Exhibit 10.35

 

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Title:

 

Executive - Operating Plan Incentive

Effective Date:

 

October 31, 2005

 

 

Document Owner:

 

Human Resources - Compensation

 

 

 

Approvals:

 

Jan Collinson

 

 

Senior Vice President, HR

 

 

 

 

 

Chi-Foon Chan

 

 

President and COO

 

 

 

 

 

Aart de Geus

 

 

Chairman and CEO

 

 

DATE

 

AUTHOR

 

REVISION HISTORY

 

 

 

 

 

December 6, 2005

 

J. Cleveland

 

Initial plan document

 

 

This Synopsys Operating Plan Incentive (“OPI” or the “Plan”) provides members of
the Company’s senior management the potential to earn variable compensation
linked directly to attainment of the Company’s 2006 and 2007 fiscal year
operating plan objectives.

 

The purpose of the Plan is to align the actions and accomplishments of senior
management toward the achievement of key annual financial targets.  The specific
measure and goal shall be approved in December by the Compensation Committee of
the Board of Directors.  Plan targets can be expressed as an absolute
achievement, or improvement against a particular measure at a specific point in
time.

 

Approved Annual Financial Target:

 

FY2006:

Cash Award Target – Non-GAAP Operating Margin of [*] for full fiscal year 2006

 

 

Equity Award Target – Non-GAAP Operating Margin of [*] for full fiscal year 2006

 

 

 

 

FY2007:

Cash Award Target - TBD December 2006

 

 

Equity Award Target – Non-GAAP Operating Margin of [*] for full fiscal year 2007

 

ELIGIBILITY

 

To be eligible to receive an award under this Plan, an executive must be
designated by the Board of Directors as an “officer” of the Company pursuant to
rule 16(b) of the Securities Exchange Act of 1934 and must be:

•                  a Senior Vice President, Chief Operating Officer and/or Chief
Executive Officer;

•                  a regular employee scheduled to work at least 20 hours per
week;

 

Synopsys Confidential

 

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•                  actively employed through the last day of the current fiscal
year (or on an approved leave of absence);

•                  and approved for participation by the Compensation Committee
of the Board of Directors;

 

BONUS TARGETS

 

The targeted incentive for each eligible executive is set by the Compensation
Committee of the Board of Directors.

 

The targeted incentive is expressed as a combination of cash compensation in the
form of a fixed dollar amount and equity compensation in the form of performance
vesting stock option grants for each eligible executive.

 

For eligible executives who join the Company pursuant to an acquisition or are
hired after the start of the fiscal year, their participation in the plan will
be approved by the Compensation Committee and the related target incentive will
be prorated based on their hire date.

 

FUNDING THE PLAN

 

The cash portion of the Plan is budgeted in the FY2006 and FY2007 expense plan
forecast and is included in the Company’s forecasted operating margin
calculation.  The equity portion of the Plan is budgeted in the FY2006 Option
Budget approved by the Compensation Committee, and will expensed at the time of
grant.

 

CORPORATE PERFORMANCE AND RELATED PAYOUT

 

To achieve funding of the Operating Plan Incentive, the Company must achieve in
aggregate 100% of the designated fiscal target on or before the specified target
date.

 

If the Company does achieve its target within the specified time frame,
individuals will receive their fiscal year cash award, and 50% of their OPI
stock option grant will vest in accordance with the performance vesting criteria
specified in the grant document.  In year two, should the Company achieve the
Approved Annual Financial Target, participants will receive the second year cash
award and the remaining 50% of their OPI stock option grant will vest.

 

If the Company does not achieve its Approved Annual Financial Targets within the
specified time frame, individuals participating in the plan will not receive
their target cash awards, and the OPI stock option grant will not vest.

 

The maximum payout an executive may earn each year is the target payout.

 

IMPORTANT NOTES ABOUT THE PLAN

 

The Company may amend or terminate the Plan at any time, with or without notice.
The Company may likewise terminate an individual’s participation in the Plan at
any time, with or without notice.  Nothing in this Plan shall be construed to be
a guarantee that any participant will receive all or part

 

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of an incentive award or to imply a contract between the Company and any
participant.   Eligibility for and determination of incentive awards under the
Plan are within the sole discretion of the Company, and prior to actual
distribution, incentive awards may be increased, reduced or eliminated.

 

 

APPROVALS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jan Collinson

 

Date

 

Senior Vice President – HR/FAC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chi-Foon Chan

 

Date

 

President and COO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aart de Geus

 

Date

 

Chairman and CEO

 

 

 

 

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*                 Represents specific quantitative or qualitative
performance-related factors, or factors or criteria involving confidential
commercial or business information, the disclosure of which would have an
adverse effect on the Registrant.

 

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