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                                                                   EXHIBIT 10.06

                          CADENCE DESIGN SYSTEMS, INC.
                              AMENDED AND RESTATED
                          EMPLOYEE STOCK PURCHASE PLAN

                 ADOPTED BY BOARD OF DIRECTORS NOVEMBER 9, 1998
                        STOCKHOLDER APPROVAL NOT REQUIRED
                             TERMINATION DATE: NONE

1.       PURPOSE.

         (A) The Plan initially was established effective as of January 30, 1990
(the "Initial Plan") and has been amended subsequently from time to time. The
Initial Plan hereby is amended and restated in its entirety as the Amended and
Restated Employee Stock Purchase Plan effective as of the date of its adoption.
The terms of the Initial Plan shall remain in effect and apply to all Rights
granted pursuant to the Initial Plan.

         (B) The purpose of the Plan is to provide a means by which Employees of
the Company and certain designated Affiliates may be given an opportunity to
purchase Shares of the Company.

         (C) The Company, by means of the Plan, seeks to retain the services of
such Employees, to secure and retain the services of new Employees and to
provide incentives for such persons to exert maximum efforts for the success of
the Company and its Affiliates.

         (D) The Company intends that the Rights to purchase Shares granted
under the Plan be considered options issued under an "employee stock purchase
plan," as that term is defined in Section 423(b) of the Code.

2.       DEFINITIONS.

         (A)      "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

         (B)      "BOARD" means the Board of Directors of the Company.

         (C)      "CODE" means the United States Internal Revenue Code of 1986,
as amended.

         (D)      "COMMITTEE" means a committee of the Board appointed by the
Board in accordance with subsection 3(c) of the Plan.

         (E)      "COMPANY" means Cadence Design Systems, Inc., a Delaware
corporation.
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         (F)      "DIRECTOR" means a member of the Board.

         (G)      "ELIGIBLE EMPLOYEE" means an Employee who meets the
requirements set forth in the Offering Memorandum for eligibility to participate
in the Offering.

         (H)      "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or an Affiliate of the Company. Neither service as a
Director nor payment of a director's fee shall be sufficient to constitute
"employment" by the Company or the Affiliate.

         (I)      "EMPLOYEE STOCK PURCHASE PLAN" means a plan that grants rights
intended to be options issued under an "employee stock purchase plan," as that
term is defined in Section 423(b) of the Code.

         (J)      "EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended.

         (K)      "FAIR MARKET VALUE" means the value of a security, as
determined in good faith by the Board. If the security is listed on the New York
Stock Exchange or any other established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of the
security shall be the closing sales price (rounded up where necessary to the
nearest whole cent) for such security (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or, in the event that the
security is traded on more than one such exchange or market, the exchange or
market with the greatest volume of trading in the relevant security of the
Company) on the trading day occurring on or closest to the relevant
determination date, as reported in The Wall Street Journal or such other source
as the Board deems reliable, and on the date as determined more precisely in the
Offering Memorandum.

         (L)      "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

         (M)      "OFFERING" means the grant of Rights to purchase Shares under
the Plan to Eligible Employees.

         (N)      "OFFERING DATE" means a date selected by the Board for an
Offering to commence.

         (O)      "OFFERING MEMORANDUM" means a memorandum describing the terms
of the then current or otherwise relevant Offering.

         (P)      "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of the Treasury regulations


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promulgated under Section 162(m) of the Code), is not a former employee of the
Company or an "affiliated corporation" receiving compensation for prior services
(other than benefits under a tax qualified pension plan), was not an officer of
the Company or an "affiliated corporation" at any time, and is not currently
receiving direct or indirect remuneration from the Company or an "affiliated
corporation" for services in any capacity other than as a Director, or (ii) is
otherwise considered an "outside director" for purposes of Section 162(m) of the
Code.

         (Q)      "PARTICIPANT" means an Eligible Employee who holds an
outstanding Right granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Right granted under the Plan.

