EXHIBIT 10.01
EXECUTIVE TRANSITION AND RELEASE AGREEMENT
     This Executive Transition and Release Agreement (this “Agreement”) is
entered into between Kevin S. Palatnik (“Executive”) and Cadence Design Systems,
Inc. (“Cadence” or the “Company”).
     1. RESIGNATION. Effective as of November 1, 2010, or such later date (no
later than November 15, 2010) as mutually agreed between Executive and Cadence
(such date, the “Effective Date”), Executive hereby resigns his positions as
Senior Vice President and Chief Financial Officer of Cadence and, after the
Effective Date, Executive will be relieved of all of Executive’s authority and
responsibilities in those positions and all other positions that Executive may
hold as an officer of Cadence or any of its subsidiaries or affiliates, after
which Executive shall be employed by Cadence solely as a non-executive employee,
as an advisor to the Chief Financial Officer.
     2. TRANSITION COMMENCEMENT DATE. From the Effective Date until February 28,
2011 (the “Initial Period”), Executive shall remain a full-time employee of
Cadence; provided, however, that (i) if Executive desires to accept full-time
employment with a third party that is not engaged in a Cadence Business or the
EDA Industry (each, as hereinafter defined), Cadence shall not unreasonably
withhold or delay its consent to same, and (ii) if Cadence grants such consent
and Executive accepts such full-time employment, then Executive’s employment
with Cadence during the remainder of the Initial Period shall change to a
part-time basis. Effective as of March 1, 2011 (the “Transition Commencement
Date”), Executive, to the extent he has not already transitioned into part-time
status, shall become a part-time employee of Cadence. Executive will be paid
(a) any earned but unpaid base salary for his services as an officer of the
Company prior to the Transition Commencement Date and any outstanding expense
reimbursements submitted and approved pursuant to Section 3.1 of Executive’s
Employment Agreement with the Company dated as of July 29, 2008, as amended by
the First Amendment dated as of May 13, 2009 and the Second Amendment dated as
of March 31, 2010 (as amended, the “Employment Agreement”); and (b) other unpaid
vested amounts or benefits under the compensation, incentive and benefit plans
of the Company in which Executive participates, in each case under this clause
(b) as of the Transition Commencement Date. The payment of the foregoing amounts
shall be made to Executive by no later than the next regular payroll date
following the Transition Commencement Date. As of the first day of the month
following the Transition Commencement Date, or, if sooner, the first date that
Executive no longer meets the eligibility requirements under the terms of
Cadence’s medical, dental, and vision insurance plans, Executive will no longer
participate in Cadence’s medical, dental, and vision insurance plans (unless
Executive elects to continue coverage pursuant to COBRA). In addition, Executive
will not be eligible for a bonus for any services rendered after January 1,
2011.

 

