Form of Nonqualified Stock Option Agreement



 Exhibit 10.74 
 MSC.SOFTWARE CORPORATION 
 2006 PERFORMANCE INCENTIVE PLAN 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) dated _____________________ by and between MSC.SOFTWARE CORPORATION, a Delaware corporation (the “Corporation”), and
___________________________ (the “Grantee”) evidences the nonqualified stock option (the “Option”) granted by the Corporation to the Grantee as to the number of shares of the Corporation’s Common Stock first
set forth below. 
  

	
	  
 Number of Shares of Common Stock:1    _______
                    Award Date: __________________
  
 Exercise Price per Share:1                     $________                 Expiration
Date:1,2 _____________
  
 Vesting1,2   The Option shall become vested as to 25% of the total number of shares of Common Stock subject to the Option on the first anniversary of the Award Date. The remaining 75% of the total number of shares of
Common Stock subject to the Option shall become vested and exercisable as to an additional 25% on and after each of the second, third, and fourth anniversaries of the Award Date.
  


 The Option is granted under the MSC.Software Corporation 2006 Performance Incentive Plan (the
“Plan”) and subject to the Terms and Conditions of Nonqualified Stock Option (the “Terms”) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option 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. Capitalized terms are defined in the Plan if not defined herein. The parties agree to the terms of the Option set forth
herein. The Grantee acknowledges receipt of a copy of the Terms, the Plan and the Prospectus for the Plan. 
  

					
	 “GRANTEE”
  
  
  
 Signature
  
  
 Print Name
	 	 	  	 MSC.SOFTWARE CORPORATION
 a Delaware corporation

  
 By:______________________________________________
  
 Print Name:_______________________________________
  
 Title:____________________________________________


  

	 1
	 Subject to adjustment under Section 7.1 of the Plan. 



	 2
	 Subject to early termination under Section 4 of the Terms and Section 7.4 of the Plan.



  







 TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION 
  

	1.	Vesting; Limits on Exercise; Incentive Stock Option Status. 

 The Option shall vest and become exercisable in percentage installments of the aggregate number of shares subject to the Option as set forth on the cover page of this Option Agreement. The Option may be exercised only
to the extent the Option is vested and exercisable. 
  

	 	•	 	 Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not
previously exercised), and such right shall continue, until the expiration or earlier termination of the Option. 


  

	 	•	 	 No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated. 


  

	 	 •
	 	 Minimum Exercise. No fewer than 1001 shares of Common Stock may be purchased at any one time, unless the number purchased is the total number at the time exercisable under the Option. 


  

	 	•	 	 Nonqualified Stock Option. The Option is a nonqualified stock option and is not, and shall not be, an incentive stock option within the meaning of
Section 422 of the Code. 


  

	2.	Continuance of Employment/Service Required; No Employment/Service Commitment. 

 The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option Agreement. Employment or service 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 or services as provided in Section 4 below or under the Plan. 
 Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the Corporation or any of its Subsidiaries, affects the Grantee’s status, if he or she is an
employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or service, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation. 
  

	3.	Method of Exercise of Option. 

 The Option
shall be exercisable by the delivery to the Chief Financial Officer of the Corporation (or such other person as the Administrator may require pursuant to such administrative exercise procedures as the Administrator may implement from time to time)
of 








	 	•	 	 a written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise
procedures as the Administrator may require from time to time; 


  

	 	•	 	 payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Corporation, or (subject to compliance
with all applicable laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in shares of Common Stock already owned by the Grantee, valued at their fair market
value on the exercise date, provided, however, that any shares initially acquired upon exercise of a stock option or otherwise from the Corporation must have been owned by the Grantee for at least six (6) months before the date of
such exercise; 


  

	 	•	 	 any written statements or agreements required pursuant to Section 8.1 of the Plan; and 


  

	 	•	 	 satisfaction of the tax withholding provisions of Section 8.5 of the Plan. 


 The Administrator also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the Administrator. 
  

