Document:

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                                                                   EXHIBIT 10.14
                                                                   -------------

                                ---------------
                                       HQ       BUSINESS CENTERS
                                ---------------

                           OFFICE SERVICE AGREEMENT

This Agreement is dated and is entered into in DALLAS, TEXAS by and between
Mooremc L.L.P.; Plano Executive Suite, Inc., d.b.a. HQ Plano, Managing Partner
(hereinafter referred to as "HQ") and Verisity Design, Inc. (hereinafter
"Client"). HQ and Client agree that HQ shall grant to Client for and in
consideration of the agreements and fee(s) set forth herein, a license to use
the Office(s) as from time to time designated by HQ and, in common with HQ's
other clients, a license to use HQ's Business Center facilities and services, in
accordance with the terms hereof.

1.   BASIC TERMS. This Section 1 contains the basic terms of this Agreement and
all provisions of this Agreement are to be read in accordance therewith:

     A.   Base Services: HQ's Complete Executive Office Program, including the
          use of executive offices complete with professional administrative
          staff, telephone answering and such other inclusive services are as
          defined in Schedule A".

     B.   Additional Services: Access to additional business services for
          purchase as needed by Client, including secretarial, administrative,
          telecommunications support and such other services are as defined in
          Schedule "B".

     C.   HQ Business Center  HQ Plano, Sixth Floor

     D.   Building Bank Of America Tower, 101 E. Park Blvd., Plano, Texas 75074

     E.   Office number 23,26 having a maximum occupancy capacity of 2
          person(s).

     F.   Commencement Date November 8, 1999

     G.   Initial Term 12 months and 22 days, subsequent terms will be 12 months

     H.   End of Initial Term  October 31, 2000

     I.   Monthly Base Services Fee $2,443.17

     J.   Refundable Services Retainer $3,664.75

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

2.  OFFICE. Client shall, as part of the Base Services, be granted a license to
use the Office and shall have access to the Office twenty-four (24) hours a day,
seven (7) days a week. HQ agrees to provide office cleaning, maintenance
services, electricity, heating and air conditioning to the Office for normal
office use in such reasonable quantities and during such reasonable hours as
shall be determined by HQ or the Building. In addition, Client will have
reasonable use of HQ common area facilities. Client shall use the Office and
common areas of the HQ Business Center solely for general office use in the
conduct of the Client's business.

     If, for any reason whatsoever, HQ is unable to provide use of the Office or
a mutually agreed upon alternative Office at the time herein agreed, Client may
either extend the Commencement Date until the Office becomes available or, as
its sole remedy for such failure, cancel and terminate this Agreement if the use
of the Office is not available to Client within five (5) business days after
written notice to HQ by Client. In which case any prior payments shall be fully
refunded. No such failure to provide use of the Office shall subject HQ to any
liability for loss or damage, nor affect the validity of this Agreement or the
obligations of the Client hereunder.

     HQ will have the right to relocate Client to another office in the HQ
Business Center, and to substitute such other office for the Office licensed
hereby, provided such other office is substantially similar in area and
configuration to Client's contracted office and provided Client shall incur no
increase in the Monthly Base Services Fee or any relocation cost or expense.

3.   SERVICES. HQ AGREES, IN CONSIDERATION OF THE Monthly Base Services fee, to
provide Base Services to Client as described in Schedule "A". From time to time
during the Term, HQ may, at its option, make other services available to Client
of the nature described in Schedule "B", at fees that are from time to time
established by HQ. HQ shall be under no obligation to provide Schedule "B"
services if the monthly cost thereof exceeds the Refundable Services Retainer.
In the event Client is in default of this Agreement HQ may, at its option, cease
furnishing any and all services including telephone services.

                                  Page 1 of 6
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     Client will not offer to any party in the HQ Business Center or the
Building, any of the services that HQ provides to its clients including, but not
limited to, the services described in Schedule "A" or "B".

     HQ will answer all incoming telephone calls, unless otherwise mutually
agreed, during normal business hours, as determined by HQ. Answering service
will be limited to normal business communications, excluding inbound
telemarketing and advertising response which requires pre-approval by HQ and
shall be subject to fees established from time to time by HQ.

     Client will use only telecommunications systems and services as provided by
HQ unless written permission to do otherwise shall first have been obtained from
HQ. Client will pay to HQ a monthly equipment rental fee for the use of each
telephone instrument and voice lines. In the event HQ discontinues the offering
of long distance service, Client will provide its own long distance service
through a locally accessed long distance carrier.

     Client acknowledges that due to the imperfect nature of verbal, written and
electronic communications, neither HQ nor any of its officers, directors,
employees, shareholders. partners, agents or representatives shall be
responsible for damages, direct or consequential, that may result from the
failure of HQ to furnish any service, including but not limited to the service
of conveying messages, communications and other utility or services required
under this Agreement or agreed to by HQ. Client's sole remedy and HQ's sole
obligation for any failure to render any service, any error or omission, or any
delay or interruption with respect thereto, is limited to an adjustment to
Client's billing in an amount equal to the charge for such service for the
period during which the failure, delay or interruption continues.

     CLIENT EXPRESSLY WAIVES, AND AGREES NOT TO MAKE ANY CLAIM FOR DAMAGES,
DIRECT OR CONSEQUENTIAL, ARISING OUT OF ANY FAILURE TO FURNISH ANY UTILITY,
SERVICE OR FACILITY, ANY ERROR OR OMISSION WITH RESPECT THERETO, OR ANY DELAY OR
INTERRUPTION OF THE SAME.

