Document:

Exhibit 10.31

 

SYNOPSYS, INC.

2005 NON-EMPLOYEE DIRECTORS EQUITY INCENTIVE PLAN

 

Adopted
by the Board of Directors on March 1, 2005 and approved by the Stockholders
on May 23, 2005 and amended by the Board on March 3, 2006 and March 24,
2006

 

I. PURPOSE
OF THE PLAN

 

This 2005 Non-Employee
Directors Equity Incentive Plan (the “Plan”) is intended to promote the
interests of Synopsys, Inc., a Delaware corporation (the “Corporation”),
by providing the non-employee members of the Board of Directors with the opportunity
to acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain in the service
of the Corporation.

 

II. DEFINITIONS

 

For purposes of the Plan,
the following definitions shall be in effect:

 

ANNUAL
MEETING: the first meeting of the Corporation’s 
stockholders held each calendar year at which directors of the
Corporation are selected.

 

AWARD:
an option granted pursuant to Section VI.A(1), Section VI.A(2)(i) or
Section VI.A(3) or common stock issued as Restricted Stock pursuant
to Section VI.A(2)(ii).

 

BOARD:
the Corporation’s Board of Directors.

 

CODE:
the Internal Revenue Code of 1986, as amended.

 

COMMON
STOCK: shares of the Corporation’s common stock.

 

CHANGE
IN CONTROL: a change in ownership or control of the Corporation effected
through either of the following transactions:

 

(1)                                              any
person or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation’s outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation’s stockholders; or

 

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(2)                                              there
is a change in the composition of the Board over a period of twenty-four (24)
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections for Board membership, to be comprised
of individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the
Board members described in clause (A) who were still in office at the time
such election or nomination was approved by the Board.

 

CORPORATE
TRANSACTION: any of the following stockholder-approved transactions to which
the Corporation is a party:

 

(1)                                              a
merger or consolidation in which the Corporation is not the surviving entity,

 

(2)                                              the
sale, transfer or other disposition of all or substantially all of the assets
of the Corporation but only if such sale, transfer or other disposition occurs
in connection with the complete liquidation or dissolution of the Corporation,
or

 

(3)                                              any
merger in which the Corporation is the surviving entity but becomes a more than
fifty percent (50%) owned subsidiary of another corporation.

 

EFFECTIVE
DATE: March 1, 2005, the date on which the Plan was adopted by the Board.

 

ELIGIBLE
DIRECTOR:  a person designated as an
Eligible Director pursuant to Section V.A.

 

FAIR
MARKET VALUE: the Fair Market Value per share of Common Stock determined in
accordance with the following provisions:

 

(1)                                              If
the Common Stock is not at the time listed or admitted to trading on any
national securities exchange but is traded on the Nasdaq National Market, the
Fair Market Value shall be the closing selling price per share on the date in
question, as such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If there is no
reported closing selling price for the Common Stock on the date in question,
then the closing selling price on the last preceding date for which such
quotation exists shall be determinative of Fair Market Value.

 

(2)                                              If
the Common Stock is at the time listed or admitted to trading on any national
securities exchange, then the Fair Market Value shall be the closing selling
price per share on the date in question on the exchange serving as the primary
market for the Common

 

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Stock, as such price is
officially quoted in the composite tape of transactions on such exchange. If
there is no reported sale of Common Stock on such exchange on the date in
question, then the Fair Market Value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.

 

1934
ACT: the Securities Exchange Act of 1934, as amended.

 

OPTIONEE:
any person to whom an option is granted under the  Plan.

 

PERMANENT
DISABILITY OR PERMANENTLY DISABLED: the inability of the Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.

 

RESTRICTED
STOCK:  shares of Common Stock as
described in Section VI.A(2)(ii).

 

III. ADMINISTRATION
OF THE PLAN

 

Except as otherwise
provided herein, the terms and conditions of each Award (including the timing
and pricing of option grants) shall be determined by the express terms and
conditions of the Plan. To the extent not inconsistent with the foregoing, the
Board shall have the power to construe and interpret the Plan and Awards
granted under it, and to establish, amend, and revoke rules and
regulations for the administration of the Plan. The Board, in the exercise of
this power, may (i) correct any defect, omission or inconsistency in
the Plan or in any Stock Option Agreement or Restricted Stock Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective, (ii) to amend the Plan or an Award as provided in Section VIII,
or (iii) to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the
Corporation. Notwithstanding the foregoing, the Board shall not have the power
to approve a program whereby outstanding Awards are surrendered in exchange for
Awards with a lower exercise price, without first obtaining stockholder
approval of such program other than changes to outstanding awards pursuant to Section IV.C.

 

IV. STOCK
SUBJECT TO THE PLAN

 

A.                       Shares of
the Corporation’s Common Stock shall be available for issuance under the Plan
and shall be drawn from either the Corporation’s authorized but unissued shares
of Common Stock or from reacquired shares of Common Stock, including shares
repurchased by the Corporation on the open market. The number of shares of
Common Stock reserved for issuance over the term of the Plan shall initially be
fixed at 750,000 shares, subject to stockholder approval at the 2006 Annual
Meeting of Stockholders of the Company.

 

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B.                         Should
one or more outstanding options under this Plan expire or terminate for any
reason prior to exercise in full, then the shares subject to the portion of
each option not so exercised shall be available for issuance under the Plan. Unvested
shares of Restricted Stock that revert to the Corporation shall also be
available for reissuance under the Plan. In addition, should the exercise price
of an outstanding option under the Plan be paid with shares of Common Stock
that were not acquired from the Corporation, then the number of shares of
Common Stock available for issuance under the Plan shall be reduced by the
gross number of shares for which the option is exercised, and not by the net
number of shares of Common Stock actually issued to the holder of such option.

 

C.                         Should
any change be made to the Common Stock issuable under the Plan by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class without
the Corporation’s receipt of consideration, then appropriate adjustments shall
be made to (i) the  maximum number
and/or class of securities issuable under the Plan, (ii) the number
and/or class of securities for which Awards are to be subsequently made to
each newly-elected or continuing non-employee Board member under the Plan, and (iii) the
number and/or class of securities and price per share in effect under each
Award outstanding under the Plan. The adjustments to the outstanding Awards
shall be made by the Board in a manner which shall preclude the enlargement or
dilution of rights and benefits under such Awards and shall be final, binding
and conclusive.

 

V. ELIGIBILITY

 

A.                       Eligible
Directors. The individuals eligible to receive Awards pursuant to the
provisions of this Plan shall be limited to (i) those individuals who are
first elected or appointed as non-employee Board members after the Effective
Date, whether through appointment by the Board or election by the Corporation’s
stockholders, and (ii) those individuals who are re-elected as
non-employee Board members at one or more Annual Meetings held after the
Effective Date whether or not such individual is serving as a non-employee
director on the Effective Date. Each non-employee Board member eligible to
participate in the Plan pursuant to the foregoing criteria is hereby designated
an Eligible Director.

 

B.                         Limitation.
Except for the grants to be made pursuant to this Plan, non-employee Board
members shall not be eligible to receive any stock options, stock appreciation
rights, direct stock issuances or other stock awards under this Plan or any
other stock plan of the Corporation or any parent or subsidiary.

 

VI. TERMS
AND CONDITIONS OF AUTOMATIC AWARDS

 

A.             Award
Amounts and Dates. Awards shall be granted in the amounts and on the dates
specified below:

 

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(1)       Initial Awards. Each individual who first
becomes an Eligible Director after the Effective Date, whether through election
by the Corporation’s stockholders or appointment by the Board, shall automatically
be granted, at the time of such initial election or appointment, a
non-statutory option to purchase thirty thousand (30,000) shares of Common
Stock. The terms and conditions of any such option shall be as set forth in Section VI.B.

 

(2)       Annual Awards. On the date of each Annual
Meeting during the term of this Plan, each Eligible Director who is re-elected
to the Board at that Annual Meeting shall automatically be granted, on the date
of such Annual Meeting (the “Award Annual Meeting”), an annual Award (an “Annual
Award”) in the form described below, with a value equal to the Annual
Award Value, as defined below. There shall be no limit on the number of Annual
Awards any one Eligible Director may receive over his or her period of
continued Board service during the term of this Plan. On or before the December 31st
of the calendar year immediately preceding the calendar year in which the Award
Annual Meeting occurs, the Board shall determine if the Annual Award shall be
in the form of a stock option in the form described in Section VI.A(2)(i) below
or in the form of Restricted Stock described in Section VI.A(2)(ii) below.
In the event that no such determination is made by such December 31st,
the last election made by the Board as to the type of Award to receive shall
continue with respect to the Annual Awards issuable at the Award Annual
Meeting.

