Document:

exv10w1

 

Exhibit 10.1

EXECUTIVE RELEASE AND TRANSITION AGREEMENT

     This Executive Transition and Release Agreement (this “Agreement”) is entered into between
Moshe Gavrielov (“Executive”) and Cadence Design Systems, Inc. (“Cadence” or the “Company”).

     1. TRANSITION COMMENCEMENT DATE. As of November 30, 2007, (the “Transition Commencement
Date”), Executive will no longer hold the position of Executive Vice President and General Manager,
Verification Division, and will be relieved of all of Executive’s authority and responsibilities in
that position. Executive will be paid all accrued salary for his services as Executive Vice
President and General Manager, Verification Division, to the Transition Commencement Date by not
later than the following regular payroll date. Following the Transition Commencement Date,
Executive will no longer participate in Cadence’s medical, dental, and vision insurance plans
(unless Executive elects to continue coverage pursuant to COBRA), and will not be eligible for a
bonus for any services rendered after that date.

     2. TRANSITION PERIOD. The period from the Transition Commencement Date to the date when
Executive’s employment with Cadence terminates (the “Termination Date”) is called the “Transition
Period” in this Agreement. Executive’s Termination Date will be the earliest to occur of:

          a. the date on which Executive resigns from all employment with Cadence;

          b. the date on which Cadence terminates Executive’s employment due to a breach by Executive of
Executive’s duties or obligations under this Agreement; and

          c. one year from the Transition Commencement Date.

     3. DUTIES AND OBLIGATIONS DURING THE TRANSITION PERIOD AND AFTERWARDS.

          a. During the Transition Period, Executive will assume the position of Consultant. In this
position, Executive will render those services reasonably requested by Cadence’s Chief Executive
Officer (“CEO”), the Executive Vice President, Development, or the Board of Directors on an
as-needed basis. Executive’s time rendering those services is not expected to exceed thirty (30)
hours per month. Executive and Cadence agree that neither party anticipates that Executive will
resume full-time employment with Cadence in the future.

          b. As a Cadence executive, as well as other positions Executive may have held with Cadence,
Executive has obtained extensive and valuable knowledge and information concerning Cadence’s
business (including confidential information relating to Cadence and its operations, intellectual
property assets, contracts, customers, personnel, plans, marketing plans, research and development
plans and prospects). Executive acknowledges and agrees that it would be virtually impossible for
Executive to work as an employee, consultant or advisor in the electronic design automation (“EDA”)
industry (as defined below) without inevitably disclosing confidential and proprietary information
belonging to Cadence. Accordingly, during the Transition Period, Executive will not, directly or
indirectly, provide services, whether as an

 

 

employee, consultant, independent contractor, agent, sole proprietor, partner, joint venture,
corporate officer or director, on behalf of any corporation, limited liability company,
partnership, or other entity or person that (i) is engaged in the EDA industry, (ii) directly
competes against Cadence or any of its existing or future affiliates in the EDA industry anywhere
in the world, or (iii) produces, markets, distributes or sells any products, directly or indirectly
through intermediaries, that are competitive with EDA industry products produced, marketed, sold or
distributed by Cadence. As used in this paragraph, the term “EDA industry” means the research,
design or development of electronic design automation software, electronic design verification,
emulation hardware and related products, such products containing hardware, software and both
hardware and/or software products, designs or solutions for, and all intellectual property embodied
in the foregoing, or in commercial electronic design and/or maintenance services, such services
including all intellectual property embodied in the foregoing. If Executive receives an offer of
employment or consulting from any person or entity during the Transition Period, then Executive
must first obtain written approval from Cadence’s CEO or his successor before accepting said offer,
unless the potential employer that makes an offer to the Executive is a company that appears on
Appendix A. Such written approval (i) shall be granted or withheld within ten (10) business days
after the CEO received written notice of such offer from Executive and (ii) may be withheld only if
Executive’s acceptance of such offer would not comply with this paragraph 3. During the Transition
Period, Executive will be prohibited, to the full extent allowed by applicable law, and except with
the written advance approval of Cadence’s CEO (or his successor(s)), from voluntarily or
involuntarily, for any reason whatsoever, directly or indirectly, individually or on behalf of
persons or entities not now parties to this Agreement: (i) encouraging, inducing, attempting to
induce, soliciting or attempting to solicit for employment, contractor or consulting opportunities
anyone who is employed at that time, or was employed during the previous one year, by Cadence or
any Cadence affiliate; (ii) interfering or attempting to interfere with the relationship or
prospective relationship of Cadence or any Cadence affiliate with any former, present or future
client, customer, joint venture partner, or financial backer of Cadence or any Cadence affiliate
engaged in the EDA industry; or (iii) soliciting, diverting or accepting business, in any line or
area of business engaged in by Cadence or any Cadence affiliate in the EDA industry, from any
former or present client, customer or joint venture partner of Cadence or any Cadence affiliate
(other than on behalf of Cadence), except that Executive may solicit or accept business, in a line
of business engaged in by Cadence or a Cadence affiliate in the EDA industry, from a former or
present client, if and only if Executive had previously provided consulting services in such line
of business, to such client, prior to ever being employed by Cadence, but in no event may Executive
violate paragraph 3(b) hereof. The restrictions contained in subparagraph (i) of the immediately
preceding sentence shall also be in effect for a period of one year following the Termination Date.
This paragraph 3(b) does not alter any of the obligations the Executive may have under the
Employee Proprietary Information Agreement, executed in January 2005.