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     3. TRANSITION PERIOD. The period from the Effective Date to the date when
Executive’s employment with Cadence under this Agreement terminates (the
“Termination Date”) is called the “Transition Period” in this Agreement.
Executive’s Termination Date will be the earliest to occur of:
          a. the date on which Executive resigns from all employment with
Cadence;
          b. the date on which Cadence terminates Executive’s employment due to
a material breach by Executive of Executive’s duties or obligations under this
Agreement after written notice delivered to Executive identifying such breach
and his failure to cure such breach, if curable, within thirty (30) days
following delivery of such notice; and
          c. February 28, 2012.
     4. DUTIES AND OBLIGATIONS DURING THE TRANSITION PERIOD AND AFTERWARDS.
          a. During the Initial Period, Executive shall assist Cadence in the
smooth transition of his duties and responsibilities to his successor and will
render such services as Cadence’s Chief Executive Officer and/or Chief Financial
Officer may reasonably request during normal business hours. During the period
from the Transition Commencement Date until the Termination Date, Executive will
render such services as reasonably requested by Cadence’s Chief Financial
Officer on an as-needed basis at mutually-convenient times. From and after the
Transition Commencement Date, Executive’s time rendering the services described
herein shall not exceed twenty (20) hours per month. Except as otherwise
provided in paragraph 4(b) of this Agreement, from and after the Transition
Commencement Date (or such earlier date as mutually agreed by Executive and
Cadence), Executive’s obligations hereunder will not preclude Executive from
accepting and holding full-time employment elsewhere. Neither party expects that
Executive will resume employment with Cadence in the future at a level that
exceeds the level set forth in this paragraph 4(a) and it is the parties’ intent
that Executive will have experienced a “separation from service” as defined in
Section 409A of the Code as of the Transition Commencement Date.
          b. In the course of his work with Cadence, Executive has obtained
extensive and valuable knowledge and information concerning Cadence’s business
(including confidential information relating to Cadence and its operations,
intellectual property, assets, contracts, customers, personnel, plans, marketing
plans, research and development plans and prospects). Executive acknowledges and
agrees that it would be virtually impossible for Executive to work as an
employee, consultant or advisor in any business in which Cadence engages on the
Transition Commencement Date, including the EDAIndustry (as hereinafter
defined), without inevitably disclosing confidential and proprietary information
belonging to Cadence. Accordingly, during the Transition Period, Executive will
not, directly or indirectly, provide services, whether as an employee,
consultant, independent contractor, agent, sole proprietor, partner, joint
venturer, corporate officer or director, on behalf of any corporation, limited
liability company, partnership, or other entity or person or successor thereto
that (i) is engaged in any business in which Cadence or any of its affiliates is
engaged on the Transition Commencement Date or has been engaged at any time
during the 12-month period immediately preceding the Transition Commencement
Date, whether in the EDA industry or otherwise, anywhere in the

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world (a “Cadence Business”), or (ii) produces, markets, distributes or sells
any products, directly or indirectly through intermediaries, that are
competitive with Cadence or any of its affiliates. As used in this Agreement,
the term “EDA Industry” means the research, design or development of electronic
design automation software, electronic design verification, emulation hardware
and related products, such products containing hardware, software and both
hardware and/or software products, designs or solutions for, and all
intellectual property embodied in the foregoing, or in commercial electronic
design and/or maintenance services, such services including all intellectual
property embodied in the foregoing. If, during the Transition Period, Executive
receives an offer of employment or consulting from any person or entity that
engages in whole or in part in a Cadence Business, then Executive must first
obtain written approval from Cadence’s CEO before accepting said offer.
          c. During the Transition Period, Executive will be prohibited, to the
fullest extent allowed by applicable law, and except with the written advance
approval of Cadence’s CEO (or his successor(s)), from voluntarily or
involuntarily, for any reason whatsoever, directly or indirectly, individually
or on behalf of persons or entities not now parties to this Agreement: (i)
encouraging, inducing, attempting to induce, recruiting, attempting to recruit,
soliciting or attempting to solicit or participating in any way in hiring or
retaining for employment, contractor or consulting opportunities anyone who is
employed at that time, or was employed during the previous one year, by Cadence
or any Cadence affiliate; (ii) interfering or attempting to interfere with the
relationship or prospective relationship of Cadence or any Cadence affiliate
with any former, present or future client, customer, joint venture partner, or
financial backer of Cadence or any Cadence affiliate; or (iii) soliciting,
diverting or accepting business, in any line or area of business engaged in by
Cadence or any Cadence affiliate, from any former or present client, customer or
joint venture partner of Cadence or any Cadence affiliate (other than on behalf
of Cadence), except that Executive may solicit or accept business, in a line of
business engaged in by Cadence or a Cadence affiliate, from a former or present
client, if and only if Executive had previously provided consulting services in
such line of business, to such client, prior to ever being employed by Cadence,
but in no event may Executive violate paragraph 4(b) hereof. The restrictions
contained in subparagraph (i) of this paragraph 4(c) shall also be in effect for
a period of one year following the Termination Date. This paragraph 4(c) does
not alter any of the obligations the Executive may have under the Employee
Proprietary Information and Inventions Agreement, dated as of May 8, 2001.
          d. Executive will fully cooperate with Cadence in all matters relating
to his employment, including the winding up of work performed in Executive’s
prior position and the orderly transition of such work to other Cadence
employees.
          e. Executive will not make any statement, written or oral, that
disparages Cadence or any of its affiliates, or any of Cadence’s or its
affiliates’ products, services, policies, business practices, employees,
executives, officers, or directors, past, present or future. Similarly, Cadence
agrees to instruct its executive officers and members of the Company’s Board of
Directors not to make any statement, written or oral, that disparages Executive.
The restrictions described in this paragraph shall not apply to any truthful
statements made in response to a subpoena or other compulsory legal process.
          f. Notwithstanding paragraph 11 hereof, the parties agree that damages
would be an inadequate remedy for Cadence in the event of a breach or threatened
breach by Executive

