PERSONAL SERVICES AGREEMENT

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EXHIBIT 10.7

PERSONAL SERVICES AGREEMENT

THIS PERSONAL SERVICES AGREEMENT ("Agreement") is entered into between

UNIGRAPHICS SOLUTIONS INC. ("UGS" or "Company") and Charles C. Grindstaff

("Executive"), to be effective July 15, 2000 ("Effective Date").

RECITALS

WHEREAS, UGS desires to employ Executive pursuant to the terms and

conditions and for the consideration set forth in this Agreement, and Executive

desires to enter the employ of UGS pursuant to such terms and conditions and for

such consideration; and

WHEREAS, The provisions of this Agreement are a condition of Executive's

being employed by UGS, or Executive's having access to confidential business and

technological information, and Executive's being eligible to receive certain

benefits at UGS. This Agreement is entered into, and is reasonably necessary, to

protect confidential information and customer relationships to which Executive

may have access, and to protect the goodwill and other business interests of

UGS; and

WHEREAS, The Compensation Committee of the UGS Board of Directors has

determined that it is in the best interests of the Company and its shareholders

to assure that, in the event of a Change of Control (as defined in Section 3.5

hereof), UGS will have the continued services of the Executive and the Executive

will be provided with the compensation and benefits provided herein; and

WHEREAS, The provisions of this Agreement are also a condition of

Executive's agreeing to provide personal services to UGS.

NOW, THEREFORE, in consideration of the mutual promises and covenants

agreed to herein, the receipt and sufficiency of which are hereby acknowledged,

UGS and Executive agree as follows:

Section 1. EMPLOYMENT DUTIES AND PREVIOUS AGREEMENTS

1.1. UGS agrees to employ Executive, and Executive agrees to be employed

by UGS, beginning as of the Effective Date and continuing throughout the Term as

specified in Section 3.1. Executive shall be employed in the position of Vice

President- Products and Operations or such other leadership position as shall be

determined by the Board of Directors. Executive shall faithfully and diligently

render such services and perform such related duties and responsibilities as are

customarily performed by a person holding such corporate title and as otherwise

may from time to time be reasonably assigned to Executive. Executive shall

comply with provisions of this Agreement and shall at all times be subject to

such UGS policies and procedures, including, but not limited to, the UGS Code of

Conduct, as UGS may from time to time maintain, modify, terminate and/or

establish.

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1.2. This Agreement supercedes and replaces any personal services

agreement or employment agreement in place between UGS and the Executive as of

the Effective Date.

Section 2. COMPENSATION AND BENEFITS

2.1. Base Salary. For the Term of this Agreement, UGS shall pay Executive

a base salary of not less than $190,000 per year (as may be increased or

decreased from time-to-time by UGS' Compensation Committee of the Board of

Directors or any successor body or person (the "Committee" ). Such base salary

shall be paid semi-monthly and shall be subject to all applicable withholdings

and deductions.

2.2. Performance Bonuses. Executive shall be eligible to receive annual

bonuses, pursuant to the following:

2.2.1 Executive shall be eligible for a performance bonus, if any,

as determined by the Committee. Any bonus amount awarded will be paid as

soon as practicable following the end of the Company's fiscal year. Any

such bonus will be based upon Executive's performance, as well as the

actual financial performance of UGS in relation to the approved business

plan and other factors specified by the Committee.

2.2.2 Executive shall be eligible to participate in any other UGS

executive bonus plan implemented during the Term and generally applicable

to other similarly situated executives.

2.2.3 All bonus payments specified in this Section 2.2 are

contingent upon Executive's not having been discharged for Cause (as such

term is defined in Section 3.2.3) by UGS or Executive's not having

voluntarily terminated his employment under Section 3.2.1 prior to each

particular payment having been made.

2.3. Annual and Long Term Incentives. Executive shall he eligible to

receive annual and long-term incentive compensation under the Company's

incentive plans on the same basis as other similarly situated Executives.