          c. Nothing in paragraph 3(b) shall preclude Executive from providing services as an employee
or consultant to an entity engaged in the EDA industry that has multiple subsidiaries, divisions or
other business units, if Executive provides his services exclusively to a subsidiary, division or
other business unit that is not engaged in the EDA industry, and as long as Executive receives
written approval from Cadence’s CEO to accept such position.

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          d. Executive will fully cooperate with Cadence in all matters relating to his employment,
including the winding up of work performed in Executive’s prior position and the orderly transition
of such work to other Cadence employees, and any legal matters that may require his involvement, at
the request of the Company’s General Counsel.

          e. Executive will not make any statement, written or oral, that disparages Cadence or any of
its affiliates, or any of Cadence’s or its affiliates’ products, services, policies, business
practices, employees, executives, officers, or directors. Similarly, Cadence agrees to instruct
its executive officers and members of the Company’s Board of Directors not to make any statement,
written or oral, that disparages Executive. The restrictions described in this paragraph shall not
apply to any truthful statements made in response to a subpoena or other compulsory legal process.

          f. Notwithstanding paragraph 9 hereof, the parties agree that damages would be an inadequate
remedy for Cadence in the event of a breach or threatened breach by Executive of paragraph 3(b), or
for Cadence or Executive in the event of a breach or threatened breach of paragraph 3(e). In the
event of any such breach or threatened breach, the non-breaching party may, either with or without
pursuing any potential damage remedies, obtain from a court of competent jurisdiction, and enforce,
an injunction prohibiting the other party from violating this Agreement and requiring the other
party to comply with the terms of this Agreement.

     4. TRANSITION COMPENSATION AND BENEFITS. In consideration and compensation for Executive’s
services during the Transition Period, Cadence will provide the following to Executive:

          a. a monthly salary of $4,000 less applicable tax withholdings and deductions, payable in
accordance with Cadence’s regular payroll schedule, commencing on the first pay date that is more
than six months following the Transition Commencement Date;

          b. immediate vesting as of the Transition Commencement Date of that portion of the stock
options and restricted stock granted to Executive prior to the Termination Date, or assumed by the
Company by virtue of its acquisition of Verisity, that would ordinarily have vested during the
Transition Period, provided that Executive has executed all necessary stock option and restricted
stock agreements, and with the understanding that (i) upon the Transition Commencement Date all
unvested options and unvested restricted stock that do not vest in accordance with this paragraph
4(b) shall immediately expire and be forfeited and (ii) upon Executive’s Termination Date, all
vested options may be exercised in accordance with the applicable stock option agreement; and

          c. if Executive elects to continue coverage under Cadence’s medical, dental, and vision
insurance plans pursuant to COBRA following the Transition Commencement Date, Cadence will pay
Executive’s COBRA premiums during the Transition Period.

Except as so provided, Executive will receive no other compensation or benefits from Cadence in
consideration of Executive’s services during the Transition Period.

     5. FIRST TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not voluntarily
resign from employment with Cadence and Cadence does not

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terminate Executive’s employment with Cadence due to a breach by Executive of Executive’s
duties under this Agreement, and in consideration for Executive’s acceptance of this Agreement and
Executive’s further execution and delivery of a Release of Claims in the form of Attachment 1
hereto, Cadence will provide to Executive within ten business days of the date that is six months
following the Transition Commencement Date and after Executive has returned to the Company all hard
and soft copies of records, documents, materials and files relating to confidential, proprietary or
sensitive company information in his possession or control by the Transition Commencement Date, as
well as all other Company-owned property, the following termination payment, to which Executive
would not otherwise be entitled:

	 	•	 	a lump-sum payment of one year’s base salary, or $400,000.00, less applicable
tax deductions and withholdings;
	 
	 	•	 	a bonus, prorated for the time worked during the Second Half of 2007 as an
executive of the Company, reflecting an Individual Performance Modifier of “1,” and
the Cadence Group Modifier that Executive would have received had he continued to
work as an executive for the Company on the date the bonus would normally have been
paid in February 2008, if and only if a bonus is paid to executives.