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of paragraph 4(b) or 4(c), or for Cadence or Executive in the event of a breach
or threatened breach of paragraph 4(e). In the event of any such breach or
threatened breach, the non-breaching party may, either with or without pursuing
any potential damage remedies, obtain from a court of competent jurisdiction,
and enforce, an injunction prohibiting the other party from violating this
Agreement and requiring the other party to comply with the terms of this
Agreement.
     5. TRANSITION COMPENSATION AND BENEFITS. In consideration of Executive’s
execution of the release of claims in this Agreement and in Attachment 1 and as
compensation for Executive’s services during the Initial Period and the
Transition Period, Cadence will provide the following payments and benefits to
Executive (to which Executive would not otherwise be entitled), so long as
Executive returns to the Company, on the earlier of the Transition Commencement
Date or the date the Executive ceases to serve as a full-time employee of the
Company, all hard and soft copies of records, documents, materials and files in
his possession or control, which contain or relate to confidential, proprietary
or sensitive information obtained by Executive in conjunction with his
employment with the Company, as well as all other Company-owned property, except
to the extent retained pursuant to Section 7 of the Employment Agreement:
          a. During the Initial Period, Executive shall continue to receive his
base salary, and shall remain eligible to receive bonus compensation for
calendar year 2010; provided, however, that in the event Executive’s employment
transitions from full-time to part-time prior to the Transition Commencement
Date, from and after such transition to part-time status (i) Executive’s base
salary shall be pro-rated based on the number of hours per week actually worked
by Executive and (ii) if such transition occurs before December 31, 2010,
Executive’s bonus for the second half of 2010 shall be based on his eligible
earnings for the period, which would consist of his base salary earned during
the period plus any payments earned under paragraph 5(a)(i) above.
          b. Effective as of the Transition Commencement Date, so long as the
Executive executes and delivers a Release of Claims in the form of Attachment 1
hereto no more than ten (10) days before the Transition Commencement Date and
such Release of Claims has become irrevocable in accordance with its terms on or
prior to the Transition Commencement Date, all of the unvested equity
compensation awards (including stock options, restricted stock and restricted
stock units) that are not performance-based within the meaning of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”), that are
outstanding and held by Executive on the Transition Commencement Date and that
would have vested over the twelve (12) months following the Transition
Commencement Date had Executive continued to serve as an executive of the
Company pursuant to his Employment Agreement, shall immediately vest and become
exercisable in full on the Transition Commencement Date of this Agreement, and
there shall be no further vesting of those equity compensation awards during or
after the Transition Period, notwithstanding any provision in any equity
compensation award to the contrary, except as otherwise provided by paragraph 8
hereof. Provided Executive continues in employment under this Agreement through
the end of the applicable performance period, unvested equity compensation
awards that are performance-based within the meaning of Section 162(m) of the
Code and that are outstanding and held by Executive on the Transition
Commencement Date shall continue to vest though the end of the applicable
performance period provided any such performance period ends within twelve
(12) months following the Transition