         (R)      "PLAN" means this Amended and Restated Employee Stock Purchase
Plan.

         (S)      "PURCHASE DATE" means one or more dates established by the
Board during an Offering on which Rights granted under the Plan shall be
exercised and purchases of Shares carried out in accordance with such Offering.

         (T)      "RIGHT" means an option to purchase Shares granted pursuant to
the Plan.

         (U)      "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3 as in effect with respect to the Company at the time
discretion is being exercised regarding the Plan.

         (V)      "SECURITIES ACT" means the United States Securities Act of
1933, as amended.

         (W)      "SHARE" means a share of the common stock of the Company.

3.       ADMINISTRATION.

         (A)      The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c). Whether
or not the Board has delegated administration, the Board shall have the final
power to determine all questions of policy and expediency that may arise in the
administration of the Plan.

         (B)      The Board (or the Committee) shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

                  (I)      To determine when and how Rights to purchase Shares
shall be granted and the provisions of each Offering of such Rights (which need
not be identical).

                  (II)     To designate from time to time which Affiliates of
the Company shall be eligible to participate in the Plan.

                  (III)    To construe and interpret the Plan and Rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.


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                  (IV)     To amend the Plan as provided in Section 14.

                  (V)      Generally, to exercise such powers and to perform
such acts as it deems necessary or expedient to promote the best interests of
the Company and its Affiliates and to carry out the intent that the Plan be
treated as an Employee Stock Purchase Plan.

         (C)      The Board may delegate administration of the Plan to a
Committee of the Board composed of two (2) or more members, all of the members
of which Committee may be, in the discretion of the Board, Non-Employee
Directors and/or Outside Directors. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee of two (2) or more Outside Directors any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or such a
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

4.       SHARES SUBJECT TO THE PLAN.

         (A)      Subject to the provisions of Section 13 relating to
adjustments upon changes in securities, the Shares that may be sold pursuant to
Rights granted under the Plan shall not exceed in the aggregate Twenty Nine
Million Five Hundred Thousand (29,500,000) Shares. If any Right granted under
the Plan shall for any reason terminate without having been exercised, the
Shares not purchased under such Right shall again become available for the Plan.

         (B)      The Shares subject to the Plan may be unissued Shares or
Shares that have been bought on the open market at prevailing market prices or
otherwise.

5.       GRANT OF RIGHTS; OFFERING.

         (A)      The Board may from time to time grant or provide for the grant
of Rights to purchase Shares of the Company under the Plan to Eligible Employees
in an Offering on one or more Offering Dates selected by the Board. Each
Offering shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate, which shall comply with the requirements of
Section 423(b)(5) of the Code that all Employees granted Rights to purchase
Shares under the Plan shall have the same rights and privileges. The terms and
conditions of an Offering shall be incorporated by reference into the Plan and
treated as part of the Plan. The provisions of separate Offerings need not be
identical, but each Offering shall include (through incorporation of the
provisions of this Plan by reference in the Offering Memorandum or otherwise)
the period during which the Offering shall be effective, which period shall not
exceed twenty-seven (27) months beginning with the Offering Date, and the
substance of the provisions contained in Sections 6 through 9, inclusive.

         (B)      If a Participant has more than one Right outstanding under the
Plan, unless he or she otherwise indicates in agreements or notices delivered
hereunder: (i) each agreement or notice delivered by that Participant will be
deemed to apply to all of his or her Rights under the Plan, and (ii) an
earlier-granted Right (or a Right with a lower exercise price, if two Rights
have


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identical grant dates) will be exercised to the fullest possible extent before a
later-granted Right (or a Right with a higher exercise price if two Rights have
identical grant dates) will be exercised.

6.       ELIGIBILITY.

         (A)      Rights may be granted only to Employees of the Company or, as
the Board may designate as provided in subsection 3(b), to Employees of an
Affiliate. Except as provided in subsection 6(b), an Employee shall not be
eligible to be granted Rights under the Plan unless, on the Offering Date, such
Employee has been in the employ of the Company or the Affiliate, as the case may
be, for such continuous period preceding such grant as the Board may require,
but in no event shall the required period of continuous employment be equal to
or greater than two (2) years.

