Exhibit 10.B

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT

TERMS AND CONDITIONS
(FY16 Awards)

This Performance-Based Restricted Stock Unit Award Agreement (this “Agreement”)
is made and entered into as of the Grant Date as indicated on the equity award
summary provided with this Agreement by and between Mentor Graphics Corporation,
an Oregon corporation (the “Company”), and you pursuant to the Mentor Graphics
Corporation 2010 Omnibus Incentive Plan (the “Plan”). Compensation paid pursuant
to this Agreement is intended to qualify as performance-based compensation under
Section 162(m) of the Internal Revenue Code of 1986 (the “Code”). Unless
otherwise defined herein, capitalized terms used in this Agreement have the same
defined meanings as in the Plan. The terms of this Agreement are as follows:

1.    Grant of Performance-Based Restricted Stock Units.
Pursuant to the Plan, the Company hereby grants you performance-based restricted
stock units (the “PBRSUs”) with respect to shares of the Company’s common stock.
Subject to the terms and conditions of this Agreement, the Company shall issue
to you the number of shares of the Company’s common stock determined under this
Agreement based on (a) the performance of the Company during the two-year period
from February 1, 2016 to January 31, 2018 (the “Performance Period”) as
described in 2, and your continued employment from the Grant Date to September
9, 2018 (the “Vesting Date”) as described in 3. The number of the PBRSUs granted
to you is indicated on the equity award summary provided with this Agreement. By
accepting this grant of the PBRSUs, you agree to all of the terms and conditions
of this Agreement and the Plan.
2.    Performance Condition.
2.1
Subject to adjustment under 3, 6 and 7, the number shares of the Company’s
common stock to be issued to you under this Agreement shall be determined by
multiplying the Payout Factor (as defined below) by the number of PBRSUs granted
to you.

2.2
The Payout Factor shall be determined based on the Company’s Non-GAAP Operating
Income Margin (as defined in 14.1) for the fiscal year ending January 31, 2017
(the “FY17 Margin”) and the Company’s Non-GAAP Operating Income Margin for the
fiscal year ending January 31, 2018 (the “FY18 Margin”), and shall be the higher
of the FY17 Payout Factor or the FY18 Payout Factor determined under the
following table:

FY17 Margin
FY17 Payout Factor
 
FY18 Margin
FY18 Payout Factor
less than 16.0%
0%
 
less than 16.0%
0%
16.0% - 16.9%
40%
 
16.0% - 16.9%
40%
17.0% - 17.9%
50%
 
17.0% - 17.9%
50%
18.0% - 18.9%
60%
 
18.0% - 18.9%
60%
19.0% - 19.9%
80%
 
19.0% - 19.9%
80%
20.0% - 20.4%
100%
 
20.0% - 20.4%
100%
20.5% - 20.9%
110%
 
20.5% - 20.9%
110%
21.0% - 21.4%
120%
 
21.0% - 21.4%
120%
21.5% or more
130%
 
21.5% or more
130%

2.3
If a Change in Control (as defined in 14.4) or a Company Sale (as defined in
8.2) occurs before the Vesting Date, the Payout Factor for any payout of shares
occurring after the Change in Control or Company Sale shall be 100%; provided,
however, that if the Change in Control or Company Sale occurs on or after
January 31, 2018, the Payout Factor shall be the greater of 100% or the amount
determined under 2.2, and if the Change in Control or Company Sale occurs on or
after January 31, 2017 and before January 31, 2018, the Payout Factor shall be
the greater of 100% or the amount determined under 2.2 based solely on the FY17
Margin.

3.    Employment Condition.
3.1
Except as provided in 3.2, 3.3 or 8.2, in order to receive a payout of shares
under this Agreement, you must remain continuously and actively employed by the
Company or any of its Subsidiaries or Affiliates through the Vesting Date.

3.2
If your employment terminates as a result of death, Disability (as defined in
14.9) or Involuntary Termination (as defined in 14.10) on or after January 31,
2018 and before the Vesting Date, you shall be entitled to receive a payout of
the number of shares determined under 2 not more than ninety (90) days after
such event. If your employment terminates as a result of death, Disability or
Involuntary Termination on or after January 31, 2017 and before January 31,
2018, you shall be entitled to receive a payout not more than ninety (90) days
after such event of the number of shares determined under 2 based solely on the
FY17 Margin.