 

(i) 
If the Annual Award is in the form of a stock option, the Annual Award
shall be a non-statutory option to purchase a number of shares of Common Stock
(an “Annual Option Grant”) equal to the number of shares which will result in
the Annual Option Grant having a value as determined under the generally
accepted accounting principles employed by the Corporation for the purposes of
preparing its financial statements equal to the Annual Award Value. The Annual
Option Grant shall have the terms and conditions set forth in Section VI.B.

 

(ii) 
If the Annual Award is in the form of Restricted Stock, the Annual Award
shall be a grant of a number of unvested shares of Common Stock with a Fair
Market Value equal to the Annual Award Value with any fractional share being
eliminated. The terms and conditions of an Annual Award in the form of
restricted stock shall be as set forth in Section VI.C. Notwithstanding
the foregoing, the Board shall have the authority to provide that an Award in
the form of Restricted Stock shall instead be in the form of a
commitment to issue shares of Common Stock on the dates the Restricted Stock
would have vested and otherwise with substantially the same provisions as set
forth in this Plan for Awards of Restricted Stock. (Such a commitment is
commonly referred to as an award of “Restricted Stock Units.”)  If the Board has determined that Awards of
Restricted Stock  Units shall be made in
lieu of Awards of Restricted Stock, references in this Plan to Restricted Stock
shall be deemed references to Restricted Stock Units.

 

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(3)       Interim Awards. In the case of an
Eligible Director who is appointed to the Board on a date (the “Interim
Appointment Date”) that is neither (x) the date of an Annual Meeting nor (y) a
date that is more than eleven (11) months since the most recent Annual Meeting
that preceded the Interim Appointment Date, such Eligible Director shall
automatically be granted, at the time of such appointment, an Award (an “Interim
Award”) in the form of a non-statutory option to purchase a number of
shares of Common Stock (an “Interim Option Grant”) equal to the number of
shares which will result in the Interim Option Grant having a value as
determined under the generally accepted accounting principles employed by the
Corporation for the purposes of preparing its financial statements equal to the
Interim Award Value, as defined below. The Interim Option Grant shall have the
terms and conditions set forth in Section VI.B

 

(4)                      Definitions.
The following definitions shall apply for the purposes of this Section VI:

 

(i) 
For the purposes of this Section VI.A, “Annual Award Value” shall mean a dollar
amount equal to the annual cash retainer for service as a Director in effect at
the time of the Award Annual Meeting for the period from the Award Annual
Meeting until the first Annual Meeting following the Award Annual Meeting.

 

(ii) 
“Interim Award Value” shall mean a dollar amount equal to the product of (i) the
Annual Award Value the Eligible Director would have received had the Eligible
Director been appointed to the Board at the time of the most recent Annual
Meeting that preceded the Interim Appointment Date multiplied by (ii) a
fraction the numerator of which is twelve (12) minus the lesser of (x) the
number of whole months from the most recent Annual Meeting that preceded the
Interim Appointment Date until the Interim Appointment Date with any fraction
of a month being rounded up to the next whole month or (y) twelve (12) and the
denominator of which is twelve (12).

 

B.                                    Terms
and Conditions of Options. Any options granted pursuant to Section VI.A(1),
Section VI.A(2)(i) or Section VI.A(3) shall have the
following terms and conditions:

 

(1)                      Exercise
Price. The exercise price per share of Common Stock subject to such option
shall be equal to one hundred percent (100%) of the Fair Market Value per share
of Common Stock on the grant date.

 

(2)                      Payment.
Upon the exercise of the option in whole or in part, the exercise price for the
portion being exercised shall become immediately due and shall be payable in
one of the alternative forms specified below, or in a combination of such
alternative forms, to the extent permitted by law and permitted in the form of
Stock Option Agreement issued in connection with the option:

 

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(i)     full payment in cash or check made payable
to the Corporation’s order; or

 

(ii)    full payment in shares of Common Stock
valued at Fair Market Value on the Exercise Date (as such term is defined
below); or

 

(iii)   full payment through a broker-dealer sale and
remittance procedure pursuant to which the non-employee Board member (x) shall
provide irrevocable written instructions to a brokerage firm acceptable to the
Corporation to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the
purchased shares and (y) shall concurrently provide written directives to the
Corporation to deliver the certificates for 
the purchased shares directly to such brokerage firm in order to
complete the sale transaction; or

 

(iv)  a “net
exercise” arrangement pursuant to which the Corporation will reduce the number
of shares of Common Stock issued upon exercise of the option by the largest
whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price; provided, however, that the Corporation shall accept
a cash payment from the Eligible Director to the extent of any remaining
balance of the aggregate exercise price not satisfied by such holding back of
whole shares; provided further, however, that shares of Common Stock will no
longer be outstanding under the option and will not be exercisable thereafter
to the extent that (x) shares are used to pay the exercise price pursuant to
the “net exercise” of the option and (y) shares are directly or indirectly
delivered to the Eligible Director as a result of such exercise of the option.

 

For purposes of this Section VI.B(2),
the Exercise Date shall be the date on which written notice of the option
exercise is delivered to the Corporation. Except to the extent the sale and
remittance procedure specified above is utilized in connection with the
exercise of the option, payment of the exercise price for the purchased shares
must accompany the exercise notice.

 

(3)                      Exercisability/Vesting.
Each stock option granted pursuant to this Plan shall be exercisable only if
the option becomes vested in accordance with the terms of this Plan. Once a
portion of an option becomes vested, such portion shall remain exercisable
until either such portion is exercised or the option is terminated in
accordance with the provisions of this Plan. In no event, however, shall any
additional option shares vest after the Optionee’s cessation of Board service. Except
as otherwise provided in this Plan, options granted pursuant to this Plan shall
vest as follows:

 

(i)                                                 The
initial automatic grant for thirty thousand (30,000) shares made to each
Eligible Director shall vest in a series of four (4) successive equal
installments as such individual continues in Board service through the date
immediately preceding each of the first four (4) Annual Meetings following
the grant date of that option.

 

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(ii)                                              Each
Annual Option Grant and any Interim Option Grant made to an Eligible Director
shall vest in thirty-six (36) successive equal installments for each month the
Optionee continues in Board service from the grant date of that option through
the third (3rd) anniversary of the grant date of the option.

 

(iii)                                           Should
the Optionee die or become Permanently Disabled while serving as a Board
member, then any option grant issued under the Plan held by the Optionee at the
time of his or her death or Permanent Disability may subsequently be
exercised for any or all of the option shares in which the Optionee is vested
at that time plus an additional number of option shares equal to the number of
option shares (if any) in which the Optionee would have vested had he or she
continued in Board service until the next Annual Meeting.

 

(4)                      Option Term.
Each option grant under the Plan shall have a maximum term of seven (7) years
measured from the automatic grant date.

 

(5)                      Effect of
Termination of Board Service.

 

(i)      Should the Optionee cease to serve as a
Board member for any reason (other than death or Permanent Disability) while
holding one or more option grants issued under the Plan, then such individual
shall have a six (6)-month period following the date of such cessation of Board
service in which to exercise each such option for any or all of the option
shares in which the Optionee is vested at the time of his or her cessation of
Board service. Each such option shall immediately terminate and cease to be
outstanding, at the time of such cessation of Board service, with respect to any
option shares in which the Optionee is not otherwise at that time vested.

 

(ii)      Should the Optionee die on or before the
date that is six (6) months after cessation of Board service, then any
option grant issued under the Plan held by the Optionee at the time of death may subsequently
be exercised, for any or all of the option shares in which the Optionee is
vested at the time of his or her cessation of Board service (less any option
shares subsequently purchased by the Optionee prior to death), by the personal
representative of the Optionee’s estate or by the person or persons to whom the
option is transferred pursuant to the Optionee’s will or in accordance with the
laws of descent and distribution. The right to exercise each such option shall
lapse upon the expiration of the twelve (12)-month period measured from the
date of the Optionee’s death.

 

(iii)      Should the Optionee become Permanently
Disabled while serving as a Board member, then the Optionee shall have the
right to exercise the option for any or all of the option shares in which the
Optionee is vested at the time of his or her cessation of Board service at any
time prior to the expiration of the twelve (12)-month period measured from the
date of the Optionee’s Permanent Disability.

 

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(iv)      In no event shall any option grant under
this Plan remain exercisable after the expiration date of the maximum seven (7) year
option term. Upon the expiration of the applicable post-service exercise period
under subparagraphs (i) through (iii) above or (if earlier) upon the
expiration of the maximum seven (7)-year option term, the grant shall terminate
and cease to be outstanding for any option shares in which the Optionee was
vested at the time of his or her cessation of Board service but for which such
option was not otherwise exercised.