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Commencement Date, but only to the extent justified by the satisfaction of the
performance goals prescribed for such equity awards. Upon the conclusion of the
performance period, such awards shall immediately vest to the extent they would
have vested over the twelve (12) months following the Transition Commencement
Date had Executive continued to serve as an executive of the Company pursuant to
his Employment Agreement, and there shall be no further vesting of such awards
during or after the Transition Period except as otherwise provided by paragraph
8 hereof. Any acceleration pursuant to this paragraph 5(b) will have no effect
on any other provisions of the stock awards.
          c. Executive’s employment pursuant to this Agreement (whether
full-time or part-time) shall be considered a continuation of employee status
and continuous service for all purposes under any equity compensation awards
previously granted to Executive by the Company and outstanding on the Effective
Date.
          d. If Executive elects to continue coverage under Cadence’s medical,
dental, and vision insurance plans pursuant to COBRA following the Transition
Commencement Date (or such earlier date when Executive ceases to be eligible for
coverage under Cadence’s medical, dental, and vision insurance plans), Cadence
will pay Executive’s COBRA premiums during the Transition Period; provided,
however, that Cadence’s payment of such COBRA premiums shall cease upon
Executive becoming eligible for coverage under similar benefit plans made
available by a subsequent employer.
Except as so provided or as otherwise set forth in paragraphs 6, 7 and 8 hereof,
Executive will receive no other compensation or benefits from Cadence in
consideration of Executive’s services during the Transition Period.
     6. FIRST TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not
resign from employment with Cadence under this Agreement and Cadence does not
terminate Executive’s employment with Cadence pursuant to paragraph 3(b) due to
a material breach by Executive of Executive’s duties under this Agreement, and
in consideration for, and subject to, Executive’s execution and acceptance of
and adherence to this Agreement and Executive’s execution and delivery of a
Release of Claims in the form of Attachment 1 as set forth in paragraph 5(b),
and as compensation for Executive’s services during the Transition Period from
and after the Transition Commencement Date, Cadence will provide to Executive
the following termination payment, to which Executive would not otherwise be
entitled, in each case, so long as the Release of Claims has become irrevocable
in accordance with its terms prior to the date of payment:
          a. a lump-sum payment of $450,000.00, less applicable tax deductions
and withholdings, payable on the thirtieth (30th) day following the date that is
six months after the Transition Commencement Date; and
          b. for a period of six months, a monthly salary of $4,000.00 less
applicable tax withholdings and deductions, payable in accordance with Cadence’s
regular payroll schedule, commencing on the first pay date that is more than
thirty (30) days following the date that is six months after the Transition
Commencement Date.

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     7. SECOND TERMINATION PAYMENT AND BENEFITS; REFUND OF PAYMENTS.
          a. Provided that Executive does not resign from employment with
Cadence under this Agreement and Cadence does not terminate Executive’s
employment with Cadence pursuant to paragraph 3(b) due to a material breach by
Executive of Executive’s duties under this Agreement, on the thirtieth (30th)
day following the Termination Date, and in consideration for, and subject to,
Executive’s execution and acceptance of and adherence to this Agreement and
Executive’s further execution of a Release of Claims in the form of Attachment 2
to this Agreement on the Termination Date, Cadence will provide to Executive the
following termination payment, to which Executive would not otherwise be
entitled, so long as the Release of Claims has become irrevocable in accordance
with its terms prior to the date of payment:
               i. a lump-sum payment of $337,500.00, less applicable tax
deductions and withholdings.
          b. If the Company should terminate Executive’s employment with the
Company due to a breach by Executive of Executive’s duties or obligations under
this Agreement, Executive shall promptly refund to the Company any and all
amounts theretofore paid to Executive pursuant to paragraph 6(a), with interest
on any such amount of eight percent per annum, compounded monthly.
          c. Notwithstanding anything in this Agreement to the contrary, to the
extent that the Company in good faith determines that any portion of the
payments provided for in this Agreement resulting from Executive’s termination
of employment constitutes a “deferral of compensation” and that Executive is a
“specified employee,” both within the meaning of Section 409A of the Code, no
such amounts shall be payable to Executive pursuant to the Agreement prior to
the earlier of (1) Executive’s death following the Transition Commencement Date
or (2) the date that is six months following the date of Executive’s “separation
from service” with the Company (within the meaning of Section 409A of the Code).
     8. CHANGE IN CONTROL. If a Change in Control (as defined in the Employment
Agreement) occurs within three (3) months following the Effective Date, in which
case the Company shall promptly notify Executive of the occurrence of such
Change in Control, then (a) Section 4.5(a)(3) of the Employment Agreement shall
apply in lieu of paragraph 5(b) of this Agreement; and (b) Sections 4.5(a)(1)
and 4.5(a)(2) of the Employment Agreement shall apply in addition to paragraphs
6(a) and 7(a) of this Agreement.
     9. GENERAL RELEASE OF CLAIMS.
          a. Executive hereby irrevocably, fully and finally releases Cadence,
its parent, subsidiaries, affiliates, directors, officers, agents and employees
(“Releasees”) from all causes of action, claims, suits, demands or other
obligations or liabilities, whether known or unknown, suspected or unsuspected,
that Executive ever had or now has as of the time that Executive signs this
Agreement which relate to his hiring, his employment with the Company, the
termination of his employment with the Company and claims asserted in
shareholder derivative actions or shareholder class actions against the Company
and its officers and Board of Directors, to the extent those derivative or class
actions relate to the period during which Executive was employed