4.   DURATION OF AGREEMENT. Upon the End of Initial Term, or any extension
thereof, the term of this Agreement and the license herein granted shall be
automatically extended for the same period of time as the Initial Term, upon the
same terms and conditions as contained herein, unless either party gives notice
to the other in writing to the contrary at least sixty (60) days prior to the
End of Initial Term (90 days if Client has licensed the use of three or more
offices).

     Upon any termination of this Agreement, whether by lapse of time or
otherwise, or upon any revocation of Client's license herein granted, the Client
shall cease all use of the Office, the HQ Business Center and all services
immediately. For each and every month or portion thereof that Client continues
use of the Office after the termination of this Agreement by lapse of time or
otherwise, without the express written consent of HQ, Client shall pay HQ an
amount equal to double the Monthly Base Services Fee computed on a per-month
basis for each month or portion thereof that Client continues the use of the
Office.

5.   PAYMENTS AND ESCALATIONS. Client agrees to pay to HQ the Monthly Base
Services Fee plus applicable sales or use taxes, in advance, on the first day of
each calendar month during the Initial Term and all extensions thereof, without
any deduction, offset, notice or demand. If the Commencement Date shall be other
than the first day of a month or end on the last day of a month, fees for any
such month shall be prorated. Charges for any Schedule "B" service purchased by
Client from HQ shall be due and payable on the 1/st/ of the month following the
billing for any such service.

     Inasmuch as HQ's Master Lease includes an escalation clause for expenses,
as of the first of each calendar year, Client's monthly base fee may be adjusted
to reflect its prorata share of any expense increases incurred by HQ.

     All Monthly Base Services Fees and other sums payable hereunder shall be
payable at the office of HQ or at such other location or to any agent designated
in writing by HQ. In addition to any other sums due, Client shall pay monthly
late charges equal to five percent (5%) of all amounts that have not been paid
to HQ within five (5) days of the due dates. Plus an additional $10.00 per day
for each day thereafter until paid in full. The parties agree that such late
charges are fair and reasonable compensation for costs incurred by HQ where
there is default in any payment due under this Agreement.

     Upon the execution of this Agreement, Client shall pay HQ or its agent the
Refundable Services Retainer. The Refundable Services Retainer need not be kept
separate and apart from other funds of HQ, no interest shall be paid thereon,
and may be used by HQ to provide Schedule "A" and "B" services under this
Agreement. In addition to the Refundable Services Retainer, Client will, upon
execution hereof, pay to HQ the Monthly Base Services Fee for the first full
month of the Initial Term.

     Client agrees that the Refundable Services Retainer shall not be used by
Client as payment for the Monthly Base Services Fee for the last month of the
Initial Term, or any extension thereof. In the event Client defaults in the
performance of any of the terms thereof, HQ may terminate this Agreement and the
license herein granted and may also use, apply or retain the whole, or any part,
of the Refundable Services Retainer for the payment of any service fee or any
other payment due hereunder, or for payment of any other sum that HQ may spend
by reason of Client's default. If Client shall, at the end of the term of this
Agreement, have fully and faithfully complied with all of the terms and
provisions of this Agreement, and surrendered all keys, access cards and
building passes, the Refundable Services Retainer, or any balance thereof, shall
be returned to Client within forty-five (45) days thereafter.

6.   DAMAGES AND INSURANCE. Client will not damage or deface the furnishings,
walls, floors or ceilings, nor make holes for the hanging of pictures or make or
suffer to be made any waste, obstruction or unlawful, improper or offensive use
of the Office or the common area facilities. Client will not cause damage to any
part of the Building or the property of HQ or disturb the quiet enjoyment of any
other licensee or occupant of the Building. At the termination of this
Agreement, the Office

                                  Page 2 of 6
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shall be in as good condition as when Client commenced the use thereof, normal
wear and tear excepted. Client agrees to pay for repainting each Office used by
Client, One Hundred Seventy Five Dollars ($175.00) per office. HQ will have the
right, at any time and from time to time, to enter the office to inspect the
same, to make such repairs and alterations as HQ reasonably deems necessary, and
the cost of any such repair resulting from the act or omission of Client shall
be reimbursed to HQ by Client upon demand. HQ shall have the right to show the
Office to prospective Clients, provided HQ will use reasonable efforts not to
disrupt Client's business.

     HQ and its respective directors, licensors, officers, agents, servants and
employees shall not, to the extent permitted by law, except upon the affirmative
showing of HQ's gross negligence or willful misconduct, be liable for, and
Client waives all right of recovery against such entities and individuals for
any damage or claim with respect to any injury to person or damage to, or loss
or destruction of any property of Client, its employees, authorized persons and
invitees due to any act, omission or occurrence in or about the HQ Business
Center or the Building. Without limitation of any other provision hereof, each
party hereto hereby agrees to indemnify, defend and hold harmless the other
party hereto, and such other party's officers, directors, employees,
shareholders, partners, agents and representatives from and against any
liability to third parties arising out of, in the case of Client as an
indemnifying party, Client's use and occupancy of the Office or any negligent
act or omission of Client or Client's officers, directors, employees,
shareholders, partners, agents, representatives, contractors, customers or
invitees and, in the case of HQ as an indemnifying party, any act or omission
constituting gross negligence or willful misconduct of HQ or HQ's officers,
directors, employees, shareholders, partners, agents or representatives. Subject
to the foregoing, Client assumes all risk of loss with respect to all personal
property of Client, its agents employees, contractors, and invitees, within or
about the HQ Business Center or the Building. Client acknowledges that it is the
Client's responsibility to maintain insurance to cover the risks set forth in
this paragraph.