 

(6)                      Stockholder
Rights. The holder of an option grant issued under the Plan shall have none of
the rights of a stockholder with respect to any shares subject to such option
until such individual shall have exercised the option and paid the exercise
price for the purchased shares.

 

(7)                      Remaining
Terms. The remaining terms and conditions of each option grant issued under the
Plan shall be as set forth in a written stock option agreement (the “Stock
Option Agreement”) in a form adopted from time to time by the Board;
provided, however, that the terms of any Stock Option Agreement shall be
consistent with the provisions of this Plan.

 

C.                                    Terms
and Conditions of Restricted Stock. Any Restricted Stock granted pursuant to
the provisions of Section VI.A(2)(ii) shall have the following terms
and conditions:

 

(1)                      Payment. To
the fullest extent permitted by law, the payment for the restricted shares
shall be in the form of past services rendered to or future services to be
rendered to the Corporation. In the event additional consideration is required
to be paid in order that the restricted shares shall be deemed fully paid and
nonassessable, the Board shall determine the amount and character of such
additional consideration.

 

(2)                      Vesting. Each
Annual Award granted to an Eligible Director in the form of Restricted
Stock shall vest, and the Corporation’s repurchase right shall lapse, in
thirty-six (36) successive equal installments for each month the Eligible
Director continues in Board service from the grant date of that Annual Award
through the third (3rd) anniversary of the grant date of such Annual
Award. Should the Eligible Director die or become Permanently Disabled while
serving as a Board member, then any Restricted Stock issued under the Plan held
by the Eligible Director at the time of his or her death or Permanent
Disability shall be deemed vested for a number of shares equal to the number
calculated in the preceding sentence as of the date of death or Permanent
Disability plus an additional number of shares equal to the number of shares
(if any) in which the Eligible Director would have vested had he or she
continued in Board service until the next Annual Meeting.

 

(3)                      Effect of
Termination of Board Service. Should an Eligible Director cease to serve as a
Board member while holding unvested Restricted Stock, the unvested stock shall
immediately be forfeited and revert back to the Corporation. No notice or other
action shall be required of the Corporation to effectuate such reversion.

 

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(4)                      Remaining
Terms. The remaining terms and conditions of each grant of Restricted Stock
under the Plan shall be as set forth in a written restricted stock agreement
(the “Restricted Stock Agreement”) in a form adopted from time to time by
the Board; provided, however, that the terms of any Restricted Stock Agreement
shall be consistent with the provisions of this Plan.

 

VII. SPECIAL
VESTING ACCELERATION EVENTS

 

A.                       In the
event of any Corporate Transaction, the Board may provide that some or all
of the outstanding stock options and some or all of the Corporation’s
outstanding reacquisition rights shall be assumed by the successor corporation
or its parent corporation. In the event of any Corporate Transaction, each
outstanding stock option and each outstanding share of Restricted Stock shall
become immediately vested, immediately prior to the Corporate Transaction
unless (i) in the case of an option, such option is assumed by the
successor corporation or its parent corporation or (ii) in the case of
Restricted Stock, the Corporation’s reacquisition rights are assumed by the
successor corporation or its parent corporation. In the event an option outstanding
immediately prior to the Corporate Transaction is not assumed by the successor
corporation or its parent corporation, the outstanding option shall terminate
and cease to be outstanding immediately following the Corporate Transaction to
the extent that such option is not exercised as of the effective date of the
Corporate Transaction.

 

B.                         In
connection with any Change in Control of the Corporation, each outstanding,
unvested option granted under the Plan and each share of unvested Restricted
Stock issued under the Plan shall automatically vest in full immediately prior
to the specified effective date for the Change in Control.

 

VIII. AMENDMENT
OF THE PLAN AND AWARDS

 

The Board has complete
and exclusive power and authority to amend or modify the Plan (or any component
thereof) in any or all respects whatsoever; provided, however, that no such
amendment or modification shall adversely affect rights and obligations with
respect to Awards at the time outstanding under the Plan, unless the affected
Eligible Directors consent to such amendment. In addition, the Board may not,
without the approval of the Corporation’s stockholders, amend the Plan in such
a manner that would violate the listing requirements applicable to the
Corporation with respect to any securities exchange or quotation system on
which the Corporation lists the Corporation’s securities.

 

IX. EFFECTIVE
DATE AND TERM OF PLAN

 

A.                       The Plan
became effective immediately upon adoption by the Board on the Effective Date,
and one or more automatic option grants may be made under the Plan at any
time on or after such Effective Date. However, no options granted under the
Plan shall become

 

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exercisable in whole or
in part prior to approval of the Plan by the Corporation’s stockholders at
the 2005 Annual Meeting. If such approval is not obtained, then all options
previously granted under the Plan shall terminate and cease to be outstanding,
and no further option grants shall be made under the Plan.

 

B.                         Subject
to stockholder approval at the 2006 Annual Meeting of Stockholders, the Plan
shall terminate upon the earlier of (i) the day immediately prior to the
date of the Annual Meeting of stockholders that occurs in 2010 or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued or canceled pursuant to the exercise of Awards. If the date of
termination is determined under clause (i) above, then all option grants
and issuances of Restricted Stock outstanding on such date shall thereafter
continue to have force and effect in accordance with the provisions of the
applicable Stock Option Agreements and Restricted Stock Agreements..

 

X. USE
OF PROCEEDS

 

Any cash proceeds
received by the Corporation from the sale of shares pursuant to option grants
or share issuances under the Plan shall be used for general corporate purposes.

 

XI. REGULATORY
APPROVALS

 

A.                       The
implementation of the Plan, the granting of any Awards and the issuance of
Common Stock upon the exercise of an Award shall be subject to the Corporation’s
compliance in all respects with the requirements of applicable law and the rules of
any securities exchange or quotation system on which the Corporation lists the
Corporation’s securities.

 

B.                         No shares
of Common Stock or other assets shall be issued or delivered under this Plan
unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of
Common Stock issuable under the Plan, and all applicable listing requirements
of any securities exchange or quotation system on which the Common Stock is
then listed or quoted for trading.

 

XII. NO
IMPAIRMENT OF RIGHTS

 

Neither the action of the
Corporation in establishing the Plan nor any provision of the Plan shall be
construed or interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove any individual from the
Board at any time in accordance with the provisions of applicable law.

 

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XIII. MISCELLANEOUS
PROVISIONS

 

A.                       Awards may not
be assigned, encumbered or otherwise transferred by any holder of the Award
except by will or the laws of descent and distribution or as provided in the
associated Stock Option Agreement or Restricted Stock Agreement.

 

B.                         The
provisions of the Plan shall inure to the benefit of, and be binding upon, the
Corporation and its successors or assigns, whether by Corporate Transaction or
otherwise, and the Optionees, the legal representatives of their respective
estates, their respective heirs or legatees and their permitted assignees.

 

C.                         The
existence of outstanding Awards shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

 

12Exhibit 10.36

 

SYNOPSYS, INC.

 

FORM OF EXECUTIVE
CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

 

SECTION 1.                                        INTRODUCTION.

 

The Synopsys, Inc. Executive Change of
Control Severance Benefit Plan (the “Plan”) is
hereby established effective March 23, 2006  (the “Effective Date”).
The purpose of the Plan is to provide for the payment of benefits to certain
eligible executive employees of Synopsys, Inc. (the “Company”)
if such employees are subject to qualifying employment terminations in
connection with a Change of Control (as such term is defined below). This Plan
shall supersede, as to any Eligible Employee, any severance benefit plan,
policy, or practice previously maintained by the Company, other than change of
control or severance benefits set forth in an equity incentive plan in which
the primary form of award is in the form of options on stock of the
Company or grants of shares of stock of the Company. In the event of a benefit
set forth in an equity incentive plan, an employee’s severance benefit, if any,
shall be governed by the terms of such equity incentive plan and shall be
governed by this Plan only to the extent that the reduction pursuant to Section 5(b) below
does not entirely eliminate benefits under this Plan. This Plan shall not
supersede or otherwise amend any severance plan, policy, or practice of the
Company with respect to individuals who are not Eligible Employees. This
document also constitutes the Summary Plan Description for the Plan.

 

SECTION 2.                                        DEFINITIONS.

 

For purposes of the Plan, the following terms
are defined as follows:

 

(a)                                  “Base Salary” means the Eligible
Employee’s annual base pay (excluding incentive pay, premium pay, commissions,
overtime, bonuses and other forms of variable compensation), at the rate in
effect during the last regularly scheduled payroll period immediately preceding
the date of the Eligible Employee’s Covered Termination.

 

(b)                                  “Board”
means the Board of Directors of the Company.

