Document:

Exhibit 10.16

 

SYNOPSYS, INC.

 

EMPLOYEE STOCK PURCHASE PLAN

 

I.              PURPOSE

 

The Synopsys, Inc. Employee Stock Purchase Plan (the “Plan”) is
intended to provide Eligible Employees of the Company and one or more of its
Corporate Affiliates with the opportunity to acquire a proprietary interest in
the Company through the periodic application of their payroll deductions to the
purchase of shares of the Company’s common stock.

 

II.            DEFINITIONS

 

For purposes of plan administration, the following terms shall have the
meanings indicated.

 

Base Salary means all compensation paid as
wages, salaries, commissions, overtime, and bonuses (other than bonuses subject
to repayment as a result of a specified future event), but excluding all of the
following items (even if included in taxable income): reimbursements, car
allowances or other expense allowances, severance pay, fringe benefits (cash
and noncash), moving expenses, deferred compensation, income attributable to
stock options, restricted stock grants, SARs and other equity-related incentive
programs, and welfare benefits.

 

Code means the Internal Revenue Code of 1986,
as amended from time to time.

 

Company means Synopsys, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Synopsys, Inc. which shall by appropriate action
adopt the Plan.

 

Common Stock means shares of the Company’s
common stock.

 

Corporate Stock means shares of the Company’s
common stock.

 

Corporate Affiliate means any company which is
a parent or subsidiary corporation of the Company (as determined in accordance
with Code Section 424), including any parent or subsidiary corporation
which becomes such after the Effective Date.

 

Effective Date means the first day of the
initial offering period scheduled to commence upon the later of (i) February 1,
1992 or (ii) the effective date of the S-8 Registration Statement covering
the share of Common Stock issuable under the Plan. However, for any Corporate
Affiliate which becomes a participating Company in the Plan after the first day
of the initial offering period, a subsequent Effective Date shall be designated
with respect to participation by its Eligible Employees.

 

Eligible Employee means any person who is
engaged, on a regularly-scheduled basis of more than twenty (20) hours per
week and more than five (5) months per calendar year, in the rendition of
personal services to the Company or any other Participating Company for
earnings considered wages under Section 3121(a) of the Code.

 

Enrollment Date has the meaning ascribed to it
in Section V.A.

 

Participant means any Eligible Employee of a
Participating Company who is actively participating in the Plan.

 

Participating Company means the Company and
such Corporate Affiliate or Affiliates as may be designated from time to time
by the Board.

 

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Semi-Annual Entry Date means (i) during
1999 and each preceding calendar year within an offering period in effect under
the Plan, the first business day of May and the first business day of November and
(ii) during 2000 and all subsequent calendar years within an offering
period under the Plan, the first business day of March and the first
business day of September. The earliest Semi-Annual Entry Date under the Plan
shall be November 2, 1992.

 

Semi-Annual Period of Participation means each
period for which the Participant actually participates in an offering period in
effect under the Plan. There shall be a maximum of four (4) periods of
participation within each offering period. Except as otherwise designated by
the Plan Administrator, each such period shall commence on the applicable
Semi-Annual Entry Date.

 

Semi-Annual Purchase Date means (i) during
1999 and each preceding year on which shares of Common Stock are automatically
purchased for Participants under the Plan, the last business day of April and
October, and (ii) during 2000 and each subsequent year on which shares of
Common Stock are automatically purchased for Participants under the Plan, the
last business day of February and August.

 

III.           ADMINISTRATION

 

The Plan shall be administered by the Board of Directors of the Company
or a committee that will satisfy Rule 16b-3 of the Securities and Exchange
Commission, as in effect with respect to the Company from time to time (in
either case, the “Board”). The Board may from time to time select a committee
or persons (the “Plan Administrator”) to be responsible for any transactions
not subject to Rule 16b-3. Subject to the express provisions of the Plan,
to the overall supervision of the Board, and to the limitations of Section 423
of the Code, the Plan Administrator may administer, interpret and amend the
Plan in any manner it believes to be desirable (including amendments to
outstanding options/purchase rights and the designation of a brokerage firm at
which accounts for the holding of shares purchased under the Plan must be
established by each employee desiring to participate in the Plan), and any such
interpretation shall be final and binding on all parties who have an interest
in the Plan; provided, however, that the Plan Administrator may not, without
the approval of the Company’s Board, (i) increase the number of shares
issuable under the Plan or the maximum number of shares which may be purchased
per Participant or in the aggregate during any one Semi-Annual Period of
Participation under the Plan, except that the Plan Administrator shall have the
authority, exercisable without such stockholder approval, to effect adjustments
to the extent necessary to reflect changes in the Company’s capital structure
pursuant to Section VI.B;(ii) alter the purchase price formula so as
to reduce the purchase price payable for the shares issuable under the Plan; or
(iii) materially increase the benefits accruing to Participants under the
Plan or materially modify the requirements for eligibility to participate in
the Plan

 

IV.           OFFERING PERIODS

 

The Plan shall be implemented in a series of offering periods. Each
offering period shall be of a duration of twenty-four (24) months or less
as designated by the Plan Administrator prior to the start date of any offering
period, except that offering periods that include the Semi-Annual Entry Date on
November 1, 1999 shall be of a duration of twenty-two (22) months.
Within each offering period, there shall be a maximum of four (4) Semi-Annual
Periods of Participation.

 

V.            ELIGIBILITY AND
PARTICIPATION

 

A.            Each Eligible Employee
will be automatically enrolled in the Plan in the offering period that begins
on the first Semi-Annual Entry Date following the commencement of employment;
thereafter, any Eligible Employee may enroll or re-enroll in the Plan in the
offering period that begins as of any Semi-Annual Entry Date, or such other
days as may be established by the Board from time to time (each, an “Enrollment
Date”). To participate, an Eligible Employee must complete, sign, and submit to
the Company an enrollment form prescribed by the Plan Administrator. Any
enrollment form received by the Company by the 15th day of the month preceding
an Enrollment Date (or by the Enrollment

 

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Date in the case of employees hired after such 15th day), or such other
date established by the Plan Administrator from time to time, will be effective
on that Enrollment Date. Enrollment or re-enrollment by a Participant in the
Plan on an Enrollment Date will constitute the grant by the Company to the
Participant of an option to purchase shares of Common Stock from the Company
under the Plan. At the end of each offering period, each Participant who has
not withdrawn from the Plan will automatically be re-enrolled in the Plan in
the offering period that begins on the Enrollment Date immediately following
the date on which the option expires. Furthermore, except as may otherwise be
determined by the Plan Administrator, each Participant who has not withdrawn
from the Plan will automatically be re-enrolled in the Plan in each offering
period that begins on an Enrollment Date on which the fair market value per
share of the Company’s Common Stock is lower than the fair market value per
share of the Company’s Common Stock on the Enrollment Date for the offering
period in which the Participant is then enrolled. Notwithstanding anything in
the Plan to the contrary, if the fair market value (the “Authorization Date FVM”)
on the date (the “Authorization Date”) on which additional shares of Common
Stock are authorized for issuance hereunder by the Company’s shareholders is
higher than the fair market value at the beginning of any Offering Period that
commenced prior to the Authorization Date, then, with respect to any of such
authorized shares available to be issued on Purchase Dates relating to such
Offering Period, the Authorization Date FMV shall be used instead of the fair
market value on the Enrollment Date for the purposes of the preceding sentence,
provided that the Plan Administrator, in its discretion, may waive application
of this sentence with respect to the first Purchase Date occurring after the
Authorization Date.