         (B)      The Board may provide that each person who, during the course
of an Offering, first becomes an Eligible Employee will, on a date or dates
specified in the Offering which coincides with the day on which such person
becomes an Eligible Employee or which occurs thereafter, receive a Right under
that Offering, which Right shall thereafter be deemed to be a part of that
Offering. Such Right shall have the same characteristics as any Rights
originally granted under that Offering, as described herein, except that:

                  (I)      the date on which such Right is granted shall be the
"Offering Date" of such Right for all purposes, including determination of the
exercise price of such Right;

                  (II)     the period of the Offering with respect to such Right
shall begin on its Offering Date and end coincident with the end of such
Offering; and

                  (III)    the Board may provide that if such person first
becomes an Eligible Employee within a specified period of time before the end of
the Offering, he or she will not receive any Right under that Offering.

         (C)      No Employee shall be eligible for the grant of any Rights
under the Plan if, immediately after any such Rights are granted, such Employee
owns stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any Affiliate. For
purposes of this subsection 6(c), the rules of Section 424(d) of the Code shall
apply in determining the stock ownership of any Employee, and stock which such
Employee may purchase under all outstanding rights and options shall be treated
as stock owned by such Employee.

         (D)      An Eligible Employee may be granted Rights under the Plan only
if such Rights, together with any other Rights granted under all Employee Stock
Purchase Plans of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such Eligible Employee's rights to purchase
Shares of the Company or any Affiliate to accrue at a rate which exceeds twenty
five thousand dollars ($25,000) of the fair market value of such Shares
(determined at the time such Rights are granted) for each calendar year in which
such Rights are outstanding at any time.


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         (E)      The Board may provide in an Offering that Employees who are
highly compensated employees within the meaning of Section 423(b)(4)(D) of the
Code shall not be eligible to participate.

7.       RIGHTS; PURCHASE PRICE.

         (A)      On each Offering Date, each Eligible Employee, pursuant to an
Offering made under the Plan, shall be granted the Right to purchase up to the
number of Shares purchasable either:

                  (I)      with a percentage designated by the Board not
exceeding fifteen percent (15%) of such Employee's Earnings (as defined by the
Board in each Offering) during the period which begins on the Offering Date (or
such later date as the Board determines for a particular Offering) and ends on
the date stated in the Offering, which date shall be no later than the end of
the Offering; or

                  (II)     with a maximum dollar amount designated by the Board
that, as the Board determines for a particular Offering, (1) shall be withheld,
in whole or in part, from such Employee's Earnings (as defined by the Board in
each Offering) during the period which begins on the Offering Date (or such
later date as the Board determines for a particular Offering) and ends on the
date stated in the Offering, which date shall be no later than the end of the
Offering and/or (2) shall be contributed, in whole or in part, by such Employee
during such period.

         (B)      The Board shall establish one or more Purchase Dates during an
Offering on which Rights granted under the Plan shall be exercised and purchases
of Shares carried out in accordance with such Offering.

         (C)      In connection with each Offering made under the Plan, the
Board may specify a maximum amount of Shares that may be purchased by any
Participant as well as a maximum aggregate amount of Shares that may be
purchased by all Participants pursuant to such Offering. In addition, in
connection with each Offering that contains more than one Purchase Date, the
Board may specify a maximum aggregate amount of Shares which may be purchased by
all Participants on any given Purchase Date under the Offering. If the aggregate
purchase of Shares upon exercise of Rights granted under the Offering would
exceed any such maximum aggregate amount, the Board shall make a pro rata
allocation of the Shares available in as nearly a uniform manner as shall be
practicable and as it shall deem to be equitable.