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3.3    You shall be entitled to receive a payout within ninety (90) days of the
number of shares determined under 2 if:
3.3.1
a Change in Control (as defined in 14.4) occurs before the Vesting Date, and

3.3.2
at any time after the earlier of the Approval Date (as defined in 14.5), if any,
or the Change in Control and on or before the first anniversary of the Change in
Control, (a) your employment is terminated by the Company or a Subsidiary or
Affiliate without Cause (as defined in 14.6), (b) your employment is terminated
by you for Good Reason (as defined in 14.8), or (c) your employment terminates
as a result of your death or Disability;

provided, however, that you may also become entitled to a payout in connection
with a Change in Control that also meets the definition of a Company Sale as
provided in 8.2.
3.4
In the event of termination of your employment (as defined in 3.5) before the
Vesting Date for any reason other than as described in 3.2 or 3.3, the PBRSUs
shall be forfeited and you shall have no right to vest in such PBRSUs or to
receive the underlying shares of common stock.

3.5
For purposes of this Agreement, your employment will be considered terminated as
of the date you are no longer actively providing services to the Company or any
of its Subsidiaries or Affiliates (regardless of the reason for termination and
whether or not later found to be invalid or in breach of employment laws in the
jurisdiction where you are employed or the terms of your employment agreement,
if any) and will not be extended by any statutory or contractual notice period
(e.g., your period of service would not include any contractual notice period or
any period of “garden leave” or similar period mandated under employment laws in
the jurisdiction where you are employed or the terms of your employment
agreement, if any). The Compensation Committee of the Company's Board of
Directors (the “Committee”) shall have the exclusive discretion to determine
when you are no longer actively providing services for purposes of this
Agreement (including whether you may still be considered to be providing
services while on a leave of absence).

3.6
If you are a party to an employment or severance agreement with the Company that
includes any general provisions for vesting of restricted stock units held by
you, those provisions shall not apply and the vesting and payment of PBRSUs
shall be subject only to the terms of this Agreement.

4.    Nature of Grant.
4.1    Nature of Grant. In accepting the grant you understand, acknowledge and
agree that:
4.1.1
the Plan is established voluntarily by the Company, it is discretionary in
nature and it may be modified, amended, suspended or terminated by the Company
at any time, to the extent permitted by the Plan;

4.1.2
the grant of the PBRSUs is voluntary and occasional and does not create any
contractual or other right to receive future grants of PBRSUs, or benefits in
lieu of the PBRSUs, even if PBRSUs have been granted in the past;

4.1.3
all decisions with respect to future grants of the PBRSUs, if any, will be at
the sole discretion of the Company;

4.1.4
the PBRSU grant and your participation in the Plan shall not create a right to
employment or be interpreted as forming an employment or service contract with
the Company, the Employer (as defined in 14.7) or any other Subsidiary or
Affiliate and shall not interfere with the ability of the Company, the Employer
or any other Subsidiary or Affiliate, as applicable, to terminate your
employment or service relationship (if any);

4.1.5
you are voluntarily participating in the Plan;

4.1.6
the grant of the PBRSUs and the shares of common stock subject to the PBRSUs,
and the income and value of same, are not intended to replace any pension rights
or compensation;

4.1.7
the PBRSUs and the shares of common stock subject to the PBRSUs, and the income
and value of same, are not part of normal or expected compensation for purposes
of calculating any severance, resignation, termination, redundancy, dismissal,
end-of-service payments, bonuses, long-service awards, pension or retirement or
welfare benefits or similar payments;

4.1.8
the future value of the underlying shares of common stock is unknown,
indeterminable and cannot be predicted with certainty;

4.1.9
unless otherwise agreed with the Company, the PBRSUs and the shares of common
stock subject to the PBRSUs, and the income and value of same, are not granted
as consideration for, or in connection with, the service you may provide as a
director of the Company;

4.1.10
no claim or entitlement to compensation or damages shall arise from forfeiture
of the PBRSUs resulting from the termination of your employment (as defined in
3.5) by the Company or the Employer (for any reason whatsoever and whether or
not later found to be invalid or in breach of employment laws in the
jurisdiction where you are employed or the terms of your employment or service
agreement, if any) and in consideration of the grant of the PBRSUs to which you
are otherwise not entitled, you irrevocably agree never to institute any claim
against the Company, the Employer or any other Subsidiary or Affiliate, to waive
your ability, if any, to bring any such claim, and to release the Company, the
Employer and all other Subsidiaries and Affiliates from any such claim; if,
notwithstanding the foregoing, any such claim is allowed by a court of competent
jurisdiction, then, by participating in the Plan, you shall be deemed
irrevocably to have agreed not to pursue such claim and agree to execute any and
all documents necessary to request dismissal or withdrawal of such claims; and

4.1.11
except as provided in 8.2, the PBRSUs and the benefits under the Plan, if any,
will not automatically transfer to another company in the case of a merger,
take-over or transfer of liability.