2.4. EDS Incentive Awards. For so long as Executive is an employee of UGS,

Executive shall continue to vest in any and all grants awarded through the

Effective Date to Executive under (i) the 1996 Incentive Plan of the Electronic

Data Systems Corporation or any predecessor plan and (ii) the EDS Performance

Share program. Notwithstanding anything to the contrary herein, upon the

Effective Date of this Agreement Executive shall not be eligible for any

additional awards under any EDS incentive plan.

Section 3. TERM AND TERMINATION

3.1. Term. The initial term of this Agreement shall commence on the

Effective Date and shall end on January 21, 2002, and shall thereafter be

automatically renewed for

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successive one (1) year terns (the initial term and any subsequent renewal term

are referred to as the "Term" in this Agreement) unless either party gives

written notification to the other party at least sixty (60) days in advance of

the expiration of the Term that further renewal shall not be effected. Such

notice to Executive must he delivered to Executive's address then on record with

UGS. Notice to UGS must be delivered to the Chief Executive Officer at the

designated headquarters of UGS.

3.1.1 Termination Date. Executive's termination of employment shall

be effective on, as applicable, the date coincident with the occurrence of

a terminating event as described in this Article 3, the date specified in

the written notice provided under Sections 3.1, 3.2.1 or 3.2.2, or such

other date as determined by the Board of Directors or the Committee. The

effective date of Executive's termination of employment shall be the

"Termination Date."

3.2. Termination. Executive's employment under this Agreement may not be

terminated by either party except as follows:

3.2.1 Executive's Voluntary Termination. Executive may terminate his

employment with UGS at any time for any reason whatsoever by giving 60

days' written notice to UGS. Upon Executive giving the requisite notice of

his intent to terminate his employment, the Company, at its sole

discretion, shall have the option of immediately accepting Executive's

resignation. Upon accepting Executive's resignation, the Company shall

have no further obligation to provide Executive with any benefits and/or

payments, except those required by law.

3.2.2 UGS Termination With Notice. Excluding for "Cause"

terminations (the procedure for which is described below), UGS may

terminate Executive's employment at any time for any reason whatsoever by

giving 60 days' written notice to Executive. In lieu of providing

Executive with 60 days' written notice, the Company shall have the sole

discretion to immediately terminate Executive's employment, provided

Executive receives 60 days of full base salary, in addition to any bonus

or long term incentive compensation he would have received during the 60

days following his termination.

3.2.3 Termination for Cause. UGS may terminate Executive's

employment at any time for Cause, with or without notice. For purposes of

this Section, the term "Cause" shall mean (a) gross or habitual neglect of

duties or misconduct in the performance of the duties and services

required of Executive pursuant to this Agreement; (b) conduct of Executive

which is materially detrimental to UGS' reputation or business operations

or its ability to secure or renew future contracts; (c) Executive's

conviction of a felony or of a misdemeanor involving moral turpitude; (d)

Executive's breach of a material provision of this Agreement which remains

uncorrected for 30 days following written notice to the Executive by UGS

of such breach; (e) continued failure or refusal of Executive to

faithfully, diligently and competently perform the usual and customary

duties of his employment; or (f) failure or refusal of Executive to

materially comply with

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the policies, standards and regulations of UGS as from time to time may be

made known to Executive.

3.2.4 Executive's Termination for Good Reason. Executive may

terminate his employment with UGS at any time for Good Reason. The term

"Good Reason" shall mean:

(a) a material breach of a material provision of this

Agreement by the Company which breach remains uncorrected for 30

days following written notice to UGS by Executive of such breach

(such written notice must detail the action or conduct allegedly

constituting Good Reason). If Executive fails to give such requisite

notice, or if UGS timely corrects such alleged breach, the action or

conduct shall not constitute Good Reason;

(b) a reduction by UGS in Executive's base salary as in effect

on the Effective Date by more than twenty five percent (25%);

(c) Executive's ineligibility to participate in bonus and/or

compensation programs (excluding those described in Paragraph 2.4)

in which other similarly situated Executives are eligible to

participate;

(d) failure by the Company to provide Executive with benefits

(e.g., life insurance, medical, dental, accident, and disability)

that are available to other similarly situated executives;

(e) if a Change of Control occurs, the Company's requiring

Executive to be based at any office or location more than thirty

five (35) miles from the location at which he was based prior to the

Change of Control, except for travel reasonably required in the

performance of the Executive's responsibilities; or

(f) any failure by UGS to obtain the assumption of this

Agreement by any successor or assign of UGS.

