Exhibit 10.35


 





 


	
  Title:

  	
   

  	
  Executive - Operating Plan Incentive

  
	
  Effective Date:

  	
   

  	
  October 31, 2005

  



 


 


	
  Document Owner:

  	
   

  	
  Human Resources - Compensation

  
	
   

  	
   

  	
   

  
	
  Approvals:

  	
   

  	
  Jan Collinson

  
	
   

  	
   

  	
  Senior Vice President, HR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Chi-Foon Chan

  
	
   

  	
   

  	
  President and COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aart de Geus

  
	
   

  	
   

  	
  Chairman and CEO

  



 


 


	
  Date

  	
   

  	
  Author

  	
   

  	
  Revision History

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 6, 2005

  	
   

  	
  J. Cleveland

  	
   

  	
  Initial plan document

  



 


 


This Synopsys Operating Plan Incentive (“OPI” or the “Plan”) provides
members of the Company’s senior management the potential to earn variable
compensation linked directly to attainment of the Company’s 2006 and 2007 fiscal
year operating plan objectives.


 


The purpose of the Plan is to align the actions and accomplishments of
senior management toward the achievement of key annual financial targets.  The specific measure and goal shall be
approved in December by the Compensation Committee of the Board of
Directors.  Plan targets can be expressed
as an absolute achievement, or improvement against a particular measure at a
specific point in time.


 


Approved Annual Financial Target:


	
   

  	
  FY2006:

  	
  Cash Award Target – Non-GAAP Operating
  Margin of [*] for full fiscal year 2006

  
	
   

  	
   

  	
  Equity Award Target –
  Non-GAAP Operating Margin of [*] for full fiscal year 2006

  
	
   

  	
   

  	
   

  
	
   

  	
  FY2007:

  	
  Cash Award Target - TBD December 2006

  
	
   

  	
   

  	
  Equity Award Target –
  Non-GAAP Operating Margin of [*] for full fiscal year 2007

  



 


ELIGIBILITY


 


To be eligible to receive an award under
this Plan, an executive must be designated by the Board of Directors as an “officer”
of the Company pursuant to rule 16(b) of the Securities Exchange Act
of 1934 and must be:


•                  a Senior Vice President, Chief Operating
Officer and/or Chief Executive Officer;


•                  a regular employee scheduled to work at least
20 hours per week;


 


Synopsys Confidential


 


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•                  actively employed through the last day of the
current fiscal year (or on an approved leave of absence);


•                  and approved for participation by the
Compensation Committee of the Board of Directors;


 


BONUS TARGETS 


 


The targeted incentive for each eligible executive is set by the
Compensation Committee of the Board of Directors.


 


The targeted incentive is expressed as a combination of cash
compensation in the form of a fixed dollar amount and equity
compensation in the form of performance vesting stock option grants for each
eligible executive.


 


For eligible executives who join the Company pursuant to an acquisition
or are hired after the start of the fiscal year, their participation in the
plan will be approved by the Compensation Committee and the related target
incentive will be prorated based on their hire date.


 


FUNDING THE PLAN


 


The cash portion of the Plan is budgeted in
the FY2006 and FY2007 expense plan forecast and is included in the Company’s forecasted
operating margin calculation.  The equity
portion of the Plan is budgeted in the FY2006 Option Budget approved by the
Compensation Committee, and will expensed at the time of grant.


 


CORPORATE PERFORMANCE AND RELATED PAYOUT


 


To achieve funding of the Operating Plan Incentive, the Company must
achieve in aggregate 100% of the designated fiscal target on or before the
specified target date.


 


If the Company does achieve its
target within the specified time frame, individuals will receive their fiscal
year cash award, and 50% of their OPI stock option grant will vest in
accordance with the performance vesting criteria specified in the grant
document.  In year two, should the Company
achieve the Approved Annual Financial Target, participants will receive the second
year cash award and the remaining 50% of their OPI stock option grant will
vest.


 


If the Company does not achieve its
Approved Annual Financial Targets within the specified time frame, individuals
participating in the plan will not receive their target cash awards, and the OPI
stock option grant will not vest.


 


The maximum payout an executive may
earn each year is the target payout.


 


IMPORTANT NOTES ABOUT THE PLAN


 


The Company may amend or terminate the Plan at any time, with or
without notice. The Company may likewise terminate an individual’s
participation in the Plan at any time, with or without notice.  Nothing in this Plan shall be construed to be
a guarantee that any participant will receive all or part


 


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of an incentive award or to imply a contract between the Company and
any participant.   Eligibility for and
determination of incentive awards under the Plan are within the sole discretion
of the Company, and prior to actual distribution, incentive awards may be
increased, reduced or eliminated.


 


 


	
  Approvals:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Jan Collinson

  	
   

  	
  Date

  	
   

  
	
  Senior Vice President – HR/FAC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Chi-Foon Chan

  	
   

  	
  Date

  	
   

  
	
  President and COO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Aart de Geus

  	
   

  	
  Date

  	
   

  
	
  Chairman and CEO

  	
   

  	
   

  	
   

  



 










*                 Represents specific quantitative or
qualitative performance-related factors, or factors or criteria involving
confidential commercial or business information, the disclosure of which would
have an adverse effect on the Registrant.


 


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