         (D)      The purchase price of Shares acquired pursuant to Rights
granted under the Plan shall be not less than the lesser of:

                  (I)      an amount equal to eighty-five percent (85%) of the
fair market value of the Shares on the Offering Date; or

                  (II)     an amount equal to eighty-five percent (85%) of the
fair market value of the Shares on the Purchase Date.


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8.       PARTICIPATION; WITHDRAWAL; TERMINATION.

         (A)      An Eligible Employee may become a Participant in the Plan
pursuant to an Offering by delivering a participation agreement to the Company
within the time specified in the Offering Memorandum, in such form as the
Company provides. Each such agreement shall authorize payroll deductions of up
to the maximum percentage specified by the Board of such Employee's Earnings
during the Offering (as defined in each Offering). The payroll deductions made
for each Participant shall be credited to a bookkeeping account for such
Participant under the Plan and either may be deposited with the general funds of
the Company or may be deposited in a separate account in the name of, and for
the benefit of, such Participant with a financial institution designated by the
Company. To the extent provided in the Offering, a Participant may reduce
(including to zero) or increase such payroll deductions. To the extent provided
in the Offering, a Participant may begin such payroll deductions after the
beginning of the Offering. A Participant may make additional payments into his
or her account only if specifically provided for in the Offering and only if the
Participant has not already had the maximum permitted amount withheld during the
Offering.

         (B)      At any time during an Offering, a Participant may terminate
his or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Offering except as provided by the Board in the Offering. Upon such withdrawal
from the Offering by a Participant, the Company shall distribute to such
Participant all of his or her accumulated payroll deductions (reduced to the
extent, if any, such deductions have been used to acquire Shares for the
Participant) under the Offering, without interest unless otherwise specified in
the Offering, and such Participant's interest in that Offering shall be
automatically terminated. A Participant's withdrawal from an Offering will have
no effect upon such Participant's eligibility to participate in any other
Offerings under the Plan but such Participant will be required to deliver a new
participation agreement in order to participate in subsequent Offerings under
the Plan.

         (C)      Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating Employee's employment
with the Company and its designated Affiliates for any reason (subject to any
post-employment participation period required by law) or other lack of
eligibility. The Company shall distribute to such terminated Employee all of his
or her accumulated payroll deductions (reduced to the extent, if any, such
deductions have been used to acquire Shares for the terminated Employee) under
the Offering, without interest unless otherwise specified in the Offering. If
the accumulated payroll deductions have been deposited with the Company's
general funds, then the distribution shall be made from the general funds of the
Company, without interest. If the accumulated payroll deductions have been
deposited in a separate account with a financial institution as provided in
subsection 8(a), then the distribution shall be made from the separate account,
without interest unless otherwise specified in the Offering.

         (D)      Rights granted under the Plan shall not be transferable by a
Participant otherwise than by will or the laws of descent and distribution, or
by a beneficiary designation as provided in Section 15 and, otherwise during his
or her lifetime, shall be exercisable only by the person to whom such Rights are
granted.


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9.       EXERCISE.

         (A)      On each Purchase Date specified therefor in the relevant
Offering, each Participant's accumulated payroll deductions and other additional
payments specifically provided for in the Offering (without any increase for
interest) will be applied to the purchase of Shares up to the maximum amount of
Shares permitted pursuant to the terms of the Plan and the applicable Offering,
at the purchase price specified in the Offering. No fractional Shares shall be
issued upon the exercise of Rights granted under the Plan unless specifically
provided for in the Offering and permitted by law.

         (B)      Unless otherwise specifically provided in the Offering, the
amount, if any, of accumulated payroll deductions remaining in any Participant's
account after the purchase of Shares that is equal to the amount required to
purchase one or more whole Shares on the final Purchase Date of the Offering
shall be distributed in full to the Participant at the end of the Offering,
without interest. If the accumulated payroll deductions have been deposited with
the Company's general funds, then the distribution shall be made from the
general funds of the Company, without interest. If the accumulated payroll
deductions have been deposited in a separate account with a financial
institution as provided in subsection 8(a), then the distribution shall be made
from the separate account, without interest unless otherwise specified in the
Offering.

