Exhibit 10.1
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AGREEMENT BETWEEN
UNIGRAPHICS SOLUTIONS INC.
AND
XXXX X. XXXXXXX
This Agreement between Unigraphics (hereinafter defined) and Xxxx X.
Xxxxxxx ("Executive") is entered into effective as of the Effective Date
(hereinafter defined).
I. RECITALS
1. Executive has been employed as an executive of Unigraphics, an affiliate of
Electronic Data Systems Corporation, and in such capacity has had access to and
has obtained trade secrets, and highly confidential business, technological,
customer, and strategic information, as well as business and other proprietary
information relating to the internal affairs of Unigraphics.
2. Executive and Unigraphics acknowledge and agree that this Agreement
supersedes and renders null and void the Personal Services Agreement between the
parties dated March 1, 1998. Pursuant to the terms of this Agreement, Executive
will receive substantial compensation and other benefits with respect to his
employment with Unigraphics that otherwise would not be available to him.
3. As set forth below, Unigraphics is providing the Executive benefits of
substantial value under this Agreement, and Executive agrees to be strictly
bound by the terms hereof.
THEREFORE, in order to set forth the terms, conditions and covenants upon
which the parties have agreed, Unigraphics and Executive agree as follows:
II. CERTAIN DEFINITIONS.
1. "Unigraphics" shall mean Unigraphics Solutions Inc., a Delaware
corporation, and its principal shareholder, Electronic Data Systems Corporation,
a Delaware corporation, all their direct and indirect subsidiaries, all their
affiliated entities, and all their successors and assigns, and the employees,
agents, attorneys, officers and directors of each of them.
2. "Unigraphics Information" shall mean all business information,
technological information, intellectual property, trade secrets, customer and
other confidential information belonging to Unigraphics or relating to
Unigraphics' internal affairs, or information relating to its business,
technology and customers which is not readily available to the general public.
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3. The term "Participate" shall mean lending one's name to, acting as a
consultant or advisor to, being retained or employed by, or acquiring any direct
or indirect interest in any business or enterprise, whether as a stockholder,
partner, officer, director, employee or otherwise (other than by ownership of
less than five percent of the stock of a publicly-held corporation).
4. The term "Effective Date" shall be the date seven days after Executive
signs this Agreement on the signature page below.
5. "Cause" shall mean a good faith determination by Unigraphics that Executive
has engaged in the following: (a) willful neglect of duties or gross misconduct
in the performance of assigned duties; (b) willful engagement in conduct that is
detrimental to Unigraphics' reputation or business operations; (c) willful
engagement in conduct that interferes with Unigraphics' ability to secure or
renew future contracts; (d) conduct that results in Executive being convicted of
a felony or misdemeanor involving moral turpitude; or (e) failure or refusal to
materially comply with Unigraphics policies, procedures, and/or Unigraphics'
Code of Conduct.
III. TERMS
1. Employment. Executive agrees to remain employed in a Senior Executive
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Position (defined as President and/or Chief Executive Officer and/or other
executive position as determined by the Board of Directors of Unigraphics and to
continue to perform the duties and responsibilities associated with such Senior
Executive Position until the later of March 31, 2001 or such time as Unigraphics
actively employs a new Chief Executive Officer and/or President. The later of
March 31, 2001 or such time as Unigraphics actively employs a new Chief
Executive Officer and/or President is referred to as the "Transition Date." On
the Transition Date, Executive shall resign from his Senior Executive Position
(and correspondingly cease performing the duties and responsibilities associated
with such position). Also, Executive agrees to resign from his directorship
position on the Unigraphics Board of Directors on the Transition Date or, if
requested by the Unigraphics Board of Directors in order to accommodate the
transition of the new President and/or Chief Executive Officer, before the
Transition Date. Nevertheless, from the Transition Date until March 31, 2003,
Executive agrees to remain employed by Unigraphics in an advisory capacity. As
of the close of business on March 31, 2003, Executive shall terminate his
employment with Unigraphics, and resign from all positions held by him as an
employee of Unigraphics. Executive acknowledges that during the period of time
he remains employed by Unigraphics, he can be discharged for Cause (as defined
in Section II of this Agreement) or he can voluntarily terminate his employment.