     6. SECOND TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not resign from
employment with Cadence and Cadence does not terminate Executive’s employment with Cadence due to a
breach by Executive of Executive’s duties under this Agreement, upon the Termination Date, and in
consideration for Executive’s acceptance of this Agreement and Executive’s further execution of a
Release of Claims in the form of Attachment 2 to this Agreement, Cadence will provide to Executive
within ten business days after the expiration of the revocation period of the Release of Claims (as
defined in that document) the following termination payment, to which Executive would not otherwise
be entitled:

	 	•	 	a lump-sum payment of one year’s target bonus, or $400,000.00, less applicable
tax deductions and withholdings provided.

     7. GENERAL RELEASE OF CLAIMS.

          a. Executive hereby irrevocably, fully and finally releases Cadence, its parent, subsidiaries,
affiliates, directors, officers, agents and employees (“Releasees”) from all causes of action,
claims, suits, demands or other obligations or liabilities, whether known or unknown, suspected or
unsuspected, that Executive ever had or now has as of the time that Executive signs this Agreement
which relate to his hiring, his employment with the Company, the termination of his employment with
the Company and claims asserted in shareholder derivative actions or shareholder class actions
against the Company and its officers and Board of Directors, to the extent those derivative or
class actions relate to the period during which Executive was employed by the Company. The claims
released include, but are not limited to, any claims arising from or related to Executive’s
employment with Cadence, such as claims arising under (as amended) Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1974, the
Americans with Disabilities Act,

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the Equal Pay Act, the Fair Labor Standards Act, the California Fair Employment and Housing
Act, the California Labor Code, the Employee Retirement Income and Security Act of 1974 (except for
any vested right Executive has to benefits under an ERISA plan), the state and federal Worker
Adjustment and Retraining Notification Act, and the California Business and Professions Code; any
other local, state, federal, or foreign law governing employment; and the common law of contract
and tort. In no event, however, shall any claims, causes of action, suits, demands or other
obligations or liabilities be released pursuant to the foregoing if and to the extent they relate
to:

               i. any amounts or benefits to which Executive is or becomes entitled to pursuant to the
provisions of this Agreement;

               ii. claims for workers’ compensation benefits under any of the Company’s workers’ compensation
insurance policies or funds;

               iii. claims related to Executive’s COBRA rights; and

               iv. any rights that Executive has or may have to be indemnified by Cadence for the period of
his full-time employment pursuant to any contract, including the Executive’s Indemnity Agreement,
dated May 11, 2005, Cadence’s bylaws and Cadence’s Directors and Officers insurance policy,
statute, or common law principle.

          b. Executive represents and warrants that he has not filed any claim, charge or complaint
against any of the Releasees.

          c. Executive acknowledges that the payments provided in this Agreement constitute adequate
consideration for the release set forth in this paragraph 7.

          d. Executive intends that this release of claims cover all claims, whether or not known to
Executive. Executive further recognizes the risk that, subsequent to the execution of this
Agreement, Executive may incur loss, damage or injury which Executive attributes to the claims
encompassed by this release. Executive expressly assumes this risk by signing this Agreement and
voluntarily and specifically waives any rights conferred by California Civil Code section 1542
which provides as follows:

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor which if known by him or her must have
materially affected his or her settlement with the debtor.

          e. Executive represents and warrants that there has been no assignment or other transfer of
any interest in any claim by Executive that is covered by this release.

     8. REVIEW OF AGREEMENT; REVOCATION OF ACCEPTANCE. Executive has been given at least 21 days in
which to review and consider this Agreement, although Executive is free to accept this Agreement
anytime within that 21-day period. Executive is advised to consult with an attorney about the
Agreement. If Executive accepts this Agreement, Executive will have an additional 7 days from the
date that Executive signs this Agreement to revoke that acceptance, which Executive may effect by
means of a written notice

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sent to the Corporate Vice President, Global Human Resources. If this 7-day period expires
without a timely revocation, this Agreement will become final and effective on the eighth day
following the date of Executive’s signature, which eighth day will be the “Effective Date” of this
Agreement.

     9. ARBITRATION. Subject to paragraph 3(f) hereof, all claims, disputes, questions, or
controversies arising out of or relating to this Agreement, including without limitation the
construction or application of any of the terms, provisions, or conditions of this Agreement, will
be resolved exclusively in final and binding arbitration in accordance with the Arbitration Rules
and Procedures, or successor rules then in effect, of Judicial Arbitration & Mediation Services,
Inc. (“JAMS”). The arbitration will be held in the San Jose, California, metropolitan area, and
will be conducted and administered by JAMS or, in the event JAMS does not then conduct arbitration
proceedings, a similarly reputable arbitration administrator. Executive and Cadence will select a
mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrators. Except as
provided by this Agreement, the Federal Arbitration Act will govern the administration of the
arbitration proceedings. The arbitrator will apply the substantive law (and the law of remedies,
if applicable) of the State of California, or federal law, as applicable, and the arbitrator is
without jurisdiction to apply any different substantive law. Executive and Cadence will each be
allowed to engage in adequate discovery, the scope of which will be determined by the arbitrator
consistent with the nature of the claim[s] in dispute. The arbitrator will have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any party and will apply the
standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator will
render a written award and supporting opinion that will set forth the arbitrator’s findings of fact
and conclusions of law. Judgment upon the award may be entered in any court of competent
jurisdiction. Cadence will pay the arbitrator’s fees, as well as all administrative fees,
associated with the arbitration. Each party will be responsible for paying its own attorneys’ fees
and costs (including expert witness fees and costs, if any). However, in the event a party prevails
at arbitration on a statutory claim that entitles the prevailing party to reasonable attorneys’
fees as part of the costs, then the arbitrator may award those fees to the prevailing party in
accordance with that statute.