 

(c)                                  “Change of Control” means the
occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:

 

(i)                                    any
person becomes the Owner, directly or indirectly, of securities of the Company
representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding
securities other than by virtue of a merger, consolidation or similar
transaction. Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur (A) on account
of the acquisition of securities of the Company by an investor, any affiliate
thereof or any other person from the Company in a transaction or series of
related transactions the primary purpose of which is to obtain financing for
the Company through the issuance of equity securities or (B) solely
because the level of Ownership held by any person (the “Subject Person”) exceeds the designated percentage
threshold of the outstanding voting securities as a result of a repurchase or
other acquisition of voting securities by the Company reducing the number of
shares outstanding, provided that if a Change of Control would occur (but for
the

 

1

 

operation of this sentence) as a
result of the acquisition of voting securities by the Company, and after such
share acquisition, the Subject Person becomes the owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a Change
of Control shall be deemed to occur;

 

(ii)                                there
is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company and, immediately after the consummation of
such merger, consolidation or similar transaction, the stockholders of the
Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding
voting securities representing more than fifty percent (50%) of the combined outstanding voting power of
the surviving entity in such merger, consolidation or similar transaction or (B) more
than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving entity in such
merger, consolidation or similar transaction, in each case in substantially the
same proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such transaction;

 

(iii)                            the
stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur;

 

(iv)                               there
is consummated a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the
Company in substantially the same proportions as their Ownership of the Company
immediately prior to such sale, lease, license or other disposition.

 

(v)                                   individuals
who, on the date this Plan is adopted by the Board, are members of the Board
(the “Incumbent Board”)
cease for any reason to constitute at least a majority of the members of the
Board; provided, however, that if the
appointment or election (or nomination for election) of any new Board member
was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan,
be considered as a member of the Incumbent Board.

 

For the avoidance of doubt, the
term Change of Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of
the Company. Once a Change of Control has occurred, no future events shall
constitute a Change of Control for purposes of the Plan.

 

(d)                                  “COBRA” means the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.

 

(e)                                  “Code” means
the Internal Revenue Code of 1986, as amended.

 

(f)                                    “Company” means Synopsys, Inc.
or, following a Change of Control, the surviving entity resulting from such
transaction.

 

2

 

(g)                                 “Constructive Termination” means a resignation
of employment by an Eligible Employee within sixty (60) days after one of the
following is undertaken without the Eligible Employee’s express written
consent:

 

(i)                                    the
Company significantly reduces the Eligible Employee’s duties, authority or
responsibilities, relative to the Eligible Employee’s duties, authority or
responsibilities as in effect immediately prior to such reduction, taken as a
whole; provided, however, that a change in the Eligible
Employee’s title shall not be taken into account in determining if the Eligible
Employee’s duties, authority or responsibilities have been reduced for the
purposes of this Section 2(g)(i);

 

(ii)                                the
Company reduces the Eligible Employee’s base salary, target bonus and/or employee
benefits, taken as a whole, unless such reduction is made in connection with an
across-the-board reduction of substantially all executives’ annual base
salaries, potential bonuses and/or employee benefits including those of the
acquiring company;

 

(iii)                            a
relocation of an Eligible Employee’s primary business office to a location more
than seventy-five (75) miles from the location at which the Eligible Employee
predominately performed duties as of the effective date of the Change of
Control, except for required travel by the Eligible Employee on the Company’s
business to an extent substantially consistent with the Eligible Employee’s
business travel obligations prior to the Change of Control.

 

Notwithstanding the foregoing, a termination
shall not constitute a Constructive Termination based on conduct described
above unless (A) within the thirty (30) day period following the
occurrence  of the conduct, the Eligible
Employee provides the Chief Executive Officer of the Company with written
notice specifying (x) the particulars of the conduct and (y) that the Eligible
Employee deems such conduct to be described in (i), (ii) or (iii) of
this Section 2(g), and (B) the conduct described has not been cured
within thirty (30) days following receipt by the Chief Executive Officer of
such notice.

 

(h)                                 “Covered Termination” means either (A) an
Involuntary Termination Without Cause which occurs within thirty (30) days
prior to or twelve (12) months following the effective date of a Change of
Control, or (B) a Constructive Termination which occurs within twelve (12)
months following the effective date of a Change of Control. Termination of
employment of an Eligible Employee due to death or disability shall not
constitute a Covered Termination unless a voluntary termination of employment
by the Eligible Employee immediately prior to the Eligible Employee’s death or
disability would have qualified as a Constructive Termination.

 

(i)                                    “Eligible Employee” means an employee of the Company (A) who has been
designated by the Board as an “officer” under Section 16 of the Securities
Exchange Act of 1934; (B) who has received, signed and timely returned a
Participation Notice; and (C) whose employment with the Company terminates
due to a Covered Termination.

 

(j)                                    “Entity” means a corporation,
partnership or other entity.

 

(k)                                “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended.

 

3

 

(l)                                    “Involuntary Termination Without Cause”
means a termination by the Company of an Eligible Employee’s employment
relationship with the Company for any reason other than the following:

 

(i)                                    the Eligible Employee has committed an act
of personal dishonesty in connection with the Eligible Employee’s
responsibilities as a Company employee;

 

(ii)                                the Eligible Employee commits a felony or
any act of moral turpitude;

 

(iii)                            the
Eligible Employee commits any willful or grossly negligent act that constitutes
gross misconduct and/or injures, or is reasonably likely to injure,  the Company; or

 

(iv)                               the
Eligible Employee substantially fails to perform the Eligible Employee’s
job duties and/or willfully and materially violates (A) any written
policies or procedures of the Company or (B) the Eligible Employee’s
obligations to the Company and that violation, if curable, continues for a
period of thirty (30) days after the Company provides the Eligible Employee
written notice that describes the basis for the Company’s belief that the Eligible
Employee has not substantially performed the Eligible Employee’s duties and/or
willfully and materially violated (x) any written policies or procedures of the
Company or (y) the Eligible Employee’s obligations to the Company.

 

(m)                              “Own,” “Owned,”
“Owner,” “Ownership”
A person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner”
of, or to have acquired “Ownership” of securities if such person or Entity,
directly or indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares voting power, which includes the power to vote or
to direct the voting, with respect to such securities.

 

(n)                                 “Participation
Notice” means the latest notice delivered by the Company
to an employee informing the employee that the employee is a participant in the
Plan. A Participation Notice shall be in such form as may be
determined by the Company. Notwithstanding the foregoing, neither the Company
nor any successor may amend a Participation Notice in any way that is adverse
to a participant, without the written consent of the participant, unless the
amendment is made more than nine (9) months
prior to an applicable Change of Control.

 

(o)                                  “Plan
Administrator” means the Board or any committee duly
authorized by the Board to administer the Plan. The Plan Administrator may, but
is not required to be, the Compensation Committee of the Board. The Board may at
any time administer the Plan, in whole or in part, notwithstanding that the
Board has previously appointed a committee to act as the Plan Administrator.

 

(p)                                  “Subsidiary” means, with respect to
the Company, (A) any corporation of which more than fifty percent (50%) of
the outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, Owned by the Company, and (B) any
partnership in which the Company has a direct or indirect interest (whether in
the form of voting or participation in profits or capital contribution) of
more than fifty percent (50%).

 

4

 

SECTION 3.                            ELIGIBILITY FOR BENEFITS.

 

(a)                                  General
Rules. Subject to the limitations set forth in this Section 3 and Section 5,
in the event of a Covered Termination, the Company shall provide the severance
benefits described in Section 4 to each affected Eligible Employee.

 

(b)                                  Exceptions
to Benefit Entitlement. An employee, including an employee who otherwise is
an Eligible Employee, will not receive benefits under the Plan (or will receive
reduced benefits under the Plan) in the following circumstances, as determined
by the Plan Administrator in its sole discretion:

 

(i)                                    The
employee’s employment terminates or is terminated for any reason other than a
Covered Termination.

 

(ii)                                The
employee resigns his or her employment with the Company in order to accept
employment with another entity that is controlled (directly or indirectly) by
the Company or is otherwise an affiliate of the Company.

 

(iii)                            The
employee does not confirm in writing that he or she shall be subject to the
provisions of Section 5(f), the employee’s proprietary information
agreement with the Company or the employee’s confidentiality agreement with the
Company.

 

(iv)                               The
employee is rehired by the Company prior to the date benefits under the Plan
are scheduled to be paid or otherwise commence.

 

(v)                                   The
employee is offered an identical or substantially equivalent or comparable
position with the Company or a successor pursuant to a Change of Control. For
purposes of the foregoing, a “substantially equivalent or comparable position”
is one that offers the employee substantially the same level of responsibility
and compensation; provided, however, that an
employee shall not be considered to be offered a “substantially equivalent or
comparable position” if a resignation by the employee would constitute a Constructive
Termination.

