Document:

exv10w8

 

Exhibit 10.8

December 2, 2004

Mr. John Graham

3333 Stanford Ave

Dallas, TX 75225

Dear John:

I am pleased to extend to you an offer to join UGS as Senior Vice President, America Sales. I
believe this offer provides a unique opportunity to enhance your career as an executive leader and
to contribute significantly to the future of UGS. Your start will be January 3, 2005.

Your initial base annual salary will be $300,000 to be paid in twenty-four (24) semimonthly
payments. In addition to base salary, you will be eligible for an annual performance-based
incentive opportunity equal to 70% of annual salary. Furthermore, you will have the opportunity to
participate in UGS benefit programs and paid vacation of four weeks per year.

You will receive a lump sum amount of $70,000 upon hire. This amount will be deducted from any
future UGS bonus you earn starting with the 2005 plan year. If you voluntarily terminate your
employment with UGS or are involuntarily terminated for “Cause” as described below, you agree to
repay UGS any part of the above amount which has not been previously deducted from your bonus
earnings.

You will be granted 250,000 shares of UGS stock option as part of your compensation package.

If you accept our offer to join UGS, be advised that UGS Code of Business Conduct and Ethics
requires you to honor any agreements you have with previous employers including obligations
regarding the disclosure or use of proprietary information.

Along with this letter you will receive the UGS Employee Agreement that covers issues such as
proprietary information, non-compete, and confidentiality. This Agreement is required for all
employees joining UGS.

In the event that your employment with UGS is involuntarily terminated for reason other than for
“Cause”, you will be considered for a severance consistent with our board approved practice for
executives, payable within 14 days of your separation. For the purpose of this agreement, “Cause”
is defined as (a) material breach of any agreement entered into between you and UGS; (b) gross
negligence or willful misconduct in the performance of your duties and responsibilities; (c)
material failure or refusal to faithfully, diligently, and competently perform the usual and
customary duties associated

 

 

with your position; (d) material failure to follow UGS’ policies, directives or orders applicable
to UGS employees holding comparable positions; (e) intentional destruction or theft of UGS property
or falsification of UGS documents; (f) conviction of a felony or any crime involving moral
turpitude; or (g) other neglect, misconduct or conduct that is materially harmful to the operation,
business, interest or reputation of UGS, which neglect, if susceptible to cure, remains uncured
after written notice specifying such neglect, misconduct or conduct.

The UGS offer of employment is contingent upon your passing various UGS pre-employment screens
including a background check and drug test.

As a U.S. employer, UGS is required to review documentation verifying your identity and
authorization to work in the United States. This documentation can be presented on your first day
of employment.

Please understand nothing in this letter alters the at-will nature of your employment relationship
with UGS. In that regard, either you or UGS may terminate your employment at any time, for any
reason, with or without notice.

To accept this offer and the terms set forth in this letter please sign, date and return the letter
to me. Additionally, please sign and return the UGS Employee Agreement that is included with this
letter. A return Federal Express mailer has been included for your convenience.

If you need any additional information about UGS benefits or any details associated with this offer
of employment, please contact me at 972.987.3354.

I believe UGS can offer you opportunities and challenges that will be professionally rewarding and
mutually satisfying. I am enthusiastic about having you as a valued member of our executive team.

Sincerely,

/s/ Dan Malliet

Dan Malliet

SVP, Human Resources

UGS

PWO/srb

Enclosures

I ACCEPT THE TERMS OF EMPLOYMENT OUTLINED IN THIS LETTER.

	 	 	 
	     /s/ John Graham

	 	      12/5/04
	 

	 	 
	Candidate Signature

	 	Dateexv10w12a

 

Exhibit 10.12a

AGREEMENT

     This is an Agreement among UGS Capital Corp., (“Capital Corp.”), UGS Capital Corp. II
(“Capital Corp II”), UGS Corp., (“UGS Corp.”), all Delaware corporations, (collectively and
individually, the “Company”), and the undersigned (the “Employee”), entered into in connection with
certain awards previously made to the Employee under the UGS Capital Corp. and UGS Capital Corp. II
2004 Management Incentive Plan (the “Management Incentive Plan”).