     10. NO ADMISSION OF LIABILITY. Nothing in this Agreement will constitute or be construed in
any way as an admission of any liability or wrongdoing whatsoever by Cadence or Executive.

     11. INTEGRATED AGREEMENT. This Agreement is intended by the parties to be a complete and
final expression of their rights and duties respecting the subject matter of this Agreement. With
the exception of the Noncompetition Agreement, dated January 12, 2005, which shall remain in effect
until the end of its term, this Agreement supersedes any written or oral employment agreements
between Executive and the Company, including, without limitation, that certain letter agreement
dated January 12, 2005 between Executive and the Company (the “Employment Agreement”). Except as
expressly provided herein, nothing in this Agreement is intended to negate Executive’s agreement to
abide by Cadence’s policies while serving as a Cadence employee, including but not limited to
Cadence’s Employee Handbook, Sexual Harassment Policy and Code of Business Conduct, or Executive’s
continuing obligations under Executive’s Employee Proprietary Information and Inventions Agreement,
or any other agreement governing the disclosure and/or use of proprietary information, which
Executive

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signed while working with Cadence or its predecessors; nor to waive any of Executive’s
obligations under state and federal trade secret laws.

     12. FULL SATISFACTION OF COMPENSATION OBLIGATIONS; ADEQUATE CONSIDERATION. Executive agrees
that the payments and benefits provided herein are in full satisfaction of all obligations of
Cadence to Executive arising out of or in connection with Executive’s employment through the
Termination Date, including, without limitation, (i) all compensation, salary, bonuses,
reimbursement of expenses, and benefits and (ii) any severance payments or benefits set forth in
Section 6 of the Employment Agreement. For the avoidance of doubt, Executive acknowledges and
agrees that the payments and benefits provided for under paragraphs 4, 5 and 6 of this Agreement
are intended to be in lieu of, and not in addition to, any payments and/or benefits Executive may
have been entitled to pursuant to Section 6 of the Employment Agreement. Executive also agrees
that Executive is not owed any other compensation under the Employment Agreement.

     13. TAXES AND OTHER WITHHOLDINGS. Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable hereunder all federal, state, local and foreign taxes and
other amounts that are required to be withheld by applicable laws or regulations, and the
withholding of any amount shall be treated as payment thereof for purposes of determining whether
Executive has been paid amounts to which he is entitled.

     14. WAIVER. Neither party shall, by mere lapse of time, without giving notice or taking other
action hereunder, be deemed to have waived any breach by the other party of any of the provisions
of this Agreement. Further, the waiver by either party of a particular breach of this Agreement by
the other shall neither be construed as, nor constitute, a continuing waiver of such breach or of
other breaches of the same or any other provision of this Agreement.

     15. MODIFICATION. This Agreement may not be modified unless such modification is embodied in
writing, signed by the party against whom the modification is to be enforced. Notwithstanding
anything herein to the contrary, the Company may, in its sole discretion, amend this Agreement
(which amendment shall be effective upon its adoption or at such other time designated by the
Company) at any time prior to a Change in Control as may be necessary to avoid the imposition of
the additional tax under Section 409A(a)(1)(B) of the Internal Revenue Code of 1986, as amended;
provided, however, that any such amendment shall be implemented in such a manner as to preserve, to
the greatest extent possible, the terms and conditions of this Agreement as in existence
immediately prior to any such amendment.

     16. ASSIGNMENT AND SUCCESSORS. Cadence shall have the right to assign its rights and
obligations under this Agreement to an entity that, directly or indirectly, acquires all or
substantially all of the assets of Cadence. The rights and obligations of Cadence under this
Agreement shall inure to the benefit and shall be binding upon the successors and assigns of
Cadence. Executive shall not have any right to assign his obligations under this Agreement and
shall only be entitled to assign his rights under this Agreement upon his death, solely to the
extent permitted by this Agreement, or as otherwise agreed to by Cadence.

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     17. SEVERABILITY. In the event that any part of this Agreement is found to be void or
unenforceable, all other provisions of the Agreement will remain in full force and effect.

