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                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is entered into as of July 21, 1998, by and between
GERALD C. HSU (the "EMPLOYEE") and AVANT! CORPORATION, a Delaware corporation
(the "COMPANY"). This Agreement amends and restates the Employment Agreement
between the parties dated July 21, 1997.

1.       TERM OF EMPLOYMENT.

         (a)      BASIC RULE. The Company agrees to continue the Employee's
         employment, and the Employee agrees to remain in employment with the
         Company, from the date of this Agreement until the date when the
         Employee's employment terminates pursuant to Subsection (b) below.

         (b)      TERMINATION. The Company may terminate the Employee's
         employment at any time and for any reason by giving the Employee 30
         days' advance notice in writing. The Employee may resign his employment
         by giving the Company 30 days' advance notice in writing. The
         Employee's employment shall terminate automatically in the event of his
         death. Any waiver of notice shall be valid only if it is made in
         writing and expressly refers to the applicable notice requirement of
         this Section 1.

         (c)      TERMINATION OF AGREEMENT. This Agreement shall terminate when
         all obligations of the parties hereunder have been satisfied.

         (d)      RIGHTS UPON TERMINATION. Unless otherwise defined in this
         subsection, each capitalized term used in this subsection shall have
         the meaning assigned to it in the Company's 1995 Stock Option/Stock
         Issuance Plan in effect on the date of this Agreement (the "PLAN").
         Upon any Involuntary Termination (as hereinafter defined) of Employee's
         employment, and subject to subsection 1(e) below: (1) the Company shall
         pay to Employee a cash termination payment equal to three times the
         amount of Employee's annual base salary in effect on the date of
         termination, in addition to any other payments, benefits or other
         rights to which Employee may then be entitled; (2) the shares of Common
         Stock then subject to any option granted by the Company to Employee and
         then outstanding (including but not limited to any such option that may
         hereafter be granted to Employee, under the Plan or otherwise) but not
         otherwise vested shall automatically vest in full; and (3) all
         outstanding repurchase rights applicable to any Common Stock previously
         issued to the Employee by the Company (including any Common Stock
         hereafter issued which is then held by Employee) shall also terminate
         automatically. If any provision of the preceding sentence regarding
         acceleration of options or early termination of repurchase rights shall
         conflict with any provision of any existing or future option agreement,
         stock purchase agreement or other agreement


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         between Employee and the Company, the provisions of the preceding
         sentence shall govern if they are more favorable to Employee under the
         circumstances than the conflicting provisions in such other agreement,
         unless such other agreement expressly refers to the preceding sentence
         and states that it is intended to govern in the event of such a
         conflict with such sentence.

         As used in this subsection, "INVOLUNTARY TERMINATION" shall mean a
         termination of Employee's employment with the Company which occurs by
         reason of:

                  (i)      Employee's involuntary dismissal or discharge by the
                  Company for reasons other than Misconduct (as defined below in
                  this subsection), or

                  (ii)     Employee's voluntary resignation within six months
                  after a Change in Control or a Corporate Transaction; or

                  (iii)    Employee's voluntary resignation within six months
                  after any of the following events occurs without Employee's
                  written consent:

                           (A)      a change in Employee's position or title
                  with the Company which materially reduces his level of
                  responsibility,

                           (B)      a reduction by more than fifteen percent
                  (15%) in Employee's level of compensation -- including base
                  salary, non-stock-related fringe benefits and cash bonus (to
                  the extent that any reduction in bonus is disproportionate to
                  a reduction in the Company's earnings per share between (i)
                  the period for which the reduced bonus is paid, and (ii) the
                  period for which Employee's most recent prior bonus was paid).

                           (C)      a relocation of Employee's place of
                  employment by more than fifty (50) miles.

         As used in this subsection, "MISCONDUCT" shall mean any of the
         following conduct by Employee occurring on or after the date hereof in
         connection with the performance of his duties hereunder which adversely
         affects the business or affairs of the Company (or any Parent or
         Subsidiary) in a material manner: (1) the commission of any act of
         fraud, embezzlement or dishonesty, (2) the unauthorized use or
         disclosure by Employee of confidential information or trade secrets of
         the Company (or any Parent or Subsidiary), or (3) any other intentional
         misconduct of Employee.