     WHEREAS:

     A. As of May 27, 2004, the Employee received awards (the “Awards”) from Capital Corp. and
Capital Corp. II under the terms of the UGS Capital Corp. Non-Qualified Roll-Over Option and
Conditional Deferred Cash Award Agreement and the UGS Capital Corp. II Non-Qualified Roll-Over
Option and Conditional Deferred Cash Award Agreement (the “Award Agreements”);

     B. The Awards granted options (the “Options”) to the Employee to purchase stock of Capital
Corp. and Capital Corp. II and, in connection with the Options, granted to the Employee the right
to receive from UGS Corp conditional deferred cash awards (the “Deferred Cash Awards”), but only
if, when, and to the extent, that the Options were exercised;

     C. In October, 2004, Congress enacted into law Section 409A of the Internal Revenue Code
(“409A”), placing restrictions on the payment of deferred compensation and imposing severe
penalties on recipients of nonqualifying deferred compensation;

     D. Under the initial guidance on 409A issued by the Internal Revenue Service (the “IRS
Guidance”), a stock option coupled with a cash bonus that is payable only upon exercise of the
option would be treated as nonqualifying deferred compensation;

     E. By statute, 409A applies to pre-existing deferred compensation arrangements to the extent
that rights under such arrangements were not scheduled to vest before the end of 2004;

     F. The Awards were not scheduled to vest fully before the end of 2004 and are therefore
subject, at least in part, to 409A;

     G. Under the IRS Guidance, nonqualifying deferred compensation awards may be terminated or
amended to comply with 409A during calendar-year 2005, provided that the arrangement is operated in
good faith prior to such termination or amendment; and

     H. The parties wish to terminate that part of the Awards that might cause the Awards to be
treated as nonqualifying deferred compensation arrangements and

Exhibit 10.12A Affuso Agreement

 

 

substitute therefor arrangements that will qualify under 409A or fall outside the bounds of 409A.

     THEREFORE, the parties agree as follows:

     1. Each Award Agreement is amended to delete Section 10, entitled “Conditional Deferred Cash
Award,” and all other references in the Award Agreements to “conditional deferred cash award” or
“deferred cash award” shall be of no effect. As a result of this amendment, exercise of an Option
will not cause the payment of any cash award to the Employee. All other terms and conditions of
the Award Agreements remain in full force and effect.

     2. On July 15, 2005, UGS Corp. will pay to the Employee a cash bonus in the amount shown on
the attached schedule (less applicable tax withholding) (“2005 Cash Bonus Amount”). This amount
equals the “conditional deferred cash award” that the Employee would have been eligible to receive
upon exercise of vested options prior to the date of this Agreement.

     3. UGS Corp. will pay to the Employee on the Company’s next regularly-scheduled payroll date
following the Payment Event (as defined below) an additional cash bonus in the amount shown on the
attached schedule (“Additional Cash Bonus”), less applicable tax withholding. This amount
represents the remainder of the “conditional deferred cash award”. A Payment Event shall be the
earliest of: (a) May 27, 2006, if the Employee’s Employment (as defined in the Management Incentive
Plan) has not been terminated previously; (b) the effective date of termination of Employee’s
Employment by the Company other than for Cause (as defined in the Award Agreement); and (c) the
effective date of a Change in Control (as defined below). For purposes of this Agreement “Change
in Control” means an event that is both a “Change in Control” as defined for purposes of the
Management Incentive Plan and a “Change in Control Event” as defined for purposes of 409A.

     4. To the extent the Employee is not entitled to receive his bonus (a) prior to the cessation
of Employment or (b) upon cessation of Employment as set forth in Paragraph 3 above, then upon
cessation of Employment, Employee’s right to receive any remaining cash bonus will be forfeited.

     5. Notwithstanding the foregoing, unless contrary to applicable law or the terms of a written
agreement signed by an officer of UGS, your employment with UGS is for an indefinite term and is
terminable, with or without cause, at any time by either you or the Company. Nothing in this
Agreement, will be construed to oblige UGS to continue your employment for any particular time or
under any particular terms or conditions of employment.

					
	 	 	 	 	 
	Exhibit 10.12A Affuso Agreement
	 	
	 	 

-2-

 

     Executed as of the 8th day of July, 2005.

	 	 	 	 	 
	UGS Capital Corp.	 	UGS Capital Corp.
	 
	 	 	 	 
	 

	 	 	 	/s/ Thomas M. Lemberg
	 	 	 
	 
	 	 	 	 
	UGS Corp.	 	UGS Corp.
	 
	 	 	 	 
	 

	 	 	 	/s/ Thomas M. Lemberg
	 	 	 
	 
	 	 	 	 
	Employee	 	/s/ Anthony J. Affuso
	 	 	 
	 	 	Name: Anthony J. Affuso

					
	 	 	 	 	 
	Exhibit 10.12A Affuso Agreement
	 	
	 	 

-3-

 

Schedule A

2005 Cash Bonus: $327,749.46*

Additional Cash Bonus $327,750.27*

 

* Subject to applicable tax withholding amounts.

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