Document:

exhibit4g3312008.htm

    Exhibit 4(g) 

     

    FORM OF DEFINITIVE FLOATING RATE
BEARER NOTE 

     

    GENERAL ELECTRIC CAPITAL CORPORATION

     

     

     

    
      	
            	
            	
            
	BEARER	  	BEARER
	No. DBFL	  	[                ]1
	
            	  	[                ]2

    

    ANY UNITED STATES PERSON WHO HOLDS
THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME
TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF
THE INTERNAL REVENUE CODE. 

     

     

     

    
    

     

    
      	
              1

               

            	
              Insert Principal Amount.
      

               

            

    

    
      	
              2

               

            	
              Insert Optional Payment Amount
      if the Note has dual-currency feature. 

               

            

    

    
    

     

    

    GENERAL ELECTRIC CAPITAL CORPORATION

     

    EURO MEDIUM-TERM NOTE

     

    (Floating Rate) 

     

    SERIES: 

     

     

     

    
      	
            	
            	
            	
            	
            	
            	
            
	
              ISIN:

               

               

               

              COMMON CODE:

               

               

               

              ORIGINAL ISSUE
      DATE:

               

               

               

              MATURITY DATE:

               

               

               

              PRINCIPAL AMOUNT IN SPECIFIED
      CURRENCY:

               

               

               

              INTEREST
      CALCULATION:

               

              [    ] Regular Floating Rate
      Note

               

              [    ] Inverse Floating Rate
      Note

               

              [    ] Other Floating Rate

               

               

               

              INTEREST RATE
      BASIS:

               

              [    ] CD Rate

               

              [    ] Commercial Paper Rate

               

              [    ] Eleventh District Cost of Funds
      Rate

               

              [    ] Federal Funds Rate

               

              [    ] LIBOR

               

              [    ] EURIBOR

               

              [    ] Treasury Rate

               

              [    ] Prime Rate

               

              [    ] Other

               

               

               

              SPREAD (PLUS OR
      MINUS):

               

               

               

              SPREAD
MULTIPLIER:

               

               

               

              INDEX MATURITY:

               

            	  	
              IF INTEREST RATE BASIS IS
      LIBOR, INDEX CURRENCY:

               

               

               

              DESIGNATED LIBOR
      PAGE:

               

              [    ]
      Reuters Page:             

               

              [    ]
      Telerate Page:             

               

               

               

              MAXIMUM INTEREST
      RATE:

               

               

               

              MINIMUM INTEREST
      RATE:

               

               

               

              INTEREST PAYMENT
      PERIOD:

               

               

               

              INTEREST PAYMENT
      DATE(S):

               

               

               

              INITIAL INTEREST
      RATE:

               

               

               

              INTEREST RESET
      PERIOD:

               

               

               

              INTEREST RESET
      DATES:

               

               

               

              INTEREST DETERMINATION
      DATE:

               

               

               

              REGULAR RECORD DATES (if
      any):

               

            	  	
              DAY COUNT
FRACTION

               

              [    ] Actual/3653

               

              [    ] Actual/Actual

               

              [    ] Actual/Actual (ISDA)

               

              [    ] Actual/365 (Fixed)

               

              [    ] Actual/365 (Sterling)

               

              [    ] Actual/3604

               

              [    ] 30/360

               

              [    ] 360/360

               

              [    ] Bond Basis

               

              [    ] 30E/360

               

              [    ] Eurobond Basis

               

              [    ] (Other)

               

               

               

              CALCULATION
AGENT:

               

               

               

              ISSUER OPTIONAL REDEMPTION
      DATE:

               

               

               

              NOTEHOLDER OPTIONAL REDEMPTION
      DATE:

               

               

               

              OPTIONAL
      REPAYMENT:

               

               

               

              FACE AMOUNT
      CURRENCY:

               

               

               

              OPTION VALUE CALCULATION
      AGENT:

               

               

               

              OPTIONAL PAYMENT
      CURRENCY:

               

               

               

              OPTION ELECTION
      DATES:

               

            	  	
              DESIGNATED EXCHANGE
      RATE:

               

               

               

              CURRENCY BASE
      RATE:

               

               

               

              DETERMINATION
      AGENT:

               

               

               

              INITIAL MATURITY
      DATE:

               

               

               

              ELECTION DATE

               

               

               

              FINAL MATURITY
      DATE:

               

               

               

              AVAILABILITY OF REGISTERED
      NOTES:

               

               

               

              DENOMINATIONS OF DEFINITIVE
      NOTES (if not as set forth herein):

               

               

               

              REDENOMINATION:

               

               

               

              LISTING:

               

               

               

              TAX REDEMPTION
      DATE:

               

               

               

              ADDENDUM
ATTACHED:

               

               

               

              OTHER PROVISIONS:

               

               

               

              RANKING:

               

              [    ] Senior

               

              [    ] Subordinated

               

            

    

    General Electric Capital Corporation
(together with its successors and assigns, the “Company”), for value received,
hereby promises to pay to the holder hereof upon surrender hereof, the principal
sum (or Face Amount, if the Note has a dual-currency or index feature) specified
above on the Maturity Date specified above (except to the extent redeemed or
repaid prior to the Maturity Date) or in accordance with the Amortization
Schedule set out in Schedule A hereto and to pay interest thereon to the bearer
of the coupons, if any, attached hereto (the “Coupons”) at the interest rate per
annum calculated in accordance with the terms hereof from the last date on which
interest was paid on the predecessor global Note, or if no such interest was
paid, then from the Original Issue Date of the predecessor global 

     

     

     

    
    

     

    
      	
              3

               

            	
              Floating Rate Notes
      denominated in any Specified Currency other than U.S. Dollars or Sterling
      

               

            

    

    
      	
              4

               

            	
              Floating Rate U.S. Dollar
      denominated Notes 

               

            

    

    
      	
            

    

     

     

    2 

     

    
    

     

    

    Note, until the principal hereof is
paid or duly made available for payment (except as provided below), in arrears
monthly, quarterly, semi-annually or annually as specified above as the Interest
Payment Period on each Interest Payment Date (as specified above), commencing
with the first Interest Payment Date next succeeding the Original Issue Date
specified above, and on the Maturity Date (or any other redemption or repayment
date specified above). 

     

    Payment of the principal of this
Note and any premium due at the Maturity Date (or any other redemption or
repayment date) will be made in immediately available funds upon surrender of
this Note at the office or agency of the Fiscal and Paying Agent or at the
office or agency of such other paying agents outside the United States (this and
certain other capitalized terms used herein are defined on the reverse of this
Note) as the Company may determine maintained for that purpose (a “Paying
Agent”). 

     

    Interest on this Note will accrue
from the most recent Interest Payment Date to which interest hereon or on the
predecessor global Note has been paid or duly provided for, or, if no interest
has been paid or duly provided for, from the Original Issue Date of the
predecessor global Note, until the principal hereof has been paid or duly made
available for payment (except as provided below). The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date, will,
subject to certain exceptions described herein, be paid to the holder of the
appropriate Coupon upon presentment and surrender thereof at the office or
agency of the Fiscal and Paying Agent or at the office of any Paying Agent.

     

    If the Specified Currency is other
than U.S. dollars, then, except as provided on the reverse hereof, payment of
the principal of and premium, if any, and interest on this Note will be made in
such Specified Currency either by a check drawn on a bank in London, Luxembourg
or a city in the country of such Specified Currency or by wire transfer of
immediately available funds to an account maintained by the holder of this Note
with a bank located outside the United States if appropriate wire transfer
instructions in writing have been received by the Fiscal and Paying Agent or any
Paying Agent not less than 10 days prior to the applicable Interest Payment
Date. 

     

    If the Specified Currency indicated
on the face hereof is U.S. dollars, any payment of the principal of and premium,
if any, and interest on this Note will be made, subject to applicable laws and
regulations, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts either
by a check drawn on a bank in The City of New York mailed to an address outside
the United States furnished by the holder or by wire transfer of immediately
available funds to an account maintained by the holder of this Note with a bank
located outside the United States if appropriate wire transfer instructions have
been received by the Fiscal and Paying Agent or any Paying Agent not less than
10 days prior to the applicable payment date. Notwithstanding the foregoing, in
the event that payment in U.S. dollars of the full amount payable on this Note
at the offices of all Paying Agents would be illegal or effectively precluded as
a result of exchange controls or similar restrictions, payment on this Note will
be made by a paying agency in the United States, if such paying agency, under
applicable law and regulations, would be able to make such payment.

     

    This Note is issued in the principal
amount set forth on the face hereof, but the total aggregate principal amount of
the Series to which this Note belongs is unlimited. The Company has the right,
without the consent of the holder of any Note or coupon appertaining thereto, to
issue additional Notes which form part of the Series to which this Note belongs.

     

    Reference is hereby made to the
further provisions of this Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place. 

     

    Unless the certificate of
authentication hereon has been executed by the Fiscal and Paying Agent by manual
signature, this Note shall not be entitled to any benefit under the Fiscal
Agency Agreement, as defined on the reverse hereof, or be valid or obligatory
for any purpose. 

     

     

     

    3 

     

    
    

     

    

    IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed under its corporate seal.

     

     

     

    
      	
            	
            	
            	
            	
            
	DATED:	 	GENERAL ELECTRIC
      CAPITAL CORPORATION
	
            	
            	
            
	[SEAL]	 	By:	 	
              /s/ Kathryn A.
      Cassidy

               

            
	
            	 	Name:	 	Kathryn A. Cassidy
	
            	 	Title:	 	
              Senior Vice President -
      Corporate Treasury and

               

              Global Funding
      Operation

               

            

    

    Attest: 

     

     

     

    
      	
            	
            	
            
	By:	 	
              /s/ Craig T.
      Beazer

               

            
	Title:	 	Vice
      President, General Counsel &
Secretary

    

    CERTIFICATE OF AUTHENTICATION

     

    This is one of the Notes referred to

     

    in the within-mentioned Fiscal
Agency Agreement. 

     

     

     

    
      	
            	
            	
            
	THE BANK OF NEW
      YORK
	            as
      Fiscal and Paying Agent
	
            	
            
	By:	 	
               

               

            
	
            	 	      Authorized
  Officer

    

     

     

    4 

     

    
    

     

    

    [Form of Reverse of Note]

     

    This Note is one of a duly
authorized issue of [Euro Medium-Term Notes]1 [Debt Securities]2 of the Series specified on the face
hereof, having maturities of nine months or more from the date of issue (the
“Notes”) of the Company. The Notes are issuable under an eighth amended and
restated fiscal and paying agency agreement, dated as of May 12, 2006,
among the Company, GE Capital Australia Funding Pty. Ltd., GE Capital Canada
Funding Company, GE Capital European Funding, GE Capital UK Funding and The Bank
of New York (successor to JPMorgan Chase Bank, N.A.), as fiscal agent and as
principal paying agent (in such capacities, the “Fiscal and Paying Agent”) and
The Bank of New York (Luxembourg) S.A. (successor to J.P. Morgan Bank Luxembourg
S.A.), as initial registrar and transfer agent (as amended and supplemented from
time to time, the “Fiscal Agency Agreement”), to which Fiscal Agency Agreement
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Company and holders of the Notes and the
terms upon which the Notes are, and are to be, authenticated and delivered. The
Bank of New York (successor to JPMorgan Chase Bank, N.A.) at its office in
London has been appointed the Exchange Rate Agent (the “Exchange Rate Agent”,
which terms include any successor exchange rate agent) with respect to the
Notes. The terms of individual Notes may vary with respect to interest rates,
interest rate formulas, issue dates, maturity dates, or otherwise, all as
provided in the Fiscal Agency Agreement. To the extent not inconsistent
herewith, the terms of the Fiscal Agency Agreement are hereby incorporated by
reference herein. 

     

    This Note will not be subject to any
sinking fund and will not be redeemable or subject to repayment at the option of
the holder prior to maturity, except as provided below. 

     

    Unless otherwise indicated on the
face of this Note, this Note shall not be subject to repayment at the option of
the holder prior to the Maturity Date. If so indicated on the face of this Note,
this Note may be subject to repayment at the option of the holder on the
Optional Repayment Date or Dates specified on the face hereof on the terms set
forth herein. On any Optional Repayment Date, this Note will be repayable in
whole or in part in increments of 1,000 units of the Specified Currency
indicated on the face hereof (provided that any remaining principal amount
hereof shall not be less than the minimum authorized denomination hereof) at the
option of the holder hereof at a price equal to 100% of the principal amount to
be repaid, together with interest hereon payable to, but not including, the
relevant Noteholder Optional Redemption Date. For this Note to be repaid in
whole or in part at the option of the holder hereof, the Company must receive at
the corporate trust office of the Fiscal and Paying Agent in the City of London,
at least 30 days but not more than 60 days prior to the repayment, (i) this
Note with the form entitled “Option to Elect Repayment” on the reverse hereof
duly completed or (ii) a telegram, facsimile transmission or a letter from
a commercial bank or trust company in Western Europe which must set forth the
principal amount of this Note, the principal amount of this Note to be repaid,
the certificate number or a description of the tenor and terms of this Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that this Note to be repaid, together with the duly completed form
entitled “Option to Elect Repayment” on the reverse hereof, will be received by
the Fiscal and Paying Agent not later than the fifth Business Day after the date
of such telegram, facsimile transmission or letter; provided, however, that such
telegram, facsimile transmission or letter from a commercial bank or trust
company in Western Europe shall only be effective if in such case, this Note and
form duly completed are received by the Fiscal and Paying Agent by such fifth
Business Day. Exercise of such repayment option by the holder hereof shall be
irrevocable. In the event of repayment of this Note in part only, a new Note or
Notes for the amount of the unpaid portion hereof shall be issued in the name of
the holder hereof upon cancellation hereof, but only in an authorized
denomination. 

     

    This Note will bear interest at the
rate determined as follows: 

     

    1. If this Note is designated as a
Regular Floating Rate Note on the face hereof, then, except as described below,
this Note shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis shown on the face hereof (i) plus or minus
the applicable Spread, if any, and/or (ii) multiplied by the applicable
Spread Multiplier, if any, specified and applied in the manner described on the
face hereof. Commencing on the first Interest Reset Date following the Original
Issue Date of the predecessor global Note (the “Initial Interest Reset Date”),
the rate at which interest on this Note is payable shall be reset as of each
Interest Reset Date specified on the face hereof; provided, however, that
(i) the interest rate in effect for the period from the Original Issue Date
of the predecessor global Note to the Initial Interest Reset Date will be the
Initial Interest Rate, and (ii) unless otherwise specified on the face
hereof, the interest rate in effect hereon for the ten calendar days immediately
prior to a Maturity Date shall be that in effect on the tenth calendar day
preceding such Maturity Date. 

     

     

     

    5 

     

    
    

     

    

    2. If this Note is designated as an
Inverse Floating Rate Note on the face hereof, then, except as described below,
this Note will bear interest equal to the Fixed Interest Rate indicated on the
face hereof minus the rate determined by reference to the applicable Interest
Rate Basis shown on the face hereof (i) plus or minus the applicable
Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier,
if any, specified and applied in the manner described on the face hereof; provided, however, that the
interest rate hereon will not be less than zero. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note is payable shall be
reset as of each Interest Reset Date specified on the face hereof; provided, however, that
(i) the interest rate in effect for the period from the Original Issue Date
of the predecessor global Note to the Initial Interest Reset Date will be the
Initial Interest Rate, and (ii) unless otherwise specified on the face
hereof, the interest rate in effect hereon for the ten calendar days immediately
prior to a Maturity Date shall be that in effect on the tenth calendar day
preceding such Maturity Date. 

     

    3. Notwithstanding the foregoing, if
this Note is designated above as having an Addendum attached, the Note shall
bear interest in accordance with the terms described in such Addendum.

     

    Except as provided above, the
interest rate in effect on each day shall be (a) if such day is an Interest
Reset Date, the interest rate determined on the Interest Determination Date (as
defined below) immediately preceding such Interest Reset Date or (b) if
such day is not an Interest Reset Date, the interest rate determined on the
Interest Determination Date immediately preceding the next preceding Interest
Reset Date. Each Interest Rate Basis shall be the rate determined in accordance
with the applicable provision below. If any Interest Reset Date (which term
includes the term Initial Interest Reset Date unless the context otherwise
requires) would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next succeeding day that is a Business Day,
except that if such next Business Day falls in the next succeeding calendar
month, such Interest Reset Date shall be the next preceding Business Day.

     

    Unless otherwise specified on the
face hereof, the Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate, Federal Funds Rate and Prime Rate will be the second
Business Day next preceding such Interest Reset Date. The Interest Determination
Date with respect to the Eleventh District Cost of Funds Rate will be the last
working day of the month immediately preceding each Interest Reset Date on which
the Federal Home Loan Bank of San Francisco (the “FHLB of San Francisco”)
publishes the FHLB Index (as defined below). Unless otherwise specified on the
face hereof, the Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to LIBOR shall be the
second London Banking Day (as defined below) preceding such Interest Reset Date,
unless the Designated LIBOR Currency (as defined herein) is (i) pounds
sterling, in which case the “Interest Determination Date” will be the applicable
Interest Reset Date, or (ii) euro, in which case the Interest Determination
Date will be the second TARGET Settlement Day (as defined herein) preceding such
Interest Reset Date. Unless otherwise specified on the face hereof, the Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to EURIBOR shall be the second TARGET
Settlement Day preceding each Interest Reset Date for the related Notes. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the Treasury Rate shall be the day
of the week in which such Interest Reset Date falls on which day Treasury bills
are normally auctioned (Treasury Bills are normally sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be held on
the preceding Friday); provided, however, that if an
auction is held on the Friday of the week preceding such Interest Reset Date,
the related Interest Determination Date shall be such preceding Friday; and
provided, further, that if an
auction shall fall on any Interest Reset Date, then the Interest Reset Date
shall instead be the first Business Day following the date of such auction. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest determined with reference to two or more Interest Rate Bases
shall be the latest Business Day which is at least two Business Days prior to
each Interest Reset Date for such Floating Rate Notes. “London Banking Day”
means any day on which commercial banks are open for business (including
dealings in Designated LIBOR Currency) in London, England. 

