Exhibit 10.3

 

Notice of Grant of Stock Options and Option Agreement   Magma Design Automation,
Inc.
ID: 77-0454924
5460 Bayfront Plaza
Santa Clara, CA 95054-3600 Name        Option Number:   000XXXX Address 1       
Plan:   2001 Address 2              City, State, Zip        ID:   xxx-xx-xxxx

 

Effective mm/dd/yyyy, you have been granted a Nonstatutory Stock Option to buy
xxx shares of Magma Design Automation, Inc. (the Company) stock at $xx.xx per
share.

 

The total option price of the shares granted is $xx,xxx.xx.

 

Shares in each period will become fully vested on the date shown.

 

Shares

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Vest Type

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Full Vest

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Expiration

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xxx    On Vest Date    mm/dd/yyyy    mm/dd/yyyy x,xxx    Monthly    mm/dd/yyyy
   mm/dd/yyyy

 

By your signature and the Company’s signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company’s Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.

 

 

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Magma Design Automation, Inc.

      Date

 

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Optionee Name

      Date

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[For Employees residing in countries other than the United States, China,
Israel, Italy and the United Kingdom]

 

STOCK OPTION AGREEMENT

 

TERMS AND CONDITIONS

 

MAGMA DESIGN AUTOMATION, INC.

 

2001 Stock Incentive Plan

 

THIS STOCK OPTION AGREEMENT TERMS AND CONDITIONS (the “Agreement”), together
with the Notice of Stock Option Grant (the “Notice of Grant”) to which this
Agreement is attached, constitute the Stock Option Agreement referred to in the
Magma Design Automation, Inc. 2001 Stock Incentive Plan (the “Plan”) with
respect to the option granted to you pursuant to the Notice of Grant (the
“Option”). This Option is intended to be a Nonstatutory Stock Option, as
provided in the Notice of Grant.

 

1. Exercise

 

The Option evidenced by this Agreement becomes exercisable [vesting schedule],
as summarized in the Notice of Grant. Your rights to exercise the Option accrue
only for the time period you render Service to the Company following your
vesting commencement date. Your vesting commencement date is [insert].

 

2. Term The Option expires on the date shown in the Notice of Grant, but in no
event later than the fifth anniversary of the Date of Grant set forth in the
Notice of Grant. The Option may expire earlier in connection with the
termination of your Service, as described below.

 

3. Regular Termination If your Service with the Company or a Subsidiary
terminates for any reason excluding death, Total and Permanent Disability or
Cause (as defined below), and whether or not in breach of local labor law, this
Option will expire on the date three months after your Termination Date. Your
“Termination Date” will be the date you are no longer actively providing Service
to the Company (not extended by any notice period mandated under local law).

 

4. Death or Disability If your Service with the Company or a Subsidiary
terminates as a result of your Total and Permanent Disability or death, this
Option will expire on the date six months after your Termination Date.

 

5. Cause If your Service with the Company or a Subsidiary terminates for Cause,
this Option will expire on the date seven days following your Termination Date.
For purposes of this section, “Cause” shall mean (i) continued failure to
perform substantially your duties, which standard of duties shall be referenced
to the standards set by the Company at the date of this Agreement (other than as
a result of sickness, accident or similar cause beyond your reasonable control)
after receipt of a written warning and your being given thirty (30) days to cure
the failure; (ii) willful misconduct or gross negligence, which is demonstrably
injurious to the Company or any of its Subsidiaries, including without
limitation willful or grossly negligent failure to perform your material duties
as an officer or employee of the Company or any of its Subsidiaries or a
material breach of this Agreement, your employment agreement (if any) or your
Proprietary Information and Inventions Agreement with the Company;
(iii) conviction of or plea of nolo contendere to a felony; or (iv) commission
of an act of fraud against, or the misappropriation of property belonging to,
the Company or any affiliated company, employee, customer or supplier of the
Company.

 

6. Leaves of Absence For purposes of this Option, your Service does not
terminate when you go on a military leave of absence, a sick leave of absence or
another bona fide leave of absence, if the leave of absence was approved by the
Company in writing and if continued crediting of Service is required by the
terms of the leave or by applicable law. Your Service will terminate when the
approved leave of absence ends unless you immediately return to active
employment. Except as provided by applicable law, or unless expressly provided
in writing pursuant to a Company-approved leave of absence, the period of the
approved leave of absence will not be credited as Service to the Company for the
purposes of determining when your Option vests. In accordance with the preceding
sentence, the dates on which the Option would otherwise vest will be postponed
by the number of days of the approved leave of absence.

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7. Restrictions on Exercise The Company will not permit you to exercise this
Option if the issuance of Shares at that time would violate any law or
regulation. The exercise of this Option and the issuance of the Shares upon such
exercise is subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required. No Shares will be issued or delivered to you under the Plan unless
and until there has been compliance with such applicable laws.