     HQ and Client each hereby waive any and all rights of recovery against the
other, or against the directors, licensors, officers, agents, servants and
employees of the other, for loss of or damage to its property or the property of
others under its control, to the extent such loss or damage is covered by any
insurance policy.

     If the HQ Business Center is made unusable, in whole or in part, by fire or
other casualty not due to negligence of Client, HQ may, at its option, terminate
the Agreement upon notice to Client, effective upon such casualty, or may elect
to repair, restore or rehabilitate, or cause to be repaired, restored or
rehabilitated, the HQ Business Center, without expense to Client, within ninety
(90) days or within such longer period of time as may be required because of
events beyond HQ's control. The Monthly Base Services Fee shall be abated on a
per diem basis for the portions of the Office that are unusable.

7.   DEFAULT. Client shall be deemed to be in default under this Agreement: (a)
If Client defaults in the payment of the Monthly Base Services Fee or other sums
due hereunder or (b) if Client defaults in the prompt and full performance of
any other provision of this Agreement and any such default continues in excess
of five (5) business days after written notice by HQ.

     Should Client be in default hereunder, HQ shall have the option to pursue
any one or more of the following remedies without any additional notice or
demand whatsoever and without limitation to HQ in the exercise of any remedy:

     (1)  HQ may, if HQ so elects, without any additional notice of such
election or demand to Client, either forthwith terminate this Agreement and the
license to use any portion of the HQ Business Center, and may enter into the
Office and take and hold possession of the contents thereof, without releasing
Client, in whole or in part, from the Client's obligations hereunder. In the
event of such termination, HQ may, at its option, declare the entire amount of
the Monthly Base Services Fee which would become due and payable during the
remainder of the term, to be due and payable immediately, in which event, Client
agrees to pay the same at once.

     (2)  Pursue any other remedy now or hereafter available to HQ. HQ's
exercise of any right or remedy shall not prevent it from exercising any other
right or remedy.

     Client agrees to pay all costs and expenses, including reasonable
attorneys' fees, expended or incurred by HQ in connection with the enforcement
of this Agreement, the collection of any sums due hereunder, any action for
declaratory relief in any way related to this Agreement, or the protection or
preservation of any rights of HQ hereunder.

8.   RESTRICTION ON HIRING. Client agrees that during the term of this Agreement
and within one (1) year of the termination of this Agreement, neither Client nor
any of its principals, employees or affiliates will hire directly or as an
independent contractor, any person who is at that time, or was during the term
of this Agreement, an employee of HQ. In the event of a breach of any obligation
of Client contained in this paragraph, Client shall be liable to HQ for, and
shall pay to HQ, on demand, liquidated damages in the sum of $10,000.00 for each
employee with respect to whom such breach shall occur, it being mutually agreed
that the actual damage that would be sustained by HQ as the result of any such
breach would be, from the nature of the case, extremely difficult to fix and
that the aforesaid liquidated damage amount is fair and reasonable.

9.   MISCELLANEOUS.

  A. This is the only Agreement between the parties. No other agreements are
effective. All amendments to this Agreement shall be in writing and signed by
all parties. Any other attempted amendment shall be void. The invalidity or
unenforceability of any provision hereof shall not affect the remainder hereof.

  B. All waivers must be in writing and signed by the waiving party. HQ's
failure to enforce any provision of this Agreement or its acceptance of fees
shall not be a waiver and shall not prevent HQ from enforcing any provision of
this Agreement in the future. No receipt of money by HQ shall be deemed to waive
any default of Client or to extend, reinstate or continue the term hereof.

                                  Page 3 of 6
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  C. All Schedules and Addenda attached hereto are hereby incorporated herein by
this reference. The laws of the State in which the HQ Business Center is located
shall govern this Agreement.

  D. All parties signing this Agreement as a partnership or co-signing
individuals shall be jointly and severally liable for all obligations of Client.

  E. Client represents and warrants to HQ that there are no agents, brokers,
finders or other parties except none with whom Client has dealt who are or may
be entitled to any commission or fee with respect to this Agreement.

  F. Neither Client nor anyone claiming by, through or under Client shall assign
this Agreement or permit the use of any portion of the HQ Business Center by any
person other than Client; provided, however, Client may assign this Agreement to
an affiliated corporation of Client. In the event of any such permitted
assignment, Client shall not thereby be relieved of any of its obligations under
this Agreement.

  G. The Rules and Regulations of the Building and of HQ as defined on Schedule
"C" hereto and any additional schedules that may be attached hereto are
expressly made a part of this Agreement and Client expressly covenants and
agrees to abide by all of such Rules and Regulations and such additional terms,
as well as such reasonable modifications to such Rules and Regulations as may be
hereafter adopted by HQ.