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4.2
No Advice Regarding Grant. The Company is not providing any tax, legal or
financial advice, nor is the Company making any recommendations regarding your
participation in the Plan or your acquisition or sale of the underlying shares
of common stock. You are hereby advised to consult with your own personal tax,
legal and financial advisors regarding your participation in the Plan before
taking any action related to the Plan.

5.    Non-Assignability of PBRSUs.
The PBRSUs may not be assigned or transferred except on death, by will or
operation of law.
6.    Certification and Delivery of Shares
As soon as practicable following the completion of the audit of the Company’s
consolidated financial statements for the final fiscal year of the Performance
Period, the Company shall calculate the Payout Factor and the corresponding
number of shares of the Company’s common stock that will be issuable to you upon
satisfaction of the employment condition. This calculation shall be submitted to
the Committee. No later than the Vesting Date the Committee shall certify in
writing (which may consist of approved minutes of a Committee meeting) the
levels of FY17 Margin and FY18 Margin attained by the Company and the number of
shares of the Company’s common stock issuable to you based on such performance.
Not more than ninety (90) days after the Vesting Date, if you have satisfied the
employment condition, the Company will issue to you the number of shares of
common stock so certified, and will deliver such shares to a brokerage account
established by you in accordance with instructions from the Company or in such
other manner as may be determined by the Company, but no shares shall be issued
prior to certification. No fractional shares shall be issued and the number of
shares deliverable shall be rounded to the nearest whole share. In the event of
your death, Disability or Involuntary Termination as described in 3.2, a Change
in Control as described in 3.3 or a Company Sale as described in 8.2, each of
which may require an award payout earlier than the Vesting Date, a similar
calculation and certification process shall be followed within the time frames
required by those sections.
7.    Tax Withholding
7.1
If you are a U.S. taxpayer, you acknowledge that on each date that shares
underlying the PBRSUs are issued to you (the “Payment Date”), the fair market
value of the shares of common stock will be treated as ordinary compensation
income for U.S. federal and state income and FICA tax purposes, and that the
Company will be required to withhold taxes on these income amounts pursuant to
7.3 below.

7.2
You acknowledge that, regardless of any action taken by the Company or the
Employer, the ultimate liability for all income tax, social insurance, payroll
tax, fringe benefits tax, payment on account or other tax-related items related
to your participation in the Plan and legally applicable to you or deemed by the
Company or the Employer to be an appropriate charge to you even if technically
due by the Company or the Employer (“Tax-Related Items”) is and remains your
responsibility and may exceed the amount actually withheld by the Company or the
Employer. You further acknowledge that the Company and/or the Employer (1) make
no representations or undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of the PBRSUs, including, but not limited
to, the grant, vesting, or settlement of the PBRSUs, the subsequent sale of
shares of common stock acquired pursuant to such issuance and the receipt of any
dividends and/or dividend equivalents; and (2) do not commit to and are under no
obligation to structure the terms of the grant or any aspect of the PBRSUs to
reduce or eliminate your liability for Tax-Related Items or achieve any
particular tax result. Further, if you have become subject to tax in more than
one jurisdiction, you acknowledge that the Company and/or the Employer (or
former employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.

7.3
Prior to any relevant taxable or tax withholding event, as applicable, you agree
to make adequate arrangements satisfactory to the Company and/or the Employer to
satisfy all Tax-Related Items. In this regard, you authorize the Company and/or
the Employer, or their respective agents, at their discretion, to satisfy their
withholding obligations with regard to all Tax-Related Items by one or a
combination of the following:

7.3.1    withholding from your wages or other cash compensation paid by the
Company and/or the Employer; or
7.3.2
withholding from proceeds of the sale of shares of common stock acquired upon
vesting/settlement of the PBRSUs, either through a voluntary sale or through a
mandatory sale arranged by the Company on your behalf pursuant to this
authorization; or

7.3.3    withholding in shares of common stock to be issued upon
vesting/settlement of the PBRSUs.
7.4
Depending on the withholding method, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding rates
or other applicable withholding rates, including maximum applicable rates, in
which case you will receive a refund of any over-withheld amount in cash and
will have no entitlement to the common stock equivalent. If the obligation for
Tax-Related Items is satisfied by withholding in shares of common stock, for tax
purposes, you are deemed to have been issued the full number of shares of common
stock subject to the vested PBRSUs, notwithstanding that a number of the shares
of common stock are held back solely for the purpose of paying the Tax-Related
Items.

