Document:

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 William J. Weyand (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) 100,000

  	
  Effective
  Date: February 10, 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) and to that certain
Employment Agreement between the Corporation and the Grantee of even date
herewith (the “Employment Agreement”).  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 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/ William J.
  Weyand

  	
   

  	
   

  
	
  William J. Weyand

  	
  By:

  	
  /s/ John Laskey

  	
   

  
	
   

  	
  Name: John Laskey

  
	
   

  	
  Title:

  	
  Senior Vice President,

  
	
   

  	
   

  	
  Chief Financial Officer

  
						

 

 

(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 $15.00 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 $15.00;

 

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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Following
any payment of Performance Stock Units in shares of Common Stock pursuant to Section 6,
neither any such shares, 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) until the earliest of (i) the second
anniversary of the Effective Date, (ii) the day upon which the Grantee’s
employment with the Corporation terminates under any of the circumstances
described in Section 5.3(b) or 5.3(c) of the Employment Agreement and the
Grantee is entitled to the severance benefits provided thereunder (after having
met the requirements thereunder, including, without limitation, having provided
the required release as contemplated by the Employment Agreement), or (iii)
immediately preceding a Change in Control Event (as such term is defined in the
Corporation’s 2001 Stock Option Plan (the “2001 Plan”), or
(iii) a Going Private Transaction (as defined below).

 

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

 

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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 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 (except as provided in Section 15), “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

 

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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.

 

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

 

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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 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.                               Registration
Rights.  The Corporation agrees that, at its own expense, it will use reasonable
efforts to register all shares of Common Stock covered by this Award Agreement
on a Form S-8 Registration Statement (including a reoffer prospectus prepared
in accordance with the SEC’s General Instructions to Form S-8) under the
Securities Act promptly after the Corporation is first able to file and have
declared effective such a Registration Statement.  The Corporation shall promptly remove the
legend described in Section 12(a) from the certificates when the shares
have been registered and the Registration Statement is effective.  The Grantee agrees that, in connection with
any resale of such shares, the Grantee will sell such shares pursuant to such

 

6

 

reoffer prospectus, will deliver such reoffer
prospectus in accordance with applicable securities laws, and will otherwise
comply with applicable laws as to such sale.

 

14.                               Corporation’s
Obligation to Repurchase Upon a Change in Control
Event or Going Private Transaction.  If, as a result of a Change in Control
Event (within the meaning of clause (b) of the definition of such term in the 2001
Plan) or a Going Private Transaction, the Common Stock of the Corporation is no
longer readily tradable on an established securities market, the Grantee shall
have the right to require the Corporation, immediately before such Change in
Control Event or Going Private Transaction, to purchase any or all of the
shares of Common Stock acquired by, or issued to, the Grantee under this
Agreement and then held by him (to the extent the Grantee is not permitted or
required to sell such shares in the transaction giving rise to the Change in
Control Event or Going Private Transaction, as the case may be) on
substantially the same per-share terms as the Corporation’s stockholders
selling Common Stock in such transaction generally for an amount not less than
the price paid (on a per share basis) to the other holders of the Common Stock
whose stock was acquired in connection with the Change in Control Event or the
Going Private Transaction, as the case may be) multiplied by the number of
shares sold by the Grantee to the Corporation. 
The Grantee’s right under this Section 14 is subject to the
Corporation’s ability to effect such a repurchase of shares in compliance with
all applicable laws, rules and regulations. 
For purposes of this Agreement, a “Going Private Transaction”
shall mean a transaction which does not constitute a Change of Control Event,
but in which all or substantially all of the shares of Common Stock of the
Corporation are purchased or otherwise acquired, including a redemption by the
Corporation, and in connection with such transaction, or series of
transactions, the Common Stock ceases to be traded on an established securities
exchange.

 

15.                               Corporation’s
Obligation to Repurchase Upon Termination of Employment.  If the Grantee’s employment with the Corporation terminates for any
reason at a time when there is no public trading of the Corporation’s Common
Stock, the Grantee shall have the right to require the Corporation to purchase
any or all of the shares of Common Stock acquired by the Grantee under this
Award Agreement within sixty (60) days of such termination or, if later, within
sixty (60) days after the Corporation is able to repurchase such shares in
compliance with all applicable laws, rules and regulations.  The Grantee and the Corporation shall
mutually agree on the fair market value for such shares, and in the event that
no mutual agreement can be reached, the determination of the fair market value
for such shares shall be as determined in accordance with an appraisal
procedure set out in a letter agreement of even date herewith.  The Grantee’s right under this Section 15
is subject to the Corporation’s ability to effect such a repurchase of shares
in compliance with all applicable laws, rules and regulations.