  H. All notices hereunder shall be in writing. Notices to Client shall be
deemed to be duly given if mailed by registered or certified mail, postage
prepaid, addressed to Client at:

2041 Landings Drive
--------------------------------------------------------------------
Mountain View
--------------------------------------------------------------------
California  94043
--------------------------------------------------------------------

     Notice to HQ shall be deemed to be duly given if mailed by registered or
certified mail, postage prepaid, to HQ at the Building and as follows:

HQ BUSINESS CENTERS OF DALLAS
ATTENTION: PRESIDENT
7557 Rambler Road #700
Dallas, Texas 75231

  I. THIS AGREEMENT IS NOT INTENDED TO CREATE A LEASE OR ANY OTHER INTEREST IN
REAL PROPERTY IN FAVOR OF THE CLIENT, BUT MERELY CREATES A REVOCABLE LICENSE IN
ACCORDANCE WITH THE TERMS HEREOF. This Agreement grants Client the license to
use the HQ Business Center and the Office for the specific purposes herein set
forth without diminution of the legal possession or control thereof by HQ and
shall be revocable at the option of HQ upon the destruction of the HQ Business
Center or the breach by Client of any term or condition herein set forth. This
Agreement is subject and subordinate to any underlying lease or contract of the
Building or of the premises comprising the Office or the HQ Business Center as
such lease or contract may be amended from time to time (such underlying lease
or contract together with any amendments, is hereinafter referred to as the
"Master Lease"). This Agreement shall terminate simultaneously with the
termination of the HQ Business Center operation for any reason. Client is not a
party to nor shall Client have any rights under the Master Lease.

  J. Client acknowledges that HQ Business Centers will comply with U.S. Postal
Service regulations regarding Client mail and, upon termination of this
Agreement, it will be Client's responsibility to notify all parties of
termination of the use of the above described address, assigned telephone
number, telex and facsimile numbers. For a period of thirty (30) days after the
termination of this Agreement, HQ will, at Client's written request and cost,
provide Client's new telephone number and address to all incoming callers and
will hold or forward to Client once a week all mail, packages, facsimiles and
telexes.

  K. HQ may assign this Agreement and/or any fees hereunder and Client agrees to
attorn to any such assignee.

                                  Page 4 of 6
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                     HQ

PLANO EXECUTIVE SUITE, INC. d.b.a. HQ PLANO
A TEXAS CORPORATION, MANAGING PARTNER
-------------------------------------

By:  /s/ Michael Moore
   -------------------------------------------
Its: Vice President
    ------------------------------------------

                   CLIENT

CORPORATION:  Verisity Design, Inc.
            ----------------------------------
A(n) CALIFORNIA                    corporation
    -------------------------------

By:  /s/ Charles Alvarez
   -------------------------------------------
Charles Alvarez
----------------------------------------------
Its: CFO
    ------------------------------------------

PARTNERSHIP:__________________________________

A(n)_______________________________partnership

By:___________________________________________

______________________________________________

Its:__________________________________________

INDIVIDUALS:

______________________________________________
                  (signature)

______________________________________________
                  (print name)

Address:______________________________________

______________________________________________

______________________________________________
                  (signature)

______________________________________________
                  (print name)

Address:______________________________________

______________________________________________

________________________________________________________________________________
PERSONAL GUARANTEE:

For value received, the undersigned does hereby unconditionally and irrevocably
guarantee the prompt payment and full performance of all terms, covenants,
conditions and agreements as contained herein.

BY:___________________     BY:____________________    BY:_____________________

________________________________________________________________________________
SCHEDULE "A"
Base Services

 .  Individual Executive Office
 .  Voice Messaging Service
 .  Personalized Telephone Answering of Incoming Calls (300) incoming calls per
                                                      -----
   month at no charge)
 .  Furnished and Decorated Reception Area
 .  Professional Receptionist, Message Center Secretaries, and Office Manager
 .  Use of Furnished, Audio-Visual Equipped Conference Rooms 12 hours per month
                                                            --
   at no charge
 .  Prestigious Business Address
 .  Business Identity on Building Lobby Directory
 .  Facsimile Number for Client's Use
 .  Mail and Package Receipt
 .  Utilities and Janitorial Service
 .  Building Operating Expenses as of Commencement Date
 .  Heating and air conditioning during normal business hours

SCHEDULE "B"
Additional Services

   Word Processing Services
   Secretarial Services
   Facsimile  Services = (line charges)
   Additional Voice Messaging Service
   Copy and  Binding  Services
   Outgoing Metered Mail & Express Delivery Services
   Office Furniture Rental
   Specialized Equipment Rental
   Printing & Office Supplies
   Miscellaneous Purchasing Services
   Catering & Beverage Service
   Paging Services
   Telephone Equipment
   Specialized Telephone Services
   Local Telephone  Service
   Excess Message Usage
   Excess Conference Room Usage
   Parking
   Internet Services
   Other Client Requested Services*

                                  Page 5 of 6
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                                 SCHEDULE "C"
                             RULES AND REGULATIONS

1.   Client's employees and guests will conduct themselves in a businesslike
manner, proper business attire will be worn at all times; the noise level will
be kept to a level so as not to interfere with or annoy other clients and Client
will abide by HQ's directives regarding security, keys, parking and other such
matters common to all occupants.

2.   Client agrees to use chair mats and desk pads in the Office(s) and any
damage from failure to use the same will be the responsibility of Client. Client
will not affix anything to the windows, walls or any other part of the Office(s)
or the HQ Business Center or make alterations or additions to the Office(s) or
the HQ Business Center without the prior written consent of HQ.

3.   Client will not prop open any corridor doors, exit doors or door connecting
corridors during or after business hours.

4.   Client can only use public areas with the consent of HQ and those areas
must be kept neat and attractive at all times.

5.  All corridors, halls, elevators and stairways shall not be obstructed by
Client or used for any purpose other than egress and ingress.