7.5
Finally, you agree to pay to the Company or the Employer any amount of
Tax-Related Items that the Company or the Employer may be required to withhold
or account for as a result of your participation in the Plan that cannot be
satisfied by the means previously described. The Company may refuse to issue or
deliver the shares or the proceeds of the sale of shares of common stock if you
fail to comply with your obligations in connection with the Tax-Related Items.

8.    Changes in Capital Structure.

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8.1
If, prior to the payout of shares of the Company’s common stock under this
Agreement, the outstanding shares of common stock of the Company are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of any recapitalization,
reclassification, stock split, combination of shares, or dividend payable in
shares, appropriate adjustment shall be made by the Committee in the number and
kind of shares subject to this Agreement so that your proportionate interest
before and after the occurrence of the event is maintained. Fractional shares
will be disregarded. Any such adjustment made by the Committee shall be
conclusive.

8.2
If, prior to the payout of shares of the Company’s common stock under this
Agreement, there shall occur a merger, consolidation, or plan of exchange
involving the Company pursuant to which outstanding shares of common stock of
the Company are converted into cash, other securities or other property, or a
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Company
(each event listed in this 8.2, a “Company Sale”), then either:

8.2.1
the unvested PBRSUs shall be converted into restricted stock units of the
surviving or acquiring corporation in the applicable transaction, with the
amount and type of shares to be issued under such converted restricted stock
units to be determined by the Committee, taking into account the Payout Factor
determined under 2.3, the relative values of the companies involved in the
applicable transaction and the exchange rate, if any, used in determining shares
of the surviving corporation to be held by holders of shares of the Company
following the applicable transaction; or

8.2.2
the number of shares determined under 2 shall be issued to you simultaneously
with the closing of the applicable transaction such that you will participate as
a shareholder in receiving proceeds from such transaction with respect to those
shares.

9.    Successorship.
Subject to the limits in 4 above, this Agreement will be binding upon and
benefit the parties, their successors and assigns.
10.    Governing Law/Venue.
10.1
The grant of PBRSUs and the provisions of this Agreement are governed by and
subject to, the laws of the state of Oregon, without regard to the conflict of
law provisions, as provided in the Plan.

10.2
For purposes of litigating any dispute that arises directly or indirectly from
the relationship of the parties evidenced by this grant or this Agreement, the
parties hereby submit to and consent to the exclusive jurisdiction of the state
of Oregon and agree that such litigation shall be conducted only in the courts
of Clackamas County, Oregon, or the federal courts for the United States for the
District Court of Oregon, and no other courts, where this grant is made and/or
to be performed.

11.    Language.
If you have received this Agreement or any other document related to the Plan
translated into a language other than English, and if the meaning of the
translated version is different from the English version, the English version
will control.
12.    Notices.
Any notices under this Agreement must be in writing and will be effective when
actually delivered (including via electronic mail) or, if mailed, when deposited
postpaid. Mail shall be directed to you at your address shown in the Company’s
records or to such other address as you may certify by notice to the Company’s
legal department.
13.    Electronic Delivery.
The Company may, in its sole discretion, decide to deliver any documents related
to current or future participation in the Plan by electronic means. You hereby
consent to receive such documents by electronic delivery and agree to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.
14.    Definitions.
14.1    Non-GAAP Operating Income Margin. Non-GAAP Operating Income Margin for
any fiscal year shall mean the Non-GAAP Operating Income (as defined in 14.2)
for that fiscal year divided by the Revenue (as defined in 14.3) for that fiscal
year, with the result expressed as a percentage and rounded to the nearest tenth
of a percentage point.
14.2    Non-GAAP Operating Income. Non-GAAP Operating Income for any fiscal year
shall mean the sum of the following items for that fiscal year: Operating Income
plus Special Charges plus 123R Expense plus Amortization plus Impairment Charges
and further adjusted to eliminate the effect of Accounting Changes (each as
defined below).
14.2.1    Operating Income. Operating Income shall mean the Company’s operating
income as set forth on the audited consolidated statement of operations of the
Company and its subsidiaries for the applicable fiscal year.
14.2.2    Special Charges. Special Charges shall mean the expense for special
charges reported by the Company as set forth on the audited consolidated
statement of operations of the Company and its subsidiaries for the applicable
fiscal year.
14.2.3    123R Expense. 123R Expense shall mean the stock-based compensation
expense reported by the Company as set forth in the audited consolidated
financial statements of the Company and its subsidiaries for the applicable
fiscal year.
14.2.4    Amortization. Amortization shall mean the expense for amortization of
purchased technology and other intangible assets reported by the Company as set
forth on the audited consolidated statement of operations of the Company and its
subsidiaries for the applicable fiscal year.