     

     

     

    6 

     

    
    

     

    

    Determination of CD
Rate. If the Interest Rate Basis specified on the face hereof is
the CD Rate, the CD Rate with respect to this Note shall be determined on each
Interest Determination Date and shall be the rate on such date for negotiable
certificates of deposit having the Index Maturity specified on the face hereof
as published by the Board of Governors of the Federal Reserve System in
“Statistical Release H.15(519), Selected Interest Rates,” or any successor
publication (“H.15(519)”), under the heading “CDs (Secondary Market)”, or, if
not so published by 3:00 p.m., New York City time, on the Interest Determination
Date, the CD Rate will be the rate on such Interest Determination Date for
negotiable certificates of deposit of the Index Maturity specified on the face
hereof as published by the Federal Reserve Bank of New York in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption “CDs (Secondary Market)”. If such rate
is not yet published in either H.15(519), H.15 Daily Update, or such other
recognized electronic source by 3:00 P.M., New York City time, on such Interest
Determination Date, then the CD Rate on such Interest Determination Date will be
calculated by the Calculation Agent referred to on the face hereof and will be
the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New
York City time, on such Interest Determination Date, for negotiable certificates
of deposit of major United States money market banks with a remaining maturity
closest to the Index Maturity specified on the face hereof in a denomination of
$5,000,000 as quoted by three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
with respect to such Interest Determination Date shall be the CD Rate as in
effect on such Interest Determination Date. For the purposes hereof, “H.15 Daily
Update” means the daily update of H.15(519), available through the
world-wide-web site of the Board of Governors of the United States Federal
Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any
successor service. 

     

    Determination of Commercial
Paper Rate. If the Interest Rate Basis specified on the face
hereof is the Commercial Paper Rate, the Commercial Paper Rate with respect to
this Note shall be determined on each Interest Determination Date and shall be
the Money Market Yield (as defined herein) of the rate on such date for
commercial paper having the Index Maturity specified on the face hereof, as such
rate shall be published in H.15(519) under the heading “Commercial Paper
Nonfinancial,” or if not so published prior to 3:00 p.m., New York City time, on
the Interest Determination Date, the Commercial Paper Rate shall be the Money
Market Yield of the rate on such Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in H.15
Daily Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption “Commercial Paper Nonfinancial”. If such
rate is not yet available in either H.15(519) , H.15 Daily Update, or such other
recognized electronic source by 3:00 p.m., New York City time, then the
Commercial Paper Rate on such Interest Determination Date shall be calculated by
the Calculation Agent and shall be the Money Market Yield of the arithmetic mean
of the offered rates as of 11:00 a.m., New York City time, on such Interest
Determination Date for commercial paper of the Index Maturity specified on the
face hereof, placed for an industrial issuer whose bond rating is “AA,” or the
equivalent, from a nationally recognized rating agency, as quoted by three
leading dealers in commercial paper in The City of New York selected by the
Calculation Agent; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting offered rates as set forth above, the
Commercial Paper Rate with respect to such Interest Determination Date shall be
the Commercial Paper Rate in effect on such Interest Determination Date.

     

    “Money Market Yield” shall be a
yield (expressed as a percentage) calculated in accordance with the following
formula: 

     

    Money Market Yield =   D x
360     
  x 100 

     

                                           
  360 - (D x M) 

     

    where “D” refers to the applicable
per annum rate for commercial paper quoted on a bank discount basis and
expressed as a decimal and “M” refers to the actual number of days in the period
for which interest is being calculated. 

     

    Determination of Eleventh
District Cost of Funds Rate. If the Interest Rate Basis for this
Note is the Eleventh District Cost of Funds Rate, as indicated above, the
Eleventh District Cost of Funds Rate shall be determined on each applicable
Interest Determination Date and shall be the rate equal to the monthly weighted
average cost of funds for the calendar month preceding such Interest
Determination Date as set forth under the caption “11th District” on Reuters
Screen COFI/ARMS as of 11:00 a.m., San Francisco time, on such Interest
Determination Date. If such rate does not appear on Reuters Screen COFI/ARMS on
any such Interest Determination Date, the Eleventh District Cost of

     

     

     

    7 

     

    
    

     

    

    Funds Rate for such Interest
Determination Date shall be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was
most recently announced (the “Index”) by the FHLB of San Francisco as such cost
of funds for the calendar month preceding the date of such announcement. If the
FHLB of San Francisco fails to announce such rate for the calendar month next
preceding such Interest Determination Date, then the Eleventh District Cost of
Funds Rate for such Interest Determination Date will be the Eleventh District
Cost of Funds Rate in effect on such Interest Determination Date. 

     

    Determination of Federal
Funds Rate. If the Interest Rate Basis specified on the face
hereof is the Federal Funds Rate, the Federal Funds Rate with respect to this
Note shall be determined on each Interest Determination Date and shall be the
rate on such date for Federal Funds as published in H.15(519) under the heading
“Federal Funds (Effective)” as such rate is displayed on Telerate Page 120 (or
any other pages as may replace such pages on such service), or, if the rate does
not appear on Telerate Page 120 (or any other pages as may replace such pages on
such service) or is not published in H.15(519) prior to 11:00 a.m., New York
City time, on such Interest Determination Date, the Federal Funds Rate will be
the rate on such Interest Determination Date as published in H.15 Daily Update,
or such other recognized electronic source used for the purpose of displaying
such rate, under the caption “Federal Funds (Effective)”. If such rate does not
appear on Telerate Page 120 (or any other pages as may replace such pages on
such service) or is not published in H.15(519), H.15 Daily Update or such other
recognized electronic source by 3:00 p.m., New York City time, the Federal Funds
Rate for such Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction in
overnight United States dollar Federal funds as of 11:00 a.m., New York City
time, on such Interest Determination Date arranged by three leading brokers of
Federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if fewer than three brokers are providing the
aforesaid quotes, the Federal Funds Rate with respect to such Interest
Determination Date shall be the Federal Funds Rate in effect on such Interest
Determination Date. 

     

    Determination of
LIBOR. If the Interest Rate Basis specified on the face hereof is
LIBOR, LIBOR with respect to this Note shall be determined on each Interest
Determination Date as follows: 

     

    (i) LIBOR will be either (a) if
fewer than two offered rates appear on the Designated LIBOR Page, the rate for
deposits in the London interbank market in the Designated LIBOR Currency (as
defined below) having the Index Maturity designated on the face hereof
commencing on the second Business Day immediately following such Interest
Determination Date (or, if pounds sterling is the Designated LIBOR Currency,
beginning on such date or, if euro is the Designated LIBOR Currency, beginning
on the second TARGET Settlement Day immediately after such date), that appears
on the Designated LIBOR Page (as defined below) as of 11:00 a.m., London time,
on that Interest Determination Date, or (b) if at least two offered rates
appear on the Designated LIBOR Page, the arithmetic mean of the offered rates
for deposits in the London interbank market in the Designated LIBOR Currency
having the Index Maturity designated on the face hereof and commencing on the
second Business Day immediately following such Interest Determination Date, (or,
if pounds sterling is the Designated LIBOR Currency, beginning on such date or,
if euro is the Designated LIBOR Currency, beginning on the second TARGET
Settlement Day immediately after such date), that appears on the Designated
LIBOR Page (as defined below) that appear on the Designated LIBOR Page as of
11:00 a.m., London time, on such Interest Determination Date, if at least two
such offered rates on such Designated LIBOR Page. If fewer than two offered
rates appear, or no rate appears, as applicable, LIBOR in respect of such
Interest Determination Date will be determined as if the parties had specified
the rate described in clause (ii) below. 

     

    (ii) If no rate appears on the
applicable Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered quotation
for deposits in the Designated LIBOR Currency for the period of the Index
Maturity designated on the face hereof, commencing on the second Business Day
(or if pounds sterling is the Designated LIBOR Currency, commencing on such
Interest Determination Date or, if euro is the Designated LIBOR Currency,
beginning on the second TARGET Settlement Day immediately after such date)
immediately following such Interest Determination Date, to prime banks in the
London interbank market at approximately 11:00 a.m., London time, on such
Interest Determination Date and in a principal amount that is representative for
a single transaction in such Designated LIBOR Currency in such market at such
time. If at least two such 

     

     

     

    8 

     

    
    

     

    

    quotations are provided, LIBOR
determined on such Interest Determination Date will be the arithmetic mean of
such quotations. If fewer than two quotations are provided, LIBOR determined on
such Interest Determination Date will be the arithmetic mean of the rates quoted
at approximately 11:00 a.m. (or such other time specified on the face hereof),
New York City time, on such Interest Determination Date by three major banks
(one of which may be an affiliate of the calculation agent) in the Principal
Financial Center selected by the calculation agent. The rates will be for loans
in the Designated LIBOR Currency to leading European banks having the Index
Maturity designated in the applicable Final Terms or Securities Note (as the
case may be) beginning on the second London Business Day after that date (or, if
pounds sterling is the Designated LIBOR Currency, commencing on such date or, if
euro is the Designated LIBOR Currency, beginning on the second TARGET Settlement
Day immediately after such date) and in a Representative Amount; provided, however, that if the
banks so selected by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such Interest Determination
Date will be LIBOR in effect on such Interest Determination Date. 

     

    “Designated LIBOR
Currency” means the currency (including composite currencies and
euro) specified on the face hereof as the currency with respect to which LIBOR
shall be calculated. If no such currency is specified on the face hereof, the
Designated LIBOR Currency shall be U.S. dollars. 

     

    “Designated LIBOR
Page” means Capital Markets Report Screen LIBOR01 of Reuters, or
any other page as may replace such page on such service. 

     

    Determination of
EURIBOR. If the Interest Rate Basis specified on the face hereof
is EURIBOR, EURIBOR with respect to this Note shall be determined on each
Interest Determination Date and shall be the rate for deposits in euro having
the Index Maturity designated on the face hereof that appears on the Designated
EURIBOR Page as of 11:00 a.m., Brussels time, on that Interest Determination
Date. If such rate does not appear on the Designated EURIBOR Page as of 11:00
a.m., Brussels time, on that Interest Determination Date, then the Calculation
Agent will request the principal offices of four major banks (one of which may
be an affiliate of the Calculation Agent) in the Euro-zone selected by the
Calculation Agent to provide such bank’s offered quotation to prime banks in the
Euro-zone interbank market for deposits in euro having the Index Maturity
designated on the face hereof as of 11:00 a.m., Brussels time, on such Interest
Determination Date and in a Representative Amount. If at least two quotations
are provided, EURIBOR determined on such Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
EURIBOR determined on such Interest Determination Date will be the arithmetic
mean of the rates quoted by major banks (which may include an affiliate of the
Calculation Agent) in the Euro-zone, selected by the Calculation Agent, at
approximately 11:00 a.m., Brussels time, on the Interest Determination Date for
loans in euro to leading European banks for a period of time corresponding to
the Index Maturity designated on the face hereof and in a Representative Amount.
If no rates are quoted by major banks, EURIBOR for such Interest Determination
Date will be EURIBOR in effect for such Interest Determination Date. “Euro-zone”
means the area encompassed by member states in the European Union that are
participating in the third stage of European Economic and Monetary Union
pursuant to the Treaty establishing the European Communities, as amended by the
Treaty on European Union. 

     

    Determination of Prime
Rate. If the Interest Rate Basis specified on the face hereof is
the Prime Rate, the Prime Rate with respect to this Note shall be determined on
each Interest Determination Date and shall be the rate on such date as published
in H.15(519) under the heading “Bank Prime Loan”, or if not so published by 3:00
p.m., New York City time, on such Interest Determination Date, the Prime Rate
will be the rate as published on such Interest Determination Date in the H.15
Daily Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption “Bank Prime Loan”. If such rate is not
published in H.15(519), H.15 Daily Update or such other recognized electronic
source, then the Prime Rate will be the arithmetic mean (rounded upwards, if
necessary, to the next higher one-hundred thousandth of a percentage point) of
the rates of interest publicly announced by each bank named on the Reuters
Screen U.S. Prime 1 Page (as defined below) as such bank’s prime rate or base
lending rate as in effect for such Interest Determination Date as quoted on the
Reuters Screen U.S. Prime 1 Page on such interest Determination Date, or, if
fewer than four, but more than one, such rates appear on the Reuters Screen U.S.
Prime 1 Page for such Interest Determination Date, the rate shall be the
arithmetic mean of the prime rates quoted on the basis of actual number of days
in the year divided by 360 as of the close of business on such Interest
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent 

     

     

     

    9 

     

    
    

     

    

    from which quotations are requested.
For purposes of making the foregoing determination, each change in the prime
rate or base lending rate of any bank so announced by such bank will be
effective as of the effective date of the announcement or, if no effective date
is specified, as of the date of the announcement. If fewer than two such
quotations are provided, the Prime Rate will be calculated by the Calculation
Agent and will be determined as the arithmetic mean on the basis of the prime
rates or base lending rates quoted in The City of New York by the appropriate
number of substitute banks or trust companies organized and doing business under
the laws of the United States or any state thereof, each having total equity
capital of at least $500 million and being subject to supervision or examination
by a federal or state authority, selected by the Calculation Agent to quote such
rate or rates; provided, however, that if the banks or trust companies so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Prime Rate with respect to such Interest Determination Date will be the
Prime Rate in effect on such Interest Determination Date. 

     

    Determination of Treasury
Rate. If the Interest Rate Basis specified on the face hereof is
the Treasury Rate, the Treasury Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate applicable
to the most recent auction of direct obligations of the United States (“Treasury
Bills”) having the Index Maturity specified on the face hereof, as it appears
under the caption “[HIGH RATE]” on page 56 or page 57 of Telerate (or any other
pages that may replace such pages on such service) or if not so published by
3:00 p.m., New York City time, on such Interest Determination Date, the auction
average rate on such Interest Determination Date (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury Bills
having the Index Maturity specified on the face hereof are not published or
reported as provided above by 3:00 p.m., New York City time, on such Interest
Determination Date, or if no such auction is held in the five Business Days
preceding such Interest Determination Date, then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of such Treasury bills having the specified Index
Maturity as published in H.15(519) under the caption “U.S. Government Securities
Treasury Bills [Auction high].” If such rate is not so published in H.15(519) by
3:00 p.m., New York City time, on the related Interest Determination Date, the
rate on such Interest Determination Date of such Treasury bills will be as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption “U.S. Government
Securities/Treasury Bills/[Auction high]” on such Interest Determination Date If
such rate is not yet published in H.15(519), H.15 Daily Update or another
recognized electronic source on such Interest Determination Date, then the
Treasury Rate will be a yield to maturity (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such Interest Determination
Date, of three leading primary United States government securities dealers
selected by the Calculation Agent for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified on the face hereof;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting bid rates as mentioned in this sentence, the Treasury Rate
with respect to such Interest Determination Date will be the Treasury Rate in
effect on such Interest Determination Date. 

     

    Notwithstanding the foregoing, the
interest rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, specified on the face
hereof. The Calculation Agent shall calculate the interest rate hereon in
accordance with the foregoing on or before each Interest Determination Date. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States Federal
law of general application. 

     

    At the request of the holder hereof,
the Calculation Agent will provide to the holder hereof the interest rate hereon
then in effect and, if determined, the interest rate that will become effective
as of the next Interest Reset Date. 

     

    Interest payments on this Note will
equal the amount of interest accrued from and including the next preceding
Interest Payment Date in respect of which interest has been paid (or from and
including the date of issue of the predecessor global Note, if no interest has
been paid) to but excluding the related Interest Payment Date; provided, however, that if the
Interest Reset Period with respect to this Note is daily or weekly, each
interest payment will include interest accrued from and including the date of
issue of the predecessor global Note or from but excluding the fifteenth
calendar day preceding the next preceding Interest Payment Date (whether or not
such fifteenth calendar day is a 

     

     

     

    10 

     

    
    

     

    

    Business Day) to which interest has
been paid, as the case may be, through and including the fifteenth calendar day
preceding the applicable Interest Payment Date (whether or not such fifteenth
calendar day is a Business Day), unless otherwise specified on the face hereof;
and provided,
further, that
the interest payment with respect to this Note made on the Maturity Date will
include interest accrued to but excluding such Maturity Date. 

     

    Unless otherwise specified on the
face hereof, the day count fraction in respect of the calculation of an amount
of interest on this Note for any period of time (the “Calculation Period”) will
(a) in the case of this Note being denominated in U.S. Dollars be
Actual/360 or (b) in the case of this Note being denominated in any other
Specified Currency, be Actual/Actual. 

     

    If a Day Count Fraction is specified
above: 

     

    (a) “Actual/Actual” or “Actual/Actual (ISDA)” means
the actual number of days in the Interest Reset Period divided by 365 (or, if
any proportion of that Interest Reset Period falls in a leap year, the sum of
(A) the actual number of days in that portion of the Interest Reset Period
falling in a leap year divided by 366 and (B) the actual number of days in
that portion of the Interest Reset Period falling in a non-leap year divided by
365); 

     

    (b) “Actual/365 (Fixed)” means the
actual number of days in the Interest Reset Period divided by 365; 

     

    (c) “Actual/360” means the actual
number of days in the Interest Reset Period divided by 360; 

     

    (d) “30/360”, “360/360” or “Bond Basis” means the number
of days in the Interest Reset Period divided by 360, calculated on a formula
basis as follows: 

     

    Day Count Fraction = [360 x (Y2 – Y1)] + [30 x
(M2 – M1)] + (D2 – D1) 

     

    360 

     

    where: 

     

    “Y1” is the year, expressed as a
number, in which the first day of the Interest Reset Period falls; 

     

    “Y2” is the year, expressed as a
number, in which the day immediately following the last day of the Interest
Reset Period falls; 

     

    “M1” is the calendar month, expressed
as a number, in which the first day of the Interest Reset Period falls;

     

    “M2” is the calendar month, expressed
as a number, in which the day immediately following the last day of the Interest
Reset Period falls; 

     

    “D1” is the first calendar day,
expressed as a number, of the Interest Reset Period, unless such number is 31,
in which case D1 will be 30; and 

     

    “D2” is the calendar day, expressed as
a number, immediately following the last day included in the Interest Reset
Period, unless such number would be 31 and D1 is greater than 29, in which case
D2 will be 30; 

     

    (e) “30E/360” or “Eurobond Basis” means the
number of days in the Interest Reset Period divided by 360, calculated on a
formula basis as follows: 

     

    Day Count Fraction = [360 x (Y2 – Y1)] + [30 x
(M2 – M1)] + (D2 – D1) 

     

                            360

     

    where: 

     

    “Y1” is the year, expressed as a
number, in which the first day of the Interest Reset Period falls; 

     

     

     

    11 

     

    
    

     

    

    “Y2” is the year, expressed as a
number, in which the day immediately following the last day of the Interest
Reset Period falls; 

     

    “M1” is the calendar month,
expressed as a number, in which the first day of the Interest Reset Period
falls; 

     

    “M2” is the calendar month,
expressed as a number, in which the day immediately following the last day of
the Interest Reset Period falls; 

     

    “D1” is the first calendar day,
expressed as a number, of the Interest Reset Period, unless such number would be
31, in which case D1 will be 30; and 

     

    “D2” is the calendar day, expressed
as a number, immediately following the last day included in the Interest Reset
Period, unless such number would be 31, in which case D2 will be 30; and

     

    (f) “30E/360 (ISDA)” means the
Final Terms, the number of days in the Interest Reset Period divided by 360,
calculated on a formula basis as follows: 

     

    Day Count Fraction = [360 x (Y2 – Y1)] + [30 x
(M2 – M1)] + (D2 – D1) 

     

                            360

     

    where: 

     

    “Y1” is the year, expressed as a
number, in which the first day of the Interest Reset Period falls; 

     

    “Y2” is the year, expressed as a
number, in which the day immediately following the last day of the Interest
Reset Period falls; 

     

    “M1” is the calendar month,
expressed as a number, in which the first day of the Interest Reset Period
falls; 

     

    “M2” is the calendar month,
expressed as a number, in which the day immediately following the last day of
the Interest Reset Period falls; 

     

    “D1” is the first calendar day,
expressed as a number, of the Interest Reset Period, unless (i) that day is
the last day of February or (ii) such number would be 31, in which case D1
will be 30; and 

     

    “D2” is the calendar day, expressed
as a number, immediately following the last day included in the Interest Reset
Period, unless (i) that day is the last day of February but not the
Maturity Date or (ii) such number would be 31, in which case D2 will be 30.