6.   No advertisement or identifying signs, other than provided by HQ, or other
notices shall be inscribed, painted, or affixed on any part of the corridors,
doors or public areas.

7.   Client shall not, without HQ's prior written consent, store or operate in
the Office(s) or the HQ Business Center any computer (excepting a personal
computer) or any other large business machine, reproduction equipment, postage
meter, fire proof safe, heating equipment, stove, radio, stereo equipment or
other mechanical amplification equipment, vending or coin operated machine,
refrigerator or coffee equipment, water cooler, or conduct a mechanical business
therein, do any cooking therein, or use or allow to be used in the Building, oil
burning fluids, gasoline, kerosene for heating, warming or lighting. No article
deemed hazardous on account of fire or any explosives shall be brought into the
HQ Business Center. No offensive gases, odors or liquids will be permitted.

8.   The electrical current shall be used for ordinary lighting and office
equipment purposes only unless written permission to do otherwise shall first
have been obtained from HQ at an agreed cost to Client.

9.   If Client requires any special installation or wiring for electrical use,
telephone equipment or otherwise, such wiring shall be done at Client's expense
by the personnel designated by HQ.

10.  Client may not conduct business in the hallways, reception area or any
other area except in its designated Office(s) without the prior written consent
of HQ.

11.  Client will bring no animals other than seeing-eye dogs in the company of
blind persons into the Building.

12.  Client shall not remove furniture, fixtures or decorative material from the
Office(s) without the written consent of HQ and such removal shall be under the
supervision and regulations of the HQ Business Center.

13.  Client will not use the HQ Business Center for manufacturing or storage of
merchandise except as such storage may be incidental to general office purposes.

14.  Client will not occupy or permit any portion of the HQ Business Center to
be occupied or used for the manufacture, sale, gift or use of liquor, narcotics
or tobacco in any form.

15.  Client will not use the Office(s) for lodging or sleeping or for any
immoral or illegal purposes.

16.  No additional locks or bolts of any kind shall be placed upon any of the
doors or windows of the HQ Business Center by Client nor shall any changes be
made on existing locks or the mechanisms thereof.

17.  Client shall, before leaving the Office(s) unattended for an extended
period of time, close and securely lock all doors and shut off all lights and
other electrical apparatus. Any damage resulting from failure to do so shall be
paid by Client.

18.  Canvassing, soliciting and peddling in the Building are prohibited and
Client shall not solicit other clients for any business or other purpose without
the prior written approval of HQ.

19.  All property belonging to Client or any employee, agent or invitee of
Client shall be at the risk of such person only and HQ shall not be liable for
damages thereto or for theft or misappropriation thereof.

20.  If Client does not remove any property belonging to Client from the HQ
Business Center by the end of the term, at the option of HQ, Client shall be
conclusively presumed to have conveyed such property to HQ under this Agreement
as a bill of sale without further payment or credit by HQ to Client and HQ may
remove the same and Client shall pay HQ all costs of such removal upon demand.

21.  Smoking shall be prohibited in all public areas including conference and
training rooms. No smoking shall be permitted at any time in any area of the HQ
Business Center (including open offices and workstations).

     HQ shall have no responsibility to Client for the violation or non-
performance by any other HQ clients of any of the Rules and Regulations but
shall use reasonable efforts to uniformly enforce all Rules and Regulations.

                                  Page 6 of 6<PAGE>

                                                                   EXHIBIT 10.18
                                                                   -------------

                         Employment-At-Will Agreement

        This agreement (the "Agreement") is effective as of October 26, 1999 by
and between Verisity Design, Inc., a California corporation (the "Company") and
                                                                  -------
Michael McNamara, an individual ("Employee").
                                  --------

                              W I T N E S S E T H
                              - - - - - - - - - -

        WHEREAS, the Company and Employee are parties to that certain Agreement
and Plan of Merger dated October __, 1999, along with Verisity Ltd., the
Company's sole shareholder, SureFire Verification, Inc. ("SureFire"), of which
Employee was a founding member, and certain other shareholders of SureFire (the
"Merger Agreement"), whereby the Company and Employee agreed that it would be in
the best interests of both the Company and SureFire to merge their businesses;

        WHEREAS, Employee's knowledge and experience is critical to the success
of SureFire's business even as it is merged with and into the Company's;

        WHEREAS, a material inducement to the Company entering the Merger
Agreement is Employee's acceptance of employment with the Company;

        WHEREAS, the Company wishes to employ Employee in the position, and upon
the terms, set forth herein; and

        WHEREAS, Employee wishes to accept employment in such position.

        NOW, THEREFORE, in consideration of the mutual promises set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Employee hereby agree as follows:

  1.  Employment.  The Company hereby employs Employee and Employee hereby
      ----------
accepts employment at the Company's Mountain View, California office or such
other location as may be reasonably determined by the Company; provided however
that Employee acknowledges that this employment offer is contingent upon and
subject to the successful closing and effectiveness of the Merger.

  2.  Position and Duties; Employment "At-Will".  Employee will be employed by
      -----------------------------------------
the Company as Senior Vice President of Technology. As such,

                                      -1-
<PAGE>

Employee shall have responsibilities, duties and authority reasonably accorded
to and expected of a Senior Vice President, as well as those which may from time
to time be reasonably assigned to him by the Chief Executive Officer, Chief
Operating Officer or President of the Company and he will report directly to the
Chief Executive Officer, Chief Operating Officer or President of the Company.
Such employment will continue on an "at-will" basis until terminated as provided
in Section 15 below. Employee will devote all of his time, attention, energies
and skill to the business of the Company during the term of this Agreement.

