portion of the vesting period, even if a substantial portion, will not
entitle the Grantee to any proportionate vesting or avoid or mitigate a
termination of rights and benefits upon or following a termination of
employment as provided in Section 7 below.


 


Nothing
contained in this Award Agreement constitutes an employment commitment by the
Corporation or any Subsidiary (as defined below), confers upon the Grantee any
right to remain employed by the Corporation or any Subsidiary, or interferes in
any way with the right of the Corporation or any Subsidiary at any time to
terminate such employment.  Nothing in
this paragraph, however, is intended to adversely affect any independent
contractual right of the Grantee under any written employment agreement with
the Corporation.


 


4.             No Stockholder Rights.  The Grantee shall have no rights as a
stockholder of the Corporation, no dividend rights and no voting rights with
respect to the Performance Stock Units or any shares of Common Stock issuable
in respect of such Performance Stock Units, until shares of Common Stock are
actually issued to and held of record by the Grantee.  No adjustments will be made for dividends or
other rights of a holder for which the record date is prior to the date of
issuance of the stock certificate evidencing the shares.


 


5.             Restrictions on Transfer.  Prior to the time (if any) the Performance
Stock Units are vested and paid, neither the Performance Stock Units comprising
the Award nor any interest therein or amount payable in respect thereof may be
sold, assigned, transferred, pledged or otherwise disposed of, alienated or
encumbered, either voluntarily or involuntarily, other than by will or the laws
of descent and distribution.


 


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The transfer restrictions of this Section 5
shall not apply to transfers to the Corporation..


 


6.             Timing and Manner of Payment of Performance
Stock Units.  Performance
Stock Units subject to this Award Agreement that vest in accordance with Section 2
shall be paid in an equivalent number of shares of Common Stock, which shall be
fully paid and non-assessable, promptly on or as soon as practicable after the
vesting date of such units (the “Payment Date”),
but in no event earlier than the earliest date that payment may be received
under Section 409A (as defined herein). 
Such payment shall be subject to the tax withholding provisions of Section 9
and subject to adjustment as provided in Section 8, and shall be in
complete satisfaction of such vested Performance Stock Units.  The Grantee shall deliver to the Corporation
any representations or other documents or assurances required pursuant to Section 10
and Section 11.


 


7.             Effect
of Termination of Employment.  The Award and any Performance Stock
Units subject to the Award, to the extent not vested as of the first date the
Grantee is no longer employed by the Corporation or one of its Subsidiaries,
shall terminate as of such date (regardless of the reason for such termination,
including, without limitation, a termination due to death or disability), and
the Grantee shall have no further rights with respect to the Award or such
Performance Stock Units.


 


8.             Adjustments
Upon Specified Events.


 


Upon
or in contemplation of any reclassification, recapitalization, stock split (including a stock split
in the form of a stock dividend) or reverse stock split; any merger,
combination, consolidation or other reorganization; any split-up; spin-off, or
similar extraordinary dividend distribution in respect of the Common Stock
(whether in the form of securities or property); any exchange of Common Stock
or other securities of the Corporation, or any similar, unusual or
extraordinary corporate transaction in respect of the Common Stock; or a sale
of substantially all the assets of the Corporation as an entirety; then the
Corporation shall, in such manner, to such extent (if any) and at such time as
it deems appropriate and equitable in the circumstances make
adjustments if appropriate in the number of Restricted Stock Units contemplated
hereby and the number and kind of securities that may be issued in respect of
the Award.


 


The
Corporation shall adjust the performance measures, performance goals, relative
weights of the measures, and other provisions of this Award Agreement to the
extent (if any) it determines that the adjustment is necessary or advisable to
preserve the intended incentives and benefits to reflect (1) any stock
split, reverse stock split, stock dividend, material change in corporate
capitalization, any material corporate transaction (such as a reorganization,
combination, separation, merger, acquisition, or any combination of the
foregoing), or any complete or partial liquidation of the Corporation, (2) any
change in accounting policies or practices, (3) the effects of any special
charges to the Corporation’s earnings, or (4) any other similar special
circumstances.