     

    If the interest rate on this Note
may be calculated with reference to two or more Interest Rate Bases, the accrued
interest factor will be calculated in each period by selecting one such Interest
Rate Basis for such period. For these calculations, the interest rate in effect
on any Interest Reset Date will be the new reset rate. 

     

    All percentages resulting from any
calculation will be to the nearest one hundred-thousandth of a percentage point,
with five one millionths of a percentage point rounded upwards (e.g., 9.9876545% (or
..09876545) would be rounded to 9.87655% (or.0987655), and all dollar amounts
used in or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upward). 

     

    If any Interest Payment Date other
than the Maturity Date would otherwise be a day that is not a Business Day, such
Interest Payment Date will be postponed to the next succeeding Business Day,
except that such Business Day falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day. If the
Maturity Date falls on a day that is not a Business Day, the required payment of
principal, premium, if any, and interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on such payment for the period from and after the Maturity Date to the
date of such payment on the next succeeding Business Day. 

     

     

     

    12 

     

    
    

     

    

    [This Note is unsecured and ranks
paripassu with all other
unsecured and unsubordinated indebtedness of the Company/This Note is a
subordinate Note and [insert
applicable subordination provisions.]]5 

     

    This Note has been issued in bearer
form (a “Bearer Note”), with Coupons, if any, and any Note or Notes issued upon
transfer or exchange hereof is issuable as a Bearer Note, with Coupons, if any,
attached in such denominations of the Specified Currency as are indicated on the
face hereof or (if so specified on the face hereof) as a Note in fully
registered form, without coupons (a “Registered Note”), in such denominations of
the Specified Currency indicated on the face hereof. 

     

    This Note may be transferred by
delivery. If so specified on the face hereof, then, at the option of the holder
of this Note, and subject to the terms of the Fiscal Agency Agreement, this Note
(with all unmatured Coupons, and all matured Coupons in default) will be
exchangeable at the option of the holder hereof into Registered Notes of any
authorized denominations of like tenor and in an equal aggregate principal
amount, in accordance with the provisions of the Fiscal Agency Agreement, at the
corporate trust office of The Bank of New York (successor to JPMorgan Chase
Bank, N.A.), which initially has been appointed registrar for the Registered
Notes or at the office of any transfer agent appointed by the Company for such
purpose. If this Note is surrendered in exchange for Registered Notes after the
close of business at any such office on (i) any record date for the payment
of interest (a “Regular Record Date”) on a Registered Note on an Interest
Payment Date and before the opening of business at such office on the relevant
Interest Payment Date, or (ii) any record date to be established for the
payment of defaulted interest on a Registered Note (a “Special Record Date”) and
before the opening of business at such office on the related proposed date for
payment of defaulted interest, this Note shall be surrendered without the Coupon
relating to such date for payment of interest. This Note may also be exchanged
for other definitive Bearer Notes with Coupons, if any, in other authorized
denominations, in an equal aggregate principal amount, in accordance with the
provisions of the Fiscal Agency Agreement, at the offices of the Fiscal and
Paying Agent or at the office of any transfer agent designated by the Company
for such purpose. All such exchanges of Notes and Coupons will be made free of
charge, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in connection therewith. The date of surrender of
any Note or Coupon delivered upon any exchange or transfer of Notes or Coupons
shall be such that no gain or loss of interest results from such exchange or
transfer. 

     

    If this Note is to be redeemed, the
Company shall not be required to issue or exchange this Note for a period of 15
days preceding the date fixed for redemption. 

     

    In case any Note shall at any time
become mutilated, destroyed, lost or stolen, or is apparently destroyed, lost or
stolen, and such Note or evidence of the loss, theft or destruction thereof
(together with the indemnity hereinafter referred to and such other documents or
proof as may be required in the premises) shall be delivered to the Fiscal and
Paying Agent, a new Note of like tenor will be issued by the Company in exchange
for the Note so mutilated or defaced, or in lieu of the Note so destroyed or
lost or stolen, but, in the case of any destroyed or lost or stolen Note only
upon receipt of evidence satisfactory to the Fiscal and Paying Agent and the
Company that such Note was destroyed or lost or stolen and, if required, upon
receipt also of an indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen. 

     

    The Fiscal Agency Agreement provides
that if an Event of Default (as defined in the Fiscal Agency Agreement) with
respect to the Series of which this Note forms a part, shall have occurred and
be continuing, the holder hereof, by notice in writing to the Company and to the
Fiscal and Paying Agent, may declare the principal of this Note and the interest
accrued hereon to be due and payable immediately. 

     

    Notes of the Series of which this
Note forms a part may be redeemed, at the option of the Company, as a whole but
not in part, at any time prior to maturity, upon the giving of a notice of
redemption as described below, at a redemption price equal to 100% of the
principal amount thereof, together with accrued interest to the date fixed for
redemption, or, in the case of Original Issue Discount Notes, at 100% of the
portion of the face amount thereof that has 

     

     

     

    
    

     

    
      	
              5

               

            	
              insert as applicable as set
      out in the applicable Final Terms or Securities Note (as the case may be)
      

               

            

    

     

     

    13 

     

    
    

     

    

    accrued to the date of redemption,
if the Company determines that, as a result of any change in or amendment to the
laws (or any regulations or rulings promulgated thereunder) of the United States
or of any political subdivision or taxing authority thereof or therein affecting
taxation, or any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
becomes effective on or after the Tax Redemption Date specified on the face
hereof, the Company has or will become obligated to pay Additional Amounts (as
defined below) with respect to the Notes as described below. Prior to the giving
of any notice of redemption pursuant to this paragraph, the Company shall
deliver to the Fiscal and Paying Agent (i) a certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company to so
redeem have occurred, and (ii) an opinion of counsel satisfactory to the
Fiscal and Paying Agent to such effect based on such statement of facts;
provided that no such notice of redemption shall be given earlier than 90 days
prior to the earliest date on which the Company would be obligated to pay such
Additional Amounts if a payment in respect of the Notes were then due.

     

    Notice of redemption will be given
not less than 30 nor more than 60 days prior to the date fixed for redemption,
which date and the applicable redemption price will be specified in the notice.
Such notice will be given in accordance with “Notices” as defined below.

     

    If the Company shall determine that
any payment made outside the United States by the Company or any Paying Agent of
principal or interest[, including original issue discount,]6 due in respect of any Bearer Notes
of the Series of which this Note forms a part would, under any present or future
laws or regulations of the United States, be subject to any certification,
identification or other information reporting requirement of any kind, the
effect of which requirement is the disclosure to the Company, any Paying Agent
or any governmental authority of the nationality, residence or identity of a
beneficial owner of such Bearer Note or interest coupon who is a United States
Alien (other than such a requirement (a) which would not be applicable to a
payment made by the Company or any one of its Paying Agents (i) directly to
the beneficial owner or (ii) to a custodian, nominee or other agent of the
beneficial owner, or (b) which can be satisfied by such custodian, nominee
or other agent certifying to the effect that such beneficial owner is a United
States Alien, provided that in each case referred to in clauses (a)(ii) and
(b) payment by such custodian, nominee or agent to such beneficial owner is
not otherwise subject to any such requirement), the Company shall redeem the
Bearer Notes, in whole, at a redemption price equal to 100% of the principal
amount thereof, together with accrued interest to the date fixed for redemption
(or, in the case of Original Issue Discount Notes, at 100% of the portion of the
face amount thereof that has accrued to the date of redemption) or, at the
election of the Company if the conditions of the next succeeding paragraph are
satisfied, pay the additional amounts specified in such paragraph. The Company
shall make such determination and election as soon as practicable and publish
prompt notice thereof (the “Determination Notice”) stating the effective date of
such certification, identification or other information reporting requirements,
whether the Company will redeem the Bearer Notes of such Series, or whether the
Company has elected to pay the Additional Amounts specified in the next
succeeding paragraph, and (if applicable) the last date by which the redemption
of the Bearer Notes must take place, as provided in the next succeeding
sentence. If the Company redeems the Bearer Notes, such redemption shall take
place on such date, not later than one year after the publication of the
Determination Notice, as the Company shall elect by notice to the Fiscal and
Paying Agent at least 60 days prior to the date fixed for redemption. Notice of
such redemption of the Bearer Notes will be given to the holders of the Bearer
Notes not more than 60 nor less than 30 days prior to the date fixed for
redemption. Such redemption notice shall include a statement as to the last date
by which the Bearer Notes to be redeemed may be exchanged for Registered Notes.
Notwithstanding the foregoing, the Company shall not so redeem the Bearer Notes
if the Company shall subsequently determine, not less than 30 days prior to the
date fixed for redemption, that subsequent payments would not be subject to any
such requirement, in which case the Company shall publish prompt notice of such
determination and any earlier redemption notice shall be revoked and of no
further effect. The right of any of the holders of Bearer Notes called for
redemption pursuant to this paragraph to exchange such Bearer Notes for
Registered Notes will terminate at the close of business of the Fiscal and
Paying Agent on the fifteenth day prior to the date fixed for redemption, and no
further exchanges of such Series of Bearer Notes for Registered Notes shall be
permitted. 

     

    If and so long as the certification,
identification or other information reporting requirements referred to in the
preceding paragraph would be fully satisfied by payment of a backup withholding
tax or similar charge, the Company 

     

     

     

    
    

     

    
      	
              6

               

            	
              Include if Notes are original
      issue discount Notes. 

               

            

    

     

     

    14 

     

    
    

     

    

    may elect to pay as Additional
Amounts such amounts as may be necessary so that every net payment made outside
the United States following the effective date of such requirements by the
Company or any Paying Agent of principal or interest, [including original issue
discount,]7 due in respect of any Bearer Note
or any interest coupon of which the beneficial owner is a United States Alien
(but without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority, with respect to the payment of such additional amounts),
after deduction or withholding for or on account of such backup withholding tax
or similar charge (other than a backup withholding tax or similar charge which
(i) would not be applicable in the circumstances referred to in the second
parenthetical clause of the first sentence of the preceding paragraph, or
(ii) is imposed as a result of the presentation of such Bearer Note or
interest coupon for payment more than 15 calendar days after the date on which
such payment becomes due and payable or on which payment thereof is duly
provided for, whichever occurs later), will not be less than the amount provided
for in such Bearer Note or interest coupon to be then due and payable. In the
event the Company elects to pay Additional Amounts pursuant to this paragraph,
the Company shall have the right to redeem the Bearer Notes of such Series in
whole at any time pursuant to the applicable provisions of the immediately
preceding paragraph and the redemption price of such Bearer Notes shall not be
reduced for applicable withholding taxes. If the Company elects to pay
Additional Amounts pursuant to this paragraph and the condition specified in the
first sentence of this paragraph should no longer be satisfied, then the Company
shall redeem the Bearer Notes of such Series in whole, pursuant to the
applicable provisions of the immediately preceding paragraph. 

     

    The Company will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
“Additional Amounts”) to the holder of any Note or of any coupon, if any, who is
a United States Alien as may be necessary in order that every net payment of the
principal of, premium and interest, including original issue discount, on such
Note and any other amounts payable on such Note, after withholding for or on
account of any present or future tax, assessment or governmental charge imposed
upon or as a result of such payment by the United States (or any political
subdivision or taxing authority thereof or therein), will not be less than the
amount provided for in such Note or coupon, if any, to be then due and payable.
However, the Company will not be required to make any payment of Additional
Amounts to any such holder for or on account of: 

     

    (a) any such tax, assessment or
other governmental charge which would not have been so imposed but for
(i) the existence of any present or former connection between such holder
(or between a fiduciary, settlor, beneficiary, member or shareholder of such
holder, if such holder is an estate, a trust, a partnership or a corporation)
and the United States, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, member or shareholder) being or having been a
citizen or resident thereof or being or having been engaged in a trade or
business or present therein or having, or having had, a permanent establishment
therein or (ii) the presentation by the holder of any such Note or coupon,
if any, for payment on a date more than 15 calendar days after the date on which
such payment became due and payable or on the date on which payment thereof is
duly provided for, whichever occurs later; 

     

    (b) any estate, inheritance, gift,
sales, transfer or personal property tax or any similar tax, assessment or
governmental charge; 

     

    (c) any tax, assessment or other
governmental charge imposed by reason of such holder’s past or present status as
a personal holding company or foreign personal holding company or controlled
foreign corporation or passive foreign investment company with respect to the
United States or as a corporation which accumulates earnings to avoid United
States federal income tax or as a private foundation or other tax-exempt
organization; 

     

    (d) any tax, assessment or other
governmental charge which is payable otherwise than by withholding from payments
on or in respect of any Note; 

     

    (e) any tax, assessment or other
governmental charge which would not have been imposed but for the failure to
comply with certification, information or other reporting requirements

     

     

     

    
    

     

    
      	
              7

               

            	
              Include if Notes are original
      issue discount Notes. 

               

            

    

     

     

    15 

     

    
    

     

    

    concerning the nationality,
residence or identity of the holder or beneficial owner of such Note, if such
compliance is required by statute or by regulation of the United States or of
any political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other
governmental charge; 

     

    (f) any tax, assessment or other
governmental charge imposed by reason of such holder’s past or present status as
the actual or constructive owner of 10% or more of the total combined voting
power of all classes of stock entitled to vote of the Company or as a direct or
indirect subsidiary of the Company; or 

     

    (g) any tax, assessment or other
governmental charge required to be deducted or withheld by any Paying Agent from
a payment on a Note or coupon, if such payment can be made without such
deduction or withholding by any other Paying Agent; or 

     

    (h) any combination of items (a),
(b), (c), (d), (e), (f) and (g); 

     

    nor shall Additional Amounts be paid
with respect to any payment on a Note to a United States Alien who is a
fiduciary or partnership or other than the sole beneficial owner of such payment
to the extent such payment would be required by the laws of the United States
(or any political subdivision thereof) to be included in the income, for tax
purposes, of a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner who would not have been entitled to
the Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of such Note. 

     

    The Company will not be required to
make any payment of Additional Amounts to any holder for or on the account of :

     

     

     

    
      	 	(a)	any tax, duty, assessment or other governmental charge required to
      be withheld by any Paying Agent from any payment of principal of, or
      interest on, any Note, if such payment can be made without such
      withholding by any other Paying Agent in a member state of the European
      Union; or 

    

     

     

    
      	 	(b)	any tax, duty, assessment or other governmental charge required to
      be imposed or withheld on a payment to an individual and such deduction or
      withholding is required to be made pursuant to any European Union
      Directive on the taxation of savings or any law implementing or complying
      with, or introduced in order to conform to, such Directive.
  

    

    The Fiscal Agency Agreement provides
that the Company will not merge or consolidate with any other corporation or
sell, convey, transfer or otherwise dispose of all or substantially all of its
properties to any other corporation, unless (i) either the Company shall be
the continuing corporation or the successor corporation (if other than the
Company) (the “successor corporation”) shall be a corporation organized under
the laws of the United States of America or of a state thereof and such
successor corporation shall expressly assume the due and punctual payments of
all amounts due under this Note and the due and punctual performance of all of
the covenants and obligations of the Company under this Note by supplemental
agreement satisfactory to the Fiscal and Paying Agent executed and delivered to
such Fiscal and Paying Agent by the successor corporation and the Company and
(ii) the Company or such successor corporation, as the case may be, shall
not, immediately after such merger or consolidation, or such sale, conveyance,
transfer or other disposition, be in default in the performance of any such
covenant or obligation. Upon any such merger or consolidation, sale, conveyance,
transfer or other disposition, such successor corporation shall succeed to and
be substituted for, and may exercise every right and power of and shall be
subject to all the obligations of, the Company under this Note, with the same
effect as if such successor corporation had been named as the Company herein,
and the Company shall be released from its liability under this Note and under
the Fiscal Agency Agreement. 

     

    The Fiscal Agency Agreement permits
the Company, when authorized by resolution of the Board of Directors, and the
Fiscal and Paying Agent, with the consent of the holders of not less than a
majority in aggregate principal amount of the Notes of the Series of which this
Note forms a part, to modify or amend the Fiscal Agency Agreement or such Notes;
provided, however, that no such
modification or amendment may, without the consent of the holders of each

     

     

     

    16 

     

    
    

     

    

    such Note affected thereby,
(i) change the stated maturity of the principal of any such Note or extend
the time for payment of interest thereon; (ii) change the amount of the
principal of an Original Issue Discount Note of such Series that would be due
and payable upon an acceleration of the maturity thereof; (iii) reduce the
amount of interest payable thereon or the amount payable thereon in the event of
redemption or acceleration; (iv) change the currency of payment of
principal of or any other amounts payable on any such Note; (v) impair the
right to institute suit for the enforcement of any such payment on or with
respect to any such Note; (vi) reduce the above-stated percentage of the
principal amount of Notes of such Series the consent of whose holders is
necessary to modify or amend the Fiscal Agency Agreement or the Notes of such
Series or reduce the percentage of the Notes of such Series required for the
taking of action or the quorum required at any such meeting of holders of Notes
of such Series; or (vii) modify the foregoing requirements to reduce the
percentage of outstanding Notes of such Series necessary to waive any future
compliance or past default. 

     

    Purchasers are required to pay for
the Notes in the currency specified in the applicable Final Terms or Securities
Note (as the case may be). Payment of principal, premium, if any, and interest,
if any, on each Note will be made in immediately available funds in the
Specified Currency unless otherwise specified in the applicable Final Terms or
Securities Note (as the case may be) and except as provided below. 