 

8. Notice of Exercise When you wish to exercise this Option you must notify the
Company by completing the Notice of Stock Option Exercise in the form attached
to this Agreement (or such other form approved by the Company) (the “Notice of
Exercise”) and filing it with the Treasury Department of the Company. The
exercise of your Option will be effective when the Notice of Exercise and
payment of the Exercise Price is received by the Company. In the case of a
cashless exercise through a securities broker approved by the Company, the
Notice of Exercise form must be filed in advance and approved by the Company
prior to placing the order with the broker. This Notice of Exercise form may be
superseded by a Company-sponsored web-based trading program that includes
security measures sufficient to ensure your identification, such that your entry
of a web-based exercise or cashless exercise constitutes your request and
authorization to exercise the Option. If someone else wants to exercise this
Option after your death, that person must prove to the Company’s satisfaction
that he or she is entitled to do so.

 

9. Form of Payment Payment may be made (i) by personal check, a cashier’s check
or a money order, or (ii) by delivering a Committee-approved form of irrevocable
direction to a securities broker approved by the Company to sell all or part of
the Shares subject to the Option and to deliver to the Company from the sale
proceeds an amount sufficient to pay the aggregate Exercise Price and any
withholding taxes (including social insurance contributions and payment on
account obligations). In the case of a cashless exercise, the balance of the
sale proceeds will be delivered to you and you will not receive any Shares. In
the case of any other exercise method described herein, as soon as practicable
after the date you exercise your Option, the Company shall issue to you the
purchased Shares, (as evidenced by the appropriate entry in the books of the
Company or a duly authorized transfer agent of the Company). Notwithstanding the
foregoing, a form of payment will not be available if the Committee determines,
in its sole and absolute discretion, that such form of payment could violate any
law or regulation.

 

10. Withholding Taxes and Stock Withholding

 

Regardless of any action the Company or your employer (the “Employer”) takes
with respect to any or all income tax, social insurance, payroll tax, payment on
account or other tax-related withholding (“Tax-Related Items”), you acknowledge
that the ultimate liability for all Tax-Related Items legally due by you is and
remains your responsibility and 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 Option grant, including the grant, vesting
or exercise of the Option, the subsequent sale of Shares acquired pursuant to
such exercise and the receipt of any dividends; and (2) do not commit to
structure the terms of the grant or any aspect of the Option to reduce or
eliminate your liability for Tax-Related Items.

 

Prior to exercise of the Option, you will pay or make adequate arrangements
satisfactory to the Company and/or the Employer to satisfy all withholding and
payment on account obligations for Tax-Related Items of the Company and/or the
Employer. In this regard, you authorize the Company and/or the Employer to
withhold all applicable Tax-Related Items legally payable by you from your wages
or other cash compensation paid to you by the Company and/or the Employer or
from proceeds of the sale of Shares. Alternatively, or in addition, if
permissible under local law, the Company may (1) sell or arrange for the sale of
Shares that you acquire to meet the withholding obligation for Tax-Related
Items, and/or (2) withhold in Shares, provided that the Company only withholds
the amount of Shares necessary to satisfy the minimum withholding amount.
Finally, you will pay to the Company or the Employer any amount of Tax-Related
Items that the Company or the Employer may be required to withhold as a result
of your participation in the Plan or your purchase of Shares that cannot be
satisfied by the means previously described. The Company may refuse to honor the
exercise and refuse to deliver the Shares if you fail to comply with your
obligations in connection with the Tax-Related Items as described in this
section.

 

11. Restrictions on Resale By entering into this Agreement, you agree not to
sell any Shares at a time when applicable laws or Company policies prohibit a
sale. This restriction will apply as long as you are providing Service to the
Company or a Subsidiary.

 

12. Transfer of Option Prior to your death, only you can exercise this Option.
You cannot sell, transfer, assign, pledge or otherwise alienate this Option. For
instance, you may not sell this Option or use it as security for a loan. If

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you attempt to do any of these things, this Option will immediately become
invalid. You may in any event dispose of this Option in your will. Regardless of
any marital property settlement agreement, the Company is not obligated to honor
a notice of exercise from your former spouse, nor is the Company obligated to
recognize your former spouse’s interest in your Option in any other way.

 

13. Retention Rights Neither your Option nor this Agreement give you the right
to be retained by the Company or a Subsidiary in any capacity. The Company and
its Subsidiaries reserve the right to terminate your Service at any time, with
or without Cause.