3.2.5 Termination Upon Death or Incapacity. Executive's employment

will also terminate immediately upon Executive's death or Disability. For

purposes of this Agreement, "Disability" shall mean the inability of the

Executive to perform his duties on a full-time basis for 180 consecutive

business days as a result of incapacity due to mental or physical illness

which is determined to be total and permanent by a physician selected by

the Company or its insurers and acceptable to Executive or Executive's

legal representative (such agreement as to acceptability is not to be

withheld unreasonably).

3.3. Effects of Termination. The effects of termination of the employment

relationship shall be as follows:

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3.3.1 Termination of Benefits. In the event of Executive's voluntary

termination of employment pursuant to Section 3.2.1 or the termination of

Executive's employment by UGS for Cause pursuant to Section 3.2.3, UGS

shall have no further obligation to provide Executive with any benefits

and/or payments, except as required by law or the terms of a controlling

benefit or stock plan or policy and the payment of any salary, bonus, or

other compensation or benefits accrued to the Termination Date.

3.3.2 Death and Disability Benefits. In the event of the termination

of the employment relationship by reason of death or Disability pursuant

to Section 3.2.5, UGS shall pay Executive his salary to the date of his

death or decision regarding Disability; and the right of Executive or

Executive's heirs to compensation thereafter shall be governed by the

applicable death, disability, pension, insurance or other written benefit

plans or policies.

3.3.3 Other Termination Benefit Entitlements. Except as otherwise

provided in Section 3.4 with respect to Executive's termination in the

event of a Change of Control, if UGS terminates the employment of

Executive with notice as set forth in Sections 3.1 or 3.2.2, or Executive

terminates the employment relationship for Good Reason under Section

3.2.4, Executive will be entitled to the following benefits:

(a) Full base salary and any bonus or long term incentive

compensation to which Executive is entitled through the Termination

Date.

(b) A severance payment, less all applicable deductions, equal

to (i) one times the Executive's annual base salary in effect as of

the Termination Date plus (ii) an amount equal to the Executive's

bonus target in effect for the fiscal year in which the Termination

Date falls, or if a bonus target has not yet been established, an

amount equal to 1.25 times the Executive's bonus target for the

previous fiscal year.

(c) Notwithstanding any provision to the contrary in any

applicable award agreement(s), continued vesting of any unvested UGS

stock options, other UGS stock awards, and EDS incentive plan awards

granted as of the Termination Date in accordance with the vesting

schedules set forth in the applicable award agreement(s) between the

Executive and UGS and/or EDS. This Agreement shall be deemed to

amend any employee award agreement to the extent required to comply

with this Section 3.3.3(c).

(d) A cash payment to pay for twelve (12) months of (i)

Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")

continuation health coverage for the Executive and his family, (ii)

premiums for basic employee life insurance coverage ($50,000), and

(iii)

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premiums for long tern disability insurance providing income

replacement of $7,000 per month.

(e) Reimbursement not to exceed $75,000 of the costs of

existing home sale (including payment of any real estate sales

commission up to six percent of the home sale price) and packing and

shipping expenses in accordance with Company's then-existing

household goods shipping policies for employees if within twelve

(12) months of termination under this Section 3.3.3, Executive

relocates to a new work location which is more than 35 miles from

his primary work location on the Termination Date.