 

B.            The payroll deduction
authorized by the Participant for purposes of acquiring shares of Common Stock
under the Plan may be zero percent (0%) or any whole multiple of one percent
(1%) of the Base Salary paid to the Participant during each Semi-Annual Period
of Participation within the offering period, up to a maximum of ten percent
(10%). The deduction rate so authorized shall continue in effect for the entire
Semi-Annual Period of Participation and for each successive Semi-Annual Period
of Participation unless (i) the Participant shall change the rate for a
subsequent Semi-Annual Period of Participation by filing the appropriate form
with the Plan Administrator prior to the commencement of that Semi-Annual
Period of Participation or (ii) the Participant shall change the rate
within a Semi-Annual Period of Participation by filing the appropriate form
with the Plan Administrator. The new rate shall become effective as soon as
practicable following the filing of such form. A Participant may not increase
or decrease the deduction rate more than once per Semi-Annual Period of
Participation in addition to fixing the rate at the beginning of the
Semi-Annual Period of Participation. Payroll deductions, however, will
automatically cease upon the termination of the Participant’s purchase right in
accordance with Article VII below.

 

C.            In no event may any
Participant’s payroll deductions for any one Semi-Annual Period of
Participation exceed Seven Thousand Five Hundred Dollars ($7,500.00).

 

VI.           STOCK SUBJECT TO
PLAN

 

A.            The Common Stock
purchasable by Participants under the Plan shall, solely in the discretion of
the Plan Administrator, be made available from either authorized but unissued
shares of the Common Stock or from shares of Common Stock reacquired by the
Company, including shares of Common Stock purchased on the open market. The
total number of shares which may be issued under the Plan shall not exceed
21,700,000 shares, less any shares sold under the Synopsys, Inc.
International Employee Stock Purchase Plan (subject to adjustment under Section VI.B
below).

 

B.            In the event any
change is made to the Company’s outstanding Common Stock by reason of any stock
dividend, stock split, combination of shares or other change affecting such
outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made by the Plan Administrator to (i) the
class and maximum number of shares issuable over the term of the Plan, (ii) the
class and maximum number of shares purchasable per Participant during each

 

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Semi-Annual Period of Participation, (iii) the class and maximum
number of shares purchasable in the aggregate by all Participants on any one
purchase date under the Plan and (iv) the class and number of shares and
the price per share of the Common Stock subject to each purchase right at the
time outstanding under the Plan. Such adjustments shall be designed to preclude
the dilution or enlargement of rights and benefits under the Plan.

 

VII.          PURCHASE RIGHTS

 

An Employee who participates in the Plan for a particular offering
period shall have the right to purchase shares of Common Stock, in a series of
successive installments during such offering period, upon the terms and
conditions set forth below and shall execute a purchase agreement embodying
such terms and conditions and such other provisions (not inconsistent with the
Plan) as the Plan Administrator may deem advisable.

 

Purchase Price.  Common Stock shall be issuable on each
Semi-Annual Purchase Date at a purchase price equal to 85 percent of the
lower of (i) the fair market value per share on the Participant’s
Enrollment Date or (ii) the fair market value per share on the Semi-Annual
Purchase Date. Notwithstanding anything in the Plan to the contrary, if the
Authorization Date FVM is higher than the fair market value at the beginning of
any Offering Period that commenced prior to the Authorization Date, then, with
respect to any of such authorized shares available to be issued on Purchase Dates
relating to such Offering Period, the Authorization Date FMV shall be used
instead of the fair market value on the Enrollment Date for the purposes of
clause (i) of the preceding sentence, provided that the Plan
Administrator, in its discretion, may waive application of this sentence with
respect to the first Purchase Date occurring after the Authorization Date.

 

Valuation. 
For purposes of determining the fair market value per share of Common
Stock on any relevant date, the following procedures shall be in effect:

 

(i)  If
such fair market value is to be determined on any date on or after the date the
Common Stock is first registered under Section 12(g) of the
Securities Exchange Act of 1934, then the fair market value shall be the
closing selling price on that date, as officially quoted on the Nasdaq National
Market System. If there is no quoted selling price for such date, then the
closing selling price on the next preceding day for which there does exist such
a quotation shall be determinative of fair market value.

 

(ii)  If
such fair market value is to be determined on any date prior to the time of
such Section 12(g) registration of the Common Stock, then the fair
market value of the Common Stock on such date shall be determined by the Plan
Administrator, after taking into account such factors as the Plan Administrator
deems appropriate.

 

Number of Purchasable Shares.  The number of shares purchasable per
Participant on each Semi-Annual Purchase Date shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the corresponding Semi-Annual Period of Participation
by the purchase price in effect for the Semi-Annual Purchase Date. However, no
Participant may, during any Semi-Annual Purchase Period, purchase more than
4,000 shares of Common Stock, subject to periodic adjustment under Section VI.B.

 

Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or any of its Corporate Affiliates.

 

Payment. 
Payment for the Common Stock purchased under the Plan shall be effected
by means of the Participant’s authorized payroll deductions. Such deductions
shall begin on the first pay day coincident with or immediately following the
Participant’s Enrollment Date and shall (unless sooner

 

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terminated by the Participant) continue through the pay day ending with
or immediately prior to the last day of the offering period.

 

The amounts so collected shall be credited to the Participant’s book
account under the Plan, but no interest shall be paid on the balance from time
to time outstanding in such account. The amounts collected from a Participant
may be commingled with the general assets of the Company and may be used for
general corporate purposes.