 

(c)                                  Termination
or Return of Benefits. An Eligible Employee’s right to receive benefits
under this Plan shall terminate immediately (and any benefits received pursuant
to this Plan shall be immediately returned to the Company) if, at any time
prior to or during the eighteen (18) month period following a Change of Control,
the Eligible Employee, without the prior written approval of the Plan
Administrator:

 

(i)                                    willfully
breaches a material provision of the Eligible Employee’s proprietary
information or confidentiality agreement with the Company, as referenced in Section 3(b)(iii);

 

(ii)                                encourages
or solicits any of the Company’s then current employees to leave the Company’s
employ for any reason or interferes in any other manner with employment
relationships at the time existing between the Company and its then current
employees;

 

5

 

(iii)                            induces
any of the Company’s then current clients, customers, suppliers, vendors,
distributors, licensors, licensees or other third party to terminate or
materially diminish their existing business relationship with the Company or
interferes in any other manner with any existing business relationship between
the Company and any then current client, customer, supplier, vendor,
distributor, licensor, licensee or other third party; or

 

(iv)                               willfully
breaches a material provision of Section 5(f).

 

SECTION 4.                            AMOUNT OF BENEFITS. In the event an Eligible Employee incurs
a Covered Termination, the Eligible Employee shall receive the benefits set
forth in this Section 4, subject, however, to the payment provisions set
forth in Section 6 and the other limitations and exclusions set forth in
this Plan.

 

(a)                                  Cash
Severance Benefits. Except as otherwise provided herein, the Company shall
make four equal quarterly cash severance payments to each Eligible Employee in
an amount equal to the sum of (i) one-fourth the Eligible Employee’s Base
Salary, as in effect on the date of a Covered Termination, or, if higher, as in
effect immediately prior to the Change of Control, plus (ii) an additional payment equal to one-fourth of the
product of (i) the Eligible Employee’s annual target bonus at 100%
achievement, as in effect on the date of a Covered Termination, or, if
higher, as in effect immediately prior to the Change of Control multiplied by (ii) a fraction (x) the
numerator of which is the sum of 365 plus the number of calendar days of
service actually served by the Eligible Employee in the fiscal year of the
Company in which such termination occurs and (y) the denominator of which is
365 (e.g., if a qualifying termination occurs effective May 31st of a
given year and the Company’s bonus program is based on an October 31
fiscal year end, the payment pursuant to this Section 4(a) will equal
the full bonus for the fiscal year of termination at 100% of target, regardless
of the Company’s actual performance, multiplied by (365 + 212)/365)), such
payments to be due on the last day of the third, sixth, ninth and twelfth months,
respectively, following the date of the Covered Termination. For the
avoidance of doubt, it is the intent of this Section 4(a) to provide
a cash severance benefit equal to 100% of the Base Salary (as modified) plus
100% of the target bonus for the year of the Covered Termination plus a
prorated target bonus (so that the total bonus is between 100% and 200% of the
target bonus regardless of actual over or under achievement of performance
targets).

 

(b)                                  Health
Continuation Coverage.

 

(i)                                    Provided
that the Eligible Employee is eligible for, and has made an election at the
time of the Covered Termination pursuant to COBRA under a health, dental, or
vision plan sponsored by the Company, each such Eligible Employee shall be
entitled to receive a lump-sum payment equal to the amount of the COBRA
premiums (inclusive of premiums for the Eligible Employee’s dependents for such
health, dental, or vision plan coverage as in effect immediately prior to the
date of the Covered Termination) necessary to maintain such health, dental, or
vision plan coverage for a period of twelve (12) months following the date of
the Covered Termination. At all times the Eligible Employee shall be solely
responsible for all health costs of the Eligible Employee and any dependents of
the Eligible Employee including any coverage pursuant to COBRA.

 

6

 

(ii)                                For
purposes of this Section 4(b), (A) references to COBRA shall be
deemed to refer also to analogous provisions of state law, and (B) any
applicable insurance premiums that are paid by the Company shall not include
any amounts payable by the Eligible Employee under an Internal Revenue Code Section 125
health care reimbursement plan, which amounts, if any, are the sole
responsibility of the Eligible Employee.

 

(c)                                  Vesting Acceleration.
Effective upon the Covered Termination,
all Company stock awards, including options, restricted stock, stock
appreciation rights and any other form of performance-based equity award,
then held by the Eligible Employee shall vest in full and become fully
exercisable as of the date of such Covered Termination (subject, if applicable,
to the exercise period post-termination set forth in the applicable option
agreement, or if none is stated, in the plan(s) pursuant to which such options
were granted).

 

(d)                                  Other
Employee Benefits. All other benefits (such as life insurance, disability
coverage, and 401(k) plan coverage) shall terminate as of the Eligible Employee’s
termination date (except to the extent that a conversion privilege may be
available thereunder).

 

(e)                                  Additional
Benefits. Notwithstanding the foregoing, the Plan Administrator may, in its
sole discretion, provide benefits in addition to those pursuant to Sections
4(a), 4(b), and 4(c) to Eligible Employees or employees who are not
Eligible Employees (Non-Eligible Employees”)
chosen by the Plan Administrator, in its sole discretion, and the provision of
any such benefits to an Eligible Employee or a Non-Eligible Employee shall in
no way obligate the Company to provide such benefits to any other Eligible
Employee or to any other Non-Eligible Employee, even if similarly situated. If
benefits under the Plan are provided to a non-Eligible Employee, references in
the Plan to “Eligible Employee” (with the exception of Sections 4(a), 4(b), and
4(c)) shall be deemed to refer to such Non-Eligible Employee.

 

SECTION 5.                            LIMITATIONS ON BENEFITS.

 

(a)                                  Release.
In order to be eligible to receive benefits under the Plan, an Eligible
Employee must execute a general waiver and release in substantially the form attached
hereto as Exhibit A, Exhibit B,
or Exhibit C, as appropriate, and
such release must become effective in accordance with its terms. Unless a Change
of Control has occurred, the Plan Administrator, in its sole discretion, may modify
the form of the required release to comply with applicable law and shall
determine the form of the required release, which may be incorporated
into a termination agreement or other agreement with the Eligible Employee.

 

(b)                                  Certain
Reductions. The Plan Administrator, in its sole discretion, shall have the
authority to reduce an Eligible Employee’s severance benefits, in whole or in
part, by any other severance benefits, pay in lieu of notice, or other similar
benefits payable to the Eligible Employee by the Company that become payable in
connection with the Eligible Employee’s termination of employment pursuant to (i) any
applicable legal requirement, including, without limitation, the Worker
Adjustment and Retraining Notification Act (the “WARN
Act”), (ii) a written employment or severance agreement
with the Company, or (iii) any Company policy or practice providing for
the Eligible Employee to remain on the payroll for a limited period of time
after being given notice of the termination of the Eligible Employee’s
employment. The benefits provided under this Plan are intended to satisfy, in
whole or in part, any and all statutory

 

7

 

obligations that may arise out of an Eligible
Employee’s termination of employment, and the Plan Administrator shall so
construe and implement the terms of the Plan. The Plan Administrator’s decision
to apply such reductions to the severance benefits of one Eligible Employee and
the amount of such reductions shall in no way obligate the Plan Administrator
to apply the same reductions in the same amounts to the severance benefits of
any other Eligible Employee, even if similarly situated. In the Plan
Administrator’s sole discretion, such reductions may be applied on a
retroactive basis, with severance benefits previously paid being
re-characterized as payments pursuant to the Company’s statutory obligation.

 

(c)                                  Parachute
Payments. Except as otherwise provided in an agreement between an Eligible
Employee and the Company, if any payment or benefit the Eligible Employee would
receive in connection with a Change of Control from the Company or otherwise (“Payment”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but
for this sentence, be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), then such
Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be
either (x) the largest portion of the Payment that would result in no portion
of the Payment being subject to the Excise Tax, or (y) the largest portion, up
to and including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state and local employment taxes, income taxes,
and the Excise Tax (all computed at the highest applicable marginal rate),
results in the Eligible Employee’s receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some portion of the
Payment may be subject to the Excise Tax. If a reduction in payments or
benefits constituting “parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the following order unless
the Eligible Employee elects in writing a different order (provided, however,
that such election shall be subject to Company approval if made on or after the
date on which the event that triggers the Payment occurs): (1) reduction
of cash payments; (2) cancellation of accelerated vesting of equity awards
other than stock options; (3) cancellation of accelerated vesting of stock
options; and (4) reduction of other benefits paid to an Eligible Employee.
If acceleration of vesting of compensation from an Eligible Employee’s equity
awards is to be reduced, such acceleration of vesting shall be cancelled by
first canceling such acceleration for the vesting installment that will vest
last and continuing by canceling as a first priority such acceleration for
vesting installment with the latest vesting unless the Eligible Employee elects in writing a different
order for cancellation prior to any Change of Control.