     

    If specified in the applicable Final
Terms or Securities Note (as the case may be), the Company may, without the
consent of holders of Notes denominated in a Specified Currency of a member
state of the European Union, which on or after the issue date of such Notes
participates in European Economic and Monetary Union, on giving at least 30
days’ prior notice (the “Redenomination Notice”) to the holders of such Notes
and on prior notice to the Paying Agent and, if applicable, Euroclear Bank,
S.A./N.V. as operator of the Euroclear System, Clearstream Banking, société
anonyme and/or any other relevant clearing system, elect that, with effect from
the date specified in the Redenomination Notice (the “Redenomination Date”),
such Notes shall be redenominated in euro. The election will have effect as
follows: (a) the Notes shall be deemed to be redenominated into euro in the
denomination of ?0.01 with a nominal amount for each Note equal to the nominal
amount of that Note in the Specified Currency, converted into euro at the
Established Rate (defined below), provided that, if the Company determines after
consultation with the Paying Agent that the then market practice in respect of
the redenomination into euro of internationally offered securities is different
from the provisions specified above, such provisions shall be deemed to be
amended so as to comply with such market practice and the Company shall promptly
notify the holders of Notes, any stock exchange on which the Notes may be listed
and the Paying Agent of such deemed amendments; (b) save to the extent that
an Exchange Notice (defined below) has been given in accordance with paragraph
(d) below, the amount of interest due in respect of the Notes will be
calculated by reference to the aggregate nominal amount of Notes presented (or,
as the case may be, in respect of which coupons are presented) for payment by
the relevant holder and the amount of such payment shall be rounded down to the
nearest ?0.01; (c) if definitive Notes are required to be issued after the
Redenomination Date, they shall be issued at the expense of the Company in the
denominations of ?1,000, ?10,000, ?100,000 and (but only to the extent of any
remaining amounts less than ?1,000 or such smaller denominations as the Paying
Agent may approve) ?0.01 and such other denominations as the Issuer shall
determine and notify to the Noteholders; (d) if issued prior to the
Redenomination Date, all unmatured coupons denominated in the Specified Currency
(whether or not attached to the Notes) will become void with effect from the
date on which the Company gives notice (the “Exchange Notice”) that replacement
euro-denominated Notes and coupons are available for exchange (provided that
such securities are so available) and no payments will be made in respect of
them. The payment obligations contained in any Notes so issued will also become
void on that date although such Notes will continue to constitute valid exchange
obligations of the Company. New euro-denominated Notes and coupons, if any, will
be issued in exchange for Notes and coupons, if any, denominated in the
Specified Currency in such manner as the Paying Agent may specify and as shall
be notified to the holders of Notes in the Exchange Notice. No Exchange Notice
may be given less than 15 days prior to any date for payment of principal or
interest on the Notes; (e) after the Redenomination Date, all payments in
respect of the Notes and the coupons, if any, including payments of interest in
respect of periods commencing before the Redenomination Date, will be made
solely in euro as though references in the Notes to the Specified Currency were
to euro. Payments will be made in euro by credit or transfer to a euro account
outside the United States (or any other account to which euro may be credited or
transferred) specified by the payee or, at the option of the payee, by a euro
cheque mailed to an address outside the United States; (f) the applicable
Final Terms or Securities Note (as the case may be) will specify any relevant
changes to the provisions relating to interest; and (g) such other changes
shall be made as the Company may decide, after consultation with the Paying
Agent and the calculation agent (if applicable), and as may be specified in the
Redenomination Notice, to conform them to conventions then applicable to
instruments denominated in euro. For the 

     

     

     

    17 

     

    
    

     

    

    purposes hereof, “Established Rate”
means the rate for the conversion of the Specified Currency (including
compliance with rules relating to roundings in accordance with applicable
European Union regulations) into euro established by the Council of the European
Union pursuant to Article 109L(4) of the treaty establishing the European
Communities, as amended by the Treaty on European Union, and “sub-unit” means,
with respect to any Specified Currency other than euro, the lowest amount of
such Specified Currency that is available as legal tender in the country of such
Specified Currency and, with respect to euro, means one cent. 

     

    Payments of principal, premium, if
any, and interest, if any, on any Note denominated in a Specified Currency other
than U.S. dollars shall be made in U.S. dollars if, on any payment date, such
Specified Currency (a) is unavailable due to imposition of exchange
controls or other circumstances beyond the Company’s control or (b) is no
longer used by the government of the country issuing such currency or for the
settlement of transactions by public institutions in that country or within the
international banking community. Such payments shall be made in U.S. dollars on
such payment date and on all subsequent payment dates until such Specified
Currency is again available or so used as determined by the Company.

     

    Amounts so payable on any such date
in such Specified Currency shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent on the basis of the most recently
available Market Exchange Rate or as otherwise indicated in the applicable Final
Terms or Securities Note (as the case may be). The Exchange Rate Agent at the
date of the Fiscal Agency Agreement is The Bank of New York (successor to
JPMorgan Chase Bank, N.A.). Any payment required to be made on Notes denominated
in a Specified Currency other than U.S. dollars that is instead made in U.S.
dollars under the circumstances described above will not constitute a default of
any obligation of the relevant Issuer under such Notes. The “Market Exchange
Rate” with respect to any currency other than U.S. dollars means, for any day,
the noon dollar buying rate in The City of New York on such day for cable
transfers of such currency as published by the Federal Reserve Bank of New York,
or, if such rate is not published for such day, the equivalent rate as
determined by the Exchange Rate Agent. 

     

    The provisions of the two preceding
paragraphs shall not apply in the event of the introduction in the country
issuing any Specified Currency of the euro pursuant to the entry of such country
into European Economic and Monetary Union. In this situation, payments of
principal, premium, if any, and interest, if any, on any Note denominated in any
such Specified Currency shall be effected in euro at such time as is required
by, and otherwise in conformity with, legally applicable measures adopted with
reference to such country’s entry into European Economic and Monetary Union. All
references herein or in any Final Terms or Securities Note (as the case may be)
to “euro” or “?” shall be to the lawful currency of the member states of the
European Union that adopt the single currency in accordance with the treaty
establishing the European Communities, as amended. 

     

    All determinations made by the
Company or its agent shall be at such person’s sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
Company and all holders of Notes. 

     

    So long as this Note or the Coupons
shall be outstanding, the Company will cause to be maintained an office or
agency for the payment of the principal of and premium, if any, and interest on
this Note as herein provided in London, England, and in any jurisdiction
required by the rules and regulations of any stock exchange, competent authority
and/or market on which this Note may be listed and/or admitted to trading and an
office or agency in London for the transfer and exchange as aforesaid of the
Notes. The Company may designate other agencies for the payment of said
principal, premium and interest at such place or places outside the United
States (subject to applicable laws and regulations) as the Company may decide.
So long as there shall be any such agency, the Company shall keep the Fiscal and
Paying Agent advised of the names and locations of such agencies, if any are so
designated. 

     

    With respect to moneys paid by the
Company and held by the Fiscal and Paying Agent or any Paying Agent for the
payment of the principal of or interest or premium, if any, on any Note that
remain unclaimed at the end of three years after such principal, interest or
premium shall have become due and payable (whether at maturity or upon call for
redemption or otherwise), (i) the Fiscal and Paying Agent or such Paying
Agent shall notify the holders of such Notes that such moneys shall be repaid to
the Company and any person claiming such moneys shall thereafter look only to
the Company for payment thereof and (ii) such moneys shall be so repaid to
the Company. Upon such repayment all liability of the Fiscal and Paying Agent or
such Paying Agent with respect to such moneys shall thereupon cease, without,
however, limiting in any way any obligation that the Company may have to pay the
principal of or interest or premium, if any, on this Note as the same shall
become due. 

     

     

     

    18 

     

    
    

     

    

    No provision of this Note or of the
Fiscal Agency Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Note at the time, place, and rate, and in the coin or
currency, herein and in the Fiscal Agency Agreement prescribed unless otherwise
agreed between the Company and the holder of this Note. 

     

    No recourse shall be had for the
payment of the principal of, or premium, if any, or the interest on this Note,
for any claim based hereon, or otherwise in respect hereof, or based on or in
respect of the Fiscal Agency Agreement or any fiscal agency agreement
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released. 

     

    This Note and the Coupons shall for
all purposes be governed by, and construed in accordance with, the laws of the
State of New York. 

     

    As used herein: 

     

    (a) the term “Business Day” means, unless
otherwise specified in the applicable Final Terms or Securities Note (as the
case may be), any day other than a Saturday or Sunday or any other day on which
banking institutions are generally authorized or obligated by law or regulation
to close in each of (i) the Principal Financial Center of the country in
which the Company is incorporated; (ii) the Principal Financial Center of
the country of the currency in which the Notes are denominated (if the Note is
denominated in a Specified Currency other than euro); (iii) London,
England; (iv) The City of New York and (v) any Additional Business
Centre specified in the applicable Final Terms or Securities Note (as the case
may be); provided, however, that with respect to Notes denominated in euro, such
day is also a TARGET Settlement Day. For purposes of this definition, the
Principal Financial Center of the United States is New York; 

     

    (b) the term “Designated EURIBOR Page” means
Capital Markets Report Screen EURIBOR01 of Reuters, or any other page as may
replace such page on such service; 

     

    (c) the term “Notices” refers to notices to
holders of the Notes to be given by publication in one leading English language
daily newspaper with general circulation in London or, if publication in London
is not practical, such publication shall be made elsewhere in Western Europe.
Such publication is expected to be made in the Financial Times. If the
Series of which this Note forms part is listed on any stock exchange, competent
authority and/or market, notices to the holders of the Notes will be published
in a manner which complies with the rules and regulations of such stock
exchange, competent authority and/or market. Such notices will be deemed to have
been given on the date of such publication, or if published in such newspapers
on different dates, on the date of the first such publication; 

     

    (d) the term “Principal Financial Center”
means (i) the capital of the country issuing the currency in which the
Notes are denominated or (ii) the capital city of the country to which the
Designated LIBOR Currency relates, as applicable, except, in the case of
(i) or (ii) above, that with respect to the following currencies, the
“Principal Financial Center” will be as indicated below: 

     

     

     

    
      	
            	
            	
            
	
              Currency

               

            	  	
              Principal Financial
      Center

               

            
	
              United States
      Dollars

               

            	  	The City
      of New York
	
              Australian
Dollars

               

            	  	Sydney
      and Melbourne
	
              Canadian Dollars

               

            	  	Toronto
	
              New Zealand
      Dollars

               

            	  	Auckland
      and Wellington
	
              Norwegian Krone

               

            	  	Oslo
	
              South African
Rand

               

            	  	Johannesburg
	
              Swedish Krona

               

            	  	Stockholm
	Swiss
      Francs	  	Zurich

    

     

     

    19 

     

    
    

     

    

    (e) the term “Representative Amount” means a
principal amount of not less than $1,000,000 (or its foreign currency
equivalent) that in the calculation agent’s judgment is representative for a
single transaction in the relevant currency in which related Notes are issued in
such market at such time; 

     

    (f) the term “TARGET Settlement Day” means
any day on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open; 

     

    (g) the term “United States” means the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction;

     

    (h) the term “United States Alien” means a
beneficial owner of a Note that is not, for United States federal income tax
purposes, (i) a citizen or resident of the United States, (ii) a
corporation, partnership or any other entity created or organized in or under
the laws of the United States or any political subdivision thereof,
(iii) an estate the income of which is subject to United States federal
income taxation regardless of its source or (iv) a trust if a court in the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have the authority to control
all substantial decisions of the trust, or if such trust has a valid election in
effect under applicable U.S. Treasury regulations to be treated as a United
States person;. Notwithstanding the preceding sentence, to the extent provided
in Treasury regulations, certain trusts in existence on August 20, 1996,
and treated as United States persons prior to such date, that elect to continue
to be treated as United States persons, will also not be a United States Alien;
and 

     

    (i) all other terms used in this
Note which are defined in the Fiscal Agency Agreement and not otherwise defined
herein shall have the meanings assigned to them in the Fiscal Agency Agreement.

     

     

     

    20 

     

    
    

     

    

    OPTION TO ELECT REPAYMENT

     

    The undersigned hereby irrevocably
request(s) the Issuer to repay the within Note (or portion thereof specified
below) pursuant to its terms at a price equal to the principal amount thereof,
together with interest to the Optional Repayment Date, to the undersigned,
at                    
(Please print or typewrite name
and address of the undersigned). 

     

    If less than the entire principal
amount of the within Note is to be repaid, specify the portion thereof (which
shall be increments of 1,000 units of the Specified Currency indicated on the
face hereof) which the holder elects to have repaid:                    
; and specify the denomination or denominations (which shall not be less than
the minimum authorized denomination) of the Notes to be issued to the holder for
the portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being
repaid):

     

                        
.. 

     

    Date: 

     

     

     

    
      	
            
	NOTICE: The signature on
      this Option to Elect Repayment must correspond with the name as written
      upon the face of the within instrument in every particular without
      alteration or enlargement.

    

     

     

    21 

     

    
    

     

    

    SCHEDULE A

     

    AMORTIZATION SCHEDULE

     

    [INSERT IF APPLICABLE] / [NOT
APPLICABLE] 

     

    
    

     

    

    EURO MEDIUM-TERM NOTE

     

    NO.             

     

    FORM OF COUPON

     

    ANY UNITED STATES PERSON WHO HOLDS
THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME
TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF
THE INTERNAL REVENUE CODE. 

     

    GENERAL ELECTRIC CAPITAL CORPORATION

     

    EURO MEDIUM-TERM NOTE

     

     

     

    
      	
            	
            	
            
	Principal
      Amount: 	  	Coupon
      Number8            
	
            	  	    [Specified Currency]
	
            	  	Due
                          

    

    Unless the Note to which this Coupon
appertains shall have been called for previous redemption and payment thereof
duly provided for, on the date set forth hereon, GENERAL ELECTRIC CAPITAL
CORPORATION (the “Company”) will pay to bearer, upon surrender hereof at such
agencies in such places outside the United States as the Company may determine
from time to time (the “Paying Agents”), interest on the principal amount of
such Note, calculated in accordance with the terms of such Note (together with
any additional amounts in respect thereof which the Company may be required to
pay according to the terms of such Note), in such coin or currency as specified
above as at the time of payment shall be legal tender for the payment of public
and private debts. Payment on this Coupon shall be made, at the option of the
bearer hereof and subject to any applicable laws and regulations, by a check
mailed to an address outside the United States furnished by such bearer or by
wire transfer to an account maintained by the payee with a bank located outside
the United States. 

     

    GENERAL ELECTRIC CAPITAL CORPORATION

     

     

     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            	
            	
            
	
              [SEAL]

               

               

               

            	 	
            
	Attest: 	 	By	 	
               

               

            	 	
            	 	By:	 	
               

               

            
	
            	 	Title	 	
            	 	
            	 	Title	 	
            

    

     

     

    
    

     

    
      	
              8

               

            	
              The Coupon number, the
      Specified Currency and due date should appear in the right-hand section of
      the face of the Coupon. 

               

            

    

    
    

     

    

    [Form of Reverse of Coupon]

     

    Principal Paying Agent:

     

    The Bank of New York 

     

    One Canada Square 

     

    London E14 5AL, United Kingdom

     

    Paying Agents:exv10w01

 

Exhibit 10.01

CADENCE DESIGN SYSTEMS, INC.

EMPLOYMENT AGREEMENT

WITH R.L. SMITH McKEITHEN

          THIS AGREEMENT (this “Agreement”) is made effective as of April 1, 2008 (the “Effective
Date”), between CADENCE DESIGN SYSTEMS, INC., a Delaware corporation (the “Company”), and R.L.
SMITH McKEITHEN (“Executive”).

          WHEREAS, Executive is currently employed by the Company as its Senior Vice President, General
Counsel and Secretary;

          WHEREAS, the Company and Executive wish to enter into a formal employment agreement on the
terms and conditions as set forth herein outlining a different set of duties and
responsibilities; and

          WHEREAS, this Agreement supersedes the Employment Agreement entered into between the
Company and the Executive on May 18, 2004.

          NOW, THEREFORE, in consideration of the premises and of the covenants and agreements set forth
below, it is mutually agreed as follows:

1. TERM AND DUTIES.

          1.1. EFFECTIVE DATE AND TERM. The Company hereby employs Executive and Executive hereby
accepts employment pursuant to the terms and provisions of this Agreement, including but not
limited to the services set forth in Section 1.2, commencing on the Effective Date. The term of
this Agreement shall be for a period of two (2) years (“Initial Term”), with such additional one
(1) year extensions as to which the Company and Executive may mutually agree. The initial two year
term together with any extensions (and adjusted for any earlier termination of employment described
under Section 4 hereof) shall be referred to herein as the “Term.”

          1.2. SERVICES.

               (a) Executive shall have the title of Executive Vice President. Executive’s duties will be
assigned to Executive by the Company’s Chief Executive Officer (“CEO”) to whom Executive shall
directly report.

               (b) Executive shall be required to comply with all applicable company policies and procedures,
as such shall be adopted, modified or otherwise established by the Company from time to time.

          1.3. NO CONFLICTING SERVICES. During his employment with the Company, Executive agrees to
devote his productive time and best efforts to the performance of

 

 

Executive’s duties hereunder. Executive further agrees, as a condition to the performance
by the Company of each and all of its obligations hereunder, that so long as Executive is
employed by the Company or receiving compensation or any other consideration from the Company, he
will not directly or indirectly render services of any nature to, otherwise become employed by,
serve on the board of directors of, or otherwise participate or engage in any other business
without complying with the Company’s Code of Business Conduct. Nothing herein contained shall be
deemed to preclude Executive from having outside personal investments and involvement with
appropriate community activities, or from devoting a reasonable amount of time to such matters,
provided that they shall in no manner interfere with or derogate from Executive’s work for the
Company.

          1.4. OFFICE. The Company shall maintain an office for Executive at the Company’s corporate
headquarters, which currently are located in San Jose, California.

2. COMPENSATION.

          The Company shall pay to Executive, and Executive shall accept as full consideration for the
Services, compensation consisting of the following:

          2.1. BASE SALARY. The Company shall pay Executive a base salary of no less than Four Hundred
Thousand Dollars ($400,000) per year (“Base Salary”), payable in installments in accordance with
the Company’s customary payroll practices, less such deductions and withholdings required by law or
authorized by Executive.

          2.2. BONUS. Executive shall be entitled to an annual bonus with an annual target bonus of
100% of Base Salary, which as of the Effective Date shall be Four Hundred Thousand Dollars
($400,000) (the “Target Bonus”). Executive’s bonus shall be calculated as if Executive were
participating in the Company’s Senior Executive Bonus Plan or its successor (the “Bonus Plan”)
pursuant to the terms of such Bonus Plan (the criteria for earning a bonus thereunder are set
annually by the Compensation Committee). The Board or the Compensation Committee shall review the
amount of the Target Bonus from time to time, but no less frequently than annually; provided that
(i) Executive shall receive no less than the Target Bonus with respect to each fiscal year of the
Company during which Executive is employed during the entire fiscal year; and (ii) in the event
that bonuses are measured and paid to other executives at the same level as Executive in periods
shorter than a full fiscal year (a “Bonus Measurement Period”), Executive shall receive no less
than a pro-rated payment of his Target Bonus with respect to each such Bonus Measurement Period
during which Executive is employed.