 

16.                               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.

 

17.                               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.

 

7

 

18.                               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.

 

19.                               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.

 

20.                               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.

 

21.                               Entire
Agreement.  This Award Agreement,
together with the Employment 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, together with the
Employment Agreement, is an integrated Agreement as to the subject matter
hereof.

 

22.                               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.

 

23.                               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.

 

24.                               Resolution
of Disputes.  Except as set forth
in Section 15, any dispute, claim or controversy arising out of or
relating to this Award Agreement, including the enforcement or interpretation
of any provision of this Award Agreement, shall be submitted to arbitration in
accordance with the provisions set forth in Section 22 of the Employment
Agreement.

 

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25.                               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:

 

(i)  if to the Corporation:

 

MSC.Software
Corporation

2
MacArthur Place

Santa
Ana,  California
92707

Attn:
Board of Directors

 

with a copy to:

 

Jeffrey
W. Walbridge, Esq.

O’Melveny
& Myers LLP

610
Newport Center Drive, Suite 1700

Newport
Beach, California 92660

 

(ii)  if to the Grantee:

 

William
J. Weyand

6805
Alberly Lane

Cincinnati,
Ohio 45243

 

(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 25 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.

 

26.                               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.

 

27.                               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

 

9

 

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.

 

10Exhibit 10.5

 

MSC.SOFTWARE
CORPORATION

2001
STOCK OPTION PLAN

NONQUALIFIED
STOCK OPTION AGREEMENT

 

THIS
NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) dated as of February 10, 2005 (the “Effective Date”) is entered into by and
between MSC.SOFTWARE CORPORATION, a Delaware
corporation (the “Corporation”),
and William J. Weyand (the “Grantee”).

 

W I T N E
S S E T H

 

WHEREAS,
the Corporation has adopted and the stockholders of the Corporation have
approved the MSC.Software Corporation 2001 Stock Option Plan (the “Plan”);

 

WHEREAS,
the Corporation and the Grantee have entered into an employment agreement of
even date herewith (the “Employment Agreement”);

 

WHEREAS,
pursuant to the Employment Agreement, the Corporation has granted to the
Grantee as of the Effective Date
a stock option (the “Option”) to
purchase up to Four Hundred Fifty Thousand (450,000) shares of the Corporation’s
common stock, par value $0.01 per share (the “Common Stock”),
subject to and upon the terms and conditions set forth in this Agreement, the
Employment Agreement and the Plan; and

 

WHEREAS,
such Option has been granted by the Corporation to the Grantee in addition to,
and not in lieu of, any form of compensation otherwise payable or to be paid to
the Grantee;

 

NOW,
THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties agree as follows:

 

1.             Defined Terms. 
Capitalized terms used herein and not otherwise defined herein shall
have the meaning assigned to such terms in the Plan.

 

2.             Grant of Option.  This
Agreement evidences the Corporation’s grant to the Grantee of the right and
option to purchase, on the terms and conditions set forth in this Agreement,
the Employment Agreement and in the Plan, up to Four Hundred Fifty Thousand
(450,000) shares of Common Stock at an exercise price per share of [$              ] (the “Exercise Price”),
which Option shall be exercisable from time to time, subject to the provisions
of this Agreement, the Employment Agreement and the Plan, prior to the close of
business on the day before the tenth anniversary of the Effective Date (the “Expiration Date”). 
The Option is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.

 

 

3.             Vesting; Exercisability of Option.  Subject to earlier vesting as provided in
Section 6 or Section 7 below, the Option shall become vested with respect to
50% of the shares subject to the Option on each of the first and second
anniversaries of the Effective Date.

 

The Option may be
exercised only to the extent the Option is vested and exercisable.  The Option, to the extent vested, shall
become exercisable on the earliest to occur of (i) the second anniversary of
the Effective Date, (ii) the day on which the Executive ceases to be employed
by the Corporation in any of the circumstances described in Section 5.3(b) or
5.3(c) of the Employment Agreement, or (iii) immediately prior to a Change in
Control Event or a Going Private Transaction (as defined herein).  In no event may any portion of the Option be
exercised at any time after the Expiration Date or an earlier termination of
the Option pursuant to Section 6 or 7 below.