         Except as provided above in this subsection with respect to an
         Involuntary Termination, upon the termination of the Employee's
         employment pursuant to this Section 1, the Employee shall only be
         entitled to the compensation, benefits and reimbursements described in
         Sections 3, 4 and 5 for the period preceding the effective date of the
         termination. The payments under this Agreement shall fully discharge
         all responsibilities of the Company to the Employee.


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         (e)      LIMITATION ON PAYMENTS UNDER SUBSECTION 1(d).

                  (1)      APPLICATION OF LIMITATION. This Subsection 1(e) shall
         apply only if the Employee, on an after-tax basis, would receive more
         value under an Involuntary Termination that is subject to subsection
         1(d) after the application of this subsection 1(e) than the Employee
         would receive before the application of this subsection 1(e). For this
         purpose, "AFTER-TAX BASIS" shall mean a calculation taking into account
         all federal and state income and excise taxes imposed on the Employee,
         including (without limitation) the excise tax described in section 4999
         of the Internal Revenue Code of 1986, as amended (the "CODE"). If this
         subsection 1(e) is applicable, it shall supersede any conflicting
         provision of this Agreement.

                  (2)      BASIC RULE. The Company shall not make any payment or
         property transfer to, or for the benefit of, the Employee (under this
         Agreement or otherwise) that would subject the Employee to the excise
         tax described in section 4999 of the Code. All calculations required by
         this subsection 1(e) shall be performed by the independent auditors
         retained by the Company most recently prior to the Involuntary
         Termination (the "AUDITORS"), based on information supplied by the
         Company and the Employee, and shall be binding on the Company and the
         Employee. All fees and expenses of the Auditors shall be paid by the
         Company.

                  (3)      REDUCTIONS. If the amount of the aggregate payments
         or property transfers to the Employee must be reduced under this
         subsection 1(e), then the Employee shall direct in which order the
         payments or transfers are to be reduced, but no change in the timing of
         any payment or transfer shall be made without the Company's consent. As
         a result of uncertainty in the application of section 4999 of the Code
         at the time of an initial determination by the Auditors hereunder, it
         is possible that a payment will have been made by the Company that
         should not have been made (an "OVERPAYMENT") or that an additional
         payment that will not have been made by the Company could have been
         made (an "UNDERPAYMENT"). In the event that the Auditors, based upon
         the assertion of a deficiency by the Internal Revenue Service against
         the Employee that the Auditors believe has a high probability of
         success, determine that an Overpayment has been made, such Overpayment
         shall be treated for all purposes as a loan to the Employee that he
         shall repay to the Company, together with interest at the applicable
         federal rate specified in section 7872(f)(2) of the Code; provided,
         however, that no amount shall be payable by the Employee to the Company
         if and to the extent that such payment would not reduce the amount that
         is subject to an excise tax Under section 4999 of the Code. In the
         event that the Auditors determine that an Underpayment has occurred,
         such Underpayment shall promptly be paid or transferred by the Company
         to, or for the benefit of, the Employee, together with interest at the
         applicable federal rate specified in section 7872(f)(2) of the Code.


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2.       DUTIES AND SCOPE OF EMPLOYMENT.

         (a)      POSITION. The Company agrees to employ the Employee as its
         President, Chief Executive Officer and Chairman of the Board of
         Directors for the term of his employment under this Agreement
         ("Employment").

         (b)      OBLIGATIONS. During the term of his Employment, the Employee
         shall devote his full business efforts and time to the Company and its
         subsidiaries, affiliates and investments. He shall not render services
         to any other person or entity without the express prior approval of the
         Company's Board of "Directors (the "BOARD").

3.       CASH COMPENSATION.

         (a)      SALARY. The Company agrees to pay the Employee as compensation
         for his services a base salary at an annual rate of not less than
         $600,000. Such salary shall be payable in accordance with the Company's
         standard payroll procedures.