          2.3. EQUITY GRANTS. Executive has previously been granted stock options and incentive stock
awards by the Company which remain in full force and effect in accordance with the terms of the
agreements documenting such grants.

          2.4. INDEMNIFICATION. In the event Executive is made, or threatened to be made, a party to
any legal action or proceeding, whether civil or criminal, by reason of the fact that Executive is
or was a director or officer of the Company or serves or served any other corporation or other
person in which the Company has an ownership interest in any capacity at the Company’s request,
Executive shall be indemnified by the Company, and the Company shall

 

 

pay Executive’s related expenses when and as incurred, all to the fullest extent not
prohibited by law, as more fully described in that Indemnification Agreement between the Company
and Executive dated as of August 4, 1999, and attached hereto as Exhibit A.

3. EXPENSES AND BENEFITS.

          3.1. REASONABLE AND NECESSARY BUSINESS EXPENSES. In addition to the compensation provided
for in Section 2 hereof, the Company shall reimburse Executive for all reasonable, customary and
necessary expenses incurred in the performance of Executive’s duties hereunder. Executive shall
account for such expenses by submitting a statement itemizing such expenses prepared in
accordance with the policy set by the Company for reimbursement of such expenses. The amount,
nature and extent of reimbursement for such expenses shall always be subject to the control,
supervision and direction of the Chief Financial Officer, the CEO and the Board, or such other
persons as may be specified from time to time by the CEO.

          3.2. BENEFITS. During Executive’s employment with the Company, pursuant to this Agreement:

               (a) Executive shall be eligible to participate in the Company’s standard U.S. health
insurance, life insurance and disability insurance plans, as such plans may be modified from time
to time; and

               (b) Executive shall be eligible to participate in the Company’s qualified and non-qualified
retirement and other deferred compensation programs pursuant to their terms, as such programs may
be modified from time to time.

          3.3. SARBANES-OXLEY ACT LOAN PROHIBITION. To the extent that any company benefit, program,
practice, arrangement, or any term of this Agreement would or might otherwise result in the
Company’s extension of a credit arrangement to Executive not permissible under the Sarbanes-Oxley
Act of 2002 (a “Loan”), the Company will use reasonable efforts to provide Executive with a
substitute for such Loan, which is lawful and of at least equal value. If this cannot be done, or
if doing so would be significantly more expensive to the Company than making a Loan, then the
Company need not make or maintain a Loan or provide a substitute for it.

4. TERMINATION OF EMPLOYMENT.

          4.1. GENERAL. Executive’s employment by the Company under this Agreement shall terminate upon
the expiration of the Term, or earlier in the following circumstances: (a) immediately upon
delivery to Executive of written notice of termination by the Company, (b) upon the specified
effective date of termination provided by written notice of termination by Executive, which notice
is received by the Company at least thirty (30) days before the specified effective date of such
termination, or (c) upon Executive’s death or Permanent Disability (as defined in Section 4.4
hereof).

               (a) In the event of a termination by the Company, including an event constituting
Constructive Termination, except where Executive is terminated for Cause (as defined in Section

 

 

4.2 hereof) and except as the result of a Permanent Disability or death, and (i) upon execution by
Executive of a release of claims substantially in the form attached hereto as Exhibit B (the
“Release”), (ii) after Executive has returned to the Company all hard and soft copies of records,
documents, materials and files in his possession or control, which contain or relate to
confidential, proprietary or sensitive information obtained by Executive in conjunction with his
employment with the Company, as well as all other Company-owned property, and (iii) subject to
Executive’s compliance with the covenants set forth in Sections 7, 8 and 9 hereof, the Company
shall provide Executive with the benefits as set forth in Section 4.7 below (to which Executive
would not otherwise be entitled).

               (b) In the event of a termination by the Executive, except as the result of a Permanent
Disability or death, and upon execution by Executive of a release of claims substantially in the
form attached hereto as Exhibit B (the “Release”) and after Executive has returned to the Company
all hard and soft copies of records, documents, materials and files in his possession or control,
which contain or relate to confidential, proprietary or sensitive information obtained by Executive
in conjunction with his employment with the Company, as well as all other Company-owned property,
the Company shall provide Executive with the benefits as set forth in Section 4.8 below (to which
Executive would not otherwise be entitled).

               (c) In the event of the termination of Executive’s employment on account of the expiration
and non-renewal of the Term, the provisions of Section 4.9 of this Agreement shall apply.

               (d) In the event of the termination of Executive’s employment on account of death or
Permanent Disability, the provisions of Section 4.10 of this Agreement shall apply.

          4.2. DEFINITION OF CAUSE. For purposes of this Agreement, “Cause” shall mean (1)
Executive’s gross misconduct or fraud in the performance of his duties under this Agreement; (2)
Executive’s conviction or guilty plea or plea of nolo contendere with respect to any felony or
act of moral turpitude; (3) Executive’s engaging in any material act of theft or material
misappropriation of company property in connection with his employment; (4) Executive’s material
breach of this Agreement, after written notice delivered to Executive of such breach and failure
to cure such breach, if curable, within thirty (30) days following delivery of such notice; (5)
Executive’s material breach of the Proprietary Information Agreement (as defined in Section 8
hereof); (6) Executive’s material failure/refusal to perform his assigned duties, and, where
such failure/refusal is curable, if such failure/refusal is not cured within thirty (30) days
following delivery of written notice thereof from the Company; or (7) Executive’s material
breach of the Company’s Code of Business Conduct as such code may be revised from time to time.

          4.3. DEFINITION OF CONSTRUCTIVE TERMINATION. For purposes of this Agreement, “Constructive
Termination” shall mean:

               (i) a material adverse change, without Executive’s written consent, in Executive’s title
causing Executive’s position to be of materially less stature or responsibility, after written
notice delivered to the Company of such change and the Company’s failure to cure such change, if
curable, within thirty (30) days following delivery of such notice;

 

 

               (ii) any change, without Executive’s written consent, to Executive’s reporting structure
causing Executive to no longer report to the CEO, or, following a Change in Control, the CEO of any
successor to the Company, after written notice delivered to the Company of such change and the
Company’s failure to cure such change, if curable, within thirty (30) days following delivery of
such notice;

               (iii) a reduction, without Executive’s written consent, in Executive’s Base Salary in effect
on the Effective Date (or such higher level as may be in effect in the future) by more than ten
percent (10%) or a reduction by more than ten percent (10%) in Executive’s stated Target Bonus in
effect on the Effective Date (or such greater Target Bonus amount as may be in effect in the
future);

               (iv) a relocation of Executive’s principal place of employment by more than thirty (30) miles,
unless Executive consents in writing to such relocation;

               (v) any material breach by the Company of any provision of this Agreement, after written
notice delivered to the Company of such breach and the Company’s failure to cure such breach, if
curable, within thirty (30) days following delivery of such notice; or

               (vi) any failure by the Company to obtain the written assumption of this Agreement by any
successor to the Company.

          4.4 DEFINITION OF PERMANENT DISABILITY. For purposes of this Agreement, “Permanent
Disability” shall mean any medically determinable physical or mental impairment that can reasonably
be expected to result in death or that has lasted or can reasonably be expected to last for a
continuous period of not less than twelve (12) months and that renders Executive unable to perform
effectively the services pursuant to this Agreement.

          4.5 CHANGE IN CONTROL.

               (a) Should there occur a Change in Control (as defined below) and if within ninety (90) days
prior to, or thirteen (13) months following, the Change in Control either (i) Executive is
terminated without Cause or (ii) Executive resigns his employment as a result of an event
constituting a Constructive Termination (as defined in Section 4.3 above), then, in exchange for
signing the Transition Agreement substantially in the form attached hereto as Exhibit C, and in
lieu of any other benefits to which Executive may be entitled hereunder, including but not limited
to Sections 4.7 and 4.8 of this Agreement, Executive shall be entitled to all of the benefits set
forth in such Exhibit C.

               (b) For purposes of this Section 4.5, a Change in Control shall be deemed to occur upon the
consummation of any one of the following events:

	 	(i)	 	any “person” (as such term is used in sections
13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing more than fifty percent

 

 

	 	 	 	(50%) of the total voting power represented by the Company’s then
outstanding voting securities;
	 
	 	(ii)	 	except pursuant to the exception applicable to
clause (iii) below, a change in the composition of the Board occurring
within a two-year period, as a result of which fewer than a majority of
the directors are Incumbent Directors (“Incumbent Directors” means
directors who either (i) are directors of the Company as of the
Effective Date, or (ii) are elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination, but
will not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the
election of directors to the Board);
	 
	 	(iii)	 	the consummation of a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation in which the holders of the Company’s outstanding voting
securities immediately prior to such merger or consolidation receive,
in exchange for their voting securities of the Company in consummation
of such merger or consolidation, securities possessing at least fifty
percent (50%) of the total voting power represented by the outstanding
voting securities of the surviving entity (or parent thereof)
immediately after such merger or consolidation; or
	 
	 	(iv)	 	the consummation of the sale or disposition by
the Company of all or substantially all the Company’s assets.

          4.6 TERMINATION FOR CAUSE. In the event Executive’s employment is terminated for Cause, then
Executive will be paid only (a) any earned but unpaid base salary and any outstanding expense
reimbursements submitted and approved pursuant to Section 3.1 hereof, and (b) other unpaid vested
amounts or benefits under Company compensation, incentive and benefit plans, in each case as of the
effective date of such termination.

          4.7 BENEFITS PAYABLE UPON TERMINATION NOT FOR CAUSE OR CONSTRUCTIVE TERMINATION. The benefits
payable pursuant to Section 4.1(a) above are as follows:

               (a) all of the unvested options and other outstanding stock awards, which are then held by
Executive, and that would have vested had Executive continued to serve as an executive of the
Company for the greater of (i) the remainder of the Initial Term (if any) or (ii) the twelve (12)
month period succeeding such termination, shall immediately vest and become exercisable within five
(5) days following the end of the Term, and there shall be no further vesting of those options or
stock awards, notwithstanding any provision in any stock grant or stock agreement to the contrary.
This acceleration will have no effect on any other provisions of the stock awards.

 

 

               (b) if Executive elects to continue coverage under the Company’s medical, dental, and vision
insurance plans pursuant to the Executive’s rights established by the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the Company will pay Executive’s COBRA premiums for the
entire period for which Executive or a qualified beneficiary of Executive is eligible to receive
such coverage pursuant to COBRA.

               (c) six months after the date of termination of employment, a lump-sum payment equal to the
greater of (i) the base salary and target bonus Executive could have earned had he remained
employed through the remainder of the Initial Term, or (ii) eight hundred thousand dollars
($800,000), less applicable tax deductions and withholdings.

          4.8 PAYMENTS AND BENEFITS PAYABLE UPON EXECUTIVE’S RESIGNATION OF EMPLOYMENT. The benefits
payable pursuant to Section 4.1(b) above are as follows:

               (a) six months after the date of termination of employment, a lump-sum payment equal to the
amount of base salary and target bonus that Executive could have earned had he remained employed
through the remainder of the Initial Term, or if the term of the Agreement has been extended, for
the remainder of the then applicable extension. The amount payable to Executive shall be reduced
by applicable tax deductions and withholdings.

               (b) if Executive elects to continue coverage under the Company’s medical, dental, and vision
insurance plans pursuant to COBRA, the Company will pay Executive’s COBRA premiums for the greater
of (i) the remainder of the Initial Term (if any) or (ii) the succeeding twelve (12) month period.

               (c) all of the unvested options and other outstanding stock awards granted to Executive prior
to February 2008, which are then held by Executive and that would have vested had Executive
continued to serve as an executive of the Company for the lesser of (i) the remainder of the
Initial Term (if any) or (ii) the succeeding twelve (12) month period, shall immediately vest and
become exercisable within five (5) days following the end of the Term, and there shall be no
further vesting of those options or stock awards, notwithstanding any provision in any stock grant
or stock agreement to the contrary. This acceleration will have no effect on any other provisions
of any of Executive’s other options and outstanding stock awards.

          4.9 ADDITIONAL BENEFITS IN THE EVENT OF THE NON-RENEWAL OF THE AGREEMENT FOLLOWING COMPLETION
OF THE INITIAL TERM. In the event that the Initial Term is not extended by mutual agreement of the
Company and Executive, upon execution by Executive of a release of claims substantially in the form
attached hereto as Exhibit B (the “Release”) and after Executive has returned to the Company all
hard and soft copies of records, documents, materials and files in his possession or control, which
contain or relate to confidential, proprietary or sensitive information obtained by Executive in
conjunction with his employment with the Company, as well as all other Company-owned property, the
Company shall provide Executive with the benefits as set forth below (to which Executive would not
otherwise be entitled).

 

 

               (a) if Executive elects to continue coverage under the Company’s medical, dental, and vision
insurance plans pursuant to COBRA, the Company will pay Executive’s COBRA premiums for the entire
period for which Executive or a qualified beneficiary of Executive is eligible to receive such
coverage pursuant to COBRA.

               (b) six months after the date of termination of employment, a lump-sum payment of $100,000,
less applicable tax deductions and withholdings.

          4.10 TERMINATION ON ACCOUNT OF DEATH OR PERMANENT DISABILITY. In the event that Executive’s
employment terminates on account of death or Permanent Disability, then Executive (or in the case
of Executive’s death, his estate, beneficiary or other successor in interest) shall receive the
following benefits:

               (a) all of the unvested options and other outstanding stock awards, which are then held by
Executive and that would have vested had Executive continued to serve as an executive of the
Company for the greater of (i) the remainder of the Initial Term (if any) or (ii) the succeeding
twelve (12) month period, shall immediately vest and become exercisable within five (5) days
following the end of the Term, and there shall be no further vesting of those options or stock
awards, notwithstanding any provision in any stock grant or stock agreement to the contrary. This
acceleration will have no effect on any other provisions of the stock awards.

               (b) if Executive and/or his qualified beneficiaries under COBRA elect to continue coverage
under the Company’s medical, dental, and vision insurance plans pursuant to COBRA, the Company will
pay the applicable COBRA premiums for the succeeding eighteen (18) month period.

               (c) within ten (10) days following the end of the Term, a lump-sum payment equal to the
greater of (i) the base salary and target bonus Executive could have earned had he remained
employed through the remainder of the Initial Term, or if the term of the Agreement has been
extended, for the remainder of the then applicable extension, or (ii) eight hundred thousand
dollars ($800,000), less applicable tax deductions and withholdings.

5. EXCISE TAX.

          In the event that any benefits payable to Executive pursuant to this Agreement or the
Transition Agreement (“Termination Benefits”) (i) constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), or any
comparable successor provisions, and (ii) but for this Section 5 would be subject to the excise tax
imposed by Section 4999 of the Code, or any comparable successor provisions (the “Excise Tax”),
then Executive’s Termination Benefits hereunder shall be either (a) provided to Executive in full,
or (b) provided to Executive as to such lesser extent which would result in no portion of such
benefits being subject to the Excise Tax, whichever of the foregoing amounts, when taking into
account applicable federal, state, local and foreign income and employment taxes, the Excise Tax,
and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such benefits may be
taxable under the Excise Tax. Unless the Company and Executive otherwise agree in writing, any
determination required under this Section 5 shall be made in

 

 

writing in good faith by a nationally recognized accounting firm selected by the Company (the
“Accountants”). In the event of a reduction of benefits hereunder, Executive shall be given the
choice of which benefits to reduce. If Executive does not provide written identification to the
Company of which benefits he chooses to reduce within ten (10) days after written notice of the
Accountants’ determination, and Executive has not disputed the Accountants’ determination, then the
Company shall select the benefits to be reduced. For purposes of making the calculations required
by this Section 5, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations concerning the application
of the Code, and other applicable legal authority. The Company and Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably request in order to
make a determination under this Section 5. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this Section 5.

          If, notwithstanding any reduction described in this Section 5, the IRS determines that
Executive is liable for the Excise Tax as a result of the receipt of any Termination Benefits, then
Executive shall be obligated to pay back to the Company, within thirty (30) days after a final IRS
determination or in the event that Executive challenges the final IRS determination, a final
judicial determination, a portion of the Termination Benefits equal to the “Repayment Amount.” The
Repayment Amount shall be the smallest such amount, if any, as shall be required to be paid to the
Company so that Executive’s net after-tax proceeds with respect to the Termination Benefits (after
taking into account the payment of the Excise Tax and all other applicable taxes imposed on such
benefits) shall be maximized. The Repayment Amount shall be zero if a Repayment Amount of more than
zero would not result in Executive’s net after-tax proceeds with respect to the Termination
Benefits being maximized. If the Excise Tax is not eliminated pursuant to this paragraph, Executive
shall pay the Excise Tax.

          Notwithstanding any other provision of this Section 5, if (1) there is a reduction in the
payment of the Termination Benefits as described in this Section 5, (2) the IRS later determines
that Executive is liable for the Excise Tax, the payment of which would result in the maximization
of Executive’s net after-tax proceeds (calculated as if Executive’s benefits had not previously
been reduced), and (3) Executive pays the Excise Tax, then the Company shall pay to Executive those
Termination Benefits which were reduced pursuant to this subsection as soon as administratively
possible after Executive pays the Excise Tax so that Executive’s net after-tax proceeds with
respect to the payment of the Termination Benefits are maximized.

6. DISPUTE RESOLUTION.

               (a) Each of the parties expressly agrees that, to the extent permitted by applicable law and
to the extent that the enforceability of this Agreement is not thereby impaired, any and all
disputes, controversies or claims between Executive and the Company arising under this Agreement
(as opposed to the Transition Agreement), except those arising under Section 6(d) hereof or under
the Proprietary Information Agreement (as defined in Section 8 hereof), shall be determined
exclusively by final and binding arbitration before a single arbitrator in accordance with the JAMS
Arbitration Rules and Procedures, or successor rules then in effect, and that judgment upon the
award of the arbitrator may be rendered in any court of competent jurisdiction. This includes,
without limitation, any and all disputes, controversies, and/or claims

 

 

arising out of or concerning Executive’s employment by the Company or the termination of his
employment or this Agreement, and includes, without limitation, claims by Executive against
directors, officers or employees of the Company, whether arising under theories of liability or
damages based on contract, tort or statute, to the full extent permitted by law. As a material part
of this agreement to arbitrate claims, the parties expressly waive all rights to a jury trial in
court on all statutory or other claims. This Section 6 does not purport to limit either party’s
ability to recover any remedies provided for by statute, including attorneys’ fees.