 

Termination of Purchase Right.  The following provisions shall govern the
termination of outstanding purchase rights:

 

(i)  A
Participant may, at any time prior to the last five (5) business days of
the Semi-Annual Period of Participation, terminate his /her outstanding
purchase right under the Plan by filing the prescribed notification form with
the Plan Administrator. No further payroll deductions shall be collected from
the Participant with respect to the terminated purchase right, and any payroll
deductions collected for the Semi-Annual Period of Participation in which such
termination occurs shall, at the Participant’s election, be immediately
refunded or held for the purchase of shares on the next Semi-Annual Purchase
Date. If no such election is made, then such funds shall be refunded as soon as
possible after the close of such Semi-Annual Period of Participation.

 

(ii)  The
termination of such purchase right shall be irrevocable, and the Participant
may not subsequently rejoin the offering period for which such terminated
purchase right was granted. In order to resume participation in any subsequent
offering period, such individual must re-enroll in the Plan in accordance with Section V.A.

 

(iii)  Should
a Participant cease to remain an Eligible Employee while his/her purchase right
remains outstanding or should there otherwise occur a change in such individual’s
employee status so that he/she is no longer an Eligible Employee while holding
such purchase right, then such purchase right shall immediately terminate upon
such termination of service or change in status and all sums previously
collected from the Participant during the Semi-Annual Period of Participation
in which the purchase right so terminates shall be promptly refunded to the
Participant. However, should the Participant die or become permanently disabled
while in service or should the Participant cease employment by reason of a
leave of absence, then the Participant (or the person or persons to whom the
rights of the deceased Participant under the Plan are transferred by will or
the laws of inheritance) shall have the election, exercisable up until the end
of the Semi-Annual Period of Participation in which the Participant dies or becomes
permanently disabled or in which the leave of absence commences, to (i) withdraw
all the funds credited to the Participant’s account at the time of his/her
cessation of service or at the commencement of such leave or (ii) have
such funds held for the purchase of shares of Common Stock at the next
Semi-Annual Purchase Date. If no such election is made, then such funds shall
automatically be held for the purchase of shares of Common Stock at the next
Semi-Annual Purchase Date. In no event, however, shall any further payroll
deductions be added to the Participant’s account following his/her cessation of
service or the commencement of such leave. Should the Participant return to
active service following a leave of absence, then his/her payroll deductions
under the Plan shall automatically resume at the rate in effect at the time the
leave began, provided such return to service occurs prior to the end of the
offering period in which such leave began. For purpose of the Plan: (i) the
Participant shall be considered to remain in service for so long as such
Participant remains in the active employ of the Company or one or more other
Participating Companies and (ii) the Participant shall be deemed to be
permanently disabled if he/she is unable to engage in any substantial gainful
employment, by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of at
least twelve (12) months.

 

5

 

Stock Purchase.  Shares of Common Stock shall automatically be
purchased on behalf of each Participant (other than Participants whose payroll
deductions have previously been refunded or set aside for refund in accordance
with the “Termination of Purchase Right” provisions above) on each Semi-Annual
Purchase Date. The purchase shall be effected by applying each Participant’s
payroll deductions for the Semi-Annual Period of Participation ending on such
Semi-Annual Purchase Date () to the purchase of whole shares of Common Stock
(subject to the limitation on the maximum number of purchasable shares set
forth above) at the purchase price in effect for such Semi-Annual Period of
Participation. Any payroll deductions not applied to such purchase (a) because
they are not sufficient to purchase a whole share or (b) by reason of the
limitation on the maximum number of shares purchasable by the Participant for
that Semi-Annual Period of Participation shall be promptly refunded to the
Participant.

 

Proration of Purchase Rights.  Not more than 2,000,000 shares of Common
Stock, subject to periodic adjustment under Section VI.B, may be purchased
in the aggregate by all Participants on any one Semi-Annual Purchase Date.
Should the total number of shares of Common Stock which are to be purchased
pursuant to outstanding purchase rights on any particular date exceed either (i) the
maximum limitation on the number of shares purchasable in the aggregate on such
date or (ii) the number of shares then available for issuance under the
Plan, the Plan Administrator shall make a pro-rata allocation of the available
shares on a uniform and non-discriminatory basis, and the payroll deductions
for each Participant, to the extent in excess of the aggregate purchase price
payable for the Common Stock pro-rated to such individual, shall be refunded to
such Participant.

 

Rights as Stockholder.  A Participant shall have no stockholder
rights with respect to the shares subject to his/her outstanding purchase right
until the shares are actually purchased on the Participant’s behalf in
accordance with the applicable provisions of the Plan. No adjustments shall be
made for dividends, distributions or other rights for which the record date is
prior to the date of such purchase.

 

Assignability. 
No purchase right granted under the Plan shall be assignable or
transferable by the Participant other than by will or by the laws of descent
and distribution following the participant’s death, and during the Participant’s
lifetime the purchase right shall be exercisable only by the Participant.

 

Change in Ownership.  Should the Company or its stockholders enter
into an agreement to dispose of all or substantially all of the assets or
outstanding capital stock of the Company by means of:

 

(i)  a
sale, merger or other reorganization in which the Company will not be the
surviving corporation (other than a reorganization effected primarily to change
the State in which the Company is incorporated), or

 

(ii)  a
reverse merger in which the Company is the surviving corporation but in which
more than fifty percent (50%) of the Company’s outstanding voting stock is
transferred to holders different from those who held the stock immediately
prior to the reverse merger, then all outstanding purchase rights under the
Plan shall automatically be exercised immediately prior to the consummation of
such sale, merger, reorganization or reverse merger by applying the payroll
deductions of each Participant for the Semi-Annual Period of participation in
which such transaction occurs to the purchase of whole shares of Common Stock
at eighty-five percent (85%) of the lower of (i) the fair market value of
the Common Stock on the Participant’s Enrollment Date for the offering period
in which such transaction occurs or (ii) the fair market value of the Common
Stock immediately prior to the consummation of such transaction. However, the
applicable share limitations of Articles VII and VIII shall continue to apply
to any such purchase, and the clause (i) amount above shall not, for
any Participant whose Enrollment Date for the offering period is other than the
start date of such offering period, be less than the fair market value of the
Common Stock on such start date.

 

6

 

The Company shall use its best efforts to provide at least ten (10) days’
advance written notice of the occurrence of any such sale, merger,
reorganization or reverse merger, and Participants shall, following the receipt
of such notice, have the right to terminate their outstanding purchase rights
in accordance with the applicable provisions of this Article VII.

 

VIII.        ACCRUAL LIMITATIONS

 

A.    No Participant shall be
entitled to accrue rights to acquire Common Stock pursuant to any purchase
right outstanding under this Plan if and to the extent such accrual, when
aggregated with (I) rights to purchase Common Stock accrued under any
other purchase right outstanding under this Plan and (II) similar rights
accrued under other employee stock purchase plans (within the meaning of Section 423
of the Code) of the Company or its Corporate Affiliates, would otherwise permit
such Participant to purchase more than $25,000 worth of stock of the Company or
any Corporate Affiliate (determined on the basis of the fair market value of
such stock on the date or dates such rights are granted to the Participant) for
each calendar year such rights are at any time outstanding.