(f) Reimbursement not to exceed $25,000 for outplacement

services provided by an outplacement service acceptable to UGS

within twelve (12) months of termination under this Section 3.3.3.

3.4. Termination as a Result of a Change of Control. UGS recognizes that

the continuing possibility of a Change of Control of UGS is unsettling to

Executives of the Company. Therefore, the arrangements set forth below are being

made to help assure a continuing dedication by Executive to his duties to the

Company, notwithstanding the occurrence or potential occurrence of a Change in

Control. In particular, UGS believes it important, should the Company receive

proposals or inquiries from third parties with respect to its future, to enable

Executive, without being influenced by uncertainties of his own situation, to

assess and advise the Company whether such proposals would be in the best

interests of the Company and its shareholders and to take such other action

regarding such proposals as the Company might determine to be appropriate.

Accordingly, if between effective date (the "Change of Control Date") of a

Change of Control (as defined below) and 24 months following the Change of

Control Date, UGS gives notice under Section 3.1 that this Agreement will not be

extended for reasons other than Cause, gives notice of termination under Section

3.2.2, or if Executive terminates for Good Reason, UGS shall provide the

Executive with the benefits as set forth below in this Section 3.4.

Notwithstanding any other provision of this Agreement, if a Change in Control

occurs and if the Executive's employment with the Company or any of its

subsidiaries is terminated by the Company less than six months prior to the date

on which the Change in Control occurs, and if it is demonstrated by the

Executive that such termination of employment by the Company (i) was at the

request of a third party which has taken steps reasonably calculated to result

in or effect the Change in Control or (ii) otherwise arose in connection with or

in anticipation of the Change in Control, then for all purposes of this

Agreement, such termination of employment shall be deemed to have occurred

within two years following such Change in Control provided that the obligations

contained in Section 3.1 to deliver a notice of termination shall not apply.

Benefits to which Executive shall be entitled are:

3.4.1 Full base salary and any bonus or long term incentive

compensation to which the Executive is entitled through the Termination

Date.

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3.4.2 A severance payment, less all applicable deductions, equal to

(i) two times the Executive's annual base salary in effect as of the

Termination Date plus (ii) an amount equal to two times the Executive's

bonus target in effect for the fiscal year in which the Termination Date

falls, or if a bonus target has not yet been established, an amount equal

to two times the Executive's bonus target for the previous fiscal year.

3.4.3 Notwithstanding any provision to the contrary in any

applicable award agreement(s), continued vesting of any unvested UGS stock

options, other UGS stock awards, and EDS Incentive Plan awards granted as

of the Termination Date in accordance with the vesting schedules set forth

in the applicable award agreement(s) between the Executive and UGS and/or

EDS. This Agreement shall be deemed to amend any employee award agreement

to the extent required to comply with this Section 3.4.3.

3.4.4 A cash payment to pay for twelve (12) months of (i)

Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")

continuation health coverage for the Executive and his family, (ii)

premiums for basic employee life insurance coverage ($50,000), and (iii)

premiums for long term disability insurance providing income replacement

of $7,000 per month.

3.4.5 Reimbursement not to exceed $75,000 of the costs of existing

home sale (including payment of any real estate sales commission up to six

percent of the home sale price) and packing and shipping expenses in

accordance with Company's then-existing household goods shipping politics

for employees if within twelve (12) months of termination under this

Section 3.4, Executive relocates to a new work location which is more than

35 miles from his primary work location on the Termination Date.

3.4.6 Reimbursement not to exceed $25,000 for outplacement services

provided by an outplacement service acceptable to UGS within twelve (12)

months of termination under this Section 3.4.

3.5. Change of Control Conditions Precedent and Definition. No

compensation shall be payable under Section 3.4 unless and until (a) there shall

have been a Change of Control in UGS while the Executive is still an employee of

UGS or was an employee within six (6) months of the Change of Control Date if

the second to the last sentence of Section 3.4 applies and (b) the Executive's

employment by the Company thereafter shall have been terminated in accordance

with Sections 3.1,