 


9.             Tax Withholding.  The Corporation shall reasonably determine
the amount of any federal, state, local or other income, employment, or other
taxes which the Corporation or any of its affiliates may reasonably be
obligated to withhold with respect to the grant, vesting, or other event with
respect to the Performance Stock Units. 
The Corporation may, in its sole discretion, withhold a sufficient
number of shares of Common Stock in connection with the vesting of the


 


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Performance Stock
Units at the then Fair Market Value (as defined below) of the Common Stock
(determined either as of the date of such withholding or as of the immediately
preceding trading day, as determined by the Corporation in its discretion) to
satisfy the amount of any such withholding obligations that arise with respect
to the vesting of such Performance Stock Units. 
The Corporation may take such action(s) without notice to the Grantee
and shall remit to the Grantee the balance of any proceeds from withholding
such shares in excess of the amount reasonably determined to be necessary to
satisfy such withholding obligations. 
The Grantee shall have no discretion as to the satisfaction of tax
withholding obligations in such manner. 
If, however, any withholding event occurs with respect to the Performance
Stock Units other than the vesting of such units, or if the Corporation for any
reason does not satisfy the withholding obligations with respect to the vesting
of the Stock Units as provided above in this Section 9 the Corporation
shall be entitled to require a cash payment by or on behalf of the Grantee
and/or to deduct from other compensation payable to the Grantee the amount of
any such withholding obligations.


 


For
purposes of this Award Agreement, “Fair Market Value”
on any date means (i) if the stock is listed or admitted to trade on a
national securities exchange, the closing price of the stock on the Composite
Tape, as published in the Western Edition of the Wall Street Journal, of the
principal national securities exchange on which the stock is so listed or
admitted to trade, on such date, or, if there is no trading of the stock on
such date, then the closing price of the stock as quoted on such Composite Tape
on the next preceding date on which there was trading in such shares; (ii) if
the stock is not listed or admitted to trade on a national securities exchange,
the last/closing price for the stock on such date, as furnished by the National
Association of Securities Dealers, Inc. (“NASD”) through the NASDAQ
National Market Reporting System or a similar organization if the NASD is no
longer reporting such information; (c) if the stock is not listed or
admitted to trade on a national securities exchange and is not reported on the
National Market Reporting System, the mean between the bid and asked price for
the stock on such date, as furnished by the NASD or a similar organization; or (d) if
the stock is not listed or admitted to trade on a national securities exchange,
is not reported on the National Market Reporting System and if bid and asked
prices for the stock are not furnished by the NASD or a similar organization,
the value as established by the Corporation’s Board of Directors at such time
for purposes of this Award Agreement. 
Any determination as to fair market value made pursuant to this Award Agreement
shall be determined without regard to any restriction other than a restriction
which, by its terms, will never lapse, and shall be conclusive and binding on
all persons.


 


10.          Compliance with Laws.  The Award and the offer, issuance and
delivery of securities and/or payment of money under this Award Agreement are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory
or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith.  The Grantee will, if requested by the
Corporation, provide such assurances and representations to the Corporation as
the Corporation may deem necessary or desirable to assure compliance with all
applicable legal requirements.  The
Corporation will cause such action to be taken, and such filings to be made, so
that the grant hereunder shall comply with the rules of the New York Stock
Exchange.