Executive acknowledges that if he is discharged for Cause or if he voluntarily
terminates his employment, he shall not receive the unconveyed compensation and
consideration described in Subsections 4(a), 4(b), and 4(c) of Section III of
this Agreement. Executive further acknowledges he remains an at-will employee
and can be terminated by Unigraphics with or without Cause at any time, with or
without notice. However, Unigraphics agrees that if it terminates Executive
without Cause prior to March 31, 2003, he will remain entitled to receive the
unconveyed compensation and consideration described in Subsections 4(a), 4(b),
and 4(c) of Section III of this Agreement
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2. Non-Competition and Other Conduct. Executive acknowledges and agrees that
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under the terms and the provisions of this Agreement, and in consideration for
compliance with the terms, conditions and covenants hereunder, he will receive
benefits from Unigraphics that would not otherwise be available to him, and that
such benefits are substantial and material. Executive further acknowledges and
agrees that in the course of his employment with Unigraphics he has been
entrusted with, and been privy to, sensitive, privileged and confidential
Unigraphics Information, and as an executive of Unigraphics has participated in
the legal affairs, management, strategic planning and development of the
business and services of Unigraphics, the analysis of the needs and requirements
of Unigraphics' customers, and other similar matters that, if discussed,
communicated, or disclosed to third parties or used in competition with
Unigraphics, would be highly detrimental to Unigraphics. In addition, Executive
has been entrusted with, and has obtained, other Unigraphics Information.
Accordingly, Executive agrees to the following provisions and covenants:
2.1 Non-Competition. For the period of time that Executive is receiving
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cash or stock benefits pursuant to Subsection 4 hereof and for two years
thereafter, Executive will not (without Unigraphics' express written waiver),
directly or indirectly, engage in the following conduct wherever Unigraphics is
marketing or providing its services or products:
a. Participate in any activity as or for a competitor of
Unigraphics, which is the same or similar to the activities in
which Executive was involved at Unigraphics;
b. Hire, attempt to hire or assist any other person or entity in
hiring or attempting to hire an employee of Unigraphics, or any
person who was a Unigraphics employee within the preceding six-
month period;
c. Solicit, in competition with Unigraphics, the business of any
Unigraphics customer or any entity whose business Unigraphics was
actively soliciting during the preceding six-month period;
d. Consult with or accept employment with any existing or
prospective customer, contractor or venture partner of
Unigraphics with respect to any matters or transactions in which
Unigraphics has an economic or financial interest (for purposes
of this Subsection 2.1d., prospective customer, contractor or
venture partner means any person or entity to or with which
Unigraphics is proposing or negotiating any business
relationship);
e. Participate voluntarily with any person or entity that is
involved in a potential or existing business or legal dispute
with Unigraphics, including but not limited to litigation, except
as may be required by law.
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2.2 Other Conduct. Following the Transition Date and except as reasonably
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comprehended as part of his defined role as an employee of Unigraphics (as that
role is defined from time-to-time by the Board or the President and Chief
Executive Officer of Unigraphics), Executive will not discuss, disclose,
communicate, or use for any purpose any Unigraphics Information. By way of
example and not by way of limitation, absent written approval from Unigraphics,
Executive shall not publish any books or articles related to his employment at
Unigraphics and shall not grant interviews and/or make appearances related to
his employment at Unigraphics. Executive also agrees that absent written
approval by Unigraphics, he shall make no public statements nor publish in any
form any information related to his separation and/or pending separation from
Unigraphics. Executive further agrees he will not commit any act or make any
statement that is, or could reasonably be interpreted as, detrimental to the
business, reputation, or good will of Unigraphics, including disparaging or
embarrassing Unigraphics or its officers, directors, agents, attorneys and other
personnel, or discussing the internal or private business affairs of Unigraphics
with any third parties. However, Subsection 2.2 shall not prohibit Executive
from communicating to third parties general information about his duties and
responsibilities while employed by Unigraphics, general information about
Unigraphics that is readily available to the general public, and general
information about the positions he held while employed by Unigraphics. Upon the
termination of his employment (or as otherwise requested by Unigraphics),
Executive shall return to Unigraphics all Unigraphics property and equipment,
and, any and all documents (including all electronic material and duplicate
copies) and other tangible items of or containing Unigraphics Information which
are in Executive's possession, custody or control, or which come into his
possession, custody, or control. Unigraphics and Executive acknowledge that the
terms of this Paragraph shall not preclude Executive from providing truthful
testimony if mandated by subpoena or court order to do so.