 

(d)                                  Mitigation.
Except as otherwise specifically provided herein, an Eligible Employee shall
not be required to mitigate damages or the amount of any payment provided under
this Plan by seeking other employment or otherwise, nor shall the amount of any
payment provided for under this Plan be reduced by any compensation earned by an
Eligible Employee as a result of employment by another employer or any
retirement benefits received by such Eligible Employee after the date of the Eligible
Employee’s termination of employment with the Company, except for health
continuation coverage provided pursuant to Section 4(b).

 

(e)                                  Non-Duplication
of Benefits. Except as otherwise specifically provided for herein, no Eligible
Employee is eligible to receive benefits under this Plan more than one time. This
Plan is designed to provide certain severance pay and Change of Control to Eligible
Employees pursuant to the terms and conditions set forth in this Plan. The
payments pursuant to this Plan are in addition to, and not in lieu of, any
unpaid salary, bonuses or benefits to which an

 

8

 

Eligible Employee may be entitled for
the period ending with the Eligible Employee’s Covered Termination.

 

(f)                                    Noncompetition.
At the written request of the Company or the surviving corporation in a Change
of Control, for a period of eighteen (18) months following the effective date
of the Change of Control, the Eligible Employee shall not serve as an officer,
director, stockholder, employee, partner, proprietor, investor, joint venturer,
affiliate, agent or consultant of any other person, corporation, firm,
partnership or other entity whatsoever that competes directly or indirectly
with the Company or any Subsidiary of the Company (“Applicable
Entities”) anywhere in the world, in any line of business
engaged in (or reasonably planned to be engaged in) by the Applicable Entities
immediately prior to the effective time of the Change of Control; provided, however, that the Eligible Employee may hold,
as a passive investment, up to (i) 2% of any class of securities of
any private enterprise (but without active participation in the activities of
such enterprise); or (ii) 1% of any class of securities of any
publicly-traded enterprise (but without active participation in the activities
of such enterprise).

 

SECTION 6.                            TIME OF PAYMENT AND FORM OF BENEFITS.

 

(a)                                  General
Rules. Except as otherwise provided herein, the payment of benefits in Section 4
shall be made in accordance with and subject to the Company’s normal payroll
practices. In no event shall payment of any Plan benefit be made prior to the Eligible
Employee’s termination date or prior to the effective date of the release
described in Section 5(a). For the avoidance of doubt, in the event of an
acceleration of the exercisability of an option pursuant to Section 4(c),
such option shall not be exercisable with respect to such acceleration of
exercisability unless and until the effective date of the release described in Section 5(a).

 

(b)                                  Application
of Section 409A. If the Plan Administrator determines that (i) any
cash severance benefit provided under Section 4(a), (ii) any health
continuation coverage provided under Section 4(b) or (iii) any
additional benefit provided under Section 4(e) fails to satisfy the
distribution requirement of Section 409A(a)(2)(A) of the Code as a
result of the application of Section 409A(a)(2)(B)(i) of the Code,
the payment of such benefit shall be delayed to the minimum extent necessary so
that such benefits are not subject to the provisions of Section 409A(a)(1) of
the Code. The Plan Administrator may attach conditions to or adjust the
amounts paid pursuant to this Section 6(b) to preserve, as closely as
possible, the economic consequences that would have applied in the absence of
this Section 6(b); provided, however,
that no such condition shall result in the payments being subject to Section 409A(a)(1) of
the Code.

 

(c)                                  Withholding.
All such payments under the Plan will be subject to all applicable withholding obligations
of the Company, without limitation, obligations to withhold for federal, state
and local income and employment taxes.

 

(d)                                  Indebtedness
of Eligible Employees. If an Eligible Employee is indebted to the Company
on the effective date of his or her Covered Termination, the Plan Administrator
reserves the right to offset any severance payments under the Plan by the
amount of such indebtedness.

 

9

 

SECTION 7.                            REEMPLOYMENT.

 

In the event of an Eligible Employee’s reemployment by the Company
during the period of time in respect of which severance benefits pursuant to Section 4(a),
4(b), 4(c), and 4(e) have been paid, the Plan Administrator, in its sole
and absolute discretion, may require such Eligible Employee to repay to
the Company all or a portion of such severance benefits as a condition of
reemployment.

 

SECTION 8.                            RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

 

(a)                                  Exclusive
Discretion. The Plan Administrator shall have the exclusive discretion and
authority to establish rules, forms, and procedures for the administration of
the Plan, and to construe and interpret the Plan and to decide any and all
questions of fact, interpretation, definition, computation or administration
arising in connection with the operation of the Plan, including, but not
limited to, the eligibility to participate in the Plan and amount of benefits
paid under the Plan. The rules, interpretations, computations and other actions
of the Plan Administrator shall be binding and conclusive on all persons.

 

(b)                                  Amendment
or Termination. The Company reserves the right to amend or terminate this
Plan or the benefits provided hereunder at any time; provided, however, that no such amendment or termination
shall occur during the period that begins nine (9) months prior to a Change
of Control and ends twelve (12) months after such Change of Control as to any Eligible
Employee who would be adversely affected by such amendment or termination
unless such Eligible Employee consents in writing to such amendment or
termination. Any action amending or terminating the Plan shall be in writing
and executed by the Chief Executive Officer or General Counsel of the Company.

 

SECTION 9.                                        NO IMPLIED EMPLOYMENT CONTRACT.

 

The Plan shall not be deemed (i) to give
any employee or other person any right to be retained in the employ of the
Company, or (ii) to interfere with the right of the Company to discharge
any employee or other person at any time, with or without cause, which right is
hereby reserved.

 

SECTION 10.                                 LEGAL CONSTRUCTION.

 

This Plan is intended to be governed by and
shall be construed in accordance with ERISA and, to the extent not preempted by
ERISA, the laws of the State of California.

 

SECTION 11.                                 CLAIMS, INQUIRIES AND APPEALS.

 

(a)                                  Applications
for Benefits and Inquiries. Any application for benefits, inquiries about
the Plan or inquiries about present or future rights under the Plan must be
submitted to the Plan Administrator in writing by an applicant (or his or her
authorized representative). The Plan Administrator is set forth in Section 13(d).

 

(b)                                  Denial
of Claims. In the event that any application for benefits is denied in
whole or in part, the Plan Administrator must provide the applicant with
written or electronic

 

10

 

notice of the denial of the application, and
of the applicant’s right to review the denial. Any electronic notice will
comply with the regulations of the U.S. Department of Labor. The notice of
denial will be set forth in a manner designed to be understood by the applicant
and will include the following:

 

(i)                                    the
specific reason or reasons for the denial;

 

(ii)                                references
to the specific Plan provisions upon which the denial is based;

 

(iii)                            a
description of any additional information or material that the Plan
Administrator needs to complete the review and an explanation of why such
information or material is necessary; and

 

(iv)                               an
explanation of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the applicant’s right to bring a
civil action under Section 502(a) of ERISA following a denial on
review of the claim, as described in Section 11(d) below.

 

This notice of denial will be given to the
applicant within ninety (90) days after the Plan Administrator receives the
application, unless special circumstances require an extension of time, in
which case, the Plan Administrator has up to an additional ninety (90) days for
processing the application. If an extension of time for processing is required,
written notice of the extension will be furnished to the applicant before the
end of the initial ninety (90) day period.

 

This notice of extension will describe the
special circumstances necessitating the additional time and the date by which
the Plan Administrator is to render its decision on the application.

 

(c)                                  Request
for a Review. Any person (or that person’s authorized representative) for
whom an application for benefits is denied, in whole or in part, may appeal
the denial by submitting a request for a review to the Plan Administrator
within sixty (60) days after the application is denied. A request for a review
shall be in writing and shall be addressed to:

 

Synopsys, Inc.