 

B.    For purposes of applying such
accrual limitations, the right to acquire Common Stock pursuant to each
purchase right outstanding under the Plan shall accrue as follows:

 

(i)            The
right to acquire Common Stock under each such purchase right shall accrue in a
series of successive semi-annual installments as and when the purchase right
first becomes exercisable for each semi-annual installment on the last business
day of each Semi-Annual Period of Participation for which the right remains
outstanding.

 

(ii)           No
right to acquire Common Stock under any outstanding purchase right shall accrue
to the extent the Participant has already accrued in the same calendar year the
right to acquire $25,000 worth of Common Stock (determined on the basis of the
fair market value on the date or dates of grant) pursuant to one or more
purchase rights held by the Participant during such calendar year.

 

(iii)          If
by reason of such accrual limitations, any purchase right of a Participant does
not accrue for a particular Semi-Annual Period of Participation, then the
payroll deductions which the Participant made during that Semi-Annual Period of
Participation with respect to such purchase right shall be promptly refunded.

 

C.    In the event there is any
conflict between the provisions of this Article VIII and one or more
provisions of the Plan or any instrument issued thereunder, the provisions of
this Article VIII shall be controlling.

 

IX.           STATUS OF PLAN UNDER
FEDERAL TAX LAWS

 

The Plan is designed to qualify as an employee stock purchase plan
under Code Section 423.

 

X.            AMENDMENT AND
TERMINATION

 

A.      The
Board may amend, alter, suspend, discontinue, or terminate the Plan at any
time, including amendments to outstanding options/purchase rights. However, the
Board may not, without the approval of the Company’s stockholders:

 

(i)  increase
the number of shares issuable under the Plan or the maximum number of shares
which may be purchased per Participant or in the aggregate during any one
Semi-Annual Period of Participation under the Plan, except that the Plan
Administrator shall have the authority, exercisable without such stockholder
approval, to effect adjustments to the extent necessary to reflect changes in
the Company’s capital structure pursuant to Section VI.B;

 

(ii)  alter
the purchase price formula so as to reduce the purchase price payable for the
shares issuable under the Plan; or

 

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(iii)  materially
increase the benefits accruing to Participants under the Plan or materially
modify the requirements for eligibility to participate in the Plan.

 

B.       The
Board may elect to terminate any or all outstanding purchase rights at any time.
In the event the Plan is terminated, the Board may also elect to terminate
outstanding purchase rights either immediately or upon completion of the
purchase of shares on the next Semi-Annual Purchase Date, or may elect to
permit purchase rights to expire in accordance with their terms (and
participation to continue through such expiration dates). If purchase rights
are terminated prior to expiration, all funds contributed to the Plan that have
not been used to purchase shares shall be returned to the Participants as soon
as administratively feasible.

 

IX.           GENERAL PROVISIONS

 

A.      The
Plan shall become effective on the designated Effective Date, provided that no
offering period shall commence, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders
and (ii) the Company shall have complied with all applicable requirements
of the Securities Act of 1933 (as amended), all applicable listing requirements
of any securities exchange on which shares of the Common Stock are listed and
all other applicable requirements established by law or regulation. In the
event such stockholder approval is not obtained, or such Company compliance is
not effected, within twelve (12) months after the date on which the Plan
is adopted by the Board, the Plan shall terminate and have no further force of
effect.

 

B.       All
costs and expenses incurred in the administration of the Plan shall be paid by
the Company.

 

C.       Neither
the action of the Company in establishing the Plan, nor any action taken under
the Plan by the Board or the Plan Administrator, nor any provision of the Plan
itself shall be construed so as to grant any person the right to remain in the
employ of the Company or any of its Corporate Affiliates for any period of
specific duration, and such person’s employment may be terminated at any time,
with or without cause.

 

D.       The
provisions of the Plan shall be governed by the laws of the State of California
without resort to that State’s conflict-of-laws rules.

 

8Exhibit 10.17

 

SYNOPSYS, INC.

 

INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN

 

I.              PURPOSE

 

The Synopsys, Inc. International Employee Stock Purchase Plan (the
“Plan”) is intended to provide Eligible Employees of designated subsidiaries of
the Company with the opportunity to acquire a proprietary interest in the
Company through the periodic application of their payroll deductions to the
purchase of shares of the Company’s common stock.

 

II.            DEFINITIONS

 

For purposes of plan administration, the following terms shall have the
meanings indicated:

 

Base Salary means all compensation paid as
wages, salaries, commissions, overtime, and bonuses (other than bonuses subject
to repayment as a result of a specified future event), but excluding all of the
following items (even if included in taxable income): reimbursements, car
allowances or other expense allowances, severance pay, fringe benefits (cash
and noncash), moving expenses, deferred compensation, income attributable to
stock options, restricted stock grants, SARs and other equity-related incentive
programs, and welfare benefits.

 

Code means the Internal Revenue Code of 1986,
as amended from time to time.

 

Company means Synopsys, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Synopsys, Inc. which shall by appropriate action
adopt the Plan.

 

Common Stock means shares of the Company’s
common stock.

 

Corporate Affiliate means any company which is
a parent or subsidiary corporation of the Company (as determined in accordance
with Code Section 424), including any parent or subsidiary corporation
which becomes such after the Effective Date.

 

Effective Date means the first day of the
initial offering period scheduled to commence on May 3, 1993. However, for
any Subsidiary which becomes a Participating Subsidiary in the Plan after the
first day of the initial offering period, a subsequent Effective Date shall be
designated with respect to participation by its Eligible Employees.

 

Eligible Employee means any person who is
engaged, on a regularly-scheduled basis of more than twenty (20) hours per
week and more than five (5) months per calendar year, in the rendition of
personal services to any Participating Subsidiary for earnings considered wages
under Section 3121(a) of the Code, but shall not include persons
prohibited by the laws of the nation of their residence or employment from
participating in the Plan.

 

Enrollment Date has the meaning ascribed to it
in Section V.A.

 

Participant means any Eligible Employee of a
Participating Subsidiary who is actively participating in the Plan.

 

Participating Subsidiary means a Subsidiary of
the Company that has been designated as a Participating Subsidiary by the
Board.

 

Semi-Annual Entry Date means (i) during
1999 and each preceding calendar year within an offering period in effect under
the Plan, the first business day of May and the first business day of November and
(ii) during 2000 and all subsequent calendar years within an offering
period under the

 

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Plan, the first business day of March and the first business day
of September. The earliest Semi-Annual Entry Date under the Plan shall be May 3,
1993.