 


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11.          Representations and Warranties.  In the event, and only in the event, that any
Performance Stock Units are to be paid in shares of Common Stock pursuant to
this Award Agreement at a time when the Corporation does not have an effective Form S-8
Registration Statement (including a reoffer prospectus prepared in accordance
with the SEC’s General Instructions to Form S-8) on file with the Securities
and Exchange Commission with respect to the offer and sale of the shares of
Common Stock covered by this Award Agreement, the Grantee, at the time he
acquires such shares, shall represent and warrant to the Corporation that:


 


(a)           the shares of Common Stock that may be
acquired by the Grantee pursuant to this Award Agreement will be acquired for
the Grantee’s own account and not with a view to, or in connection with, a
distribution thereof in violation of the Securities Act of 1933, as amended
(the “Securities Act”), or any applicable
state securities laws, and the shares of Common Stock will not be disposed of
in contravention of the Securities Act or any applicable state securities laws;


 


(b)           the Grantee is an “accredited investor” as such term is defined in Rule 501
promulgated under the Securities Act and is sophisticated in financial matters;


 


(c)           the Grantee is able to bear the economic risk of his investment in the
shares for an indefinite period of time because the shares have not been
registered under the Securities Act and, therefore, cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available;


 


(d)           the Grantee has had the opportunity to ask questions of, and receive
answers from, the Corporation and its management concerning the terms and
conditions of the offering of the Common Stock and to obtain information
regarding the Corporation’s condition (financial and otherwise) and operations;
and


 


(e)           this Award Agreement and each of the other agreements contemplated
hereby to which such Grantee is a party constitute legal, valid and binding
obligations of the Grantee, enforceable in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and limitations
on the availability of equitable remedies, and the execution, delivery and
performance of this Award Agreement and such other agreements by such Grantee
does not and will not conflict with, violate or cause a breach of any
agreement, contract or instrument to which the Grantee is a party or any
judgment or decree to which the Grantee is subject.


 


12.          Legends.


 


(a)           In
the event, and only in the event, that, at the time any Performance Stock Units
are to be paid in shares of Common Stock pursuant to this Award Agreement, the
Corporation does not have an effective Form S-8 Registration Statement (including
a reoffer prospectus prepared in accordance with the SEC’s General Instructions
to Form S-8) on file with the Securities and Exchange Commission with
respect to the offer and sale of shares of Common Stock covered by this


 


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Award Agreement, the certificates, if any, representing the
shares of Common Stock so paid will bear a legend in substantially the
following form:


 


“THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY
APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND
ANY APPLICABLE STATE LAW, OR (2) AT HOLDER’S EXPENSE, AN OPINION
(SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO THE CORPORATION)
THAT REGISTRATION IS NOT REQUIRED.”


 


(b)           In
addition, the certificates, if any, representing any shares of Common Stock
paid pursuant to this Award Agreement will bear a legend in substantially the
following form:


 


“THE OWNERSHIP OF
THIS CERTIFICATE AND THE SHARES OF STOCK EVIDENCED HEREBY AND ANY INTEREST
THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER AN AGREEMENT
ENTERED INTO BETWEEN THE REGISTERED OWNER AND MSC.SOFTWARE CORPORATION.  A COPY OF SUCH AGREEMENT IS ON FILE IN THE
OFFICE OF THE SECRETARY OF MSC.SOFTWARE.”


 


The legend set forth in this Section 12(b) will
be removed from the certificates evidencing such shares upon the occurrence of
one of the events set forth in Section 5.


 


13.          Number and Gender.  Where the context requires, the singular
shall include the plural, the plural shall include the singular, and any gender
shall include all other genders.


 


14.          Section Headings.  The section headings of, and titles of
paragraphs and subparagraphs contained in, this Award Agreement are for the
purpose of convenience only, and they neither form a part of this Award
Agreement nor are they to be used in the construction or interpretation
thereof.


 


15.          Governing Law.  This Award Agreement, and all questions
relating to its validity, interpretation, performance and enforcement, as well
as the legal relations hereby created between the parties hereto, shall be
governed by and construed under, and interpreted and enforced in accordance
with, the laws of the State of California, notwithstanding any California or
other conflict of law provision to the contrary.