Attn:  General Counsel

700 East Middlefield Road

Mountain View, CA 94043

 

A request for review must set forth all of the grounds on which it is
based, all facts in support of the request and any other matters that the
applicant feels are pertinent. The applicant (or his or her representative)
shall have the opportunity to submit (or the Plan Administrator may require
the applicant to submit) written comments, documents, records, and other
information relating to his or her claim. The applicant (or his or her
representative) shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to his or her claim. The review shall take into account all comments, documents,
records and other information submitted by the applicant (or his or her
representative) relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

 

11

 

(d)                                  Decision
on Review. The Plan Administrator will act on each request for review
within sixty (60) days after receipt of the request, unless special
circumstances require an extension of time (not to exceed an additional sixty
(60) days), for processing the request for a review. If an extension for review
is required, written notice of the extension will be furnished to the applicant
within the initial sixty (60) day period. This notice of extension will
describe the special circumstances necessitating the additional time and the
date by which the Plan Administrator is to render its decision on the review. The
Plan Administrator will give prompt, written or electronic notice of its
decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. In the event that the Plan
Administrator confirms the denial of the application for benefits in whole or
in part, the notice will set forth, in a manner calculated to be understood by
the applicant, the following:

 

(i)                                    the
specific reason or reasons for the denial;

 

(ii)                                references
to the specific Plan provisions upon which the denial is based;

 

(iii)                            a
statement that the applicant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to his or her claim; and

 

(iv)                               a
statement of the applicant’s right to bring a civil action under Section 502(a) of
ERISA.

 

(e)                                  Rules and
Procedures. The Plan Administrator will establish rules and
procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing benefit claims. The
Plan Administrator may require an applicant who wishes to submit
additional information in connection with an appeal from the denial of benefits
to do so at the applicant’s own expense.

 

(f)                                    Exhaustion
of Remedies. No legal action for benefits under the Plan may be
brought until the applicant (i) has submitted a written application for
benefits in accordance with the procedures described by Section 11(a) above,
(ii) has been notified by the Plan Administrator that the application is
denied, (iii) has filed a written request for a review of the application
in accordance with the appeal procedure described in Section 11(c) above,
and (iv) has been notified that the Plan Administrator has denied the
appeal. Notwithstanding the foregoing, if the Plan Administrator does not
respond to an applicant’s claim or appeal within the relevant time limits
specified in this Section 11, the applicant may bring legal action
for benefits under the Plan pursuant to Section 502(a) of ERISA.

 

SECTION 12.                                 BASIS OF PAYMENTS TO AND FROM PLAN.

 

The Plan shall be unfunded, and all benefits
hereunder shall be paid only from the general assets of the Company.

 

SECTION 13.                                 OTHER PLAN INFORMATION.

 

(a)                                  Employer
and Plan Identification Numbers. The Employer Identification Number
assigned to the Company (which is the “Plan Sponsor” as that term is used in
ERISA)

 

12

 

by the Internal Revenue Service is 56-1546236.
The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 5    .

 

(b)                                  Ending
Date for Plan’s Fiscal Year. The date of the end of the fiscal year for the
purpose of maintaining the Plan’s records is the fiscal year ending on the
Saturday that is closest to October 31.

 

(c)                                  Agent
for the Service of Legal Process. The agent for the service of legal process
with respect to the Plan is:

 

Synopsys, Inc.

Attn:  General Counsel

700 East Middlefield Road

Mountain View, CA 94043

 

(d)                                  Plan
Sponsor and Administrator. The “Plan Sponsor” and the “Plan Administrator”
of the Plan is:

 

Synopsys, Inc.

Attn:  General Counsel

700 East Middlefield Road

Mountain View, CA 94043

 

The Plan Sponsor’s and Plan Administrator’s
telephone number is (650) 584-5000. The Plan Administrator is the named
fiduciary charged with the responsibility for administering the Plan.

 

SECTION 14.                                 STATEMENT OF ERISA RIGHTS.

 

Participants in this Plan (which is a welfare
benefit plan sponsored by Synopsys, Inc.) are entitled to certain rights
and protections under ERISA. If you are an Eligible Employee, you are
considered a participant in the Plan for the purposes of this Section 14
and, under ERISA, you are entitled to:

 

(a)                                  Receive
Information About Your Plan and Benefits

 

(i)                                    Examine,
without charge, at the Plan Administrator’s office and at other specified
locations, such as worksites, all documents governing the Plan and a copy of
the latest annual report (Form 5500 Series), if applicable, filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure Room of
the Employee Benefits Security Administration;

 

(ii)                                Obtain,
upon written request to the Plan Administrator, copies of documents governing
the operation of the Plan and copies of the latest annual report (Form 5500
Series), if applicable, and an updated (as necessary) Summary Plan Description.
The Administrator may make a reasonable charge for the copies; and

 

13

 

(iii)                            Receive
a summary of the Plan’s annual financial report, if applicable. The Plan
Administrator is required by law to furnish each participant with a copy of
this summary annual report.

 

(b)                                  Prudent
Actions By Plan Fiduciaries. In addition to creating rights for Plan participants,
ERISA imposes duties upon the people who are responsible for the operation of
the employee benefit plan. The people who operate the Plan, called “fiduciaries”
of the Plan, have a duty to do so prudently and in the interest of you and
other Plan participants and beneficiaries. No one, including your employer,
your union or any other person, may fire you or otherwise discriminate against
you in any way to prevent you from obtaining a Plan benefit or exercising your
rights under ERISA.

 

(c)                                  Enforce
Your Rights.

 

(i)                                    If
your claim for a Plan benefit is denied or ignored, in whole or in part, you
have a right to know why this was done, to obtain copies of documents relating
to the decision without charge, and to appeal any denial, all within certain
time schedules.

 

(ii)                                Under
ERISA, there are steps you can take to enforce the above rights. For instance,
if you request a copy of Plan documents or the latest annual report from the
Plan, if applicable, and do not receive them within 30 days, you may file
suit in a Federal court. In such a case, the court may require the Plan
Administrator to provide the materials and pay you up to $110 a day until you
receive the materials, unless the materials were not sent because of reasons
beyond the control of the Plan Administrator.

 

(iii)                            If
you have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or Federal court.

 

(iv)                               If
you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a
Federal court. The court will decide who should pay court costs and legal fees.
If you are successful, the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these
costs and fees, for example, if it finds your claim is frivolous.

 

(d)                                  Assistance
With Your Questions. If you have any questions about the Plan, you should
contact the Plan Administrator. If you have any questions about this statement
or about your rights under ERISA, or if you need assistance in obtaining
documents from the Plan Administrator, you should contact the nearest office of
the Employee Benefits Security Administration, U.S. Department of Labor, listed
in your telephone directory or the Division of Technical Assistance and
Inquiries, Employee Benefits Security Administration, U.S. Department of Labor,
200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain
certain publications about your rights and responsibilities under ERISA by
calling the publications hotline of the Employee Benefits Security
Administration.

 

SECTION 15.                                 GENERAL PROVISIONS.

 

(a)                                  Notices.
Any notice, demand or request required or permitted to be given by either
the Company or an Eligible Employee pursuant to the terms of this Plan shall be
in writing

 

14

 

and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage
prepaid, and addressed to the parties, in the case of the Company, at the
address set forth in Section 13(d) and, in the case of an Eligible
Employee, at the address as set forth in the Company’s employment file
maintained for the Eligible Employee as previously furnished by the Eligible
Employee or such other address as a party may request by notifying the
other in writing.

 

(b)                                  Transfer
and Assignment. The rights and obligations of an Eligible Employee under
this Plan may not be transferred or assigned without the prior written
consent of the Company. This Plan shall be binding upon any surviving entity
resulting from a Change of Control and upon any other person who is a successor
by merger, acquisition, consolidation or otherwise to the business formerly
carried on by the Company without regard to whether or not such person or
entity actively assumes the obligations hereunder.

 

(c)                                  Waiver.
Any Party’s failure to enforce any provision or provisions of this Plan
shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent any Party from thereafter enforcing each and every
other provision of this Plan. The rights granted the Parties herein are cumulative
and shall not constitute a waiver of any Party’s right to assert all other
legal remedies available to it under the circumstances.

 

(d)                                  Severability.
Should any provision of this Plan be declared or determined to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.

 

(e)                                  Section Headings.
Section headings in this Plan are included for convenience of
reference only and shall not be considered part of this Plan for any other
purpose.

 

SECTION 16.                                 EXECUTION.

 

To record the adoption of the Plan as set
forth herein, Synopsys, Inc. has caused its duly authorized officer to
execute the same as of the Effective Date.

 

	
   

  	
   

  	
  SYNOPSYS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

15

 

For Employees Age 40 or Older

Individual Termination

 

EXHIBIT A

 

RELEASE
AGREEMENT

 

I understand and agree completely to the
terms set forth in the Synopsys, Inc. Executive Change of Control Severance
Benefit Plan (the “Plan”).

 

I understand that this Release, together with
the Plan, constitutes the complete, final and exclusive embodiment of the
entire agreement between the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that
is not expressly stated therein. Certain capitalized terms used in this Release
are defined in the Plan.

 

I hereby confirm my obligations under the
Company’s proprietary information and inventions agreement.