2.3 Remedies. If the scope of any provision contained in Subsection 2 of
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Section III of this Agreement is too broad to permit enforcement of such
provision to its full extent, then such provision shall be reformed and/or
modified to exclude the unenforceable language, and enforced as reformed or
modified to the maximum extent permitted by law, in any proceedings brought to
enforce such provision. Subject to the provisions of the foregoing sentence,
whenever possible, each provision of Subsection 2 of Section III of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision, to the extent of
such prohibition or invalidity, shall be deemed not to be a part of this
Agreement, and shall not invalidate the remainder of such provision or the
remaining provisions of this Agreement. Executive understands and agrees that
Unigraphics would be irreparably damaged in the event that the provisions of
Subsection 2 of Section III of this Agreement are violated, and agrees that
Unigraphics shall be entitled (in addition to any other remedy to which it may
be entitled, at law or in equity) to an injunction or injunctions to redress
breaches of this Agreement and to specifically enforce the terms and provisions
hereof. Executive shall be responsible for reimbursing Unigraphics for the costs
and attorneys' fees associated with litigation pursuant to Subsection 2 of
Section III of this Agreement.
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3. Cooperation. Executive covenants and agrees that from and after the
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Effective Date, he will cooperate fully with Unigraphics, its officers,
employees, agents, affiliates and attorneys in the defense or prosecution of any
lawsuit, dispute, investigation or other legal proceedings or any preparation
for any such disputes or proceedings that may be anticipated or threatened
("Proceedings"). Executive further covenants and agrees that he will cooperate
fully with Unigraphics, its officers, employees, agents, affiliates and
attorneys on any other matter ("Matters") related to Unigraphics business during
the period of Executive's employment with Unigraphics. Executive also covenants
and agrees that he will cooperate fully with Unigraphics, its officers,
employees, agents, affiliates and attorneys in responding to any form of media
inquiry or in making any form of public comment related to his employment at
Unigraphics, including, but not limited to, his separation from Unigraphics.
Such cooperation shall include providing true and accurate information or
documents concerning, or affidavits or testimony about, all or any matters at
issue in any Proceedings/Matters as shall from time to time be requested by
Unigraphics, and shall be within the knowledge of Executive. Such cooperation
shall be provided by Executive without remuneration, but Executive shall be
entitled to reimbursement for all reasonable and appropriate expenses incurred
by him in so cooperating, including (by way of example and not by way of
limitation) airplane fares, hotel accommodations, meal charges and other similar
expenses to attend Proceedings/Matters outside of the city of Executive's
residence. In the event Executive is made aware of any issue or matter related
to Unigraphics, is asked by a third party to provide information regarding
Unigraphics, or is called other than by Unigraphics as a witness to testify in
any matter related to Unigraphics, Executive will notify Unigraphics immediately
in order to give Unigraphics a reasonable opportunity to respond and/or
participate in such Proceeding/Matter.
4. Compensation, Benefits and Other Consideration to be Received by Executive.
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Following the Effective Date of this Agreement and subject to Executive's
strict, ongoing compliance with the terms, conditions, and covenants in this
Agreement, Executive shall be entitled to the following compensation, benefits
and other consideration to be paid or conveyed pursuant to the terms, conditions
and covenants in this Agreement, as set forth below:
a. Until the Transition Date, Executive shall continue to be paid his
current annual salary of $340,000 (on a semi-monthly basis).