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by the Company. The claims released include, but are not limited to, any claims
arising from or related to Executive’s employment with Cadence, such as claims
arising under (as amended) Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Age Discrimination in Employment Act of 1974, the
Americans with Disabilities Act, the Equal Pay Act, the Fair Labor Standards
Act, the California Fair Employment and Housing Act, the California Labor Code,
the Employee Retirement Income Security Act of 1974 (except for any vested right
Executive has to benefits under an ERISA plan), the state and federal Worker
Adjustment and Retraining Notification Act, and the California Business and
Professions Code; any other local, state, federal, or foreign law governing
employment; and the common law of contract and tort. In no event, however, shall
any claims, causes of action, suits, demands or other obligations or liabilities
be released pursuant to the foregoing if and to the extent they relate to:
               i. any amounts or benefits to which Executive is or becomes
entitled pursuant to the provisions of this Agreement or pursuant to the
provisions designated in Section 9.9 of the Employment Agreement to survive the
termination of Executive’s full-time employment;
               ii. claims for workers’ compensation benefits under any of the
Company’s workers’ compensation insurance policies or funds;
               iii. claims related to Executive’s COBRA rights;
               iv. any rights that Executive has or may have to be indemnified
by Cadence pursuant to any contract, statute, or common law principle; and
               v. any other rights or claims that Executive has or may have that
cannot, as a matter of law, be waived.
          b. Executive represents and warrants that he has not filed any claim,
charge or complaint against any of the Releasees based upon any of the matters
released above.
          c. Executive acknowledges that the payments provided in this Agreement
constitute adequate consideration for the release set forth in this paragraph 9.
          d. Executive intends that this release of claims cover all claims
described above, whether or not known to Executive. Executive further recognizes
the risk that, subsequent to the execution of this Agreement, Executive may
incur loss, damage or injury which Executive attributes to the claims
encompassed by this release. Executive expressly assumes this risk by signing
this Agreement and voluntarily and specifically waives any rights conferred by
California Civil Code section 1542 which provides as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.
          e. Executive represents and warrants that there has been no assignment
or other transfer of any interest in any claim by Executive that is covered by
this release.