     18. GOVERNING LAW. This Agreement will be governed and enforced in accordance with the laws
of the State of California, without regard to its conflict of laws principles.

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EXECUTION OF AGREEMENT

     The parties execute this Agreement to evidence their acceptance of it.

	 	 	 
	Dated: September 18, 2007

	 	Dated: September 18, 2007
	 
	 	 
	MOSHE GAVRIELOV

	 	CADENCE DESIGN SYSTEMS, INC.
	 
	 	 
	 
	 	 
	/s/ Moshe Gavrielov

	 	/s/ R.L. Smith McKeithen
	 

	 	 
	 
	 	 
	 

	 	R.L. Smith McKeithen
	 

	 	Senior Vice President & General Counsel
	 
	 	 
	 
	 	 
	 

	 	/s/ William Porter
	 

	 	 
	 

	 	William Porter
	 

	 	Executive Vice President & Chief Financial Officer

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ATTACHMENT 1

RELEASE OF CLAIMS

(To be executed on or after May 31, 2008)

          1. For valuable consideration, I irrevocably, fully and finally release Cadence, its parent,
subsidiaries, affiliates, directors, officers, agents and employees (“Releasees”) from all causes
of action, claims, suits, demands or other obligations or liabilities, whether known or unknown,
suspected or unsuspected, that I ever had or now have as of the time that I sign this Agreement
which relate to my hiring, my employment with the Company, the termination of my employment with
the Company and claims asserted in shareholder derivative actions or shareholder class actions
against the Company and its officers and Board of Directors, to the extent those derivative or
class actions relate to the period during my employment with the Company. The claims released
include, but are not limited to, any claims arising from or related to Executive’s employment with
Cadence, such as claims arising under (as amended) Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1974, the Americans with
Disabilities Act, the Equal Pay Act, the Fair Labor Standards Act, the California Fair Employment
and Housing Act, the California Labor Code, the Employee Retirement Income and Security Act of 1974
(except for any vested right Executive has to benefits under an ERISA plan), the state and federal
Worker Adjustment and Retraining Notification Act, and the California Business and Professions
Code; any other local, state, federal, or foreign law governing employment; and the common law of
contract and tort. This Release is not intended to, and does not, encompass any right to
compensation or benefits that I have under my Executive Transition and Release Agreement with
Cadence. In no event, however, shall any claims, causes of action, suits, demands or other
obligations or liabilities be released pursuant to the foregoing if and to the extent they relate
to:

     i. any amounts or benefits to which I am or become entitled to pursuant to the provisions of
this Agreement;

     ii. claims for workers’ compensation benefits under any of the Company’s workers’ compensation
insurance policies or funds;

     iii. claims related to my COBRA rights; and iv. any rights that Executive has or may have to
be indemnified by Cadence for the period of his full-time employment pursuant to any contract,
including the Executive’s Indemnity Agreement, dated May 11, 2005, Cadence’s bylaws and Cadence’s
Directors and Officers insurance policy, statute, or common law principle.

     2. I intend that this Release cover all claims, whether or not known to me. I further
recognize the risk that, subsequent to the execution of this Agreement, I may incur loss, damage or
injury which I attribute to the claims encompassed by this Release. I expressly assume this risk
by signing this Release and voluntarily and specifically waive any rights conferred by California
Civil Code section 1542 which provides as follows:

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A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor which if known by him or her must have
materially affected his or her settlement with the debtor.

     3. I represent and warrant that there has been no assignment or other transfer of any interest
in any claim by me that is covered by this Release.

     4. I acknowledge that Cadence has given me 21 days in which to consider this Release and
advised me to consult an attorney about it. I further acknowledge that once I execute this
Release, I will have an additional 7 days in which to revoke my acceptance of this Release by means
of a written notice of revocation given to the executive overseeing Global Human Resources. This
Release will not be final and effective until the expiration of this revocation period.

	 	 	 	 	 
	Dated:

	 	 	 .	 
	 

	 	 
	 	 
	 

	 	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Sign Name

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ATTACHMENT 2

RELEASE OF CLAIMS

(To be executed on or about November 30, 2008)

          1. For valuable consideration, I irrevocably, fully and finally release Cadence, its parent,
subsidiaries, affiliates, directors, officers, agents and employees (“Releasees”) from all causes
of action, claims, suits, demands or other obligations or liabilities, whether known or unknown,
suspected or unsuspected, that I ever had or now have as of the time that I sign this Agreement
which relate to my hiring, my employment with the Company, the termination of my employment with
the Company and claims asserted in shareholder derivative actions or shareholder class actions
against the Company and its officers and Board of Directors, to the extent those derivative or
class actions relate to the period during my employment with the Company. The claims released
include, but are not limited to, any claims arising from or related to Executive’s employment with
Cadence, such as claims arising under (as amended) Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1974, the Americans with
Disabilities Act, the Equal Pay Act, the Fair Labor Standards Act, the California Fair Employment
and Housing Act, the California Labor Code, the Employee Retirement Income and Security Act of 1974
(except for any vested right Executive has to benefits under an ERISA plan), the state and federal
Worker Adjustment and Retraining Notification Act, and the California Business and Professions
Code; any other local, state, federal, or foreign law governing employment; and the common law of
contract and tort. This Release is not intended to, and does not, encompass any right to
compensation or benefits that I have under my Executive Transition and Release Agreement with
Cadence. In no event, however, shall any claims, causes of action, suits, demands or other
obligations or liabilities be released pursuant to the foregoing if and to the extent they relate
to:

               i. any amounts or benefits to which I am or become entitled to pursuant to the provisions of
this Agreement;

               ii. claims for workers’ compensation benefits under any of the Company’s workers’ compensation
insurance policies or funds;

               iii. claims related to my COBRA rights; and

               iv. any rights that Executive has or may have to be indemnified by Cadence for the period of
his full-time employment pursuant to any contract, including the Executive’s Indemnity Agreement,
dated May 11, 2005, Cadence’s bylaws and Cadence’s Directors and Officers insurance policy,
statute, or common law principle.

     2. I intend that this Release cover all claims, whether or not known to me. I further
recognize the risk that, subsequent to the execution of this Agreement, I may incur loss, damage or
injury which I attribute to the claims encompassed by this Release. I

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expressly assume this risk by signing this Release and voluntarily and specifically waive any
rights conferred by California Civil Code section 1542 which provides as follows:

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor which if known by him or her must have
materially affected his or her settlement with the debtor.

     3. I represent and warrant that there has been no assignment or other transfer of any interest
in any claim by me that is covered by this Release.

     4. I acknowledge that Cadence has given me 21 days in which to consider this Release and
advised me to consult an attorney about it. I further acknowledge that once I execute this
Release, I will have an additional 7 days in which to revoke my acceptance of this Release by means
of a written notice of revocation given to the executive overseeing Global Human Resources. This
Release will not be final and effective until the expiration of this revocation period.

	 	 	 	 	 
	Dated:

	 	 	 .	 
	 

	 	 
	 	 
	 

	 	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Sign Name

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APPENDIX A

Intel Corporation

Texas Instruments Incorporated

Freescale Seminconductor, Inc

Advanced Micro Devices, Inc.

Micron Technology, Inc.

QUALCOMM Incorporated

International Business Machines Corp.

Broadcom Corporation

NVIDIA Corporation

SanDisk Corporation

LSI Corporation

National Semiconductor Corporation

Marvell Semiconductor, Inc.

Maxim Integrated Products, Inc.

Xilinx, Inc.

Altera Corporation

Integrated Device Technology, Inc.

Atheros Communications, Inc.

Conexant Systems, Inc.

Avago Technologies Limited

QLogic Corporation

Silicon Laboratories Incorporated

PMC-Sierra, Inc.

Silicon Storage Technology, Inc.

Zoran Corporation

Standard Microsystems Corp.

14exv10w1

 

Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE 

     This Separation Agreement and Release (the “Agreement”) is entered into between ZipRealty,
Inc. (the “Company”), on the one hand and Richard Williams (the “Executive”) on the other hand with
reference to the following facts:

WHEREAS:

     Executive was employed by the Company.

     On or about April 16, 2007 Executive and Company entered into an Employment Agreement.

     On or about April 23, 2007 Executive and Company entered into an Executive Proprietary
Information Agreement (the “Confidentiality Agreement”).

     Company and Executive have entered into a stock option agreement dated May 24, 2007 (the
“Stock Option Agreement”), granting Executive the option to purchase shares of the Company’s common
stock (collectively, the “Options”) subject to the terms and conditions of the Company’s 1999 Stock
Plan (the “1999 Plan”) and 2004 Equity Incentive Plan (the “2004 Plan” and together with the 1999
Plan, the “Plans”), as applicable, and the Stock Option Agreements.

     Executive resigned from his position with the Company for personal reasons on or about
September 13, 2007 (the “Termination Date”).

COVENANTS

     It therefore is agreed by and between the undersigned as follows:

     1. Each of the undersigned executes and enters into this Agreement in consideration of each
and all of the agreements made and undertaken by each of the undersigned as follows:

     (a) The Parties agree that for purposes of determining the number of shares of the Company’s
common stock which Executive is entitled to purchase from the Company, pursuant to the exercise of
outstanding options, the Executive will be considered to have vested only up to the Termination
Date. Executive acknowledges that as of the Termination Date, he will have vested in zero options.

     (b) Company agrees to pay Executive nine weeks of Executive’s current base salary in the
amount of $4,326.92 per week, in accordance with the Company’s standard payroll practices.