 

14. Nature of Grant

 

In accepting the grant, you acknowledge that:

 

  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, unless otherwise provided in the Plan and this Agreement;

 

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

 

  3) all decisions with respect to future option grants, if any, will be at the
sole discretion of the Company;

 

  4) you are voluntarily participating in the Plan;

 

  5) the Option is an extraordinary item that does not constitute compensation
of any kind for services of any kind rendered to the Company or the Employer,
and which is outside the scope of your employment contract, if any;

 

  6) the Option is not part of normal or expected compensation or salary for any
purposes, including, but not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments and in no event should be
considered as compensation for, or relating in any way to, past services for the
Company or the Employer;

 

  7) in the event that you are not an employee of the Company, the Option grant
will not be interpreted to form an employment contract or relationship with the
Company; and furthermore, the Option grant will not be interpreted to form an
employment contract with the Employer or any Subsidiary or affiliate of the
Company;

 

  8) the future value of the underlying Shares is unknown and cannot be
predicted with certainty;

 

  9) if the underlying Shares do not increase in value, the Option will have no
value;

 

  10) if you exercise your Option and obtain Shares, the value of those Shares
acquired upon exercise may increase or decrease in value, even below the
exercise price;

 

  11) in consideration of the grant of the Option, no claim or entitlement to
compensation or damages shall arise from termination of the Option or diminution
in value of the Option or Shares purchased through exercise of the Option
resulting from termination of your employment by the Company or the Employer
(for any reason whatsoever and whether or not in breach of local labor laws) and
you irrevocably release the Company and the Employer from any such claim that
may arise; if, notwithstanding the foregoing, any such claim is found by a court
of competent jurisdiction to have arisen, then, by signing this Agreement, you
shall be deemed irrevocably to have waived your entitlement to pursue such
claim; and

 

  12) in the event of termination of your employment (whether or not in breach
of local labor laws), your right to receive additional Options and to vest in
the Option under the Plan, if any, will terminate effective as of your
Termination Date (e.g., active employment would not include a period of “garden
leave” or similar period pursuant to local law); the Committee shall have the
exclusive discretion to determine when you are no longer actively employed for
purposes of your Option grant.

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15. Stockholder Rights You have no rights as a stockholder of the Company until
you have exercised this Option by giving the required Notice of Exercise to the
Company and paying the Exercise Price. No adjustments are made for dividends or
other rights if the applicable record date occurs before you exercise this
Option, except as described in the Plan.

 

16. Adjustments In the event of a stock split, a stock dividend or a similar
change in Company Stock, the number of Shares subject to this Option and the
Exercise Price per share may be adjusted pursuant to the Plan.

 

17. Applicable Law This Option grant and the provisions of this Agreement will
be interpreted and enforced under the laws of the State of California (without
regard to choice-of-law provisions).

 

18. Data Privacy.

 

You hereby explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of your personal data as described in
this document by and among, as applicable, the Employer, and the Company and its
Subsidiaries for the exclusive purpose of implementing, administering and
managing your participation in the Plan.

 

You understand that the Company and the Employer may hold certain personal
information about you, including, but not limited to, your name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all options or any other
entitlement to shares awarded, canceled, exercised, vested, unvested or
outstanding in your favor, for the purpose of implementing, administering and
managing the Plan (“Data”). You understand that Data may be transferred to any
third parties assisting in the implementation, administration and management of
the Plan, that these recipients may be located in your country or elsewhere, and
that the recipients’ country may have different data privacy laws and
protections than your country. You understand that you may request a list with
the names and addresses of any potential recipients of the Data by contacting
your local human resources representative. You authorize the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the sole purpose of implementing, administering and managing your
participation in the Plan, including any requisite transfer of such Data as may
be required to a broker or other third party with whom you may elect to deposit
any Shares acquired upon exercise of the Option. You understand that Data will
be held only as long as is necessary to implement, administer and manage your
participation in the Plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data or refuse or withdraw the consents herein, in
any case without cost, by contacting in writing your local human resources
representative. You understand, however, that refusing or withdrawing your
consent may affect your ability to participate in the Plan. For more information
on the consequences of your refusal to consent or withdrawal of consent, you
understand that you may contact your local human resources representative.

 

19. The Plan and Other Agreements The text of the Plan is incorporated in this
Agreement by reference. Capitalized terms used herein and not defined shall have
the meanings set forth in the Plan. This Agreement, the Notice of Grant, the
Notice of Exercise and the Plan constitute the entire understanding between you
and the Company regarding this Option. Any prior agreements, commitments or
negotiations concerning the Option are superseded. This Agreement, the Notice of
Grant and the Notice of Exercise may be amended only by another written
agreement, signed by both you and the Company.

 

20. 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.

 

21. 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 translated version is
different than the English version, the English version will control.

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22. Electronic Delivery

 

The Company may, in its sole discretion, decide to deliver any documents related
to the Option granted under the Plan or future Options that may be granted under
the Plan by electronic means or to request your consent to participate in the
Plan by electronic means. You hereby consent to receive such documents by
electronic delivery and, if requested, to agree to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.

 

BY SIGNING THE NOTICE OF GRANT, YOU AGREE TO ALL OF THE

TERMS AND CONDITIONS DESCRIBED IN THE NOTICE OF GRANT, THE

AGREEMENT, THE NOTICE OF EXERCISE AND THE PLAN, AND ACKNOWLEDGE

RECEIPT OF A COPY OF THE PLAN