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14.2.5    Impairment Charges. Impairment Charges shall mean the expense for
impairment of long-lived assets, if any, reported by the Company as set forth on
the audited consolidated statement of operations of the Company and its
subsidiaries for the applicable fiscal year.
14.2.6    Accounting Changes. Accounting Changes shall mean any change in
accounting principle or presentation that the Company implements in or for any
portion of the Performance Period, either as a result of the issuance of new
accounting standards or otherwise, the effect of which was not reflected in the
Company’s business plan on the Grant Date.
14.3    Revenue. Revenue for any fiscal year shall mean the Company’s total
revenues as set forth on the audited consolidated statement of operations of the
Company and its subsidiaries for the fiscal year.
14.4    Change in Control. A Change in Control shall be deemed to occur upon the
earliest to occur after the Grant Date of any of the following events:
14.4.1    Acquisition of Stock by Third Party. The acquisition by any Person of
Beneficial Ownership of 40% or more of either the then-outstanding shares of
common stock of the Company or the Outstanding Voting Securities; provided,
however, that any acquisition directly from the Company shall not constitute a
Change in Control;
14.4.2    Change in Board of Directors. Individuals who, as of the Grant Date,
constitute the Board, and any new director whose election by the Board or
nomination for election by the Company’s shareholders was approved by a vote of
at least two thirds of the directors then still in office who were directors on
the Grant Date or whose election or nomination for election was previously so
approved (collectively, the “Continuing Directors”), cease for any reason to
constitute at least a majority of the members of the Board;
14.4.3    Corporate Transactions. The effective date of a reorganization, merger
or consolidation of the Company (a “Business Combination”), in each case, unless
immediately following such Business Combination: (a) all or substantially all of
the Persons who were Beneficial Owners of Outstanding Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 51% of the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction either owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding
Voting Securities; (b) no Person (excluding any corporation resulting from such
Business Combination) is the Beneficial Owner, directly or indirectly, of 40% or
more of the combined voting power of the then outstanding securities entitled to
vote generally in the election of directors of such corporation except to the
extent that such ownership existed prior to such Business Combination; and (c)
at least a majority of the board of directors of the corporation resulting from
such Business Combination were Continuing Directors at the time of the execution
of the initial agreement, or of the action of the Board, providing for such
Business Combination;
14.4.4    Liquidation. The approval by the shareholders of the Company of a
complete liquidation of the Company or an agreement or series of agreements for
the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than factoring the Company’s current receivables or
escrows due (or, if such approval is not required, the decision by the Board to
proceed with such a liquidation, sale or disposition in one transaction or a
series of related transactions); or
14.4.5    Other Events. There occurs any other event of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or a response to any similar or successor item on any similar or successor
schedule or form) promulgated under the Exchange Act, whether or not the Company
is then subject to such reporting requirement.
14.4.6    Certain Definitions. For purposes of 14.4, the following terms shall
have the following meanings:
“Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth
in Rule 13d-3 promulgated under the Exchange Act.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Outstanding Voting Securities” means the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors.
“Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit plan of the Company or
Subsidiary of the Company or of any corporation owned, directly or indirectly,
by the shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company, and (iv) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or Subsidiary
of the Company or of a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
“Subsidiary” means, with respect to any Person, any business organization or
legal entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that Person.
14.5    Approval Date. Approval Date means the date on which the shareholders of
the Company approve a transaction, the consummation of which would result in the
occurrence of a Change in Control.