 

Except as otherwise set forth in this
Release, I hereby generally and completely release Synopsys, Inc. and its
current and former directors, officers, employees, shareholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary entities,
insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing
this Agreement. This general release includes, but is not limited to:  (1) all claims arising out of or in any
way related to my employment with the Company, or the termination of that
employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing, express or implied; (4) all tort claims, including
claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (5) all federal, state, and local statutory claims,
including claims for discrimination, harassment, retaliation, attorneys’ fees,
or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of 1990, the federal Age
Discrimination in Employment Act of 1967 (as amended) (“ADEA”),
the California Constitution or the constitution of any other state, and the
California Fair Employment and Housing Act (as amended) or similar statute of
any other state; provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to indemnify me
pursuant to agreement or applicable law.

 

I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the ADEA (“ADEA Waiver”). I also acknowledge
that the consideration given for the ADEA Waiver is in addition to anything of
value to which I was already entitled. I further acknowledge that I have been
advised by this writing, as required by the ADEA, that: (a) my ADEA Waiver
does not apply to any rights or claims that arise after the date I sign this
Release; (b) I should consult with an attorney prior to signing this
Release; (c) I have twenty-one (21) days to consider this Release
(although I may choose to voluntarily sign it sooner); (d) I have
seven (7) days following the date I sign this Release to revoke the ADEA
Waiver; and (e)

 

1

 

the ADEA Waiver will not be effective until the date upon which the
revocation period has expired unexercised, which will be the eighth day after I
sign this Release (“Effective Date”). Nevertheless,
my general release of claims, except for the ADEA Waiver, is effective
immediately, and not revocable.

 

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”  I hereby expressly
waive and relinquish all rights and benefits under that section and any
law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

To the fullest extent permitted by law, at no
time after the execution of this Release will I pursue, or cause or knowingly
permit the pursuit in any state or federal court, or before any local, state or
federal administrative agency, or any tribunal, any charge, claim or action of
any kind, nature or character arising out of the matters released as described
herein, except for an action to enforce the provisions of the Plan; provided, however, that nothing in this paragraph prevents
me from testifying truthfully in any legal proceeding pursuant to subpoena or
other legal process.

 

I acknowledge that to become effective, I
must sign and return this Release to the Company so that it is received not
later than twenty-one (21) days following the date it is provided to me.

 

	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
					

 

2

 

For Employees Age 40 or Older

Group Termination

 

EXHIBIT B

 

RELEASE
AGREEMENT

 

I understand and agree completely to the
terms set forth in the Synopsys, Inc. Executive Change of Control
Severance Benefit Plan (the “Plan”).

 

I understand that this Release, together with
the Plan, constitutes the complete, final and exclusive embodiment of the
entire agreement between the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that
is not expressly stated therein. Certain capitalized terms used in this Release
are defined in the Plan.

 

I hereby confirm my obligations under the
Company’s proprietary information and inventions agreement.

 

Except as otherwise set forth in this
Release, I hereby generally and completely release Synopsys, Inc. and its
current and former directors, officers, employees, shareholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary entities,
insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing this
Agreement. This general release includes, but is not limited to:  (1) all claims arising out of or in any
way related to my employment with the Company, or the termination of that
employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing, express or implied; (4) all tort claims, including
claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (5) all federal, state, and local statutory claims,
including claims for discrimination, harassment, retaliation, attorneys’ fees,
or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of 1990, the federal Age
Discrimination in Employment Act of 1967 (as amended) (“ADEA”),
the California Constitution or the constitution of any other state, and the
California Fair Employment and Housing Act (as amended) or similar statute of
any other state; provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to indemnify me
pursuant to agreement or applicable law.

 

I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the ADEA (“ADEA Waiver”). I also acknowledge
that the consideration given for the ADEA Waiver is in addition to anything of
value to which I was already entitled. I further acknowledge that I have been
advised by this writing, as required by the ADEA, that:  (a) my ADEA Waiver does not apply to any
rights or claims that arise after the date I sign this Release; (b) I
should consult with an attorney prior to signing this Release; (c) I have
forty-five (45) days to consider this Release (although I may choose to
voluntarily sign it sooner); (d) I have seven (7) days following the
date I sign this Release to revoke the ADEA Waiver; and (e)

 

1

 

the ADEA Waiver will not be effective until the date upon which the
revocation period has expired unexercised, which will be the eighth day after I
sign this Release (“Effective Date”). Nevertheless,
my general release of claims, except for the ADEA Waiver, is effective
immediately, and not revocable.

 

I have received with this Release a detailed
list of the job titles and ages of all employees who were terminated in this
group termination and the ages of all employees of the Company in the same job
classification or organizational unit who were not terminated.

 

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”  I hereby expressly
waive and relinquish all rights and benefits under that section and any
law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

To the fullest extent permitted by law, at no
time after the execution of this Release will I pursue, or cause or knowingly
permit the pursuit in any state or federal court, or before any local, state or
federal administrative agency, or any tribunal, any charge, claim or action of
any kind, nature or character arising out of the matters released as described
herein, except for an action to enforce the provisions of the Plan, provided, however, that nothing in this paragraph prevents
me from testifying truthfully in any legal proceeding pursuant to subpoena or
other legal process.

 

I acknowledge that to become effective, I
must sign and return this Release to the Company so that it is received not
later than forty-five (45) days following the date it is provided to me.

 

	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
					

 

2

 

For Employees Under Age 40

Individual and Group
Termination

 

EXHIBIT C

 

RELEASE
AGREEMENT

 

I understand and agree completely to the
terms set forth in the Synopsys, Inc. Executive Change of Control
Severance Benefit Plan (the “Plan”).

 

I understand that this Release, together with
the Plan, constitutes the complete, final and exclusive embodiment of the
entire agreement between the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that
is not expressly stated therein. Certain capitalized terms used in this Release
are defined in the Plan.

 

I hereby confirm my obligations under the Company’s
proprietary information and inventions agreement.

 

Except as otherwise set forth in this
Release, I hereby generally and completely release Synopsys, Inc. and its
current and former directors, officers, employees, shareholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary entities,
insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing
this Agreement. This general release includes, but is not limited to:  (1) all claims arising out of or in any
way related to my employment with the Company, or the termination of that
employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing; (4) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy;
and (5) all federal, state, and local statutory claims, including claims
for discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the California Constitution or the
constitution of any other state, and the California Fair Employment and Housing
Act (as amended) or similar statute of any other state; provided, however,
that nothing in this paragraph shall be construed in any way to release the
Company from its obligation to indemnify me pursuant to agreement or applicable
law.

 

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”  I hereby expressly
waive and relinquish all rights and benefits under that section and any
law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

To the fullest extent permitted by law, at no
time after the execution of this Release will I pursue, or cause or knowingly
permit the pursuit in any state or federal court, or before any local,

 

1

 

state or federal administrative agency, or any tribunal, any charge,
claim or action of any kind, nature or character arising out of the matters
released as described herein, except for an action to enforce the provisions of
the Plan; provided, however, that nothing in this
paragraph prevents me from testifying truthfully in any legal proceeding
pursuant to subpoena or other legal process.

 

I acknowledge that to become effective, I
must sign and return this Release to the Company so that it is received not
later than fourteen (14) days following the date it is provided to me.

 

	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
					

 

 

SYNOPSYS, INC.

 

EXECUTIVE CHANGE
OF CONTROL SEVERANCE BENEFIT PLAN

 

PARTICIPATION
NOTICE

 

To:                               

 

Date:                    

 

Synopsys, Inc. (the “Company”) has adopted
the Synopsys, Inc. Executive Change of Control Severance Benefit Plan (the
“Plan”). The
Company is providing you with this Participation Notice to inform you that
you qualify as a participant in the Plan. A copy of the Plan document is
attached to this Participation Notice. [Except as provided below, the][The]
terms and conditions of your participation in the Plan are as set forth in the
Plan, and in the event of any conflict between this Participation Notice and
the Plan, the terms of the Plan shall prevail.

 

[Your participation in the Plan is modified
as follows:                                               ]

 

Please retain a copy of this Participation
Notice, along with the Plan document, for your records.

 

	
   

  	
  SYNOPSYS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
				

 

ACKNOWLEDGEMENT

 

The undersigned hereby acknowledges receipt of the foregoing
Participation Notice. The undersigned acknowledges that the undersigned has
been advised to obtain tax and financial advice regarding the consequences of
participating in the Plan, including the effect, if any, of Sections 409A and
4999 of the Internal Revenue Code. The undersigned further acknowledges that
the undersigned has no severance benefits [(other than with respect to awards
under the            Plan)]
except as provided by the attached Plan.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print name

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