 

To the extent 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
Option terminates or expires.  The Option
shall only be exercisable in respect of whole shares, and fractional share interests
shall be disregarded.  The Option may
only be exercised as to at least 100 shares, unless the number purchased is the
total number at the time available for purchase under the Option.

 

4.             Method of Exercise of Option.  The Grantee shall exercise the Option by the
delivery to the Secretary of the Corporation of a written notice stating the
number of shares to be purchased pursuant to the Option.

 

Payment shall be made in
accordance with and in a form permitted by Section 2.2.2 of the Plan for the
full Exercise Price of the shares to be purchased, subject to such further
limitations and rules or procedures as the Committee may from time to time
establish as to any non-cash payment and as to the tax withholding requirements
of Section 4.5 of the Plan.  Subject to
the consent of the Committee at the time of exercise, the Exercise Price may be
paid in full or in part by shares of Common Stock already owned by the Grantee;
provided, however, that any shares delivered (i) which were initially acquired
from the Corporation (upon exercise of a stock option or otherwise) must have
been owned by the Grantee for at least six months before the date of exercise,
and (ii) shall be valued at their Fair Market Value on the date of
exercise.  In addition, the Grantee (or the
Grantee’s Beneficiary or Personal Representative) shall furnish any written
statements required pursuant to Section 4.4 of the Plan.

 

5.             Responsibility for Taxes.  Regardless of any action the Corporation
takes with respect to any or all income tax, social security and Medicare,
payroll tax or other tax-related withholding (“Tax-Related
Items”), the Grantee hereby acknowledges and agrees that the
ultimate liability for all Tax-Related Items is and remains his responsibility
and that the Corporation (i) makes no representations or undertakings regarding
the treatment of any Tax-Related Items in connection with any aspect of the
Option, including the grant, vesting or exercise of the Option and the
subsequent sale of shares; and (ii) does not commit to structure the terms of
the grant or any aspect of the Option to reduce or eliminate the Grantee’s
liability for Tax-Related Items.

 

2

 

Prior to exercise of the
Option, the Grantee shall pay or make adequate arrangements satisfactory to the
Corporation to satisfy all withholding and payment on account obligations of
the Corporation.  In this regard, the
Grantee authorizes the Corporation to withhold all applicable Tax-Related Items
legally payable by the Grantee from his or her wages or other cash compensation
paid to the Grantee by the Corporation or from proceeds of the sale of the
shares.  Finally, the Grantee shall pay
to the Corporation any amount of Tax-Related Items that the Corporation may be
required to withhold as a result of the Grantee’s participation in the Plan or
the Grantee’s purchase of shares that cannot be satisfied by the means
previously described.  The Corporation
may refuse to honor the exercise and refuse to deliver shares if the Grantee
fails to comply with his or her obligations in connection with the Tax-Related
Items as described in this section.

 

Notwithstanding the
foregoing, in the event that the Grantee is liable for the excise tax under
Section 4999 of the Code with respect to the exercise or vesting of the Option,
the Corporation shall pay the Executive the amounts required under Section 3.7
of the Employment Agreement.

 

6.             Effect of Termination of Employment.

 

(a)           If
the Grantee’s employment by the Corporation terminates for any reason, the
Option, to the extent not vested on or before the date of such termination,
shall terminate as of the date of such termination of employment.  (The last day that the Grantee is employed by
the Corporation is referred to as the Grantee’s “Severance
Date.”)

 

(b)           Except
as otherwise provided in Section 6(c), (i) if the Grantee’s employment by the
Corporation is terminated for Cause (as defined in the Employment Agreement),
the Option, to the extent vested on the Severance Date, shall be exercisable
for a period of 90 days after the Severance Date and, to the extent not
exercised during such 90-day period, shall terminate at the close of business
on the last day of such 90-day period, or (ii) if the Grantee terminates his
employment other than for Good Reason or Disability (as such terms are defined
in the Employment Agreement), the Option, to the extent vested on the Severance
Date, shall be exercisable for a period of one year after the Severance Date
and, to the extent not exercised during such one-year period, shall terminate
at the close of business on the last day of such one-year period.