Subsequent to the Transition Date and during the time period Executive
is employed by Unigraphics in an advisory capacity pursuant to
Subsection 1 of Section III of this Agreement, Executive shall be paid
an annual salary of $170,000 (on a semi-monthly basis) and shall
continue to be eligible to participate in Unigraphics' health and
welfare benefit plans, as well as the Unigraphics' Executive Deferral
Plan. Executive shall be eligible for a 2000 bonus award as
determined by the Compensation Committee of the Board of Directors of
Unigraphics in accordance with 2000 Executive Bonus Plan ("EBP").
Executive's 2000 EBP target is USD $340,000, and any award will be as
determined by the Compensation Committee based upon Unigraphics
performance and Executive's individual performance during calendar
year 2000. Also, Executive
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shall receive an option to purchase 50,000 additional Unigraphics
Class A Common Shares at a purchase price of $22.5625 and in
accordance with terms to be set forth in a Nonqualified Stock Option
Agreement between Executive and Unigraphics. Executive acknowledges
that, except as otherwise provided in this Agreement and unless
otherwise specifically authorized by the Unigraphics' Compensation
Committee, he shall receive no further bonus payments of any kind from
Unigraphics. Executive further acknowledges that, except as otherwise
provided in this Agreement and unless otherwise specifically
authorized by the Unigraphics' Compensation Committee, he shall
receive no additional awards under either EDS' or Unigraphics'
Incentive Plans.
b. The restricted stock unit shares of EDS common stock awarded to
Executive under the provisions of the EDS Stock Incentive Plan,
scheduled for vesting in the years 2001, 2002 and 2003 (3,600 shares
in the aggregate), shall, subject to the terms of this Agreement, vest
according to the following schedule:
1997 Award
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March 2001 1,200
March 2002 1,200
March 2003 1,200
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3,600
The above-referenced shares shall vest pursuant to and in accordance
with the terms of the Stock Incentive Plan and the individual
agreements with Executive awarding such shares, excluding the
performance objective contingency contained in Paragraph 2(a) and the
contingencies contained in Paragraphs 3(a), 3(c), and 3(d) of
Executive's Restricted Stock Unit Agreement dated January 3, 1997.
Executive shall continue to receive dividend payments on only those
shares of stock that will vest to him pursuant to the terms of this
Subsection 4(b). All other unvested shares of stock/stock options
awarded or made available to Executive pursuant to EDS' Stock
Incentive Plan are forfeited as of the Effective Date of this
Agreement.
c. The option shares of Unigraphics Class A Common Stock awarded to
Executive under the provisions of the 1998 and 2000Incentive Plans of
Unigraphics Solutions Inc. Nonqualified Stock Option Agreements dated
June 23, 1998, April 22, 1999, and June 23, 2000 (collectively
hereinafter the "Incentive Plan Nonqualified Agreements") (265,000
shares in the aggregate), shall continue to vest pursuant to and in
accordance with the 1998 and 2000 Incentive Plans and the Incentive
Plan Nonqualified Agreements, respectively, awarding such option
shares.
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The foregoing compensation, benefits and other consideration to be received by
Executive constitute his sole and exclusive rights to any payments or benefits
from Unigraphics, and Executive shall receive no consideration or benefits other
than those expressly granted herein, except for benefits to which he is entitled
under any Unigraphics plan qualified under Section 401(a) of the Internal
Revenue Code.
5. Indemnification of Executive. Unigraphics agrees to indemnify Executive
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pursuant to the terms of the Indemnification Agreement dated June 17, 1998.
6. Effect of Executive's Death. In the event of Executive's death, where a
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particular payment or benefit is not payable to a designated beneficiary or
pursuant to the provisions of a controlling document, then his estate shall
receive, if not already delivered, the compensation or benefit set forth in
subparagraph 4 above.