     (c) Executive’s health insurance benefits will cease on September 30, 2007, subject to
Executive’s right to continue his health insurance under COBRA. Assuming

Page 1 of 6

 

Executive makes a timely election to continue his health insurance under COBRA, Company will
reimburse Executive (or make direct payment for) Executive’s percentage of the cost of medical
insurance benefits continuation under COBRA for him and his dependents for the six months following
the Effective Date of the release described below. Executive’s participation in all other benefits
and incidents of employment will cease on the Termination Date. Executive will cease accruing
Executive benefits, including but not limited to, vacation time and paid time off, as of the
Termination Date.

     (d) Company shall forgive Executive’s obligation to repay Company the $15,000 Relocation
Payment subject to repayment pursuant to Executives Employment Agreement dated April 16, 2007.

     (e) Upon the final date of Executive’s employment with Company, he was paid all accrued,
unused vacation. Executive acknowledges and agrees that by these payments, he received from
Company each and all of the employment benefits, compensation, wages, vacation pay, and other
monies due and owing to him from Company.

     (f) Executive shall continue to maintain the confidentiality of all confidential and
proprietary information of the Company and shall continue to comply with the terms and conditions
of the Confidentiality Agreement between Executive and the Company. Executive shall return all of
the Company’s property and confidential and proprietary information in his possession to the
Company. By signing this Agreement, Executive represents and declares under penalty of perjury
under the laws of the state of California that he has returned all Company property.

     2. Executive and Company agree that the foregoing consideration represents settlement in full
of all outstanding obligations owed to Executive by the Company and its owners, related entities,
officers, directors, employees, agents, representatives and shareholders (collectively the “Company
Releasees”) and owed to the Company Releasees by the Executive. Executive, on his own behalf, and
on behalf of his respective heirs, family members, executors, agents, assigns, does hereby fully
and forever release and discharge the Company Releasees and Company Releasees do hereby fully and
forever release and discharge the Executive of and from, and agree not to sue concerning any claim,
duty, obligation or cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that either Executive or Company Releasees may possess arising
from any omissions, acts or facts that have occurred up until and including the Effective Date of
this Agreement, including without limitation:

	 	a)	 	any and all claims relating to or arising from
Executive’s employment relationship;
	 
	 	b)	 	any and all claims relating to, or arising from,
Executive’s right to purchase, or actual purchase of shares of stock of the
Company, including, without limitation, any claims for fraud
misrepresentation, breach of fiduciary duty, breach of duty under
applicable state

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	 	 	 	corporate law, and securities fraud under any state or federal law;
	 
	 	c)	 	any and all claims under the law of any jurisdiction
including, but not limited to, breach of fiduciary duty, wrongful discharge
of employment, constructive discharge from employment, termination in
violation of public policy, discrimination, harassment, retaliation, breach
of contract, both express and implied, breach of the covenant of good faith
and fair dealing, both express and implied; promissory estoppel, negligent
and intentional infliction of emotional distress, negligent and intentional
misrepresentation, negligent and intentional interference with prospective
economic advantage, unfair business practices, defamation, libel, slander,
negligence, personal injury, fraud, misrepresentation, assault, battery
invasion of privacy, false imprisonment and conversion;
	 
	 	d)	 	any and all claims for violation of any federal, state
or municipal statute, including, but not limited to, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of 1990, the
Fair Labor Standards Act, the Executive Retirement Income Security Act of
1974, the Worker Adjustment Retraining and Notification Act, the Older
Workers Benefit Protection Act; the California Fair Employment and Housing
Act, the California Labor Code;
	 
	 	e)	 	any and all claims for violation of the federal or any
state constitution;
	 
	 	f)	 	any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination;
	 
	 	g)	 	any claim for any loss, cost, damage, or expense
arising out of any dispute over the non-withholding or other tax treatment
of the proceeds received by Executive as a result of this Agreement; and
	 
	 	h)	 	any and all claims for attorneys’ fees and costs.

The Company and Executive agree that the release set forth in this section shall be and remain in
effect in all respects as a complete general release as to the matters released. This release does
not extend to any rights of defense against and/or indemnification from claims by third parties
arising from Executive’s performance of his duties while employed by the Company; any rights
arising with respect to his vested shares or options; or any obligations incurred under this
Agreement. Further, this release does not waive any rights or claims that may arise after the
Effective Date of the Agreement and does not restrict Executive’s right to challenge the validity
of this Agreement. Further, this release does not extend to claims which as a matter of law cannot
be waived, such as a right to indemnification under California Labor Code section 2802.
Furthermore, Executive understands that while this Agreement does not affect his right

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to file a charge with or participate as a witness in an investigation or proceeding conducted by
the EEOC or any similar state agency, by accepting the terms provided herein and the consideration
provided to him as a result, he gives up any right to receive any relief whatsoever, including but
not limited to financial benefit or monetary recovery, from any lawsuit or settlement related to
such rights and claims as he now gives up, whether the lawsuit is filed or the settlement reached
by the EEOC, another agency, or anyone else

     3. Executive and Company represent that each party is not aware of any claim by him or it
other than the claims that are released by this Agreement. Executive and Company acknowledge that
he/it has been advised by legal counsel and is familiar with the provisions of California Civil
Code Section 1542, which provides as follows

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS/HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.