 

(c)           If
the Grantee’s employment is terminated under any of the circumstances described
in Section 5.3(b) or 5.3(c) of the Employment Agreement and the Grantee is
entitled to the severance benefits provided thereunder (after having met the
requirements thereunder, including, without limitation, having provided the
required release as contemplated by the Employment Agreement), the Option, to
the extent not vested on the Severance Date, shall be deemed to have been fully
vested as of such Severance Date and shall be exercisable until the third
anniversary of the Severance Date.

 

3

 

In all cases, however,
the Option is subject to earlier termination on the Expiration Date or pursuant
to Section 7.

 

7.             Adjustment; Termination of Option Under
Certain Events.  The Option is
subject to adjustment pursuant to Section 4.2.1 of the Plan and subject to
early termination upon the occurrence of certain events as described in Section
4.2.3 of the Plan.  The Option, to the
extent then outstanding, shall be deemed to have fully vested immediately prior
to any termination thereof pursuant to Section 4.2.3 of the Plan.

 

8.             Non-Transferability of Option.

 

(a)           Subject
to the limited exceptions set forth in Section 1.8 of the Plan, the Option and
any other rights of the Grantee under this Agreement or the Plan are
nontransferable.  For purposes of
clarity, the Committee has not authorized any transfer exceptions as
contemplated by Section 1.8.2 of the Plan.

 

(b)           Following
any delivery of shares of Common Stock upon exercise of the Option, neither any
such shares, 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) until the earliest of (i) the second anniversary
of the Effective Date, (ii) the day upon which the Grantee’s employment with
the Corporation terminates under any of the circumstances described in Section
5.3(b) or 5.3(c) of the Employment Agreement and the Grantee is entitled to the
severance benefits provided thereunder (after having met the requirements
thereunder, including, without limitation, having provided the required release
as contemplated by the Employment Agreement), or (iii) immediately preceding a
Change in Control Event or a Going Private Transaction.

 

The transfer restrictions
of this Section 8 shall not apply to transfers to the Corporation.

 

9.             Representations and Warranties.  In the event, and only in the event, that the
Grantee exercises any portion of the Option 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 the Option, the
Grantee, at the time he acquires such shares, shall represent and warrant to
the Corporation that:

 

(a)           the
shares of Common Stock that are
being acquired by the Grantee pursuant to this 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;

 

4

 

(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
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
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.

 

10.           Legends.

 

(a)           In the
event, and only in the event, that the Grantee exercises any portion of the
Option 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 shares of Common
Stock covered by the Option, the certificates,
if any, representing the shares of Common Stock so purchased by the Grantee
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
delivered pursuant to this Agreement will bear a legend in substantially the
following form:

 

5

 

“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
10(b) will be removed from the certificates evidencing such shares upon the
occurrence of one of the events set forth in Section 8.

 

11.           Registration Rights.  The Corporation agrees that, at its own
expense, it will use reasonable efforts to register all shares of Common Stock
which covered by the Option on a Form S-8 Registration Statement (including a
reoffer prospectus prepared in accordance with the SEC’s General Instructions
to Form S-8) under the Securities Act promptly after the Corporation is first
able to file and have declared effective such a Registration Statement.  The Corporation shall promptly remove the legend
described in Section 10(a) from the certificates when the shares have been
registered and the Registration Statement is effective.  The Grantee agrees that, in connection with any
resale of such shares, the Grantee will sell such shares pursuant to such reoffer
prospectus, will deliver such reoffer prospectus in accordance with applicable
securities laws, and will otherwise comply with applicable laws as to such sale.