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     10. REVIEW OF AGREEMENT; REVOCATION OF ACCEPTANCE. Executive has been given
at least 21 days in which to review and consider this Agreement, although
Executive is free to accept this Agreement anytime within that 21-day period.
Executive is advised to consult with an attorney about the Agreement. If
Executive accepts this Agreement, Executive will have an additional 7 days from
the date that Executive signs this Agreement to revoke that acceptance, which
Executive may effect by means of a written notice sent to the CEO. If this 7-day
period expires without a timely revocation, this Agreement will become final and
effective on the eighth day following the date of Executive’s signature.
     11. ARBITRATION. Subject to paragraph 4(f) hereof, all claims, disputes,
questions, or controversies arising out of or relating to this Agreement,
including without limitation the construction or application of any of the
terms, provisions, or conditions of this Agreement, will be resolved exclusively
in final and binding arbitration in accordance with the Arbitration Rules and
Procedures, or successor rules then in effect, of Judicial Arbitration &
Mediation Services, Inc. (“JAMS”). The arbitration will be held in the San Jose,
California, metropolitan area, and will be conducted and administered by JAMS
or, in the event JAMS does not then conduct arbitration proceedings, a similarly
reputable arbitration administrator. Executive and Cadence will select a
mutually acceptable, neutral arbitrator from among the JAMS panel of
arbitrators. Except as provided by this Agreement, the Federal Arbitration Act
will govern the administration of the arbitration proceedings. The arbitrator
will apply the substantive law (and the law of remedies, if applicable) of the
State of California, or federal law, if California law is preempted, and the
arbitrator is without jurisdiction to apply any different substantive law.
Executive and Cadence will each be allowed to engage in adequate discovery, the
scope of which will be determined by the arbitrator consistent with the nature
of the claim[s] in dispute. The arbitrator will have the authority to entertain
a motion to dismiss and/or a motion for summary judgment by any party and will
apply the standards governing such motions under the Federal Rules of Civil
Procedure. The arbitrator will render a written award and supporting opinion
that will set forth the arbitrator’s findings of fact and conclusions of law.
Judgment upon the award may be entered in any court of competent jurisdiction.
Cadence will pay the arbitrator’s fees, as well as all administrative fees,
associated with the arbitration. Each party will be responsible for paying its
own attorneys’ fees and costs (including expert witness fees and costs, if any).
However, in the event a party prevails at arbitration on a statutory claim that
entitles the prevailing party to reasonable attorneys’ fees as part of the
costs, then the arbitrator may award those fees to the prevailing party in
accordance with that statute.
     12. NO ADMISSION OF LIABILITY. Nothing in this Agreement will constitute or
be construed in any way as an admission of any liability or wrongdoing
whatsoever by Cadence or Executive.
     13. INTEGRATED AGREEMENT. This Agreement is intended by the parties to be a
complete and final expression of their rights and duties respecting the subject
matter of this Agreement. Except as expressly provided herein, nothing in this
Agreement is intended to negate Executive’s agreement to abide by Cadence’s
policies while serving as a Cadence employee, including but not limited to
Cadence’s Employee Handbook, Sexual Harassment Policy and Code of Business
Conduct, or Executive’s continuing obligations under Executive’s Employee
Proprietary Information and Inventions Agreement, or any other agreement
governing the disclosure and/or use of proprietary information, which Executive
signed while working with

