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                                                                    EXHIBIT 10.3
 
                                 EMPLOYMENT AGREEMENT

     OrCAD, Inc. (Company), whose address is 9300 SW Nimbus Avenue, Beaverton,
Oregon  97008, and Donald G. Tannenbaum (Executive), enter this agreement,
effective September 17, 1998.

     Executive is an experienced manager of Company's business, and Company
believes Executive's continued employment by Company enhances shareholder value
and will contribute to Company's future success.

     Company and Executive have therefore elected to capture in contract certain
policies and rights under which Executive is employed by the Company, intending
thereby not to change any substantive right, but to describe such rights with
clarity.

     The parties agree as follows:

1.   EMPLOYMENT.

     1.1    LENGTH.  Executive's employment with Company will continue until
ended as this Agreement provides.

     1.2    FULL TIME.  Executive will work full time.  Executive will devote
Executive's good faith efforts in support of Company's operations and goals,
during the term of this Agreement.  While Executive's employment by Company
under this Agreement continues, Executive will not engage in any other
employment without Company's advance written consent.

     1.3    EXECUTIVE'S DUTIES.  Executive will serve in the Position shown on
Exhibit A, and in that position will assume such duties and perform such tasks
as Company from time to time requires.

2.   COMPENSATION PLAN.

     2.1    BASE SALARY.  As of the date of this Agreement, Company pays
Executive at the rate per year shown as the Base Salary on Exhibit A, payable in
equal increments on Company's standard payroll schedules.  Executive's Base
Salary will be reviewed on an annual basis, as with other executives of the
Company.

     2.2    INCENTIVE SALARY.  Company will pay Executive such  incentive
component of salary as may be earned under the terms of any executive incentive
plan put in place by the Company.

     2.3    STOCK.  Executive has been or may in the future be granted rights to
purchase stock or stock options on the exercise and vesting schedules and terms
and conditions shown in the grant documents.  These are referred to as "options"
herein.

     2.4    OTHER COMPENSATION.  Company will also provide benefits, such as
medical insurance, life insurance, disability insurance, 401(k) plan, vacation
time, sick leave, and other fringe benefits, in accordance with Company's then-
existing policies applicable generally to senior executives.

     2.5    OTHER BENEFITS.  Any other benefits particularly applicable to
Executive are shown on Exhibit A.

3.   TERM AND TERMINATION.

     3.1    AT WILL, CONDITIONS.  Executive is hired for employment at will,
subject to the 

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agreements described here.

     3.2    TERMINATION BY COMPANY.  Company may terminate Executive's
employment with or without cause.  A termination is effective as of the date
specified in the  Notice of termination.

     3.3    CONSTRUCTIVE TERMINATION.  If, without Executive's advance written
consent, Company reassigns Executive to duties not reasonably considered of
equivalent or greater responsibility, changes Executive's title to one not
reasonably considered equivalent or greater, or reduces Executive's overall
targeted compensation (that is, the sum of base and incentive compensation), or
directs Executive to report to a level of management below the level to which
Executive previously reported (measured by reference to levels of management
intervening below the President of the parent company), Executive may elect to
treat the change as "constructive termination" by the Company, and may resign
from the Company and be treated as if terminated without cause.  To do so,
Executive must give Notice of Executive's resignation, citing the specific
events that constitute constructive termination, within ninety days of the event
that constitutes the constructive termination, or lose the right to make that
declaration with respect to that particular event.

     3.4    CAUSE.   For the purposes of this Agreement, termination is "with
cause" if the Executive's employment is terminated because Executive is
convicted of a crime involving the company's business; or has misappropriated
Company monies or assets; or has committed fraud; or has been grossly negligent
in or willfully fails to accomplish the performance of his duties, provided that
before terminating Executive for such reasons, the Company shall have given
Executive at least five days' Notice of the allegations with an opportunity to
respond and provide evidence refuting them within that period.

     3.5    EFFECT OF VOLUNTARY RESIGNATION OR WITH CAUSE TERMINATION.  If
Executive resigns voluntarily, or is properly terminated for cause, pay and
benefits will cease as of the effective date of the resignation or termination.
Executive will also forfeit any entitlement to the rights on change in control
described in Section 4.  Executive will use good faith efforts to provide
Company as much notice as reasonably possible of any such resignation.

     3.6    COMPENSATION ON TERMINATION WITHOUT CAUSE BY COMPANY.    If
Executive is terminated without cause, or resigns following constructive
termination as described above, Company will give Executive severance benefits
as follows.

            3.6.1   COMPENSATION EARNED THROUGH TERMINATION DATE.  On
     termination by Company without cause, Company will pay Executive's Base
     Salary, any commissions, and any incentive component of salary, all as
     earned through the termination date, and a buyout of accumulated but unused
     vacation time in accordance with then-effective Company policies concerning
     rights to accumulate such time, all to be paid within thirty days of
     termination.