               (b) The arbitration shall be held in the San Jose, California metropolitan area, and shall be
administered by JAMS or, in the event JAMS does not then conduct arbitration proceedings, a
similarly reputable arbitration administrator. Under such proceeding, the parties shall select a
mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrators. Except as
provided herein, the Federal Arbitration Act shall govern the interpretation and enforcement of
such arbitration proceeding. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the State of California, or federal law, if California law is
preempted, and the arbitrator is without jurisdiction to apply any different substantive law. The
parties agree that they will be allowed to engage in adequate discovery, the scope of which will be
determined by the arbitrator, consistent with the nature of the claims in dispute. The arbitrator
shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by
any party and shall apply the standards governing such motions under the Federal Rules of Civil
Procedure. The arbitrator shall render an award that shall include a written statement of opinion
setting forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may
be entered in any court having jurisdiction thereof. The parties intend this arbitration provision
to be valid, enforceable, irrevocable and construed as broadly as possible.

               (c) The Company shall be responsible for payment of the arbitrator’s fees as well as all
administrative fees associated with the arbitration. The parties shall be responsible for their own
attorneys’ fees and costs (including expert fees and costs), except that if any party prevails on a
statutory claim that entitles the prevailing party to reasonable attorneys’ fees (with or without
expert fees) as part of the costs, the arbitrator may award reasonable attorneys’ fees (with or
without expert fees) to the prevailing party in accord with such statute.

               (d) The parties agree, however, that damages would be an inadequate remedy for the Company
in the event of a breach or threatened breach of Section 1.3 of this Agreement or any provision
of the Proprietary Information Agreement (as defined in Section 8 hereof). In the event of any
such breach or threatened breach, Cadence may, either with or without pursuing any potential
damage remedies, obtain from a court of competent jurisdiction, and enforce, an injunction
prohibiting Executive from violating Section 1.3 of this Agreement or any provision of the
Proprietary Information Agreement (as defined in Section 8 hereof) and requiring Executive to
comply with the terms of those agreements.

7. COOPERATION WITH THE COMPANY.

          Following the end of the Term for any reason (other than death), Executive shall cooperate
with the Company in all matters relating to the winding up of his pending work on behalf of the
Company and the orderly transfer of any such pending work to other employees of the Company as
may be designated by the Company. Such cooperation shall be provided by

 

 

Executive at mutually-convenient times. Executive also agrees to participate as a witness in
any litigation or regulatory proceeding to which the Company is a party at the request of the
Company upon delivery to Executive of reasonable advance notice. With respect to the
cooperation/participation described in the preceding sentences, the Company will reimburse
Executive for all reasonable expenses incurred by Executive in the course of such
cooperation/participation. Furthermore, Executive agrees to return to the Company all property of
the Company, including all hard and soft copies of records, documents, materials and files
relating to confidential, proprietary or sensitive company information in his possession or
control, as well as all other company-owned property in his possession or control, at the end of
the Term, except to the extent that retention of any of such property is necessary or desirable
or convenient in order to permit Executive to satisfy his obligations under this Section 7 or
under the Transition Agreement, after which time Executive shall promptly return all such
retained company property, except as is agreed in writing by the CEO or the Company’s chief human
resources officer.

8. PROPRIETARY INFORMATION AGREEMENT.

          The Executive’s Employee Proprietary Information and Inventions Agreement was executed on May
18, 2004, in the form attached hereto as Exhibit D (the “Proprietary Information Agreement”).

9. NON-DISPARAGEMENT COVENANT.

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

10. GENERAL RELEASE OF CLAIMS.

               (a) In consideration for the Company’s agreement to enter into this Agreement and for the
benefits provided hereunder (including substantial benefits to which Executive would not otherwise
have been entitled to in the absence of this Agreement), Executive hereby irrevocably, fully and
finally releases the Company, its parent, subsidiaries, affiliates, directors, officers, agents and
employees (“Releasees”) from all causes of action, claims, suits, demands or other obligations or
liabilities, whether known or unknown, suspected or unsuspected, that Executive ever had or now has
as of the time that Executive signs this Agreement which relate to his hiring, his employment with
the Company, the change in his employment relationship with the Company and claims asserted in
shareholder derivative actions or shareholder class actions against the Company and its officers
and Board of Directors, to the extent those derivative or class actions relate to the period during
which Executive was employed by the Company prior to the Effective Date. The claims released
include, but are not limited to, any claims arising from or related to Executive’s employment with
the Company, such as claims arising under (as amended) Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Age Discrimination in

 

 

Employment Act of 1974, the Americans with Disabilities Act, the Equal Pay Act, the Fair Labor
Standards Act, the California Fair Employment and Housing Act, the California Labor Code, the
Employee Retirement Income and Security Act of 1974 (except for any vested right Executive has to
benefits under an ERISA plan), the state and federal Worker Adjustment and Retraining Notification
Act, and the California Business and Professions Code; any other local, state, federal, or foreign
law governing employment; and the common law of contract and tort. In no event, however, shall any
claims, causes of action, suits, demands or other obligations or liabilities be released pursuant
to the foregoing if and to the extent they relate to (i) any amounts or benefits to which Executive
is or becomes entitled to pursuant to the provisions of this Agreement, (ii) claims for workers’
compensation benefits under any of the Company’s workers’ compensation insurance policies or funds;
(iii) claims related to Executive’s COBRA rights; and (iv) any rights that Executive has or may
have to be indemnified by Cadence pursuant to any contract, statute, or common law principle.

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

          Executive acknowledges that the payments provided in this Agreement constitute adequate
consideration for the release set forth in this Section 9.

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

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

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

          Executive has been given at least 21 days in which to review and consider this Agreement,
although Executive is free to accept this Agreement at any time within that 21-day period.
Executive is advised to consult with an attorney about the Agreement. If Executive accepts this
Agreement, Executive will have an additional 7 days from the date that Executive signs this
Agreement to revoke that acceptance, which Executive may effect by means of a written notice sent
to the CEO. If this 7-day period expires without a timely revocation, this Agreement will become
final and effective on the eighth day following the date of Executive’s signature, and the later of
such eighth day or April 1, 2008 will be the “Effective Date” of this Agreement.

 

 

11. GENERAL.

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

          11.2 SEVERABILITY. If for any reason a court of competent jurisdiction or arbitrator finds
any provision of this Agreement to be unenforceable, the provision shall be deemed amended as
necessary to conform to applicable laws or regulations, or if it cannot be so amended without
materially altering the intention of the parties, the remainder of the Agreement shall continue in
full force and effect as if the offending provision were not contained herein.

          11.3 NOTICES. All notices and other communications required or permitted to be given under
this Agreement shall be in writing and shall be considered effective either (a) upon personal
service or (b) upon delivery by facsimile and depositing such notice in the U.S. Mail, postage
prepaid, return receipt requested and, if addressed to the Company, in care of the CEO at the
Company’s principal corporate address, and, if addressed to Executive, at his most recent address
shown on the Company’s corporate records or at any other address which Executive may specify in
any appropriate notice to the Company, or (c) upon only depositing such notice in the U.S. Mail
as described in clause (b) of this paragraph.

          11.4 COUNTERPARTS. This Agreement may be executed by facsimile and in any number of
counterparts, each of which shall be deemed an original and all of which taken together
constitutes one and the same instrument and in making proof hereof it shall not be necessary to
produce or account for more than one such counterpart.

          11.5 ENTIRE AGREEMENT. The parties hereto acknowledge that each has read this Agreement,
understands it, and agrees to be bound by its terms. The parties further agree that this Agreement,
the exhibits to this Agreement, any existing stock option agreements or incentive stock award
agreements between the parties, and the documents, plans and policies referred to in this Agreement
(which are hereby incorporated herein by reference) constitute the complete and exclusive statement
of the agreement between the parties and supersede all proposals (oral or written), understandings,
agreements, representations, conditions, covenants, and all other communications between the
parties relating to the subject matter hereof, including but not limited to that prior employment
agreement entered into between the Company and Executive dated May 18, 2004; provided, however,
that the Proprietary Information Agreement signed by Executive on May 18, 2004, and Executive’s
agreement, made prior to the Effective Date of this Agreement, to abide by the Company’s policies,
including but not limited to the Company’s Employee Handbook, Sexual Harassment Policy and Code of
Business Conduct, remain in full force and effect and govern Executive’s conduct from the date of
execution of such agreements until the end of the Term.

          11.6 GOVERNING LAW. This Agreement shall be governed by the laws of the State of California,
without regard to its conflict of laws principles.

 

 

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

          11.8 AMENDMENTS. This Agreement, and the terms and conditions of the matters addressed in
this Agreement, may only be amended in writing executed both by the Executive and the CEO of the
Company.

          11.9 TERMINATION AND SURVIVAL OF CERTAIN PROVISIONS. This Agreement shall terminate at the
end of the Term; provided, however, that the following provisions of this Agreement shall survive
its termination: Executive’s obligations under Section 7, 8 and 9 hereof; the Company’s obligations
to provide compensation earned through the termination of the employment relationship under
Sections 2 and 3 hereof; the Company’s obligations and Executive’s obligations under Section 4
hereof; the Company’s obligations and Executive’s obligations enumerated in Section 4 of the
Transition Agreement, if applicable; the Company’s obligation to indemnify Executive pursuant to
Section 2.4 hereof and the referenced Indemnification Agreement; the dispute resolution provisions
of Section 6 hereof; the release of claims set forth in Section 10 above, and, to the extent
applicable, this Section 11.

          11.10 DEPARTMENT OF HOMELAND SECURITY VERIFICATION REQUIREMENT. If Executive has not
already done so, he will timely file all documents required by the Department of Homeland
Security to verify his identity and his lawful employment in the United States.
Notwithstanding any other provision of this Agreement, if Executive fails to meet any such
requirements promptly after receiving a written request from the Company to do so, his
employment will terminate immediately upon notice from the Company and he will not be
entitled to any compensation from the Company of any type.

          11.11 HEADINGS. The headings of the several sections and paragraphs of this Agreement are
inserted solely for the convenience of reference and are not a part of and are not intended to
govern, limit or aid in the construction of any term or provision hereof.

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

 

 

          11.13 TAX MATTERS. Notwithstanding anything in this Agreement or the Transition Agreement
to the contrary, to the extent that the Company in good faith determines that any payment
provided for in Section 4 hereof or the Transition Agreement constitutes a “deferral of
compensation” under Section 409A, no amounts shall be payable to Executive pursuant to such
provision prior to the earliest of (a) Executive’s death, (b) Executive’s Permanent Disability
(as defined in Section 4.4) or (c) the date that is six months following the date of Executive’s
“separation from service” with the Company (within the meaning of Section 409A of the Code).

          IN WITNESS WHEREOF, the parties have executed this Agreement on this 15th day of
February 2008.

	 	 	 	 	 	 	 	 	 
	CADENCE DESIGN SYSTEMS, INC.	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael J. Fister
	 	 	 	/s/ R.L. Smith McKeithen	 	 
	 

	 	 

Michael J. Fister
	 	 	 	 

R.L. Smith McKeithen
	 	 
	 	 	President & Chief Executive Officer	 	 	 	 

 

 

EXHIBIT A

INDEMNITY AGREEMENT

 

 

INDEMNITY AGREEMENT

          This Indemnity Agreement, dated as of August 4, 1999, is made by and between Cadence Design
Systems, Inc., a Delaware corporation (the “Company”), and R.L. Smith McKeithen, an Officer of the
Company (the “Indemnitee”).

RECITALS

     A. The Company is aware that competent and experienced persons are increasingly reluctant
to serve as directors or officers of corporations unless they are protected by comprehensive
liability insurance or indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the exposure frequently
bears no reasonable relationship to the compensation of such directors and officers;

     B. The statutes and judicial decisions regarding the duties of directors and officers are
often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors
and officers with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper
course of action to take;

     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be
so substantial (whether or not the case is meritorious), that the defense and/or settlement of such
litigation is often beyond the personal resources of officers and directors;

     D. The Company believes that it is unfair for its directors and officers and the directors
and officers of its subsidiaries to assume the risk of large judgments and other expenses that may
be incurred in cases in which the director or officer received no personal profit and in cases
where the director or officer was not culpable;

     E. The Company recognizes that the issues in controversy in litigation against a director
or officer of a corporation such as the Company or a subsidiary of the Company are often related to
the knowledge, motives and intent of such director or officer, that he is usually the only witness
with knowledge of the essential facts and exculpating circumstances regarding such matters and that
the long period of time which usually elapses before the trial or other disposition of such
litigation often extends beyond the time that the director or officer can reasonably recall such
matters; and may extend beyond the normal time for retirement for such director or officer with the
result that he, after retirement or in the event of his death, his spouse, heirs, executors or
administrators, may be faced with limited ability and undue hardship in maintaining an adequate
defense, which may discourage such a director or officer from serving in that position;

     F. Based upon their experience as business managers, the Board of Directors of the Company
(the “Board”) has concluded that, to retain and attract talented and experienced individuals to
serve as officers and directors of the Company and its subsidiaries and to encourage such
individuals to take the business risks necessary for the success of the Company and its
subsidiaries, it is necessary for the Company to contractually indemnify its officers and

 

 

directors and the officers and directors of its subsidiaries, and to assume for itself maximum
liability for expenses and damages in connection with claims against such officers and directors in
connection with their service to the Company and its subsidiaries, and has further concluded that
the failure to provide such contractual indemnification could result in great harm to the Company
and its subsidiaries and the Company’s shareholders;

     G. Section 145 of the General Corporation Law of Delaware, under which the Company is
organized (“Section 145”), empowers the Company to indemnify by agreement its officers, directors,
employees and agents, and persons who serve, at the request of the Company, as directors, officers,
employees or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;

     H. The Company, after reasonable investigation prior to the date hereof, has determined
that the liability insurance coverage available to the Company and its subsidiaries as of the date
hereof is inadequate and/or unreasonably expensive. The Company believes, therefore, that the
interests of the Company’s shareholders would best be served by a combination of such insurance as
the Company may obtain, or request a subsidiary to obtain, pursuant to the Company’s obligations
hereunder, and the indemnification by the Company of the directors and officers of the Company and
its subsidiaries.

     I. The Company desires and has requested the Indemnitee to serve or continue to serve as a
director or officer of the Company and/or the subsidiaries of the Company free from undue concern
for claims for damages arising out of or related to such services to the Company and/or the
subsidiaries of the Company; and

     J. The Indemnitee is willing to serve, or to continue to serve, the Company and/or the
subsidiaries of the Company, provided that he is furnished the indemnity provided for herein.

AGREEMENT

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. Definitions.

          (a) Agent. For the purposes of this Agreement, “agent” of the Company means any person who
is or was a director, officer, employee or other agent of the Company or a subsidiary of the
Company; or is or was serving at the request of, for the convenience of, or to represent the
interest of the Company or a subsidiary of the Company as a director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or other enterprise; or
was a director, officer, employee or agent of a foreign or domestic corporation which was a
predecessor corporation of the Company or a subsidiary of the Company, or was a director, officer,
employee or agent of another enterprise at the request of, for the convenience of, or to represent
the interests of such predecessor corporation.

 

 

          (b) Expenses. For purposes of this Agreement, “expenses” includes all direct and indirect
costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and
related disbursements and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense or appeal of a proceeding or
establishing or enforcing a right to indemnification under this Agreement, Section 145 or
otherwise; provided, however, that expenses shall not include any judgments, fines, ERISA excise
taxes or penalties or amounts paid in settlement of a proceeding.

          (c) Proceeding. For the purposes of this Agreement, “proceeding” means any threatened,
pending, or completed action, suit or other proceeding, whether civil, criminal, administrative,
investigative or any other type whatsoever.

          (d) Subsidiary. For the purposes of this Agreement, “subsidiary” means any corporation of
which more than 50% of the outstanding voting securities is owned directly or indirectly by the
Company, by the Company and one or more other subsidiaries, or by one or more other subsidiaries.

     2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve as an agent
of the Company, at its will (or under separate agreement, if such agreement exists), in the
capacity Indemnitee currently serves as an agent of the Company, so long as he is duly appointed or
elected and qualified in accordance with the applicable provisions of the Bylaws of the Company or
any subsidiary of the Company or until such time as he tenders his resignation in writing,
provided, however, that nothing contained in this Agreement is intended to create any right to
continued employment by Indemnitee.

     3. Maintenance of Liability Insurance.

          (a) The Company hereby covenants and agrees that, so long as the Indemnitee shall continue
to serve as an agent of the Company and thereafter so long as the Indemnitee shall be subject to
any possible proceeding by reason of the fact that the Indemnitee was an agent of the Company, the
Company, subject to Section 3(b), shall use reasonable efforts to obtain and maintain in full force
and effect director’s and officer’s liability (“D&O Insurance”) in reasonable amounts from
established and reputable insurers.

          (b) Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith that such insurance is not
reasonably available, the premium costs for such insurance are disproportionate to the amount of
coverage provided, the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or the Indemnitee is covered by similar insurance maintained by a
subsidiary of the Company.

     4. Mandatory Indemnification. The Company shall indemnify the Indemnitee:

          (a) Third Party Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in the right of the
company) by reason of the fact that he is or was an agent of the Company, or by reason of

 

 

anything done or not done by him in any such capacity, against any and all expenses and liabilities
of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) actually and reasonably incurred by him in connection
with the investigation, defense, settlement or appeal of such proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful; and

          (b) Derivative Actions. If the Indemnitee is a person who was or is a party or is threatened
to be made a party to any proceeding by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was an agent of the Company, or by reason of anything
done or not done by him in any such capacity, against any amounts paid in settlement of any such
proceeding and all expenses actually and reasonably incurred by him in connection with the
investigation, defense, settlement, or appeal of such proceeding if he acted in good faith and in
manner he reasonably believed to be in or not opposed to the best interests of the Company; except
that no indemnification under this subsection shall be made in respect of any claim, issue or
matter as to which such person shall have been finally adjudged to be liable to the Company by a
court of competent jurisdiction due to willful misconduct of a culpable nature in the performance
of his duty to the Company unless and only to the extent that the Court of Chancery or the court in
which such proceeding was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such amounts which the Court of Chancery or such other court shall deem
proper; and

          (c) Actions Where Indemnitee is Deceased. If the Indemnitee is a person who was or is a
party or is threatened to be made a party to any proceeding by reason of the fact that he is or was
an agent of the Company, or by reason of anything done or not done by him in any such capacity,
against any and all expenses and liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) actually and
reasonably incurred by him in connection with the investigation, defense, settlement or appeal of
such proceeding if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, prior to, during the pendency or after
completion of such proceeding Indemnitee is deceased, except that in a proceeding by or in the
right of the Company no indemnification shall be due under the provisions of this subsection in
respect of any claim, issue or matter as to which such person shall have been finally adjudged to
be liable to the Company, by a court of competent jurisdiction due to willful misconduct of a
culpable nature in the performance of his duty to the Company, unless and only to the extent that
the Court of Chancery or the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnify for such amounts which the Court
of Chancery or such other court shall deem proper; and

          (d) Exception for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company
shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) which have been paid directly to Indemnitee by D&O Insurance.