 

12.           Corporation’s Obligation to Repurchase
Upon a Change in Control Event or Upon Going Private Transaction.  If, as a result of a Change in Control Event (within the meaning of
clause (b) of the definition of such term in the 2001 Plan) or a Going Private
Transaction, the Common Stock of the Corporation is no longer readily tradable
on an established securities market, the Grantee shall have the right to
require the Corporation, immediately before such Change in Control Event or
Going Private Transaction, to purchase any or all of the shares of Common Stock
acquired by, or issued to, the Grantee under this Agreement and then held by
him (to the extent the Grantee is not permitted or required to sell such shares
in the transaction giving rise to the Change in Control Event or the Going
Private Transaction, as the case may be) on substantially the same per-share
terms as the Corporation’s stockholders selling Common Stock in such
transaction generally for an amount not less than the price paid (on a per
share basis) to the other holders of the Common Stock whose stock was acquired
in connection with the Change in Control Event or Going Private Transaction, as
the case may be, multiplied by the number of shares sold by the Grantee to the
Corporation.  The Grantee’s right under
this Section 12 is subject to the Corporation’s ability to effect such a repurchase
of shares in compliance with all applicable laws, rules and regulations.  For purposes of this Agreement, a “Going
Private Transaction” shall mean a transaction which does not constitute a
Change of Control Event, but in which all or substantially all of the shares of
Common Stock of the Corporation are purchased or otherwise acquired, including
a redemption by the Corporation, and in connection with such transaction, or
series of transactions, the Common Stock ceases to be traded on an established
securities exchange.

 

6

 

13.           Corporation’s Obligation to Repurchase Upon
Termination of Employment.  If the Grantee’s employment with the
Corporation terminates for any reason at a time when there is no public trading
of the Corporation’s Common Stock, the Grantee shall have the right to require
the Corporation to purchase any or all of the shares of Common Stock acquired
by the Grantee pursuant to the Option within sixty (60) days of such
termination or, if later, within sixty (60) days after the Corporation is able
to repurchase such shares in compliance with all applicable laws, rules and
regulations.  The Grantee and the
Corporation shall mutually agree on the fair market value for such shares, and
in the event that no mutual agreement can be reached, the determination of the
fair market value of such shares shall be as determined in accordance with an
appraisal procedure set out in a letter agreement of even date herewith.  The Grantee’s right under this Section 13 is
subject to the Corporation’s ability to effect such a repurchase of shares in
compliance with all applicable laws, rules and regulations.

 

14.           Data Privacy Consent.  The Grantee hereby explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of
his personal data as described in this Agreement by and among, as applicable,
the Corporation, its Subsidiaries and Salomon Smith Barney for the exclusive
purpose of implementing, administering and managing the Grantee’s participation
in the Plan.

 

The
Grantee understands that the Corporation may hold certain personal information
about the Grantee, including, but not limited to, his name, home address and
telephone number, date of birth, social security number or other identification
number, salary, nationality, job title, any shares of Common Stock or
directorships held in the Corporation, details of all Options or any other
entitlement to shares of Common Stock awarded, canceled, exercised, vested,
unvested or outstanding in the Grantee’s favor, for the purpose of
implementing, administering and managing the Plan (“Data”).  The Grantee further understands that Data may
be transferred to any third parties assisting in the implementation,
administration and management of the Plan. 
The Grantee understands that he may request a list with the names and addresses of any
potential recipients of the Data by contacting his local human resources
representative.  The Grantee authorizes
the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and
managing the Grantee’s participation in the Plan, including any requisite
transfer of such Data as may be required to Salomon Smith Barney or another
broker, escrow agent or other third party with whom the shares acquired upon
exercise of the Option may be deposited. 
The Grantee understands that Data will be held only as long as is
necessary to implement, administer and manage the Grantee’s participation in
the Plan.  The Grantee understands that
he may, at any time, view Data, request additional information about the
storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing his or her local human resources representative.  The Grantee understands that refusal or
withdrawal of consent may affect his ability to participate in the Plan.  For more information on the consequences of
the Grantee’s refusal to consent or withdrawal of consent, the Grantee
understands that he may contact his local human resources representative.

 

7

 