         (C)      The amount, if any, of accumulated payroll deductions
remaining in any Participant's account after the purchase of Shares that is less
than the amount required to purchase one whole Share on the final Purchase Date
of the Offering shall be carried forward, without interest, into the next
Offering.

         (D)      No Rights granted under the Plan may be exercised to any
extent unless the Shares to be issued upon such exercise under the Plan
(including Rights granted thereunder) are covered by an effective registration
statement pursuant to the Securities Act and the Plan is in material compliance
with all applicable state, foreign and other securities and other laws
applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan
is not so registered or in such compliance, no Rights granted under the Plan or
any Offering shall be exercised on such Purchase Date, and the Purchase Date
shall be delayed until the Plan is subject to such an effective registration
statement and such compliance, except that the Purchase Date shall not be
delayed more than twelve (12) months and the Purchase Date shall in no event be
more than twenty-seven (27) months from the Offering Date. If, on the Purchase
Date of any Offering hereunder, as delayed to the maximum extent permissible,
the Plan is not registered and in such compliance, no Rights granted under the
Plan or any Offering shall be exercised and all payroll deductions accumulated
during the Offering (reduced to the extent, if any, such deductions have been
used to acquire Shares) shall be distributed to the Participants, without
interest unless otherwise specified in the Offering. If the accumulated payroll
deductions have been deposited with the Company's general funds, then the
distribution shall be made from the general funds of the Company, without
interest. If the accumulated payroll deductions have been deposited in a
separate account with a financial institution as provided in subsection 8(a),
then the distribution shall be made from the separate account, without interest
unless otherwise specified in the Offering.


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10.      COVENANTS OF THE COMPANY.

         (A)      During the terms of the Rights granted under the Plan, the
Company shall ensure that the amount of Shares required to satisfy such Rights
are available.

         (B)      The Company shall seek to obtain from each federal, state,
foreign or other regulatory commission or agency having jurisdiction over the
Plan such authority as may be required to issue and sell Shares upon exercise of
the Rights granted under the Plan. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of Shares under the Plan, the Company shall be relieved from any liability for
failure to issue and sell Shares upon exercise of such Rights unless and until
such authority is obtained.

11.      USE OF PROCEEDS FROM SHARES.

         Proceeds from the sale of Shares pursuant to Rights granted under the
Plan shall constitute general funds of the Company.

12.      RIGHTS AS A STOCKHOLDER AND EMPLOYEE.

         (A)      A Participant shall not be deemed to be the holder of, or to
have any of the rights of a holder with respect to, Shares subject to Rights
granted under the Plan unless and until the Participant's Shares acquired upon
exercise of Rights under the Plan are recorded in the books of the Company.

         (B)      Neither the Plan nor the grant of any Right thereunder shall
confer any right on any Employee to remain in the employ of the Company or any
Affiliate or restrict the right of the Company or any Affiliate to terminate
such Employee's employment.

13.      ADJUSTMENTS UPON CHANGES IN SECURITIES.

         (A)      Subject to any required action by the stockholders of the
Company, the number of Shares covered by each Right under the Plan that has not
yet been exercised and the number of Shares that have been authorized for
issuance under the Plan but have not yet been placed under a Right
(collectively, the "Reserves"), as well as the price per Share covered by each
Right under the Plan that has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting
from a stock split or the payment of stock dividend (but only on the Common
Stock) or any other increase or decrease in the number of Shares effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to a Right.

         (B)      In the event of the proposed dissolution or liquidation of the
Company, any and all Offerings shall terminate immediately prior to the
consummation of such proposed action,


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unless otherwise provided by the Board. The Board may, in the exercise of its
sole discretion in such instances, declare that the Rights under the Plan shall
terminate as of a date fixed by the Board and give each Participant the right to
exercise his or her Right. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation or a parent or subsidiary of such successor
corporation when the Company is not the surviving corporation, any and all
Offerings shall terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, and in lieu of assumption or
substitution of the Rights, provide that each Participant shall have the right
to exercise his or her Right. If the Board makes a Right exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Board
shall notify the Participant that the Right shall be fully exercisable for a
period of twenty (20) days from the date of such notice (or such other period of
time as the Board shall determine), and the Right shall terminate upon the
expiration of such period.