	4.	Effect of Change in Control Event or Termination of Employment. 

 4.1    Possible Acceleration in Connection With a Change in Control Event. If a Change in Control Event occurs and the Participant’s employment is terminated by the Corporation
without Cause (as defined below) within twelve (12) months after the date of such Change in Control Event, any Options that are not then otherwise vested (and have not previously terminated pursuant to this Agreement) shall automatically become
vested upon the occurrence of such event; provided, however, that in the event that the Participant is covered at the relevant time by an employment, severance, change in control or similar agreement or arrangement with the Corporation that provides
a greater benefit with respect to the Option in the circumstances, the Participant shall be entitled to receive such greater benefit as provided in such other agreement or arrangement. For purposes of this Agreement, the term
“Cause” shall mean the occurrence of one or more of the following: (i) any act or failure to act within the control of the Participant done with the intent to harm the interests of the Corporation or any Subsidiary;
(ii) any act of fraud by the Participant in the performance of the Participant’s duties for or responsibilities to the Corporation or any Subsidiary; (iii) any breach of fiduciary duty in the performance of the Participant’s
duties for or responsibilities to the Corporation or any Subsidiary; (iv) the commission by the Participant of a felony or a crime involving an act of moral turpitude; or (v) willful or repeated failure by the Participant to adequately
perform the Participant’s duties or responsibilities, and the failure of the Participant to cure such performance issue within fourteen (14) days following receipt of written notice thereof to the Participant specifying such breach. In
addition, the Option is subject to termination in connection with a Change in Control Event or certain similar reorganization events as provided in Section 7.4 of the Plan. 
 4.2    Termination of Option upon a Termination of Grantee’s Employment or Services. Subject to earlier
termination on the Expiration Date of the Option or pursuant to 








 
Section 4.1 above, if the Grantee ceases to be employed by or ceases to provide services to the Corporation or a Subsidiary, the following rules shall
apply (the last day that the Grantee is employed by or provides services to the Corporation or a Subsidiary is referred to as the Grantee’s “Severance Date”): 
  

	 	•	 	 other than as expressly provided below in this Section 4.2, (a) the Grantee will have until the date that is 3 months after his or her Severance Date to
exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent
exercisable for the 3-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 3-month period; 


  

	 	•	 	 if the termination of the Grantee’s employment or services is the result of the Grantee’s death or Total Disability (as defined below), (a) the
Grantee (or his beneficiary or personal representative, as the case may be) will have until the date that is 12 months after the Grantee’s Severance Date to exercise the Option, (b) the Option, to the extent not vested on the Severance
Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 12-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of
the 12-month period; 


  

	 	•	 	 if the Grantee’s employment or services are terminated by the Corporation or a Subsidiary for Cause (as defined above), the Option (whether vested or not)
shall terminate on the Severance Date. 


 For purposes of the Option, “Total Disability” means a
“permanent and total disability” (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator). 
 In all events the Option is subject to earlier termination on the Expiration Date of the Option or as contemplated by Section 4.1. 
  


	5.	Non-Transferability. 

 The Option and any
other rights of the Grantee under this Option Agreement or the Plan are nontransferable and exercisable only by the Grantee, except as set forth in Section 5.7 of the Plan. 
  

	6.	Notices. 

 Any notice to be given under the
terms of this Option Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Corporation’s payroll records, or at such
other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage
and registry or certification fee prepaid) in a post office or 








 
branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Grantee is no longer
employed by the Corporation or a Subsidiary, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 6. 
  

	7.	Plan. 

 The Option and all rights of the
Grantee under this Option Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Option Agreement (including these Terms). The Grantee
acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Option Agreement. Unless otherwise expressly provided in other sections of this Option Agreement, provisions of the Plan that confer discretionary authority
on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by
appropriate action of the Board or the Administrator under the Plan after the date hereof. 
  

	8.	Entire Agreement. 

 This Option Agreement
(including these Terms) and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Option Agreement
may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely
affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 
  

	9.	Governing Law and Choice of Venue. 

 This
Option Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. For purposes of litigating any dispute that arises under the Option or
this Option Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Orange County, California, or the federal courts for the United States
for the Central District of California, and no other courts, where this Option grant is made and/or to be performed. 
  

	10.	Effect of this Agreement. 

 Subject to the
Corporation’s right to terminate the Option pursuant to Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation. 








	11.	Counterparts. 

 This Option Agreement may be
executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
  

	12.	Section Headings. 

 The section headings of
this Option Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.