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Cadence or its predecessors; nor to waive any of Executive’s obligations under
state and federal trade secret laws.
     14. FULL SATISFACTION OF COMPENSATION OBLIGATIONS; ADEQUATE CONSIDERATION.
Executive agrees that the payments and benefits provided herein satisfy in full
all obligations of Cadence to Executive arising out of or in connection with
Executive’s employment through the Termination Date, including, without
limitation, all compensation, salary, bonuses, reimbursement of expenses, and
benefits.
     15. TAXES AND OTHER WITHHOLDINGS. Notwithstanding any other provision of
this Agreement, the Company may withhold from amounts payable hereunder all
federal, state, local and foreign taxes and other amounts that are required to
be withheld by applicable laws or regulations, and the withholding of any amount
shall be treated as payment thereof for purposes of determining whether
Executive has been paid amounts to which he is entitled.
     16. WAIVER. Neither party shall, by mere lapse of time, without giving
notice or taking other action hereunder, be deemed to have waived any breach by
the other party of any of the provisions of this Agreement. Further, the waiver
by either party of a particular breach of this Agreement by the other shall
neither be construed as, nor constitute, a continuing waiver of such breach or
of other breaches of the same or any other provision of this Agreement.
     17. MODIFICATION. This Agreement may not be modified unless such
modification is embodied in writing, signed by the party against whom the
modification is to be enforced. Notwithstanding anything herein or in the
Employment Agreement to the contrary, the Company may, in its sole discretion,
amend this Agreement (which amendment shall be effective upon its adoption or at
such other time designated by the Company) at any time prior to a Change in
Control as may be necessary to avoid the imposition of the additional tax under
Section 409A(a)(1)(B) of the Code; provided, however, that any such amendment
shall not materially reduce the benefits provided to Executive pursuant to this
Agreement without the Executive’s consent.
     18. ASSIGNMENT AND SUCCESSORS. Cadence shall have the right to assign its
rights and obligations under this Agreement to an entity that, directly or
indirectly, acquires all or substantially all of the assets of Cadence. The
rights and obligations of Cadence under this Agreement shall inure to the
benefit and shall be binding upon the successors and assigns of Cadence.
Executive shall not have any right to assign his obligations under this
Agreement and shall only be entitled to assign his rights under this Agreement
upon his death, solely to the extent permitted by this Agreement, or as
otherwise agreed to by Cadence.
     19. SEVERABILITY. In the event that any part of this Agreement is found to
be void or unenforceable, all other provisions of the Agreement will remain in
full force and effect.
     20. GOVERNING LAW. This Agreement will be governed and enforced in
accordance with the laws of the State of California, without regard to its
conflict of laws principles.

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EXECUTION OF AGREEMENT
     The parties execute this Agreement to evidence their acceptance of it.

              Dated: September 24, 2010.   Dated: September 24, 2010.   KEVIN S.
PALATNIK   CADENCE DESIGN SYSTEMS, INC.
 
           
/s/ Kevin S. Palatnik
 
  By:   /s/ Christina R. Jones
 
   
 
      Christina R. Jones    
 
      Sr. Vice President -    
 
      Global Human Resources    

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ATTACHMENT 1
RELEASE OF CLAIMS
          1. For valuable consideration, I irrevocably, fully and finally
release Cadence, its parent, subsidiaries, affiliates, directors, officers,
agents and employees (“Releasees”) from all causes of action, claims, suits,
demands or other obligations or liabilities, whether known or unknown, suspected
or unsuspected, that I ever had or now have as of the time that I sign this
Agreement which relate to my hiring or employment with the Company, the
termination of my employment with the Company and claims asserted in shareholder
derivative actions or shareholder class actions against the Company and its
officers and Board of Directors, to the extent those derivative or class actions
relate to the period during my employment with the Company. The claims released
include, but are not limited to, any claims arising from or related to my
employment with Cadence, such as claims arising under (as amended) Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1974, the Americans with Disabilities Act,
the Equal Pay Act, the Fair Labor Standards Act, the California Fair Employment
and Housing Act, the California Labor Code, the Employee Retirement Income and
Security Act of 1974 (except for any vested right I have to benefits under an
ERISA plan), the state and federal Worker Adjustment and Retraining Notification
Act, and the California Business and Professions Code; any other local, state,
federal, or foreign law governing employment; and the common law of contract and
tort. In no event, however, shall any claims, causes of action, suits, demands
or other obligations or liabilities be released pursuant to the foregoing if and
to the extent they relate to:
               i. any amounts or benefits which I am or become entitled to
receive pursuant to the provisions of my Executive Transition and Release
Agreement with Cadence or pursuant to the provisions designated in Section 9.9
of my Employment Agreement with Cadence to survive the termination of my
full-time employment;
               ii. claims for workers’ compensation benefits under any of the
Company’s workers’ compensation insurance policies or funds;
               iii. claims related to my COBRA rights;
               iv. any rights that I have or may have to be indemnified by
Cadence pursuant to any contract, statute, or common law principle; and
               v. any other rights or claims that I have or may have that
cannot, as a matter of law, be waived.
     2. I intend that this Release cover all claims described above, whether or
not known to me. I further recognize the risk that, subsequent to the execution
of this Release, I may incur loss, damage or injury which I attribute to the
claims encompassed by this Release. I expressly assume this risk by signing this
Release and voluntarily and specifically waive any rights conferred by
California Civil Code section 1542 which provides as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if