         (C)      The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per Share covered by each outstanding Right, in the event that the Company
effects one or more reorganizations, recapitalizations, rights offering, or
other increases or reductions of outstanding Shares, and in the event of the
Company being consolidated with or merged into any other corporation.

14.      AMENDMENT OF THE PLAN.

         (A)      The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 13 relating to adjustments upon
changes in securities and except as to minor amendments to benefit the
administration of the Plan, to take account of a change in legislation or to
obtain or maintain favorable tax, exchange control or regulatory treatment for
Participants or the Company or any Affiliate, no amendment shall be effective
unless approved by the stockholders of the Company to the extent stockholder
approval is necessary for the Plan to satisfy the requirements of Section 423 of
the Code, Rule 16b-3 under the Exchange Act or any Nasdaq or other securities
exchange listing requirements. Currently under the Code, stockholder approval
within twelve (12) months before or after the adoption of the amendment is
required where the amendment will:

                  (I)      Increase the amount of Shares reserved for Rights
under the Plan;

                  (II)     Modify the provisions as to eligibility for
participation in the Plan to the extent such modification requires stockholder
approval in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code; or

                  (III)    Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code.

         (B)      It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide Employees with
the maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder


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relating to Employee Stock Purchase Plans and/or to bring the Plan and/or Rights
granted under it into compliance therewith.

         (C)      Rights and obligations under any Rights granted before
amendment of the Plan shall not be impaired by any amendment of the Plan without
the consent of the person to whom such Rights were granted, or except as
necessary to comply with any laws or governmental regulations, or except as
necessary to ensure that the Plan and/or Rights granted under the Plan comply
with the requirements of Section 423 of the Code.

15.      DESIGNATION OF BENEFICIARY.

         (A)      A Participant may file a written designation of a beneficiary
who is to receive any Shares and/or cash, if any, from the Participant's account
under the Plan in the event of such Participant's death subsequent to the end of
an Offering but prior to delivery to the Participant of such Shares and cash. In
addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participant's account under the Plan in the event
of such Participant's death during an Offering.

         (B)      The Participant may change such designation of beneficiary at
any time by written notice. In the event of the death of a Participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such Participant's death, the Company shall deliver such Shares
and/or cash to the executor or administrator of the estate of the Participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its sole discretion, may deliver such Shares
and/or cash to the spouse or to any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

16.      TERMINATION OR SUSPENSION OF THE PLAN.

         (A)      The Board in its discretion may suspend or terminate the Plan
at any time. Unless sooner terminated, the Plan shall terminate at the time that
all of the Shares subject to the Plan's reserve, as increased and/or adjusted
from time to time, have been issued under the terms of the Plan. No Rights may
be granted under the Plan while the Plan is suspended or after it is terminated.

         (B)      Rights and obligations under any Rights granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except as expressly provided in the Plan or with the consent of the person to
whom such Rights were granted, or except as necessary to comply with any laws or
governmental regulation, or except as necessary to ensure that the Plan and/or
Rights granted under the Plan comply with the requirements of Section 423 of the
Code.

17.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective upon adoption by the Board.


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<PAGE>
18.      REORGANIZATION OF CADENCE DESIGN FOUNDRY BUSINESS.

Nothing in this Plan shall be construed to restrict the ability of the Company
to effect the transactions, amendments and termination described in Section A.2.
of that certain Plan of Reorganization for Cadence Design Foundry Business,
adopted by the Board on October 30, 2002, and the Plan shall hereby deemed to be
amended in accordance therewith; provided that such transactions shall be
effected in a manner consistent with applicable law.


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