 

 

     5. Partial Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) incurred by him in the investigation, defense,
settlement or appeal of a proceeding but not entitled, however, to indemnification for all of the
total amount thereof, the Company shall nevertheless indemnify the Indemnitee for such total amount
except as the portion thereof to which the Indemnitee is not entitled.

     6. Mandatory Advancement of Expenses. Subject to Section 10 below, the Company shall
advance all expenses incurred by the Indemnitee in connection with the investigation, defense,
settlement or appeal of any proceeding to which the Indemnitee is a party or is threatened to be
made a party by reason of the fact that the Indemnitee is or was an agent of the Company or by
reason of anything done or not done by him in any such capacity. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Company as authorized hereby. The advances
to be made hereunder shall be paid by the Company to the Indemnitee within twenty (20) days
following delivery of a written request therefore by the Indemnitee to the Company.

     7. Notice and Other Indemnification Procedures.

          (a) Promptly after receipt by the Indemnitee of notice of the commencement of or the threat
of commencement of any proceeding, the Indemnitee shall, if the Indemnitee believes that
indemnification with respect thereto may be sought from the Company under this Agreement, notify
the Company of the commencement or threat of commencement thereof.

          (b) If, at the time of receipt of a notice of the commencement of a proceeding pursuant to
Section 7(a) hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice
of the commencement of such proceeding to the insurers in accordance with the procedures set forth
in the respective policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policies.

          (c) In the event the Company shall be obligated to advance the expenses for any proceeding
against the Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of
such proceeding, with counsel approved by the Indemnitee, upon the delivery to the Indemnitee of
written notice of its election so to do. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to
the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee
with respect to the same proceeding, provided that (i) the Indemnitee shall have the right to
employ his counsel in any such proceeding at the Indemnitee’s expense; and (ii) if (A) the
employment of counsel by the Indemnitee has been previously authorized by the Company, (B) the
Indemnitee shall have reasonably concluded that there may be a conflict of interest between the
company and the Indemnitee in the conduct of any such defense or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding, the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.

 

 

     8. Determination of Right to Indemnification.

          (a) To the extent the Indemnitee has been successful on the merits or otherwise in defense
of any proceeding referred to in Section 4(a), 4(b), or 4(c) of this Agreement or in the defense of
any claim, issue or matter described therein, the Company shall indemnify the Indemnitee against
expenses actually and reasonably incurred by him in connection with the investigation, defense or
appeal of such proceeding.

          (b) In the event that Section 8(a) is inapplicable, the Company shall also indemnify the
Indemnitee unless, and only to the extent that, the Company shall prove by clear and convincing
evidence to a forum listed in Section 8(c) below that the Indemnitee has not met the applicable
standard of conduct required to entitle the Indemnitee to such indemnification.

          (c) The Indemnitee shall be entitled to select the forum in which the validity of the
Company’s claim under Section 8(b) hereof that the Indemnitee is not entitled to indemnification
will be heard from among the following:

               (1) A quorum of the Board consisting of directors who are not parties to the proceeding for
which indemnification is being sought;

               (2) The stockholders of the Company;

               (3) Legal counsel selected by the Indemnitee, and reasonably approved by the Board, which
counsel shall make such determination in a written opinion.

               (4) A panel of three arbitrators, one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two arbitrators so
selected.

          (d) As soon as practicable, and in no event later than 30 days after written notice of the
Indemnitee’s choice of forum pursuant to Section 8(c) above, the Company shall, at its own expense,
submit to the selected forum in such manner as the Indemnitee or the Indemnitee’s counsel may
reasonably request, its claim that the Indemnitee is not entitled to indemnification; and the
Company shall act in the utmost good faith to assure the Indemnitee a complete opportunity to
defend against such claim.

          (e) If the forum listed in Section 8(c) hereof selected by Indemnitee determines that
Indemnitee is entitled to indemnification with respect to a specific proceeding, such determination
shall be final and binding on the Company. If the forum listed in Section 8(c) hereof selected by
Indemnitee determines that Indemnitee is not entitled to indemnification with respect to a specific
proceeding, the Indemnitee shall have the right to apply to the Court of Chancery of Delaware, the
court in which that proceeding is or was pending or any other court of competent jurisdiction, for
the purpose of enforcing the Indemnitee’s right to indemnification pursuant to the Agreement.

 

 

          (f) Notwithstanding any other provision in this Agreement to the contrary, the Company shall
indemnify the Indemnitee against all expenses incurred by the Indemnitee in connection with any
hearing or proceeding under this Section 8 involving the Indemnitee and against all expenses
incurred by the Indemnitee in connection with any other proceeding between the Company and the
Indemnitee involving the interpretation or enforcement of the rights of the Indemnitee under this
Agreement unless a court of competent jurisdiction finds that each of the material claims and/or
defenses of the Indemnitee in any such
proceeding was frivolous or not made in good faith.

     9. Limitation of Actions and Release of Claims. No proceeding shall be brought and no cause
of action shall be asserted by or on behalf of the Company or any subsidiary against the
Indemnitee, his spouse, heirs, estate, executors or administrators after the expiration of one year
from the act or omission of the Indemnitee upon which such proceeding is based; however, in a case
where the Indemnitee fraudulently conceals the facts underlying such cause of action, no proceeding
shall be brought and no cause of action shall be asserted after the expiration of one year from the
earlier of (i) the date the Company or any subsidiary of the Company discovers such facts, or (ii)
the date the Company or any subsidiary of the Company could have discovered such facts by the
exercise of reasonable diligence. Any claim or cause of action of the Company or any subsidiary of
the Company, including claims predicated upon the negligent act or omission of the Indemnitee,
shall be extinguished and deemed released unless asserted by filing of a legal action within such
period. This Section 9 shall not apply to any cause of action which has accrued on the date hereof
and of which the Indemnitee is aware on the date hereof, but as to which the Company has no actual
knowledge apart from the Indemnitee’s knowledge.

     10. Expectations. Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by the Indemnitee and not by way
of defense, except with respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as required under
Section 145, but such indemnification or advancement of expenses may be provided by the Company in
Specific cases if the Board of Directors finds it to be appropriate; or

          (b) Lack of Good Faith. To indemnify the Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by the Indemnitee to enforce or interpret this
Agreement, if a court of competent jurisdiction determines that each of the material assertions
made by the Indemnitee in such proceeding was not made in good faith or was frivolous; or

          (c) Unauthorized Settlements. To Indemnify the Indemnitee under this Agreement for any
amounts paid in settlement of a proceeding unless the Company consents to such settlement; or

          (d) Claims by the Company for Willful Misconduct. To indemnify or advance expenses to the
Indemnitee under this Agreement for any expenses incurred by the Indemnitee with

 

 

respect to any proceeding or claim brought by the Company against Indemnitee for willful
misconduct, unless a court of competent jurisdiction determines that each of such claims was not
made in good faith or was frivolous; or

          (e) 16(b) Actions. To indemnify the Indemnitee on account of any suit in which judgment is
rendered against Indemnitee for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the
Securities and Exchange Act of 1934 and amendments thereto or similar provisions of any federal,
state or local statutory law; or

          (f) Willful Misconduct. To indemnify the Indemnitee on account of Indemnitee’s conduct which
is finally adjudged to have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct; or

          (g) Unlawful Indemnification. To indemnify the Indemnitee if a final decision by a court
having jurisdiction in the matter shall determine that such indemnification is not lawful.

     11. Non-exclusivity. The provisions for indemnification and advancement of expenses set
forth in this Agreement shall not be deemed exclusive of any other rights which the indemnitee may
have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote of
the Company’s shareholders or disinterested directors, other agreements, or otherwise, both as to
action in his official capacity and to action in another capacity while occupying his position as
an agent of the Company, and the Indemnitee’s rights hereunder shall continue after the Indemnitee
has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors
and administrators of the Indemnitee.

     12. Interpretation of Agreement. It is understood that the parties hereto intend this
Agreement to be interpreted and enforced so as to provide indemnification to the Indemnitee to the
fullest extent now or hereafter permitted by law.

     13. Severability. If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality and
enforceability of the remaining provisions of the Agreement (including, without limitation, all
portions of any paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to Section 12 hereof.

     14. Modification And Waiver. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

 

     15. Successors and Assigns. The terms of this Agreement shall bind, and shall inure to the
benefit of, the successors and assigns of the parties hereto.

     16. Notice. All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by
the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, on the
third business day after the mailing date. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.

     17. Governing Law. This Agreement shall be governed exclusively by and construed according
to the laws of the State of Delaware, as applied to contracts between Delaware residents entered
into and to be performed entirely with Delaware.

     18. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent
to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement.

     The parties hereto have entered into this Indemnity Agreement effective as of the date first
above written.

	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	Cadence Design Systems, Inc.

2655 Seely Rd.

San Jose, CA 95134	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ H. Raymond Bingham	 	 
	 

	 	 	 	 	 	 

H. Raymond Bingham
	 	 
	 

	 	 	 	 	 	President & CEO	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ R.L. Smith Mckeithen	 	 
	 	 	 	 	 	 	 
	 	 	 	 	R.L. Smith Mckeithen	 	 
	 
	 	 
	 	 	 	 	Address: 2655 Seely Road

San Jose, CA 95134	 	 

 

 

EXHIBIT B

RELEASE AGREEMENT

 

 

RELEASE AGREEMENT

          1. GENERAL RELEASE OF CLAIMS.

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

                    i. any amounts or benefits to which Executive is or becomes entitled to pursuant to the
provisions of this Agreement or pursuant to the provisions designated in Section 11.9 of the
Employment Agreement to survive the termination of Executive’s full-time employment;

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

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

                    iv. any rights that Executive has or may have to be indemnified by Cadence pursuant to any
contract, statute, or common law principle.

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

               c. Executive acknowledges that the payments provided in his Employment Agreement constitute
adequate consideration for this release.

               d. Executive intends that this release of claims cover all claims, whether or not known to
Executive. Executive further recognizes the risk that, subsequent to the execution of this
Agreement, Executive may incur loss, damage or injury which Executive attributes to the

 

 

claims encompassed by this release. Executive expressly assumes this risk by signing this
Agreement and voluntarily and specifically waives any rights conferred by California Civil Code
section 1542 which provides as follows:

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

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

          2. REVIEW OF AGREEMENT; REVOCATION OF ACCEPTANCE. Executive has been given at least 21 days in
which to review and consider this Agreement, although Executive is free to accept this Agreement
anytime within that 21-day period. Executive is advised to consult with an attorney about the
Agreement. If Executive accepts this Agreement, Executive will have an additional 7 days from the
date that Executive signs this Agreement to revoke that acceptance, which Executive may effect by
means of a written notice sent to the CEO. If this 7-day period expires without a timely
revocation, this Agreement will become final and effective on the eighth day following the date of
Executive’s signature, which eighth day will be the “Effective Date” of this Agreement.

     The
undersigned has executed this Release Agreement on this ___ day of                     ,                     .

	 	 	 	 	 
	 
	 	 
	 

	 	 

R.L. Smith McKeithen
	 	 

 

 

EXHIBIT C

EXECUTIVE TRANSITION AND RELEASE AGREEMENT IN CONNECTION WITH A CHANGE IN CONTROL

 

 

EXECUTIVE TRANSITION AND RELEASE AGREEMENT IN CONNECTION WITH A CHANGE IN CONTROL

          This Executive Transition and Release Agreement (this “Agreement”) is entered into between
R.L. Smith McKeithen (“Executive”) and Cadence Design Systems, Inc. (“Cadence” or the “Company”)
pursuant to Section 4.5 of Executive’s employment agreement with the Company dated                     ,
2008 (“Employment Agreement”), as the Employment Agreement may be amended from time to time.

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

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

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

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

               c. one year from the Transition Commencement Date.

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

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

               b. As a Cadence executive, as well as other positions Executive may have held with Cadence,
Executive has obtained extensive and valuable knowledge and information concerning Cadence’s
business (including confidential information relating to Cadence and its operations, intellectual
property assets, contracts, customers, personnel, plans, marketing plans, research and development
plans and prospects). Executive acknowledges and agrees that it would be virtually impossible for
Executive to work as an employee, consultant or advisor in any business in which Cadence engages on
the Transition Commencement Date, including the

 

 

electronic design automation (“EDA”) industry (“Cadence Business”), without inevitably
disclosing confidential and proprietary information belonging to Cadence. Accordingly, during the
Transition Period, Executive will not, directly or indirectly, provide services, whether as an
employee, consultant, independent contractor, agent, sole proprietor, partner, joint venture,
corporate officer or director, on behalf of any corporation, limited liability company,
partnership, or other entity or person that (i) is engaged in a Cadence Business, (ii) directly
competes against Cadence or any of its existing or future affiliates, whether in the EDA industry
or otherwise, anywhere in the world, or (iii) produces, markets, distributes or sells any products,
directly or indirectly through intermediaries, that are competitive with Cadence. As used in this
paragraph, the term “EDA industry” means the research, design or development of electronic design
automation software, electronic design verification, emulation hardware and related products, such
products containing hardware, software and both hardware and/or software products, designs or
solutions for, and all intellectual property embodied in the foregoing, or in commercial electronic
design and/or maintenance services, such services including all intellectual property embodied in
the foregoing. If Executive receives an offer of employment or consulting from any person or
entity that engages in whole or in part in a Cadence Business, then Executive must first obtain
written approval from Cadence’s Chief Executive Officer (“CEO”) before accepting said offer.

               c. During the Transition Period, Executive will be prohibited, to the full extent allowed by
applicable law, and except with the written advance approval of Cadence’s CEO (or his
successor(s)), from voluntarily or involuntarily, for any reason whatsoever, directly or
indirectly, individually or on behalf of persons or entities not now parties to this Agreement: (i)
encouraging, inducing, attempting to induce, soliciting or attempting to solicit for employment,
contractor or consulting opportunities anyone who is employed at that time, or was employed during
the previous one year, by Cadence or any Cadence affiliate; provided that the foregoing shall not
prohibit Executive from giving an employment reference if asked to do so; (ii) interfering or
attempting to interfere with the relationship or prospective relationship of Cadence or any Cadence
affiliate with any former, present or future client, customer, joint venture partner, or financial
backer of Cadence or any Cadence affiliate; or (iii) soliciting, diverting or accepting business,
in any line or area of business engaged in by Cadence or any Cadence affiliate, from any former or
present client, customer or joint venture partner of Cadence or any Cadence affiliate (other than
on behalf of Cadence). The restrictions contained in subparagraph (i) of this paragraph 3(c) shall
also be in effect for a period of one year following the Termination Date. This paragraph 3(c) does
not alter any of the obligations the Executive may have under the Employee Proprietary Information
Agreement, dated as of May 18, 2004.

               d. Executive will fully cooperate with Cadence in all matters relating to his employment,
including the winding up of work performed in Executive’s prior position and the orderly transition
of such work to other Cadence employees.

               e. Executive will not make any statement, written or oral, that disparages Cadence or any of
its affiliates, or any of Cadence’s or its affiliates’ products, services, policies, business
practices, employees, executives, officers, or directors. Similarly, Cadence agrees to instruct its
executive officers and members of the Company’s Board of Directors not to make any statement,
written or oral, that disparages Executive. The restrictions described in this

 

 

paragraph shall not apply to any truthful statements made in response to a subpoena or other
compulsory legal process.

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

          4. TRANSITION COMPENSATION AND BENEFITS. In consideration of Executive’s execution of the
release of claims in this Agreement and as compensation for Executive’s services during the
Transition Period, Cadence will provide the following payments and benefits to Executive (to which
Executive would not otherwise be entitled), after Executive has returned to the Company all hard
and soft copies of records, documents, materials and files in his possession or control, which
contain or relate to confidential, proprietary or sensitive information obtained by Executive in
conjunction with his employment with the Company, as well as all other Company-owned property:

               a. all outstanding equity compensation awards (including, stock options granted and incentive
stock awards) issued by the Company to the Executive prior to the Change in Control (as defined in
Section 4.5 of Executive’s Employment Agreement) shall have their vesting fully accelerated so as
to be 100% vested as of the Effective Date of this Agreement, notwithstanding any provision in any
stock grant or stock agreement to the contrary. This acceleration will have no effect on any other
provisions of the stock awards; and

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

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

          5. FIRST TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not resign from
employment with Cadence and Cadence does not terminate Executive’s employment with Cadence due to a
breach by Executive of Executive’s duties under this Agreement, and in consideration for
Executive’s acceptance of this Agreement and Executive’s further execution and delivery of a
Release of Claims in the form of Attachment 1 hereto on a date that is at least six months after
the Transition Commencement Date, and as compensation for Executive’s services during the
Transition Period, Cadence will provide to Executive within ten business days after the expiration
of the revocation period of the Release of Claims (as defined in that document) the following
termination payment, to which Executive would not otherwise be entitled:

 

 

               a. a lump-sum payment equal to the greater of (i) the base salary Executive could have earned
had he remained employed through the remainder of the Initial Term, or (ii) eight hundred thousand
dollars ($800,000), less applicable tax deductions and withholdings; and

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

          6. SECOND TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not resign from
employment with Cadence and Cadence does not terminate Executive’s employment with Cadence due to a
breach by Executive of Executive’s duties under this Agreement, upon the Termination Date, and in
consideration for Executive’s acceptance of this Agreement and Executive’s further execution of a
Release of Claims in the form of Attachment 2 to this Agreement, Cadence will provide to Executive
within ten business days after the expiration of the revocation period of the Release of Claims (as
defined in that document) the following termination payment, to which Executive would not otherwise
be entitled: a lump-sum payment equal to the greater of (i) the target bonus Executive could have
earned had he remained employed through the remainder of the Initial Term, or (ii) eight hundred
thousand dollars ($800,000), less applicable tax deductions and withholdings.

          7. GENERAL RELEASE OF CLAIMS.

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

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

 

 

Section 10.9 of the Employment Agreement to survive the termination of Executive’s full-time
employment;

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

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

                    iv. any rights that Executive has or may have to be indemnified by Cadence pursuant to any
contract, statute, or common law principle.

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

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

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

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

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

          8. REVIEW OF AGREEMENT; REVOCATION OF ACCEPTANCE. Executive has been given at least 21 days in
which to review and consider this Agreement, although Executive is free to accept this Agreement
anytime within that 21-day period. Executive is advised to consult with an attorney about the
Agreement. If Executive accepts this Agreement, Executive will have an additional 7 days from the
date that Executive signs this Agreement to revoke that acceptance, which Executive may effect by
means of a written notice sent to the CEO. If this 7-day period expires without a timely
revocation, this Agreement will become final and effective on the eighth day following the date of
Executive’s signature, which eighth day will be the “Effective Date” of this Agreement.