            3.6.2   BASE PAY.  On termination by Company without cause, Company
     will in addition pay Executive's targetted compensation and benefits for
     the Severance Period defined in Exhibit A.  Payment of the Executive's Base
     Salary and incentive compensation shall be made on Company's standard
     payroll schedules from the date of termination, as if the Executive had not
     been terminated.

     3.7    COMMITMENT CONCERNING COMPETITION.  While Company continues to pay
Executive's salary during Executive's employment or after termination, unless
Company consents in writing, Executive will not consult for, be employed by,
serve on the board of, or otherwise take other than a passive investor role in,
any company that is in the business of automated electronic design; nor will
Executive encourage, influence, or assist any employee of the Company in
securing other 

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employment with a competitor so defined. For purposes of this paragraph, an
"employee" includes anyone who is then employed by the Company, or who has
voluntarily resigned, or been terminated for cause, from his or her position
with the Company within the previous three months.

     3.8    OFFSET.  To the extent permissible under applicable law, without
prejudice to other remedies, Company may offset any amounts Executive owes
Company against any amounts (net of taxes and other deductions) due employee
upon termination or thereafter.

4.   CHANGE IN CONTROL AND ACQUISITION RESTRUCTURING POLICIES.

     4.1    "CONTROL CHANGE."  A "Control Change" is the sale of substantially
all Company's assets to, or acquisition of a majority of Company's voting stock
or entry into a voting or common control agreement covering a majority of the
company's voting stock by, an entity (or a set of entities under effective
common control) in which those controlling the acquiring entity or entities are
not the same as those who have majority ownership and effective control of
Company before the sale or acquisition.

     4.2    "CONTROL CHANGE WINDOW."  The Control Change Window begins thirty
days before the LOI Date, and ends one year after the date on which the Control
Change becomes effective.

     4.3    "LOI DATE."  The "LOI Date" is the date a letter of intent, term
sheet, or other similar document is first executed by the Company or one or more
of its Shareholders and by anyone acting on behalf of the entity with respect to
which a Control Change later occurs, which document evidences an agreement in
principle to pursue a course of action that is intended to result in a Control
Change.  If no such document is executed, the "LOI Date" shall be regarded as
being the date on which a definitive merger agreement is approved by the Board
of Directors, or the date on which the Control Change occurs, whichever is
earlier.

     4.4    EQUIVALENT TREATMENT TRANSACTIONS.  The Company may engage in
acquisitions, mergers, or other similar transactions that do not amount to a
Control Change, but as a result of which the Company determines to restructure
its executive team.  If the Board of Directors (or any committee of the Board
charged with responsibility for executive compensation) in its sole discretion,
determines that  Executive's employment was (or is to be) terminated without
cause due to changes in the executive team occasioned by such a transaction,
then that transaction will be treated as one in which a Control Change occurred
on the date Executive's employment is terminated, or on the date of the
determination, whichever is later.

     4.5    SPECIAL BENEFITS ON TERMINATION DURING CONTROL CHANGE WINDOW.  If
Executive is terminated without cause within a Control Change Window, then
Company shall provide these special benefits:

            4.5.1   OPTIONS.  The Company will accelerate the exercise date of
     Executive's options, such that, for each year during which Executive has
     been employed by the Company, measured through the date on which
     Executive's employment terminates, 25% of all options that were not
     otherwise exercisable as of the date of termination shall become
     exercisable, provided that if such acceleration alone stands in the way of
     allowing "pooling of interests" accounting treatment for such acquisition,
     such acceleration would not take place.  Service with companies acquired by
     the Company shall count toward the service time total thus computed.  If
     less than all options are accelerated under this paragraph, acceleration
     shall occur in ascending order by option exercise price.

            4.5.2   SALARY.   The Company shall either provide the targeted
     compensation 

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     continuation benefits of Section 3.6.2, or if it is more favorable to the
     Executive, pay Executive target (base plus incentive) salary such that, for
     each year during which Executive has been employed by the Company,
     Executive receives three months of continuation at target salary levels, up
     to but not exceeding one full year of such continuation (subject to all
     applicable withholding.) Such salary shall be paid over the course of the
     continuation period, in accordance with the Company's usual payroll
     schedules.

     4.6    COMPANY'S ELECTION TO DECLARE COVERAGE UNDER THIS SECTION.  If as of
the date of termination the Control Change has not yet occurred, but the Company
is within a period that will become a control change window upon the effective
date of the applicable Control Change, the Company may elect nonetheless to
treat the termination under this Section 4, by Notice to Executive.