         (b)      BONUS OPPORTUNITY. The Employee shall have the opportunity to
         earn an annual bonus in an amount to be determined by the Board.

4.       EMPLOYEE BENEFITS. During the term of his Employment, the Employee
shall be eligible to participate in the employee benefit plans maintained by the
Company, subject in each case to the generally applicable terms and conditions
of the plan in question and to the determinations of any person or committee
administering such plan.

5.       BUSINESS EXPENSES. During the term of his Employment, the Employee
shall be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
shall reimburse the Employee for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.

6.       SUCCESSORS.

         (a)      COMPANY'S SUCCESSORS. This Agreement shall be binding upon any
         successor (whether direct or indirect and whether by purchase, lease,
         merger, consolidation, liquidation or otherwise) to all or
         substantially all of the Company's business and/or assets. For all
         purposes under this Agreement, the term "COMPANY" shall include any
         successor to the Company's business and/or assets which becomes bound
         by this Agreement.

         (b)      EMPLOYEE'S SUCCESSORS. This Agreement and all rights of the
         Employee hereunder shall inure to the benefit of, and be enforceable
         by, the Employee's personal or legal representatives, executors,
         administrators, successors, heirs, distributees, devisees and legatees.


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7.       MISCELLANEOUS PROVISIONS.

         (a)      NOTICE. Notices and all other communications contemplated by
         this Agreement shall be in writing and shall be deemed to have been
         duly given when personally delivered or when mailed by U.S. registered
         mail, return receipt requested and postage prepaid. In the case of the
         Employee, mailed notices shall be addressed to him at the home address
         which he most recently communicated to the Company in writing. In the
         case of the Company, mailed notices shall be addressed to its corporate
         headquarters, and all notices shall be directed to the attention of its
         Secretary.

         (b)      WAIVER. No provision of this Agreement shall be modified,
         waived or discharged unless the modification, waiver or discharge is
         agreed to in writing and signed by the Employee and by an authorized
         officer of the Company (other than the Employee). No waiver by either
         party of any breach of, or of compliance with, any condition or
         provision of this Agreement by the other party shall be considered a
         waiver of any other condition or provision or of the same condition or
         provision at another time.

         (c)      WHOLE AGREEMENT; MODIFICATIONS. No agreements, representations
         or understandings (whether oral or written and whether express or
         implied) which are not expressly set forth in this Agreement have been
         made or entered into by either party with respect to the subject matter
         hereof. This Agreement contains the entire understanding of the parties
         with respect to the subject matter hereof. A modification of this
         Agreement shall be valid only if it is made in writing and executed by
         both parties hereto.

         (d)      WITHHOLDING TAXES. All payments made under this Agreement
         shall be subject to reduction to reflect taxes or other charges
         required to be withheld by law.

         (e)      CHOICE OF LAW. The validity, interpretation, construction and
         performance of this Agreement shall be governed by the laws of the
         State of California (except their provisions governing the choice of
         law).

         (f)      SEVERABILITY. The invalidity or unenforceability of any
         provision or provisions of this Agreement shall not affect the validity
         or enforceability of any other provision hereof, which shall remain in
         full force and effect.

         (g)      NO ASSIGNMENT. The rights of any person to payments or
         benefits under this Agreement shall not be made subject to option or
         assignment, either by voluntary or involuntary assignment or by
         operation of law, including (without limitation) bankruptcy,
         garnishment, attachment or other creditor's process, and any action in
         violation of this Subsection (h) shall be void.


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         (h)      COUNTERPARTS. This Agreement may be executed in two or more
         counterparts, each of which shall be deemed an original, but all of
         which together shall constitute one and the same instrument.

                  IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.

                               /s/ Gerald C. Hsu
                               -----------------------------------
                               GERALD C. HSU ("EMPLOYEE")

                               AVANT! CORPORATION

                               By  /s/  Charles St. Clair
                                  --------------------------------
                               Title  Member of the Board and
                                      ----------------------------
                                      Compensation Committee
                                      ----------------------------


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