7. Complete Release. Executive agrees to release Unigraphics from all claims
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or demands Executive may have against Unigraphics, including, but not limited
to, any claims related to Executive's employment with Unigraphics or separation
from that employment and any claims for attorneys fees and costs. This Agreement
includes, without limitation, a release of any rights or claims Executive may
have under the Age Discrimination in Employment Act, as amended, which prohibits
age discrimination in employment; Title VII of the Civil Rights Act of 1964, as
amended, which prohibits discrimination in employment based on race, color,
national origin, religion or sex; the Americans with Disabilities Act, as
amended, which prohibits discrimination against individuals with disabilities;
the Fair Labor Standards Act, as amended, which regulates matters regarding
compensation; the Family and Medical Leave Act, as amended, which regulates
matters regarding certain types of leaves; or any other federal, state or local
laws or regulations that in any way relate to the employment of individuals
and/or prohibit employment discrimination of any form. This Agreement also
includes, without limitation, a release by Executive of any related or unrelated
wrongful discharge claims, contractual claims, tort claims or any other actions.
This Agreement covers both claims that Executive knows about and those he may
not know about. Executive expressly waives any right to assert after signing
this Agreement that any claim, demand, obligation, or cause of action has
through ignorance, oversight, or for any other reason, been omitted from the
scope of Subsection 7 of Section III of this Agreement.
This Agreement does not include a release of (i) Executive's right, if any, to
benefits Executive is entitled to under any Unigraphics plan qualified under
Section 401(a) of the Internal Revenue Code, COBRA benefits pursuant to Internal
Revenue Code section 4980B, or (ii) any rights or claims Executive may have
under the Age Discrimination in Employment Act which arise after the date
Executive signs this Agreement.
8. Non-Admission of Liability. By entering into this Agreement, Unigraphics
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does not admit it has done anything wrong.
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9. Period for Review and Consideration of Agreement. Executive understands
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he has been given a period of 21 days to review and consider this Agreement
before signing it. Executive further understands he may use as much of the 21
day period as he wishes prior to signing.
10. Encouragement to Consult with Attorney. Executive acknowledges he was
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advised in writing to consult with an attorney before signing this Agreement.
11. Employee's Right to Revoke Agreement. Executive may revoke this Agreement
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within seven days of signing it. Revocation must be made by delivering a
written notice of revocation to Unigraphics. For the revocation to be effective,
written notice must be received by Unigraphics no later than the close of
business on the seventh day after Executive signs this Agreement. If Executive
revokes this Agreement, it shall not be effective or enforceable and Executive
will not receive the benefits described in Subsection 4 of Section III or any
other payments or benefits from Unigraphics, except those to which he otherwise
is entitled by law.
12. Amendments. This Agreement may not be modified or amended, and there shall
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be no waiver of its provisions, except by a written instrument executed by
Executive and a corporate officer of Unigraphics.
13. Entire Agreement. This Agreement, in conjunction with Executive's
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Restricted Stock Unit Agreement dated January 3, 1997, Executive's Nonqualified
Stock Option Agreement dated June 23, 1998, Executive's Nonqualified Stock
Option Agreement dated April 22, 1999, Executive's Nonqualified Stock Option
Agreement dated June 23, 2000, and Executive's Indemnification Agreement dated
June 17, 1998, all of which are incorporated herein by reference, constitute the
entire agreement of the parties, and supersede and prevail over all other prior
agreements, understandings or representations by or between the parties, whether
oral or written, with respect to Executive's employment with Unigraphics and the
subject matters herein, including without limitation the Personal Services
Agreement dated March 1, 1998. To the extent provisions in this Agreement
directly conflict with provisions in the above-referenced Restricted Stock Unit
Agreement and/or Nonqualified Stock Option Agreements, the provisions in this
Agreement shall control.