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14.6    Cause. If you are a party to an employment or severance agreement with
the Company, Cause shall have the meaning set forth therein. If you are not a
party to an employment or severance agreement with the Company, termination by
the Company or any Subsidiary or Affiliate of your employment for Cause shall
mean termination (a) upon your willful and continued failure to perform
substantially your duties with the Company or any Subsidiary or Affiliate (other
than any such failure resulting from your incapacity due to physical or mental
illness), (b) upon your willful and continued failure to follow and comply
substantially with the specific and lawful directives of any person to whom you
directly or indirectly report within the Company or any Subsidiary or Affiliate
(other than any such failure resulting from your incapacity due to physical or
mental illness), (c) upon your willful commission of an act of fraud or
dishonesty resulting in economic or financial injury to the Company or any
Subsidiary or Affiliate, or (d) upon your willful engagement in illegal conduct
which is injurious to the Company or any Subsidiary or Affiliate.
14.7    Employer. Employer means the Company or the Subsidiary or Affiliate
which employs you.
14.8    Good Reason. If you are a party to a severance or employment agreement
with the Company, Good Reason shall have the meaning set forth therein. If you
are not a party to a severance or employment agreement with the Company, Good
Reason shall mean, without your express written consent, the occurrence of any
of the following circumstances, provided you give notice to the Company of your
intent to terminate your employment for Good Reason within 90 days after notice
to you of such circumstances and such circumstances are not fully corrected by
the Company or any Subsidiary or Affiliate within 30 days after your notice:
14.8.1    the assignment to you of any duties inconsistent with your position in
the Company or any Subsidiary or Affiliate, a significant adverse alteration in
the nature or status of your responsibilities or the conditions of your
employment, or any other action by the Company or any Subsidiary or Affiliate
that results in a material diminution in your position, authority, title, duties
or responsibilities;
14.8.2    the reduction of your annual base salary as in effect on the Grant
Date or as the same may be increased from time to time;
14.8.3    the relocation of the offices at which you are principally employed
(your “Principal Location”) to a location more than twenty-five (25) miles from
such location or the Company or any Subsidiary or Affiliate requiring you,
without your written consent, to be based anywhere other than your Principal
Location, except for required travel on the Company’s or any Subsidiary’s or
Affiliate’s business to an extent substantially consistent with your present
business travel obligations;
14.8.4    the failure to pay to you any portion of your current compensation or
to pay to you any portion of an installment of deferred compensation under any
deferred compensation program of the Company or any Subsidiary or Affiliate
within seven (7) days of the date such compensation is due;
14.8.5    the failure to continue in effect any material compensation or benefit
plan or practice in which you are eligible to participate in (other than any
equity based plan), unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure to continue your participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of your participation relative to
other participants, as existed prior to any such change; or
14.8.6    the failure to provide you with the number of paid vacation days to
which you are entitled on the basis of years of service in accordance with the
Employer’s normal vacation policy in effect on the Grant Date.
14.9    Disability. If you are a party to a severance or employment agreement
with the Company, Disability shall have the meaning set forth therein. If you
are not a party to a severance or employment agreement with the Company,
termination of your employment for Disability shall result if, as a result of
illness or injury you suffer from a condition of mind or body that permanently
prevents full-time employment by the Company or a Subsidiary or Affiliate, as
conclusively determined by the Committee.
14.10    Involuntary Termination. Involuntary Termination means termination of
your employment by the Company or any Subsidiary or Affiliate without Cause or
termination of your employment by you for Good Reason.
15.    Severability.
The provisions of this Agreement are severable and if any one or more provisions
are determined to be illegal or otherwise unenforceable, in whole or in part,
the remaining provisions shall nevertheless be binding and enforceable.
16.    Clawback Policy.
You acknowledge and agree that all shares acquired by you under this Agreement
shall be subject to the Mentor Graphics Corporation Policy For Recovery Of
Incentive Compensation (the “Policy”) as approved by the Board of Directors and
the Committee and in effect on the Grant Date, and that the full amount of any
payment received by you under this Agreement that was calculated based on
financial statements that are subsequently restated shall be subject to the
Policy in the same manner as bonuses under variable incentive plans are subject
to the Policy.
17.    Imposition of Other Requirements.
The Company reserves the right to impose other requirements on your
participation in the Plan, on the PBRSUs and on any shares of common stock
acquired under the Plan, to the extent the Company determines it is necessary or
advisable for legal or administrative reasons, and to require you to sign any
additional agreements or undertakings that may be necessary to accomplish the
foregoing.