 

Semi-Annual Period of Participation means each
period for which the Participant actually participates in an offering period in
effect under the Plan. There shall be a maximum of four (4) periods of
participation within each offering period. Except as otherwise designated by
the Plan Administrator, each such period shall commence on the applicable
Semi-Annual Entry Date.

 

Semi-Annual Purchase Date means (i) during
1999 and each preceding year on which shares of Common Stock are automatically
purchased for Participants under the Plan, the last business day of April and
October, and (ii) during 2000 and each subsequent year on which shares of
Common Stock are automatically purchased for Participants under the Plan, the
last business day of February and August.

 

Subsidiary shall mean any corporation
described in Section 425(e) or (f) of the Code.

 

III.           ADMINISTRATION

 

The Plan shall be administered by the Board of Directors or a committee
that will satisfy Rule 16b-3 of the Securities and Exchange Commission, as
in effect with respect to the Company from time to time (in either case, the “Board”).
The Board may from time to time select a committee or persons (the “Plan
Administrator”) to be responsible for any transactions not subject to Rule 16b-3.
Subject to the express provisions of the Plan, to the overall supervision of the
Board, and to the limitations of Section 423 of the Code, the Plan
Administrator may administer, interpret and amend the Plan in any manner it
believes to be desirable (including amendments to outstanding options/purchase
rights and the designation of a brokerage firm at which accounts for the
holding of shares purchased under the Plan must be established by each employee
desiring to participate in the Plan), and any such interpretation shall be
final and binding on all parties who have an interest in the Plan; provided,
however, that the Plan Administrator may not, without the approval of the
Company’s Board, (i) increase the number of shares issuable under the Plan
or the maximum number of shares which may be purchased per Participant or in
the aggregate during any one Semi-Annual Period of Participation under the
Plan, except that the Plan Administrator shall have the authority, exercisable
without such stockholder approval, to effect adjustments to the extent
necessary to reflect changes in the Company’s capital structure pursuant to Section VI.B;(ii) alter
the purchase price formula so as to reduce the purchase price payable for the
shares issuable under the Plan; or (iii) materially increase the benefits
accruing to Participants under the Plan or materially modify the requirements
for eligibility to participate in the Plan.

 

IV.           OFFERING PERIODS

 

The Plan shall be implemented in a series of offering periods. Each
offering period shall be of a duration of twenty-four (24) months or less
as designated by the Plan Administrator prior to the start date of any offering
period, except that offering periods that include the Semi-Annual Entry Date on
November 1, 1999 shall be of a duration of twenty-two (22) months.
Within each offering period, there shall be a maximum of four (4) Semi-Annual
Periods of Participation.

 

V.            ELIGIBILITY AND
PARTICIPATION

 

A.            Each Eligible Employee
of a Participating Subsidiary shall be eligible to participate in the Plan in
accordance with the following provisions:

 

•  The Board may at
any time designate one or more Subsidiaries as participating in the Plan. The
names of all Participating Subsidiaries shall be shown on Exhibit A to the
Plan, which shall be amended from time to time to reflect additions and
deletions of Participating Subsidiaries; failure to show a Participating
Subsidiary on Exhibit A shall not, however, prevent otherwise eligible
employees of that Subsidiary from participating in the Plan. No Subsidiary
participating in the

 

2

 

Company’s Employee Stock Purchase Plan
effective May 3, 1993 may be designated for participation in the Plan.

 

•  Each Eligible
Employee will be automatically enrolled in the Plan in the offering period that
begins on the first Semi-Annual Entry Date following the commencement of
employment; thereafter, any Eligible Employee may enroll or re-enroll in the
Plan in the offering period that begins as of any Semi-Annual Entry Date, or
such other days as may be established by the Board from time to time (each, an “Enrollment
Date”). To participate, an Eligible Employee must complete, sign, and submit to
the Company an enrollment form prescribed by the Plan Administrator. Any
enrollment form received by the Company by the 15th day of the month preceding
an Enrollment Date (or by the Enrollment Date in the case of employees hired
after such 15th day), or such other date established by the Plan Administrator
from time to time, will be effective on that Enrollment Date. Enrollment or
re-enrollment by a Participant in the Plan on an Enrollment Date will
constitute the grant by the Company to the Participant of an option to purchase
shares of Common Stock from the Company under the Plan. At the end of each
offering period, each Participant who has not withdrawn from the Plan will
automatically be re-enrolled in the Plan in the offering period that begins on
the Enrollment Date immediately following the date on which the option expires.
Furthermore, except as may otherwise be determined by the Plan Administrator, each
Participant who has not withdrawn from the Plan will automatically be
re-enrolled in the Plan in each offering period that begins on an Enrollment
Date on which the fair market value per share of the Company’s Common Stock is
lower than the fair market value per share of the Company’s Common Stock on the
Enrollment Date for the offering period in which the Participant is then
enrolled. Notwithstanding anything in the Plan to the contrary, if the fair
market value (the “Authorization Date FVM”) on the date (the “Authorization
Date”) on which additional shares of Common Stock are authorized for issuance
hereunder by the Company’s shareholders is higher than the fair market value at
the beginning of any Offering Period that commenced prior to the Authorization
Date, then, with respect to any of such authorized shares available to be
issued on Purchase Dates relating to such Offering Period, the Authorization
Date FMV shall be used instead of the fair market value on the Enrollment Date
for the purposes of the preceding sentence, provided that the Plan
Administrator, in its discretion, may waive application of this sentence with
respect to the first Purchase Date occurring after the Authorization Date.

 

•  An individual
who becomes an Eligible Employee immediately following termination of such
employee’s participation in the Synopsys, Inc. Employee Stock Purchase
Plan shall, for purposes of participation in the Plan, have a deemed Enrollment
Date corresponding to such employee’s most recent Enrollment Date under the
Synopsys, Inc. Employee Stock Purchase Plan.

 

B.            The payroll deduction
authorized by the Participant for purposes of acquiring shares of Common Stock
under the Plan may be zero percent (0%) or any whole multiple of one percent
(1%) of the Base Salary paid to the Participant during each Semi-Annual Period
of Participation within the offering period, up to a maximum of ten percent
(10%). The deduction rate so authorized shall continue in effect for the entire
Semi-Annual Period of Participation and for each successive Semi-Annual Period
of Participation unless (i) the Participant shall change the rate for a
subsequent Semi-Annual Period of Participation by filing the appropriate form
with the Plan Administrator prior to the commencement of that Semi-Annual
Period of Participation or (ii) the Participant shall change the rate
within a Semi-Annual Period of Participation by filing the appropriate form
with the Plan Administrator. The new rate shall become effective as soon as
practicable following the filing of such form. A Participant may not increase
or decrease the deduction rate more than once per Semi-Annual Period of
Participation in addition to fixing the rate at the beginning of the
Semi-Annual Period of Participation. Payroll deductions, however, will
automatically cease upon the termination of the Participant’s purchase right in
accordance with Article VII below.