 

--------------------------------------------------------------------------------

 

known by him or her must have materially affected his or her settlement with the
debtor.
     3. I represent and warrant that there has been no assignment or other
transfer of any interest in any claim by me that is covered by this Release.
     4. I acknowledge that Cadence has given me 21 days in which to consider
this Release and advised me to consult an attorney about it. I further
acknowledge that once I execute this Release, I will have an additional 7 days
in which to revoke my acceptance of this Release by means of a written notice of
revocation given to the General Counsel and the executive overseeing Human
Resources. This Release will not be final and effective until the expiration of
this revocation period.

                Dated:                                       .       Print Name 
            Sign Name           

2

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ATTACHMENT 2
RELEASE OF CLAIMS
          1. For valuable consideration, I irrevocably, fully and finally
release Cadence, its parent, subsidiaries, affiliates, directors, officers,
agents and employees (“Releasees”) from all causes of action, claims, suits,
demands or other obligations or liabilities, whether known or unknown, suspected
or unsuspected, that I ever had or now have as of the time that I sign this
Agreement which relate to my hiring or employment with the Company, the
termination of my employment with the Company and claims asserted in shareholder
derivative actions or shareholder class actions against the Company and its
officers and Board of Directors, to the extent those derivative or class actions
relate to the period during my employment with the Company. The claims released
include, but are not limited to, any claims arising from or related to my
employment with Cadence, such as claims arising under (as amended) Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1974, the Americans with Disabilities Act,
the Equal Pay Act, the Fair Labor Standards Act, the California Fair Employment
and Housing Act, the California Labor Code, the Employee Retirement Income and
Security Act of 1974 (except for any vested right I have to benefits under an
ERISA plan), the state and federal Worker Adjustment and Retraining Notification
Act, and the California Business and Professions Code; any other local, state,
federal, or foreign law governing employment; and the common law of contract and
tort. In no event, however, shall any claims, causes of action, suits, demands
or other obligations or liabilities be released pursuant to the foregoing if and
to the extent they relate to:
               i. any amounts or benefits which I am or become entitled to
receive pursuant to the provisions of my Executive Transition and Release
Agreement with Cadence or pursuant to the provisions designated in Section 9.9
of my Employment Agreement with Cadence to survive the termination of my
full-time employment;
               ii. claims for workers’ compensation benefits under any of the
Company’s workers’ compensation insurance policies or funds;
               iii. claims related to my COBRA rights;
               iv. any rights that I have or may have to be indemnified by
Cadence pursuant to any contract, statute, or common law principle; and
               v. any other rights or claims that I have or may have that
cannot, as a matter of law, be waived.
     2. I intend that this Release cover all claims described above, whether or
not known to me. I further recognize the risk that, subsequent to the execution
of this Release, I may incur loss, damage or injury which I attribute to the
claims encompassed by this Release. I expressly assume this risk by signing this
Release and voluntarily and specifically waive any rights conferred by
California Civil Code section 1542 which provides as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if

 

--------------------------------------------------------------------------------

 

known by him or her must have materially affected his or her settlement with the
debtor.
     3. I represent and warrant that there has been no assignment or other
transfer of any interest in any claim by me that is covered by this Release.
     4. I acknowledge that Cadence has given me 21 days in which to consider
this Release and advised me to consult an attorney about it. I further
acknowledge that once I execute this Release, I will have an additional 7 days
in which to revoke my acceptance of this Release by means of a written notice of
revocation given to the General Counsel and the executive overseeing Human
Resources. This Release will not be final and effective until the expiration of
this revocation period.

                Dated:                                   .       Print Name     
        Sign Name           

2