  3.  Compensation, Bonus and Benefits.  The Company will pay to Employee and
      --------------------------------
Employee accepts as full compensation for all of his services to be rendered to
the Company an initial annual salary of $160,000, payable semi-monthly, and such
benefits as may be offered by the Company to its full-time employees. Employee
will be eligible for an annual performance-related bonus of 25% of his annual
salary for 2000, to be first paid in January 2001. The amount of the bonus will
depend upon Employee's personal contributions and is contingent on the overall
success of the Company, and will be determined by senior management of Verisity,
Ltd. No severance payments or other compensation will be provided except that
which is explicitly provided in the Agreement.

  4.  Expenses.  With prior written approval, the Company agrees to reimburse
      --------
Employee from time to time for all reasonable business expenses incurred by
Employee in performing his duties for the Company under this Agreement in
accordance with the Company's policies, provided that Employee presents to the
Company adequate records and other documented evidence required by the Company
for reimbursement of such expenses incurred on its behalf.

  5.  Noncompetition. During the term of Employee's employment, Employee will
      --------------
not, except as mutually agreed to between the Employee and the Company as
evidenced in writing, directly or indirectly, as an employee, employer,
consultant, advisor, agent, principal, partner, officer, director or in any
other individual or representative capacity, engage or participate in any
business or activity that is competitive in any manner whatsoever with the
activities and business of the Company; nor will Employee, during the term of
Employee's employment induce or attempt to induce any employee of the Company to
leave such employ for the purpose of joining any organization in competition
with the Company. Nothing in this Section 5 shall modify or limit the provisions
set forth in Article XI of the Merger Agreement.

  6.  No Use of Third Party Information.  Employee represents and warrants to
      ---------------------------------
the Company that his performance of his duties as an employee of the Company

                                      -2-
<PAGE>

in the capacity agreed to above will not breach any agreement with any former
employer, client or other party. Employee further represents to the Company that
he will not bring with him to the Company or use in the performance of his
duties for the Company any documents or materials of a former employer, client
or other party that are not generally available to the public or have not been
legally transferred to the Company.

  7.  Creation of Inventions.  Employee understands that the Company is engaged
      ----------------------
in a continuous program of research, development, production and marketing in
connection with its business and that, as an essential part of his employment
with the Company, Employee may be expected to make new contributions to and
create inventions of value for the Company.

  8.  Disclosure of Inventions.  From and after the effective date of this
      ------------------------
Agreement, Employee will promptly disclose in confidence to the Company all
inventions, improvements, original works of authorship, formulas, processes,
computer programs, databases and trade secrets ("Inventions"), whether or not
                                                 ----------
patentable, copyrightable or protectable as trade secrets, that are made or
conceived or first reduced to practice or created by Employee, either alone or
jointly with others, during the period of his employment, whether or not in the
course of his employment.

  9.  Ownership Of Inventions.  Employee agrees that all Inventions that (a) are
      -----------------------
developed using equipment, supplies, facilities or trade secrets of the Company,
(b) result from work performed by Employee for the Company or (c) relate to the
Company's business or current or anticipated research and development, will be
the sole and exclusive property of and are hereby assigned to the Company.
Employee has been notified and understands that the provisions of this Section 9
do not apply to any invention that qualifies fully under the provisions of
Section 2870 of the California Labor Code, which states as follows:

ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE WILL
ASSIGN OR OFFER TO ASSIGN ANY OF HIS OR HER RIGHTS IN AN INVENTION TO HIS OR HER
EMPLOYER WILL NOT APPLY TO AN INVENTION THAT THE EMPLOYEE DEVELOPED ENTIRELY ON
HIS OR HER OWN TIME WITHOUT USING THE EMPLOYER'S EQUIPMENT, SUPPLIES,
FACILITIES, OR TRADE SECRET INFORMATION EXCEPT FOR THOSE INVENTIONS THAT EITHER:
(1) RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF THE INVENTION
TO THE EMPLOYER'S BUSINESS, OR ACTUALLY OR DEMONSTRABLY ANTICIPATED RESEARCH OR
DEVELOPMENT OF THE EMPLOYER, OR (2) RESULT FROM ANY WORK

                                      -3-
<PAGE>

PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. TO THE EXTENT A PROVISION IN AN
EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN AN INVENTION
OTHERWISE EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER CALIFORNIA LABOR
CODE SECTION 2870 ""(a), THE PROVISION IS AGAINST THE PUBLIC POLICY OF THIS
STATE AND IS UNENFORCEABLE.

  10. Further Assistance. Employee agrees to assist the Company in every proper
      ------------------
way to obtain for the Company and enforce patents, copyrights and other legal
protections for the Company's Inventions in any and all countries. Employee will
execute any documents that the Company may reasonably request for use in
obtaining or enforcing such patents, copyrights and other legal protections.
Employee's obligations under this Section will continue beyond the termination
of his employment with the Company, provided that the Company will compensate
him at a reasonable rate after such termination for time or expenses actually
spent by him at the Company's request on such assistance.