 

3

 

C.  In no event may any
Participant’s payroll deductions for any one Semi-Annual Period of
Participation exceed Seven Thousand Five Hundred Dollars ($7,500.00) calculated
on the Purchase Date following conversion of accumulated withholdings into U.S.
Dollars.

 

D.  It is intended that all
eligible employees shall have substantially equivalent rights and privileges
with respect to the Plan; notwithstanding any other provision of the Plan,
however, the Plan Administrator may make such changes in the terms of
eligibility and participation from Subsidiary to Subsidiary that it determines,
in its discretion, to be necessary or desirable to reflect or comply with local
laws or conditions.

 

VI.           STOCK SUBJECT TO
PLAN

 

A.            The Common Stock
purchasable by Participants under the Plan shall, solely in the discretion of
the Plan Administrator, be made available from either authorized but unissued
shares of the Common Stock or from shares of Common Stock reacquired by the
Company, including shares of Common Stock purchased on the open market. The
total number of shares which may be issued under the Plan shall not exceed
21,700,000 shares, less any shares sold under the Synopsys, Inc. Employee
Stock Purchase Plan (subject to adjustment under Section VI.B below).

 

B.            In the event any
change is made to the Company’s outstanding Common Stock by reason of any stock
dividend, stock split, combination of shares or other change affecting such
outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made by the Plan Administrator to (i) the
class and maximum number of shares issuable over the term of the Plan, (ii) the
class and maximum number of shares purchasable per Participant during each
Semi-Annual Period of Participation, (iii) the class and maximum number of
shares purchasable in the aggregate by all Participants on any one purchase
date under the Plan and (iv) the class and number of shares and the price
per share of the Common Stock subject to each purchase right at the time
outstanding under the Plan. Such adjustments shall be designed to preclude the
dilution or enlargement of rights and benefits under the Plan.

 

VII.          PURCHASE RIGHTS

 

An Employee who participates in the Plan for a particular offering
period shall have the right to purchase shares of Common Stock, in a series of
successive installments during such offering period, upon the terms and
conditions set forth below and shall execute such agreements and documents
embodying such terms and conditions and such other provisions (not inconsistent
with the Plan) as the Plan Administrator may deem advisable.

 

Purchase Price.  Common Stock shall be issuable on each
Semi-Annual Purchase Date at a purchase price equal to eighty-five percent
(85%) of the lower of (i) the fair market value per share on the
Participant’s Enrollment Date or (ii) the fair market value per share on
the Semi-Annual Purchase Date. Notwithstanding anything in the Plan to the
contrary, if the Authorization Date FVM is higher than the fair market value at
the beginning of any Offering Period that commenced prior to the Authorization
Date, then, with respect to any of such authorized shares available to be
issued on Purchase Dates relating to such Offering Period, the Authorization
Date FMV shall be used instead of the fair market value on the Enrollment Date
for the purposes of clause (i) of the preceding sentence, provided
that the Plan Administrator, in its discretion, may waive application of this
sentence with respect to the first Purchase Date occurring after the
Authorization Date.

 

Valuation. 
The fair market value per share of Common Stock on any relevant date
shall be the closing selling price of the Common Stock on that date, as
officially quoted on the Nasdaq National Market System. If there is no quoted
selling price for such date, then the closing selling price on the next preceding
day for which there does exist such a quotation shall be determinative of fair
market value.

 

4

 

Number of Purchasable Shares.  The number of shares purchasable per
Participant on each Semi-Annual Purchase Date shall be the number of whole
shares obtained by dividing the amount collected, after conversion into U.S.
Dollars on the Purchase Date, from the Participant through payroll deductions
during the corresponding Semi-Annual Period of Participation by the purchase
price in effect for the Semi-Annual Purchase Date. However, no Participant may,
during any one Semi-Annual Purchase Period, purchase more than 4,000 shares of
Common Stock, subject to periodic adjustment under Section VI.B.

 

Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or any of its Corporate Affiliates.

 

Payment; Withholding.  Payment for the Common Stock purchased under
the Plan shall be effected by means of the Participant’s authorized payroll
deductions. Such deductions shall begin on the first pay day coincident with or
immediately following the Participant’s Enrollment Date into the offering
period and shall (unless sooner terminated by the Participant) continue through
the pay day ending with or immediately prior to the last day of the offering
period. The amounts so collected shall be credited to the Participant’s book
account under the Plan in local currency, but no interest shall be paid on the
balance from time to time outstanding in such account. The amounts collected
from a Participant may be commingled with the general assets of the Company
and/or any Participating Subsidiary and may be used for general corporate
purposes. Upon disposition of shares acquired by exercise of purchase right,
the Participant shall pay, or make provision adequate to the Company and the
Participating Subsidiary for payment of, all federal, state, and other tax (and
similar) withholdings that the Company or the Participating Subsidiary
determines, in its discretion, are required due to the disposition, including
any such withholding that the Company or the Participating Subsidiary
determines, in its discretion, is necessary to allow the Company or the
Participating Subsidiary to claim tax deductions or other benefits in
connection with the disposition. A Participant shall make such similar
provisions for payment that the Company or the Participating Subsidiary
determines, in its discretion, are required due to the exercise of purchase
right, including such provisions as are necessary to allow the Company or the
Participating Subsidiary to claim tax deductions or other benefits in
connection with the exercise of purchase right.

 

Termination of Purchase Right.  The following provisions shall govern the
termination of outstanding purchase rights:

 

(i)   A
Participant may, at any time prior to the last five (5) business days of
the Semi-Annual Period of Participation, terminate his /her outstanding
purchase right under the Plan by filing the prescribed notification form with
the Plan Administrator. No further payroll deductions shall be collected from
the Participant with respect to the terminated purchase right, and any payroll
deductions collected for the Semi-Annual Period of Participation in which such
termination occurs shall, at the Participant’s election, be immediately
refunded or held for the purchase of shares on the next Semi-Annual Purchase
Date. If no such election is made, then such funds shall be refunded as soon as
possible after the close of such Semi-Annual Period of Participation.

 

(ii)  The
termination of such purchase right shall be irrevocable, and the Participant
may not subsequently rejoin the offering period for which such terminated
purchase right was granted. In order to resume participation in any subsequent
offering period, such individual must enroll in the Plan in accordance with Section V.A.