 


16.          Construction.  This Award Agreement shall be construed and
interpreted to comply with Section 409A of the Internal Revenue Code (“Section 409A”). 
The Corporation reserves the right to amend this Award Agreement to the
extent it reasonably determines is necessary in order to preserve the intended
tax consequences of the Performance Stock Units in light of Section 409A
and any regulations or other guidance promulgated thereunder.


 


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17.          Severability.  If any provision of this Award Agreement or
the application thereof is held invalid, the invalidity shall not affect other
provisions or applications of this Award Agreement which can be given effect
without the invalid provisions or applications and to this end the provisions
of this Award Agreement are declared to be severable.


 


18.          Entire Agreement.  This Award Agreement embodies the entire
agreement of the parties hereto respecting the matters within the scope of this
Award Agreement and supersedes all prior and contemporaneous agreements of the
parties hereto that directly or indirectly bears upon the subject matter
hereof.  Any prior negotiations,
correspondence, agreements, proposals or understandings relating to the subject
matter hereof shall be deemed to have been merged into this Award Agreement,
and to the extent inconsistent herewith, such negotiations, correspondence,
agreements, proposals, or understandings shall be deemed to be of no force or
effect.  There are no representations,
warranties, or agreements, whether express or implied, or oral or written, with
respect to the subject matter hereof, except as expressly set forth
herein.  This Award Agreement is an
integrated Agreement as to the subject matter hereof.


 


19.          Modifications.  This Award Agreement may not be amended,
modified or changed (in whole or in part), except by a formal, definitive
written agreement expressly referring to this Award Agreement, which agreement
is executed by both of the parties hereto.


 


20.          Waiver.  Neither the failure nor any delay on the part
of a party to exercise any right, remedy, power or privilege under this Award
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.  No waiver shall
be effective unless it is in writing and is signed by the party asserted to
have granted such waiver.


 


21.          Notices.


 


(a)           All notices,
requests, demands and other communications required or permitted under this
Award Agreement shall be in writing and shall be deemed to have been duly given
and made if (i) delivered by hand, (ii) otherwise delivered against
receipt therefor, or (iii) sent by registered or certified mail, postage
prepaid, return receipt requested.  Any
notice shall be duly addressed to the parties as follows:


 


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  (i)  if to the Corporation:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
  MSC.Software
  Corporation

  
	
   

  	
   

  	
  2 MacArthur
  Place

  
	
   

  	
   

  	
  Santa Ana,
  California 92707

  
	
   

  	
   

  	
  Attn: John A.
  Mongelluzzo

  
	
   

  	
   

  	
   

  
	
  (ii)  if to the Grantee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Glenn R.
  Wienkoop

  
	
   

  	
   

  	
  MSC.Software
  Corporation

  
	
   

  	
   

  	
  2 MacArthur
  Place

  
	
   

  	
   

  	
  Santa Ana,
  California 92707

  
					



 


(b)           Any party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section 21 for the
giving of notice.  Any communication
shall be effective when delivered by hand, when otherwise delivered against
receipt therefor, or five (5) business days after being mailed in
accordance with the foregoing.


 


22.          Legal Counsel; Mutual Drafting.  Each party recognizes that this is a legally
binding contract and acknowledges and agrees that they have had the opportunity
to consult with legal counsel of their choice. 
Each party has cooperated in the drafting, negotiation and preparation
of this Award Agreement.  Hence, in any
construction to be made of this Award Agreement, the same shall not be
construed against either party on the basis of that party being the drafter of
such language.  Grantee agrees and
acknowledges that he has read and understands this Award Agreement completes,
is entering into it freely and voluntarily, and has been advised to seek
counsel prior to entering into this Award Agreement and has had ample opportunity
to do so.


 


23.          Counterparts.  This Award Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against
any party whose signature appears thereon, and all of which together shall
constitute one and the same instrument. 
This Award Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories. 
Photographic copies of such signed counterparts may be used in lieu of
the originals for any purpose.


 


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