  11. Moral Rights. Employee hereby irrevocably transfers and assigns to the
      ------------
Company any and all "Moral Rights" (as defined below) that he may have in or
with respect to any Invention. Employee also hereby forever waives and agrees
never to assert any and all Moral Rights he may have in or with respect to any
Invention, even after termination of his work on behalf of the Company. "Moral
Rights" mean any rights of paternity or integrity, any right to claim authorship
of an Invention, to object to any distortion, mutilation or other modification
of, or other derogatory action in relation to, any Invention, whether or not
such would be prejudicial to the honor or reputation of the creator, and any
similar right, existing under judicial or statutory law of any country in the
world, or under any treaty, regardless of whether or not such right is
denominated or generally referred to as a "moral right".

  12. Proprietary Information. Employee understands that his employment by the
      -----------------------
Company creates a relationship of confidence and trust with respect to any
information of a confidential or secret nature that may be disclosed to him by
the Company that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company
("Proprietary Information"). Such Proprietary Information includes but is not
  -----------------------
limited to Inventions, marketing plans, product plans, business strategies,
financial information, forecasts, personnel information and customer lists.
Employee acknowledges that for protection of the Company's Proprietary
Information and as a condition to employment, Employee is required to execute
the Company's standard Proprietary Information and Inventions Agreement.

                                      -4-
<PAGE>

  13. Non-Disclosure of Proprietary Information. At all times, both during his
      -----------------------------------------
employment and after its termination, Employee will keep all such Proprietary
Information in confidence and trust, and he will not use or disclose any of such
Proprietary Information without the written consent of the Company, except as
may be necessary to perform his duties as an employee of the Company. Upon
termination of his employment with the Company, Employee will promptly deliver
to the Company all documents and materials of any nature pertaining to his work
with the Company and he will not take with him any documents or materials or
copies thereof containing any Proprietary Information.

  14. Notification of Former Employers. Employee hereby authorizes the Company
      --------------------------------
to notify his actual or future employers of the terms of this Agreement and his
responsibilities hereunder.

  15. Termination. This Agreement may be terminated by the Company immediately
      -----------
in the event that:

      (a)  (i)   Employee commits any misfeasance in office (including gross
                 negligence or recklessness) or any act of dishonesty or fraud
                 against the Company;

           (ii)  Employee commits any unlawful or criminal act involving moral
                 turpitude;

           (iii) Employee willfully breaches this Agreement, unsatisfactorily
                 performs his duties, as determined by the Chief Executive
                 Officer and Board of Directors of the Company, or habitually
                 neglects his duties to the Company duties;

      (b) Employee dies during the term of the employment created hereby or is
disabled permanently or otherwise in a manner which prevents Employee from
discharging Employee's duties under this Agreement; or

      (c) The Company determines to terminate this Agreement without cause,
which it may do at any time upon written notice to Employee, subject to the
terms of Section 18 ("Company Termination Due to Change in Control") below.

  16. Resignation. Employee may resign and terminate this Agreement upon 30 days
      -----------
written notice to the Company.

                                      -5-
<PAGE>

     17.  Effect of Expiration or Termination.  Upon the expiration or
          -----------------------------------
termination of this Agreement for any reason:

             (a)   Each party will be released from all obligations to the other
                   under this Agreement arising after the date of expiration or
                   termination, except that expiration or termination of this
                   Agreement will not relieve Employee of his obligations under
                   Sections 5, 8, 9, 10, 11, 12, 13, 14, 17, 19, 20, 24, 25, 26,
                   27 and 28 following expiration or termination, or relieve
                   Employee or the Company from any liability arising from any
                   breach of this Agreement or the Proprietary Information and
                   Inventions Agreement or the Merger Agreement; and

             (b)   Employee will promptly notify the Company of all Proprietary
                   information and Inventions in Employee's possession and, at
                   the expense of Employee and in accordance with the Company's
                   instructions, will promptly deliver to the Company all such
                   Proprietary Information and Inventions, including but not
                   limited to any and all devised, records, data, notes,
                   reports, proposals, lists, correspondence, specifications,
                   drawings, blueprints, sketches, materials, equipment, other
                   documents or property or reproductions of any of the
                   aforementioned items.

     18.  Company Termination Due to Change in Control.  In the event that
          --------------------------------------------
Employee's employment with the Company terminates or is materially changed, for
any of the reasons set forth in subsections (a) (b) or (c) below, then Employee
will be entitled to, and the Company will immediately pay to the Employee, the
compensation and benefits set forth in Sections 18.1, 18.2 and 18.3 below.  The
occurrence of any of the following shall be deemed to be a "Company
                                                            -------
Termination":
-----------

          (a)    In the event of the acquisition, directly or indirectly, of
                 more than 50% of the outstanding voting stock of the Company by
                 any person or entity (excluding affiliates of the Company) or
                 any merger, consolidation or sale of all or substantially all
                 of the assets of the Company ("Change in Control"), and
                                                -----------------
                 following which Employee is terminated for any reason other
                 than as set forth in Section 15(a) above within 18 months
                 following such Change in Control; or

                                      -6-
<PAGE>

          (b)    In the event of a Change in Control, Employee is demoted
                 without Employee's consent within 18 months following such
                 Change in Control;

          (c)    In the event of any series of events over a continuous period
                 of 18 months that results in a Change of Control from the
                 constitution of the equity ownership of the Company from the
                 beginning of such period.

     18.1  Company Wage and Severance Payments.  In the event of a Company
           -----------------------------------
Termination, the Company agrees to pay, on the last day of Employee's employ,
Employee's accrued wages, bonuses and vacation time through the date of
termination, less required employment tax withholdings.  The Company also agrees
to pay to Employee as a severance payment the equivalent of one year of
Employee's current compensation, payable in a single lump sum, within 5 days of
termination.