 

(iii) Should
a Participant cease to remain an Eligible Employee while his/her purchase right
remains outstanding or should there otherwise occur a change in such individual’s
employee status so that he/she is no longer an Eligible Employee while holding
such purchase right, then such

 

5

 

purchase right shall immediately terminate upon such termination of
service or change in status and all sums previously collected from the
Participant during the Semi-Annual Period of Participation in which the
purchase right so terminates shall be promptly refunded to the Participant.
However, should the Participant die or become permanently disabled while in
service or should the Participant cease employment by reason of a leave of
absence, then the Participant (or the person or persons to whom the rights of
the deceased Participant under the Plan are transferred by will or the laws of
inheritance) shall have the election, exercisable up until the end of the
Semi-Annual Period of Participation in which the Participant dies or becomes
permanently disabled or in which the leave of absence commences, to (i) withdraw
all the funds credited to the Participant’s account at the time of his/her
cessation of service or at the commencement of such leave or (ii) have
such funds held for the purchase of shares of Common Stock at the next
Semi-Annual Purchase Date. If no such election is made, then such funds shall
automatically be held for the purchase of shares of Common Stock at the next
Semi-Annual Purchase Date. In no event, however, shall any further payroll
deductions be added to the Participant’s account following his/her cessation of
service or the commencement of such leave; provided, however, that if a
Participant’s employment is terminated because of a transfer of employment to
the Company or any subsidiary of the Company other than a Participating Subsidiary,
any outstanding purchase right shall not terminate until the occurrence of the
earlier of (x) the last Semi-Annual Purchase Date in the offering period
or (y) enrollment of the Participant in the Company’s Employee Stock
Purchase Plan. While a purchase right remains outstanding, the Company or other
subsidiary to which the participant is transferred shall effect payroll
deductions authorized by the Participant and shall remit them to the
Participating Subsidiary that employed the Participant at the time of the
transfer for purposes of acquiring shares of Common Stock under the Plan.
Following approval by the Company and the Participating Subsidiary, the
Participant may, in lieu of payroll deduction, pay a corresponding amount to
the Participating Subsidiary if such amount is received on or before the
relevant Purchase Date. Should the Participant return to active service
following a leave of absence, then his/her payroll deductions under the Plan
shall automatically resume at the rate in effect at the time the leave began,
provided such return to service occurs prior to the end of the offering period
in which such leave began. For purpose of the Plan: (i) the Participant
shall be considered to remain in service for so long as such Participant
remains in the active employ of the Company or one or more other Participating
Subsidiaries and (ii) the Participant shall be deemed to be permanently
disabled if he/she is unable to engage in any substantial gainful employment,
by reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of at least twelve
(12) months.

 

Stock Purchase.  Shares of Common Stock shall automatically be
purchased on behalf of each Participant (other than Participants whose payroll
deductions have previously been refunded or set aside for refund in accordance
with the Termination of Purchase Right provisions above) on each Semi-Annual
Purchase Date. The purchase shall be effected by applying each Participant’s
payroll deductions after conversion to U.S. Dollars for the Semi-Annual Period
of Participation ending on such semiannual Purchase Date to the purchase of
whole shares of Common Stock (subject to the limitation on the maximum number
of purchasable shares as set forth above) at the purchase price in effect for
such Semi-Annual Period of Participation. Any payroll deductions not applied to
such purchase (a) because they are not sufficient to purchase a whole
share or (b) by reason of the limitation on the maximum number of shares
purchasable by the Participant for that Semi-Annual Period of Participation
shall be promptly refunded to the Participant.

 

Proration of Purchase Rights.  Not more than 2,000,000 shares of Common
Stock, subject to periodic adjustment under Section VI.B, may be purchased
in the aggregate by all participants under the Plan and under the Synopsys, Inc.
Employee Stock Purchase Plan on any one Semi-Annual Purchase Date. Should the
total number of shares of Common Stock which are to be purchased pursuant to
outstanding

 

6

 

purchase rights on any particular date exceed either (i) the
maximum limitation on the number of shares purchasable in the aggregate on such
date or (ii) the number of shares then available for issuance under the
Plan and the Synopsys, Inc. Employee Stock Purchase Plan, the Plan
Administrator shall make a pro-rata allocation of the available shares on a
uniform and non-discriminatory basis (including, to the extent practicable vis
a vis participants in the Synopsys, Inc. Employee Stock Purchase Plan) and
the payroll deductions for each Participant, to the extent in excess of the
aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded to such Participant.

 

Rights as Stockholder.  A Participant shall have no stockholder
rights with respect to the shares subject to his/her outstanding purchase right
until the shares are actually purchased on the Participant’s behalf in
accordance; with the applicable provisions of the Plan. No adjustments shall be
made for dividends, distributions, or other rights for which the record date is
prior to the date of such purchase.

 

Assignability. 
No purchase right granted under the Plan shall be assignable or transferable
by the Participant other than by will or by the laws of descent and
distribution following the Participant’s death, and during the Participant’s
lifetime the purchase right shall be exercisable only by the Participant.

 

Change in Ownership.  Should the Company or its stockholders enter
into an agreement to dispose of all or substantially all of the assets or
outstanding capital stock of the Company by means of:

 

(i)  a
sale, merger or other reorganization in which the Company will not be the
surviving corporation (other than a reorganization effected primarily to change
the State in which the Company is incorporated), or

 

(ii)  a
reverse merger in which the Company is the surviving corporation but in which
more than fifty percent (50%) of the Company’s outstanding voting stock is
transferred to holders different from those who held the stock immediately
prior to the reverse merger,

 

then all outstanding purchase rights under the Plan shall automatically
be exercised immediately prior to the consummation of such sale, merger,
reorganization or reverse merger by applying the payroll deductions of each
Participant, after conversion into U.S. Dollars on the date of purchase, for
the Semi-Annual Period of Participation in which such transaction occurs to the
purchase of whole shares of Common Stock at eighty-five percent (85%) of the
lower of (i) the fair market value of the Common Stock on the Participant’s
Enrollment Date into the offering period in which such transaction occurs or (ii) the
fair market value of the Common Stock immediately prior to the consummation of
such transaction. However, the applicable share limitations of Sections VII and
VIII shall continue to apply to any such purchase, and the clause (i) amount
above shall not, for any Participant whose Enrollment Date for the offering
period is other than the start date of such offering period, be less than the
fair market value of the Common Stock on such start date.

 

The Company shall use its best efforts to provide at least ten (10) days’
advance written notice of the occurrence of any such sale, merger,
reorganization or reverse merger, and Participants shall, following the receipt
of such notice, have the right to terminate their outstanding purchase rights
in accordance with the applicable provisions of this Article VII.