14. Consequences of Executive's Breach. Executive agrees that if he violates,
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or fails to strictly respect, honor and comply with any term, condition or
covenant herein, in addition to having its other legal and equitable remedies,
Unigraphics is discharged and released from its obligations under this
Agreement, including, but not limited to, all obligations to provide any unpaid
or unconveyed salary, payments, benefits, or other remuneration described in
Subsection 4 of Section III of this Agreement. Executive also recognizes and
agrees that if he violates any of the terms of this Agreement, this Agreement
shall remain in full force and effect, including his release of all claims.
Additionally, if Executive breaks his promise in Subsection 7 of Section III of
this Agreement and files a lawsuit or claim based on legal claims that have been
released, Executive will pay for all costs incurred by Unigraphics, including
its attorneys' fees, in defending against Executive's
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lawsuit and/or claims. In addition, if Executive breaks his promise in
Subsection 7 of Section III of this Agreement and files a lawsuit or claim based
on legal claims that have been released, he will pay as liquidated damages to
Unigraphics a sum of money equal to the gross consideration already provided to
Executive pursuant to Subsection 4 of Section III of this Agreement, including,
but not limited to, the monetary equivalent of all previously conveyed non-cash
benefits.
In addition to the consequences described above, if Executive breaks any of the
promises he made in Subsections 2.1, 2.2, 3, or 14 of Section III of this
Agreement, Employee acknowledges the calculation of the harm done to
Unigraphics, and the resulting damages would be extremely difficult to
determine. Therefore, Executive agrees that in the event he breaks any of the
promises he made in Subsections 2.1, 2.2, 3, or 14 of Section III of this
Agreement, he will pay as liquidated damages to Unigraphics a sum of money equal
to the gross consideration already provided to Executive pursuant to Subsection
4 of Section III of this Agreement, including, but not limited to, the monetary
equivalent of all previously conveyed non-cash benefits.
15. Confidentiality. Executive and Unigraphics agree the terms of this
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Agreement shall be kept strictly confidential, except as may be required by law,
and, in the case of Unigraphics, disclosure is permitted as necessary for
internal business purposes. Executive may disclose such information to his
spouse, to individuals retained by him to provide advice/guidance on personal
financial and/or legal matters, or as may be required by a financial institution
for business reasons (but in all such instances only if Executive shall have
first obtained from such individuals and/or institutions their written agreement
to maintain the confidentiality of such information).
16. Governing Law. This Agreement and its enforceability shall be governed by
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and construed in accordance with the substantive law of the State of Missouri.
Any dispute or conflict arising out of or relating to this Agreement, except for
an action brought by Unigraphics pursuant to Subsection 2 of Section III of this
Agreement, must be brought in a court that has jurisdiction over matters in St.
Louis County, Missouri. Furthermore, Executive agrees such court shall have
personal jurisdiction over him and further agrees to waive any rights he may
have to challenge the court's jurisdiction over him.
17. Notices. All notices and other communications hereunder shall be in
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writing and shall be given by telecopy or facsimile transmission at the
telecommunications number set forth below, by hand delivery to the other party
or by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows and shall be effective upon receipt:
If to the Executive:
Xxxx X. Xxxxxxx
0000 Xxxxxxxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxx 00000
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If to Unigraphics:
Telecommunications Number: (000) 000-0000
Xxxxxxx X. Xxxxxxx
Unigraphics Solutions Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
With a copy to:
Telecommunications Number: (972) 605-3454
0000 Xxxxxx Xxxxx X0-0X-00
Xxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Director, Corporate Compensation
EXECUTIVE ACKNOWLEDGES HE HAS READ THIS AGREEMENT, UNDERSTANDS IT AND IS
VOLUNTARILY ENTERING INTO IT.
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.
IN WITNESS WHEREOF, the parties have executed this Agreement to be binding
and enforceable on the Effective Date.
EXECUTIVE: Unigraphics:
/s/ Xxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxx X. Xxxxxxx By: Xxxxxxx X. Xxxxxx
Chairman
Dated: 6/23/2000 Dated: 6/26/2000
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