     4.7    COMPANY'S OBLIGATION IF COVERAGE IS NOT DECLARED.  If Executive is
terminated without benefits under this Section 4 and it later becomes apparent
that the termination occurred within a Control Change Window, Company shall make
available to Executive the benefits to which Executive was entitled under this
Section 4, by Notice, provided that benefits paid to Executive under Section
3.6.2 and 3.6.3 shall be offset against benefits otherwise due hereunder.  If
Executive's options do not as of the date of Notice have at least 30 days
remaining in which they can be exercised (or if the options cannot be, or the
Board determines it is inadvisable that they be, extended for such a period)
then the Board may elect, instead of allowing the acceleration of unvested
options otherwise contemplated hereunder, to provide Executive stock whose fair
market value is equivalent to the in-the-money value of the unvested options
that would accelerate hereunder, measured as of the last reported sale on the
NASDAQ system of the Company's common stock on the day of (or if none, prior to
the day of) termination.

5.   OTHER MATTERS.

     5.1    NOTICE.  Notice to Executive shall be sent to Executive's most
recent address shown in Company's personnel records.  Notice to Company shall be
sent to Company's headquarters address, marked attention:  Chief Financial
Officer.  Either party may change its address by Notice.  Notice shall be
effective when the person to whom it is sent actually gets it, if sent by any
method that leaves a paper or electronic record in the hands of the recipient.
If sent certified or registered mail, postage prepaid, return receipt requested,
to the proper address this section defines, notice shall be considered effective
whether or not actually received on the date the return receipt shows the notice
was accepted, refused, or returned undeliverable.

     5.2    SEVERABILITY.  Each clause of this agreement is severable.  If any
clause is ruled void or unenforceable, the balance of the agreement shall
nonetheless remain in effect.

     5.3    NON-WAIVER.  A waiver of one or more breaches of any clause of this
agreement shall not act to waive any other breach, whether of the same or
different clauses.

     5.4    ASSIGNMENT.  This Agreement shall be binding upon and inure to the
benefit of Company, its successors and assigns and shall be binding upon and
inure to the benefit of Executive, and Executive's administrators, executors,
legatees, and heirs.  This Agreement shall not be assigned by Executive.

     5.5    GOVERNING LAW.  This agreement is entered in, and is governed by,
the laws of the state of Oregon.

     5.6    JURISDICTION, SERVICE, INJUNCTIVE RELIEF.  Jurisdiction over
disputes arising under this Agreement rests exclusively in the state or federal
courts located in Multnomah County, Oregon, 

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and each party consents to that jurisdiction. Each party consents to service of
process through the method prescribed for notice. As violation of the non-
competition or non-solicitation obligations of this agreement, or those related
to rights in intellectual property, would result in damage to Company that could
not be cured by an award of money alone, Company shall be entitled to injunctive
relief in cases where a violation of those obligations is shown.

     5.7    ATTORNEYS' FEES.  The prevailing party in any suit, action,
arbitration, or appeal filed or held concerning this agreement shall be entitled
to reasonable attorneys' fees and the actual, reasonably necessary costs of the
proceeding, as determined by the court.

     5.8    INTEGRATION.  This agreement supersedes all prior employment
agreements or understandings between the parties, written or oral, and
supplements the Executive's Stock Option Agreements, and Executive's agreements
with the Company concerning proprietary and confidential information and
inventions.  This agreement may be modified only in writing signed by the
original parties hereto, or by their successors or superiors in office.



DONALD G. TANNENBAUM                        ORCAD, INC.
 
 
Sign: /s/ Donald G. Tannenbaum              By:    /s/ Michael F. Bosworth
      ------------------------                     -----------------------
Date: September 17, 1998                    Print: Michael F. Bosworth
                                            Title: Chairman of the Board, 
                                                   President and Chief
                                                   Executive Officer

                                            Date:  September 17, 1998

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                       EXHIBIT A TO EMPLOYMENT AGREEMENT
                                        
                             Compensation Package
                                        
Donald G. Tannenbaum                        September 17, 1998
--------------------                        ------------------
Name                                        Date
 
1.    Position:                             Vice President of Integration & 
                                            Development
 
2.    Base Salary (Annual):                 $130,000
 
3.    Target Incentive (Annual):            $ 20,000
 
4.    Severance Period:                     6 Months
 
5.    Other Benefits:                       Medical, Dental, Vision, 
                                            Life Insurance
 


                                            OrCAD, Inc.
 
 
By:    /s/ Donald G. Tannenbaum             By:    /s/ Michael F. Bosworth
       ----------------------------                ----------------------------
Print: Donald G. Tannenbaum                 Print: Michael F. Bosworth
 
Title: Vice President of Integration &      Title: Chairman of the Board, 
       Development                                 President and
                                                   Chief Executive Officer
 
Date:  September 17, 1998                   Date:  September 17, 1998