 

VIII.        ACCRUAL LIMITATIONS

 

A.        No
Participant shall be entitled to accrue rights to acquire Common Stock pursuant
to any purchase right outstanding under this Plan if and to the extent such
accrual, when aggregated with (i) rights to purchase Common Stock accrued
under any other purchase right outstanding under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
Section 423 of the Code) of the Company and its Corporate Affiliates would
otherwise permit such Participant to purchase more than $25,000 worth of stock
of the Company or any Corporate Affiliate

 

7

 

(determined on the basis of the fair market
value of such stock on the date or dates such rights are granted to the
Participant) for each calendar year such rights are at any time outstanding.

 

B.            For purposes of
applying such accrual limitations, the right to acquire Common Stock pursuant
to each purchase right outstanding under the Plan shall accrue as follows:

 

(i)            The
right to acquire Common Stock under each such purchase right shall accrue in a
series of successive semi-annual installments as and when the purchase right
first becomes exercisable for each semi-annual installment on the last business
day of each Semi-Annual Period of Participation for which the right remains
outstanding.

 

(ii)           No
right to acquire Common Stock under any outstanding purchase right shall accrue
to the extent the Participant has already accrued in the same calendar year the
right to acquire $25,000 worth of Common Stock (determined on the basis of the
fair market value on the date or dates of grant) pursuant to one or more
purchase rights held by the Participant during such calendar year.

 

(iii)          If
by reason of such accrual limitations, any purchase right of a Participant does
not accrue for a particular Semi-Annual Period of Participation, then the
payroll deductions which the Participant made during that Semi-Annual Period of
Participation with respect to such purchase right shall be promptly refunded.

 

C.            In the event there is
any conflict between the provisions of this Section VIII and one or more
provisions of the Plan or any instrument issued thereunder, the provisions of
this Section VIII shall be controlling.

 

IX.           AMENDMENT AND
TERMINATION

 

A.            The Board may amend,
alter, suspend, discontinue, or terminate the Plan at any time, including
amendments to outstanding options/purchase rights. However, the Board may not,
without the approval of the Company’s stockholders:

 

(i)            increase
the number of shares issuable under the Plan or the maximum number of shares
which may be purchased per Participant or in the aggregate during any one
Semi-Annual Period of Participation under the Plan, except that the Plan
Administrator shall have the authority, exercisable without such stockholder
approval, to effect adjustments to the extent necessary to reflect changes in
the Company’s capital structure pursuant to Section VI.B;

 

(ii)           alter
the purchase price formula so as to reduce the purchase price payable for the
shares issuable under the Plan; or

 

(iii)          materially
increase the benefits accruing to Participants under the Plan or materially
modify the requirements for eligibility to participate in the Plan.

 

B.            The Board may elect to
terminate any or all outstanding purchase rights at any time. In the event the
Plan is terminated, the Board may also elect to terminate outstanding purchase
rights either immediately or upon completion of the purchase of shares on the
next Semi-Annual Purchase Date, or may elect to permit purchase rights to
expire in accordance with their terms (and participation to continue through
such expiration dates). If purchase rights are terminated prior to expiration,
all funds contributed to the Plan that have not been used to purchase shares
shall be returned to the Participants as soon as administratively feasible.

 

X.            GENERAL PROVISIONS

 

A.            The Plan shall become
effective on the date on which it is adopted by the Board, provided the Company
has complied with all applicable requirements established by law or regulation.

 

B.            All costs and expenses
incurred in the administration of the Plan shall be paid by the Company.

 

8

 

C.            Neither the action of
the Company in establishing the Plan, nor any action taken under the Plan by
the Board or the Plan Administrator, nor any provision of the Plan itself shall
be construed so as to grant any person the right to remain in the employ of the
Company or any of its Corporate Affiliates for any period of specific duration,
and such person’s employment may be terminated at any time, with or without
cause.

 

D.            The provisions of the
Plan shall be governed by the laws of the State of California without resort to
that State’s conflict-of-laws rules.

 

E.             If the Plan
Administrator in its discretion so elects, it may retain a brokerage firm,
bank, or other financial institution to assist in the purchase of shares,
delivery of reports, or other administrative aspects of the Plan. If the Plan
Administrator so elects, each Participant shall (unless prohibited by the laws
of the nation of his or her employment or residence) be deemed upon enrollment
in the Plan to have authorized the establishment of an account on his or her
behalf at such institution. Shares purchased by a Participant under the Plan
shall be held in the account in the name in which the share certificate would
otherwise be issued pursuant to Section VII.

 

9

 

Schedule A

 

	
  Name

  	
   

  	
  Jurisdiction
  of Incorporation

  
	
   

  	
   

  	
   

  
	
  Avant! Software & Development Centre (India) Private Limited

  	
   

  	
  India

  
	
  InSilicon Canada Corporation

  	
   

  	
  Canada

  
	
  InSilicon Canada Holdings ULC

  	
   

  	
  Canada

  
	
  InSilicon Canada Ltd.

  	
   

  	
  Canada

  
	
  Nihon Synopsys KK

  	
   

  	
  Japan

  
	
  Numerical Technologies Canada Inc.

  	
   

  	
  Canada

  
	
  Synopsys Denmark ApS

  	
   

  	
  Denmark

  
	
  Numerical Nova Scotia Company

  	
   

  	
  Canada

  
	
  Numerical Subwavelength Technologies BV

  	
   

  	
  Netherlands

  
	
  Synopsys SARL

  	
   

  	
  France

  
	
  Synopsys Finland OY

  	
   

  	
  Finland

  
	
  Synopsys GmbH

  	
   

  	
  Germany

  
	
  Synopsys (India) Private Ltd.

  	
   

  	
  India

  
	
  Synopsys (India) EDA Software Private Limited

  	
   

  	
  India

  
	
  Synopsys International Limited

  	
   

  	
  Ireland

  
	
  Synopsys Ireland Limited

  	
   

  	
  Ireland

  
	
  Synopsys Ireland Resources

  	
   

  	
  Ireland

  
	
  Synopsys Israel Limited

  	
   

  	
  Israel

  
	
  Synopsys Italia, SRL

  	
   

  	
  Italy

  
	
  Synopsys Korea, Inc.

  	
   

  	
  Korea

  
	
  Synopsys (Northern Europe) Ltd.

  	
   

  	
  United Kingdom

  
	
  Synopsys Scandinavia AB

  	
   

  	
  Sweden

  
	
  Synopsys Singapore Pte. Ltd.

  	
   

  	
  Singapore

  
	
  Synopsys Taiwan Limited

  	
   

  	
  Taiwan

  

 

10

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