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18.    Code Section 409A.
18.1
Notwithstanding any provision to the contrary in this Agreement, in the event
that you are a U.S. taxpayer and any amounts payable hereunder constitute
non-qualified deferred compensation under Section 409A of the Code, then the
time of payment of any shares of common stock which become payable by reason of
your termination of employment shall not be accelerated unless your termination
of employment constitutes a “separation from service” within the meaning of
Section 409A of the Code.

18.2
If you are a U.S. taxpayer and a “specified employee” (within the meaning of
Section 409A of the Code) at the time of your separation from service, any
delivery of shares of common stock hereunder shall be made 30 days following the
earlier of (i) the expiration of the six-month period following your separation
from service and (ii) your death, to the extent such delayed payment is
otherwise required to avoid a prohibited distribution under Section 409A of the
Code.

18.3
If you are a U.S. taxpayer, to the extent that the payment event for any amount
under this Agreement constituting non-qualified deferred compensation under
Section 409A of the Code is a Change in Control, such amount shall become
payable only if the event constituting a Change in Control would also constitute
a change in ownership or effective control of the Company or a change in the
ownership of a substantial portion of the assets of the Company within the
meaning of Section 409A of the Code.

18.4
If you are a U.S. taxpayer, the PBRSUs granted hereunder are intended to be
compliant with Section 409A of the Code, and shall be interpreted, construed and
operated to reflect this intent. Notwithstanding the foregoing, this Agreement
and the Plan may be amended at any time, without the consent of any party, to
the extent necessary or desirable to satisfy any of the requirements under
Section 409A of the Code, but the Company shall not be under any obligation to
make any such amendment.

18.5
Nothing in this Agreement or the Plan shall provide a basis for any person to
take action against the Company or any Subsidiary or Affiliate based on matters
covered by Section 409A of the Code, including the tax treatment of any amount
paid or PBRSUs granted under this Agreement, and neither the Company nor any of
its Subsidiaries or Affiliates shall, under any circumstances, have any
liability to you or your estate or any other party for any taxes, penalties or
interest due on amounts paid or payable under this Agreement, including taxes,
penalties or interest imposed under Section 409A of the Code.

19.    Insider Trading Restrictions/Market Abuse Laws.
You acknowledge that, depending on your country, you may be subject to insider
trading restrictions and/or market abuse laws, which may affect your ability to
acquire or sell shares of common stock or rights to shares of common stock
(e.g., the PBRSUs) under the Plan during such times as you are considered to
have “inside information” regarding the Company (as defined by the laws in your
country). Any restrictions under these laws or regulations are separate from and
in addition to any restrictions that may be imposed under any applicable insider
trading policy of the Company. You are responsible for ensuring compliance with
any applicable restrictions and are advised to consult your personal legal
advisor on this matter.
20.    Foreign Asset/Account Reporting Requirements.
You acknowledge that there may be certain foreign asset and/or account reporting
requirements which may affect your ability to acquire or hold shares of common
stock acquired under the Plan or cash received from participating in the Plan
(including from any dividends paid on shares of common stock acquired under the
Plan) in a brokerage or bank account outside your country. You may be required
to report such accounts, assets or transactions to the tax or other authorities
in your country. You also may be required to repatriate sale proceeds or other
funds received as a result of your participation in the Plan to your country
through a designated bank or broker within a certain time after receipt. You
acknowledge that it is your responsibility to be compliant with such
regulations, and you are advised to consult your personal legal advisor for any
details.
21.    Waiver.
You acknowledge that a waiver by the Company of breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other provision
of this Agreement, or of any subsequent breach by you or any other participant.

* * * * * * * * * * * * *
By clicking the “Accept” button, you represent that you are familiar with the
terms and provisions of the Plan, and hereby accept this Agreement subject to
all of the terms and provisions thereof. You have reviewed the Plan and this
Agreement in their entirety and fully understand all provisions of this
Agreement. You agree to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan or
this Agreement.

You acknowledge and agree that if you have not actively accepted the PBRSUs by
clicking the “Accept” button or rejected the PBRSUs prior to the first
anniversary of the Grant Date, you are deemed to have accepted the PBRSUs and
the terms and conditions set forth in the Plan and this Agreement.

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