     18.2. Stock Acceleration. Following a Company Termination, Employee's stock
           ------------------
shall immediately accelerate in full, such that Employee shall become fully
vested in any and all stock then held by Employee.

     18.3  Medical Insurance Coverage. The Company agrees that in the event of a
           --------------------------
Company Termination, it will allow Employee to continue to be covered by its
employee medical insurance policy, to the extent permitted by the Company's
insurance carrier, for 12 months following termination at the Company's expense.
Employee acknowledges and understands that he may have under applicable federal
law, and at his sole cost legal rights to continue such medical insurance
coverage for a period of time following termination of his employment but
acknowledges and agrees that the Company is not liable or responsible for the
cost of any such continued coverage except as provided above.

     18.4  SureFire Merger with and Into the Company. Notwithstanding anything
           -----------------------------------------
in this Section 18 to the contrary, Employee hereby acknowledges and agrees that
the Merger and related transactions contemplated by the Merger Agreement will
not be a Change of Control for the purpose of constituting a Company
Termination, both as defined in Section 18, that would obligate the Company to
pay the compensation and benefits set forth in Sections 18.1, 18.2 and 18.3
above; except that if, within 18 months after the Merger, Employee is demoted,
without Employee's consent and for reasons other than those which would
constitute grounds for termination as set forth in Section 15 above, Employee
will be eligible for such payments.

                                      -7-
<PAGE>

     19.  Limitation of Liability.  IN NO EVENT WILL THE COMPANY BE LIABLE FOR
          -----------------------
ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND IN
CONNECTION WITH THIS AGREEMENT, EVEN IF THE COMPANY HAS BEEN INFORMED IN ADVANCE
OF THE POSSIBILITY OF SUCH DAMAGES.

     20.  Solicitation of Employment.  Because of the trade secret subject
          --------------------------
matter of the Company's business, Employee agrees that he will not solicit the
services of any of the Company's employees for Employee or any other person at
any time for a period of two years after the termination or expiration of this
Agreement.

     21.  Nonassignability. The rights and duties of the parties hereunder are
          ----------------
not assignable by either party; provided, however, that this Agreement and all
rights and obligations hereunder may be assigned by the Company and assumed by
any financially responsible corporation or other entity which succeeds to all or
substantially all of the business of the Company through merger, consolidation,
corporation reorganization or by acquisition of all or substantially all of the
assets or stock of the Company.

     22.  Notices. Any notice required or provided to be given under this
          -------
Agreement will be sufficient if in writing, sent by facsimile or by first class
mail, to Employee's residence in the case of notice to Employee or to its
principal office in the case of the Company. Any such notice will be effective
upon delivery if it is hand delivered; upon receipt if it is transmitted by wire
or telegram or upon the expiration of 48 hours after deposit in the United
States mail if mailed.

     23.  Waiver of Breach. The waiver by either party of a breach of any
          ----------------
provision of this Agreement by the other party will not operate or be construed
as a waiver of any subsequent breach by such other party.

     24.  Equitable Remedies. Because the services provided under this Agreement
          ------------------
are personal and unique and because Employee will have access to Proprietary
Information and Inventions of the Company, the Company will have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

     25.  Arbitration.  Except as provided in Section 24 above, any dispute or
          -----------
controversy arising out of or relating to any interpretation, construction,
performance or breach of this Agreement, will be settled by arbitration by 3
arbitrators to be held in Santa Clara County, California, in accordance with the
rules of the American Arbitration Association then in effect. The arbitrator may

                                      -8-
<PAGE>

grant injunctions or other relief in such dispute or controversy. The decision
of the arbitrators will be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator's decision in any court
located in Santa Clara County having jurisdiction. The parties will each pay
one-half of the costs and expenses of such arbitration, and each of the parties
will separately pay its counsel fees and expenses.

     26.  Governing Law.  This Agreement will be interpreted and enforced in
          -------------
accordance with the laws of the State of California (not including that body of
law dealing with choice of law), and any action brought to enforce a decision in
arbitration as described in Section 25 above, or to enforce this Agreement as
described in Section 24 above, will have its venue in the County of Santa Clara,
State of California.

     27.  Entire Agreement.  This Agreement contains the entire agreement of the
          ----------------
parties respecting the subject matter hereof.  This Agreement may not be changed
orally but only by an agreement in writing executed by both parties.
Notwithstanding the preceding, nothing in this Agreement shall modify or limit
any provision of the Merger Agreement.

     28.  Partial Invalidity.  If any provision of this Agreement is held by a
          ------------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions will nevertheless continue in full force without being
impaired or invalidated in any way.

     29.  Understanding of Agreement; Use of Counsel.  Employee represents and
          ------------------------------------------
warrants to the Company, and the Company is relying on this representation in
entering into this Agreement, that (a) Employee has read and he understands this
Agreement, (b) this Agreement is not ambiguous or unclear on any points, (c)
Employee has been advised that he should consult with his own legal counsel, and
(d) Employee has had the opportunity to and he has negotiated the terms of this
Agreement with the Company.

          IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.

VERISITY DESIGN, INC.                          EMPLOYEE

By:/s/ Moshe Gavrielov                         By:/s/ Michael McNamara
   ----------------------------                   ----------------------------
Name: Moshe Gavrielov                          Name: Michael McNamara
Title: CEO

                                      -9-

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