     Executive and Company, being aware of said code section, agree to expressly waive any
rights he/it may have under the above principal or any statute or common law principals of similar
effect.

     4. Executive acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing
and voluntary. Executive and the Company agree that this waiver and release does not apply to any
rights or claims that may arise under the ADEA after the Effective Date of this Agreement.
Executive acknowledges that the consideration given for this waiver and release Agreement is in
addition to anything of value to which Executive was already entitled. Executive further
acknowledges that he has been advised in writing that:

	 	a)	 	he should consult with an attorney prior to executing
this Agreement;
	 
	 	b)	 	he has up to twenty-one (21) days within which to
consider this Agreement;
	 
	 	c)	 	he has seven (7) days following his execution of this
Agreement to revoke the Agreement;
	 
	 	d)	 	this Agreement shall not be effective until the
revocation period has expired; and
	 
	 	e)	 	nothing in this Agreement prevents or precludes
Executive from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties or costs from doing so, unless specifically

Page 4 of 6

 

	 	 	 	authorized by federal law.

     Each of the undersigned agrees that none of the releases set forth herein releases any claims
arising out of obligations set forth in this Agreement.

     5. This Agreement is effective after it has been signed by both parties and after (8) days
have passed since Executive signed the Agreement (the “Effective Date”).

     6. The Parties agree that any and all disputes arising out of the terms of this Agreement,
their interpretation, and any of the matters herein released, shall be subject to binding
arbitration in Alameda County, California by an arbitrator agreed to by both parties. In the event
of any legal action relating to or arising out of this Agreement, the prevailing party shall be
entitled to recover from the losing party its attorneys’ fees and costs incurred in that action to
the extent permissible by law. The parties agree that the prevailing party in any arbitration shall
be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration
award. The Parties hereby agree to waive their right to have any dispute between them resolved in
a court of law by a judge or jury. This paragraph will not prevent either party from seeking
injunctive relief (or any other provisional remedy) from any court having jurisdiction over the
Parties and the subject matter of their dispute relating to Executive’s obligations under this
Agreement.

     7. If any provision of this Agreement or the application thereof is held invalid, the
invalidity shall not affect other provisions or application of the Agreement which can be given
effect without the invalid provisions or application and to this end the provisions of this
Agreement are declared to be severable.

     8. The Company makes no representations or warranties with respect to the tax consequences of
the payment of any sums to Executive under the terms of Section 1 of this Agreement. Executive
agrees and understands that he is responsible for payment, if any, of local, state and/or federal
taxes on the sums paid hereunder by the Company and any penalties or assessments thereon.
Executive further agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, assessments, executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of Executive’s failure to pay federal or
state taxes or damages sustained by the Company by reason of any such claims, including reasonable
attorneys’ fees.

     9. This Agreement contains the entire agreement of the undersigned with respect to the matters
covered by this Agreement and no promise made by any party or by an officer, attorney, or agent of
any party that is not expressly contained in this Agreement shall be binding or valid. This
Agreement supersedes any prior agreement between the parties with the exception of the
Confidentiality Agreement, the Plans and the Stock Option Agreements. Additionally, any
modification of any provision of this Agreement, to be effective, must be in writing and signed by
both parties.

     10. This Agreement shall be governed by and construed under the laws of the State of
California.

Page 5 of 6

 

     11. This Agreement may be executed by facsimile and in counterparts, and the counterparts,
taken together, shall constitute the original.

     12. Each of the undersigned executing this Agreement on behalf of a party represents and
warrants that he or she is a duly appointed agent or duly elected officer of the party and is fully
authorized to execute this Agreement on that party’s behalf.

     13. Each party to this Agreement has consulted with, or had the opportunity to consult with,
legal and tax counsel concerning all paragraphs of this Agreement. Each party has read the
Agreement and has been fully advised by legal counsel with respect to the rights and obligations
under the Agreement, or has had the opportunity to obtain such advice. Each party is fully aware
of the intent and legal effect of the Agreement, and has not been influenced to any extent
whatsoever by any representation or consideration other than as stated herein. After consultation
with and advice from, or the opportunity for consultation with and advice from, legal counsel, each
party voluntarily enters into this Agreement.

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	DATED: September 14, 2007	 	/s/ Richard Williams	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Richard Williams	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DATED: September 14, 2007	 	ZipRealty, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Patrick Lashinsky	 	 
	 

	 	 	 	 	 	 

Patrick Lashinsky
	 	 
	 

	 	 	 	 	 	Chief Executive Officer	 	 

Page 6 of 6

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