15.           Acknowledgment.  In accepting the grant, the Grantee acknowledges
that: (i) the Plan is established voluntarily by the Corporation, it is
discretionary in nature and may be modified, suspended or terminated by the
Corporation at any time, as provided in the Plan and this Agreement, provided
that any such modification, suspension or termination shall not reduce or
adversely affect the Grantee’s rights under the Option; (ii) the grant of the
Option is voluntary and occasional and does not create any contractual or other
right to receive future grants of Options, or benefits in lieu of Options even
if Options have been granted repeatedly in the past; (iii) all decisions with
respect to future grants, if any, will be at the sole discretion of the
Corporation; (iv) the Grantee’s participation in the Plan shall not create a
right to further employment with the Corporation and shall not interfere with
the ability of the Corporation to terminate the Grantee’s employment
relationship at any time with or without cause, except as provided in the
Employment Agreement; (v) the Grantee’s participation in the Plan is voluntary;
(vi) the Option is an extraordinary item that does not constitute compensation
of any kind for services of any kind rendered to the Corporation which is
outside the scope of the Grantee’s employment contract (except as expressly
provided herein); (vii) the Option is not part of normal or expected
compensation or salary for any purposes, including, but not limited to,
calculating any severance, resignation, termination, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments; (viii) in the event that the Grantee is not an employee of
the Corporation, the Option grant will not be interpreted to form an employment
contract or relationship with the Corporation; and furthermore, the Option
grant will not be interpreted to form an employment contract with any
Subsidiary of the Corporation; (ix) the future value of the underlying shares
is unknown and cannot be predicted with certainty; (x) if the underlying shares
do not increase in value, the Option will have no value; (xi) if the Grantee
exercises the Option and obtains shares, the value of those shares acquired
upon exercise may increase or decrease in value, even below the Grant Price;
(xii) no claim or entitlement to compensation or damages arises from
termination of the Option or diminution in value of the Option or shares
purchased through exercise of the Option and the Grantee irrevocably releases
the Corporation from any such claim that may arise; and (xiii) except as
expressly provided herein, in the event of involuntary termination of the
Grantee’s employment, the Grantee’s right to receive Options under the Plan, if
any, will terminate effective as of the date that the Grantee is no longer
actively employed.

 

16.           Plan.  Except as set
forth herein, the Option and all rights of the Grantee under this Agreement are
subject to, and the Grantee agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, incorporated herein by this
reference.  The Grantee acknowledges
receipt of a copy of the Plan and agrees to be bound by the terms thereof.  Unless otherwise expressly provided in other
sections of this Agreement, provisions of the Plan that confer discretionary
authority on the Committee (or the Board) 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 Committee (or the Board)
so conferred by appropriate action of the Committee (or the Board) under the
Plan after the date hereof and evidenced in a writing authorized by the
Committee.  The Option and the issuance
and delivery of shares of Common Stock under the Option are subject to
compliance with Section 4.4 of the Plan.

 

8

 

17.           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.

 

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

 

19.           Governing Law.  This 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.

 

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

 

21.           Entire Agreement.  This Agreement,
together with the Employment Agreement,  embodies the entire agreement of the
parties hereto respecting the matters within its scope.  This Agreement 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 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 Agreement, together with the Employment
Agreement, is an integrated Agreement as to the subject matter hereof.

 

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

 

23.           Waiver.  Neither the failure nor any delay on the part
of a party to exercise any right, remedy, power or privilege under this
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.

 

9

 

24.           Resolution of Disputes. 
Except as set forth in Section 13, any dispute, claim or controversy
arising out of or relating to this Award Agreement, including the enforcement
or interpretation of any provision of this Award Agreement, shall be submitted
to arbitration in accordance with the provisions set forth in Section 22 of the
Employment Agreement.

 

25.           Notices.

 

(a)           All notices,
requests, demands and other communications required or permitted under this
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:

 

(i)  if to the Corporation:

 

MSC.Software
Corporation

2 MacArthur Place

Santa Ana,  California 92707

Attn: Board of Directors

 

with
a copy to:

 

Jeffrey W.
Walbridge, Esq.

O’Melveny &
Myers LLP

610 Newport Center
Drive, Suite 1700

Newport Beach,
California 92660

 

(ii)  if to the Grantee:

 

William J. Weyand

6805 Alberly Lane

Cincinnati, Ohio
45243

 

(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 14 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.

 

26.           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 Agreement. 
Hence, in any construction to be made of this 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
Agreement completes, is entering into it freely and voluntarily, and has 

 

10

 

been advised to seek
counsel prior to entering into this Agreement and has had ample opportunity to
do so.

 

27.           Counterparts.  This 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
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.

 

IN
WITNESS WHEREOF, the Corporation has caused this Agreement to
be executed on its behalf by a duly authorized officer and the Grantee as of
the Effective Date.

 

	
   

  	
  MSC.SOFTWARE
  CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: John Laskey

  
	
   

  	
  Title: Senior Vice
  President, Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRANTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  William J. Weyand

  
					

 

11

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