          9. ARBITRATION. Subject to paragraph 3(f) hereof, all claims, disputes, questions, or
controversies arising out of or relating to this Agreement, including without limitation the
construction or application of any of the terms, provisions, or conditions of this Agreement, will
be resolved exclusively in final and binding arbitration in accordance with the Arbitration Rules
and Procedures, or successor rules then in effect, of Judicial Arbitration & Mediation Services,
Inc. (“JAMS”). The arbitration will be held in the San Jose, California, metropolitan area, and
will be conducted and administered by JAMS or, in the event JAMS does

 

 

not then conduct arbitration proceedings, a similarly reputable arbitration administrator.
Executive and Cadence will select a mutually acceptable, neutral arbitrator from among the JAMS
panel of arbitrators. Except as provided by this Agreement, the Federal Arbitration Act will govern
the administration of the arbitration proceedings. The arbitrator will apply the substantive law
(and the law of remedies, if applicable) of the State of California, or federal law, as applicable,
and the arbitrator is without jurisdiction to apply any different substantive law. Executive and
Cadence will each be allowed to engage in adequate discovery, the scope of which will be determined
by the arbitrator consistent with the nature of the claim(s) in dispute. The arbitrator will have
the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party
and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The
arbitrator will render a written award and supporting opinion that will set forth the arbitrator’s
findings of fact and conclusions of law. Judgment upon the award may be entered in any court of
competent jurisdiction. Cadence will pay the arbitrator’s fees, as well as all administrative fees,
associated with the arbitration. Each party will be responsible for paying its own attorneys’ fees
and costs (including expert witness fees and costs, if any). However, in the event a party prevails
at arbitration on a statutory claim that entitles the prevailing party to reasonable attorneys’
fees as part of the costs, then the arbitrator may award those fees to the prevailing party in
accordance with that statute.

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

          11. INTEGRATED AGREEMENT. This Agreement is intended by the parties to be a complete and
final expression of their rights and duties respecting the subject matter of this Agreement. Except
as expressly provided herein, nothing in this Agreement is intended to negate Executive’s agreement
to abide by Cadence’s policies while serving as a Cadence employee, including but not limited to
Cadence’s Employee Handbook, Sexual Harassment Policy and Code of Business Conduct, or Executive’s
continuing obligations under Executive’s Employee Proprietary Information and Inventions Agreement,
or any other agreement governing the disclosure and/or use of proprietary information, which
Executive signed while working with Cadence or its predecessors; nor to waive any of Executive’s
obligations under state and federal trade secret laws.

          12. FULL SATISFACTION OF COMPENSATION OBLIGATIONS; ADEQUATE CONSIDERATION. Executive agrees
that the payments and benefits provided herein satisfy in full all obligations of Cadence to
Executive arising out of or in connection with Executive’s employment through the Termination Date,
including, without limitation, all compensation, salary, bonuses, reimbursement of expenses, and
benefits.

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

 

 

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

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

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

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	R.L. SMITH McKEITHEN	 	 	 	CADENCE DESIGN SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

 

 

ATTACHMENT 1

RELEASE OF CLAIMS

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

                    i. any amounts or benefits to which I am or become entitled to pursuant to the provisions of
this Agreement or pursuant to the provisions designated in Section 11.9 of the Employment Agreement
to survive the termination of my full-time employment;

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

                    iii. claims related to my COBRA rights; and

                    iv. any rights that I have or may have to be indemnified by Cadence pursuant to any contract,
statute, or common law principle.

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

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

 

 

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

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

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 .	 	 	 	 	 
	 

	 	 

		 	 	 

Print Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Sign Name
	 	 

 

 

ATTACHMENT 2

RELEASE OF CLAIMS

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

                    i. any amounts or benefits to which I am or become entitled to pursuant to the provisions of
this Agreement or pursuant to the provisions designated in Section 11.9 of the Employment Agreement
to survive the termination of my full-time employment;

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

                    iii. claims related to my COBRA rights; and

                    iv. any rights that I have or may have to be indemnified by Cadence pursuant to any contract,
statute, or common law principle.

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

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

 

 

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

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

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 .	 	 	 	 	 
	 

	 	 

	 	 	 	 

Print Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Sign Name
	 	 

 

 

EXHIBIT D

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

 

CADENCE DESIGN SYSTEMS, INC.

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

     In consideration of my employment or continued employment by Cadence Design Systems, Inc. or
one of its subsidiaries (collectively, the “Company”), and the compensation now and hereafter paid
to me, I hereby accept and agree to the following:

1. NONDISCLOSURE

     1.1 Recognition of Company’s Rights; Nondisclosure. At all times, during my employment and
thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon, or
publish any of the Company’s Proprietary Information (defined below) unless: (a) such disclosure,
use or publication may be required in connection with my work for the Company; or (b) an officer of
the Company provides advance written authorization for such disclosure, use or publication. I will
obtain the advance written authorization of an officer of the Company before publishing or
submitting for publication any material (written, spoken, or otherwise) that relates to my work at
the Company and/or incorporates any Proprietary Information. I understand that all Proprietary
Information shall be the sole property of the Company and its assigns.

     1.2 Proprietary Information. The term “Proprietary Information” shall mean any and all
confidential and/or proprietary knowledge, data or information belonging to the Company. By way of
illustration but not limitation, “Proprietary Information” includes (a) information relating to
products, processes, know-how, designs, drawings, concepts, circuits, test data, formulas, methods,
compositions, algorithms, techniques, developmental or experimental work, improvements, unpublished
patent applications, source code and discoveries (hereinafter collectively referred to as
“Inventions”); (b) information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements, licenses, prices and
costs, suppliers and customers; (c) customer and vendor lists, contacts, plans, and agreements with
customers, vendors, and others; (d) program and product designs, specifications; and (e) personnel
and contact lists, organization charts and all confidential employee data, including without
limitation information regarding the skills, expertise and compensation of Cadence personnel.

     1.3 Third Party Information. I understand that the Company has in its possession, and will
continue to receive, confidential or proprietary information belonging to third parties (“Third
Party Information”), which the Company is obligated to keep confidential and to use only for
certain prescribed purposes. During my employment with the Company and continuing thereafter, I
will hold all Third Party Information in the strictest confidence and will not disclose it to
anyone (other than Company personnel who need to know such information in connection with their
work for the Company) or use it for any purpose (except in connection with my work for the
Company), without the advance written authorization of an officer of the Company.

     1.4 No Improper Use of Information of Prior Employers and Others. During my employment with
the Company I will not improperly use or disclose any confidential information or trade secrets of
any former employer or any other person to whom I have an obligation of confidentiality. In
addition, I will not bring any unpublished documents or any property belonging to my former
employer or any other person to whom I have an obligation of confidentiality onto the Company’s
premises without first obtaining and providing to my manager written authorization from that former
employer or person. I will use in the performance of my duties only information that is: (a)
generally known and used by persons with training and

 

 

experience comparable to my own; (b) common knowledge in the industry or otherwise legally in the
public domain; or (c) otherwise provided or developed by the Company.

2. ASSIGNMENT OF INVENTIONS

     2.1 Inventions and Proprietary Rights. The term “Proprietary Rights” shall mean all
trade secret, patent, copyright, mask work and other intellectual property rights throughout the
world. The term “Inventions” is defined in Section 1.2 above. The term “Company Inventions”
shall mean all Inventions, and all Proprietary Rights with respect to Inventions, that I have,
directly or indirectly, alone or jointly with others, made, authored, conceived, developed
or reduced to practice during my employment with the Company and for one (1) year thereafter, as
well as any and all patent applications filed by me or by a third party based on such Inventions.

     2.2 Assignment of Inventions. I hereby assign to the Company, or to a third party as directed
by the Company, all my rights, title and interest in and to any and all Company Inventions.

     2.3 Prior Inventions and Non-employment Inventions. As an exception to Section 2.2, I
understand that I am not required to assign, and do not hereby assign, under this Agreement:

     (a) any Invention to the extent it was created by me prior to the commencement of my
employment with the Company (each a “Prior Invention”), or

     (b) any Invention that does not relate to the Company’s business (or actual or demonstrably
anticipated research and development) and does not result from any work I perform for the Company,
to the extent that I develop such Invention entirely on my own time without using the Company’s
equipment, supplies, facilities or Proprietary Information (each a “Non-employment
Invention”). To preclude any possible uncertainty, I have set forth on Exhibit B attached
hereto a complete list of all Prior Inventions. If disclosure of any such Prior Invention(s) would
cause me to violate any prior confidentiality agreement, I understand that I am not to list such
Prior Invention(s) in Exhibit B, but am only to disclose a cursory name for each such invention, a
listing of the party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on Exhibit B for such purpose. If
no such disclosure is attached, I represent that there are no Prior Inventions. I agree that I will
not incorporate, or permit to be incorporated, Prior Inventions or Non-employment Inventions in any
work I do for the Company without the advance written authorization of an officer of the
Company. If, in the course of my employment with the Company, I do, in violation of this section,
incorporate a Prior Invention or a Non-employment Invention into work I do for the Company, I
hereby grant the Company, and will take all reasonable actions necessary to assist the Company in
obtaining, a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to
sublicense through multiple tiers of sublicensees) to make, have
made, modify, use and sell such Prior Inventions and Non-employment Inventions.

     2.4 Obligation to Keep Company Informed. I agree to promptly disclose to the Company fully and
in writing all Company Inventions. In addition, I agree to promptly disclose to the Company all
patent applications filed by me or on my behalf during my employment, or after if based on a
Company Invention. At the time of each such disclosure, I will advise the Company in writing of any
Inventions that I believe fully qualify as Non-employment Inventions and I will provide the Company
with a written account of all of the evidence necessary to substantiate my belief.

 

 

     2.5 Obligations of Confidentiality. The Company agrees to keep in confidence and not use for
any purpose or disclose to third parties, without my consent, any confidential information
disclosed in writing to the Company pursuant to this Agreement relating to Non-employment
Inventions, except as reasonably necessary to exercise any licenses I may grant to the Company
regarding such Non-employment Inventions. I agree to keep in confidence and not use for any purpose
other than the performance of my duties to the Company, or disclose to third parties without the
Company’s consent, any Proprietary Information or Company Inventions.

     2.6 Works for Hire. I acknowledge that all original works of authorship, which are made by me
(solely or jointly with others) within the scope of my employment and which are protectable by
copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C. Section
101).

     2.8 Enforcement of Proprietary Rights.

     (a) During and after my employment with the Company, I will assist the Company in every proper
way to obtain, and from time to time enforce, Proprietary Rights relating to Company Inventions in
any and all countries and jurisdictions. To that end I will execute, verify and deliver such
documents, appear as a witness, and perform other acts as the Company may reasonably request in
connection with applying for, obtaining, perfecting, evidencing, defending, sustaining and
enforcing its Proprietary Rights and the assignment thereof. In addition, I will execute, verify
and deliver assignments of Proprietary Rights to the Company or its designee. My obligation to
assist the Company with respect to Proprietary Rights relating to Company Inventions in any and all
countries shall continue beyond the termination of my employment.

     (b) In the event the Company is unable for any reason, after reasonable effort, to secure my
signature on any document needed in connection with the actions specified in the preceding
paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney-in-fact. This appointment is coupled with an interest to act
for and on my behalf to execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph with the same legal force and
effect as if executed by me.

     (c) I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever,
which I now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.

3. RECORDS. I agree to keep and maintain adequate and current records (in the form of notes,
sketches, drawings, electronic files, and in any other form that may be required by the Company) of
all Proprietary Information developed by me and all Company Inventions (the “Company
Records”). I agree not to keep copies of the Company Records in locations outside the Company
unless necessary to fulfill my duties to the Company, and then only upon obtaining prior written
approval from my manager. I agree that the Company Records are the sole property of the Company and
I agree to make Company Records available to the Company at all times.

4. RETURN OF COMPANY DOCUMENTS AND PROPERTY. When I leave the employ of the Company, I will deliver
to either my manager or the Company’s legal department:

 

 

(a) all drawings, notebooks, notes, memoranda, source code, specifications, devices, formulas,
records, manuals, reports and documents, together with all copies thereof in my possession, custody
or control;

(b) all Company Records and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information in my possession, custody or control, and

(c) all Company property or Company equipment in my possession, custody or control. Prior to
leaving, I will cooperate with the Company in completing and signing the Company’s Exit
Acknowledgement form.

5. ADDITIONAL ACTIVITIES. I agree that during my employment with the Company I will not engage in
any employment outside the Company nor will I engage in any business activity, which is competitive
with or would otherwise conflict with my employment with the Company, without first obtaining the
prior written approval of the Office of the General Counsel. A form for obtaining such approval is
available to me through the Company’s Intranet.

6. NO SOLICITATION. I agree that during the term of my employment with the Company, and for a
period of one (1) year following the date of my termination of employment with the Company, I will
not: (a) solicit or recruit, for my own benefit or on behalf of any entity, any person who is at
that time an employee of the Company or who has been employed by the Company for any period of time
during the previous three (3) months, nor shall I induce or encourage any such person to leave the
employ of the Company; or (b) solicit the business of any client or customer of the Company with
whom I had a relationship while employed with the Company or whom I know as a result of my
employment with the Company.

7. NO CONFLICTING OBLIGATION. I represent that I owe no obligations, of confidentiality or
otherwise, to any third party that could:

(a) prevent me from performing the duties of my job with the Company; or

(b) prevent me from fully complying with the terms of this Agreement.

8. NON-PRIVATE NATURE OF COMPANY PROPERTY. I understand that I shall have no right to or
expectation of privacy in the voicemail, computing and communication devices, electronic mail, and
instant messaging and other communication media, provided to me by the Company or in any property
situated on the Company’s premises and/or owned by the Company, including computing and
communication devices, disks and other storage media, filing cabinets, desks, cubicles, offices or
other work areas. I further understand that such property, including voicemail, computing and
communication devices, electronic mail and instant messaging and other communication media is
subject to inspection by Company personnel at any time.

9. AT-WILL EMPLOYMENT. I understand and agree the Company is an at-will employer and that nothing
in this Agreement shall confer any right with respect to continuation of employment by the Company,
nor shall it interfere in any way with my right or the Company’s right to terminate the employment
relationship at any time, for any reason, with or without cause, and with or without notice. I
further understand that only a written agreement signed by the executive in charge of Human
Resources can alter the at-will nature of my employment with the Company.

 

 

10. NOTICES. Any notices required or permitted by this Agreement shall be given to the Company at
its San Jose, California headquarters’ address, and to me at the address specified beneath my
signature below, unless either party specifies in writing its preference to receive notices
relating to this Agreement at another address. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail, three (3) days
after the date of mailing.

11. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the Company, I hereby
authorize the Company to notify my new employer of my rights and obligations under this Agreement.

12. GENERAL PROVISIONS.

     12.1 Governing Laws, Consent to Personal Jurisdiction. This Agreement will be governed by and
construed according to the laws of the State of California, as such laws are applied to agreements
entered into and to be performed entirely within California between California residents.
Alternatively, if my last place of employment with the Company is in a location outside of
California, then Sections 5 and 6 of this Agreement shall be governed by and construed by the laws
of that State. I hereby expressly consent to the personal jurisdiction of the state and federal
courts located in Santa Clara County, California for any lawsuit filed there against me by Company
arising from or related to this Agreement.

     12.2 Severability. In the event any of the provisions contained in this Agreement are, for any
reason, held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never been contained
herein. If, moreover, any of the provisions contained in this Agreement are for any reason held to
be excessively broad as to duration, geographic scope, activity or subject, such provisions shall
be construed by limiting the duration, geographic scope, activity or subject only to the extent
necessary to render them enforceable and compatible with applicable law.

     12.3 Survival. The provisions of this Agreement shall survive the termination of my employment
and the assignment of this Agreement by the Company to any successor in interest or other assignee.

     12.4 Waiver. No waiver by the Company of any breach of this Agreement shall be a waiver of any
preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be
construed as a wavier of any other right. The Company shall not be required to give notice to
enforce strict adherence to all terms of this Agreement.

     12.5 Entire Agreement. This Agreement, together with the Cadence Code of Business Conduct and
my offer letter, both of which I have signed, and both of which are incorporated herein, constitute
the complete and exclusive agreement of the parties with respect to the subject matter hereof and
supersedes all prior discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the Company’s General Counsel. Any subsequent change or changes in my duties,
salary or compensation will not affect the validity or scope of this Agreement.

     This Agreement shall be effective as of the first day of my employment with the Company,
namely:                     , 200___.

 

 

     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT
EXHIBIT B TO THIS AGREEMENT.

Dated:

                                                            

Signature

                                                            

(Printed Name)

                                                            

(Address)

                                                            

(Address)

                                                            

(Address)

 

 

EXHIBIT A

LIMITED EXCLUSION NOTIFICATION

     THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the
foregoing Agreement between you and the Company does not require you to assign or offer to assign
to the Company any invention that you developed entirely on your own time without using the
Company’s equipment, supplies, facilities or trade secret information except for those inventions
that either:

     (1) Relate at the time of conception or reduction to practice of the invention to the
Company’s business, or actual or demonstrably anticipated research or development of the Company;
or

     (2) Result from any work performed by you for the Company.

     To the extent a provision in the foregoing Agreement purports to require you to assign an
invention otherwise excluded from the preceding paragraph, the provision is against the public
policy of this state and is unenforceable.

     This limited exclusion does not apply to any patent or invention covered by a contract between
the Company and the United States or any of its agencies requiring full title to such patent or
invention to be in the United States.

     By signing below, I ACKNOWLEDGE RECEIPT of this notification.

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Print Name of Employee:                                         	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

WITNESSED BY:

                                                            

Signature of Witness

                                                            

(printed name of witness)

 

 

EXHIBIT B

TO: Cadence Design Systems, Inc.

FROM:                                         

             (Print name of employee)

DATE:

SUBJECT: Prior Inventions

     1. Except as listed in Section 2 below, the following is a complete list of all inventions or
improvements relevant to the subject matter of my employment by Cadence Design Systems, Inc. (the
“Company”) that have been made or conceived or first reduced to practice by me alone or jointly
with others prior to my employment or consulting relationship with by the Company [CHECK THE
APPLICABLE BOXE(S)]:

	 	o	 	No inventions or improvements.
	 
	 	o	 	See below:
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	o	 	Additional sheets attached.

     2. Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1
above with respect to inventions or improvements generally listed below, the proprietary rights and
duty of confidentiality with respect to which I owe to the following party(ies) [CHECK THE
APPLICABLE BOXE(S)]:

	 	o	 	Not applicable.

	 	 	 	 	 	 	 
	 

	 	Invention or Improvement
	 	Party (ies)
	 	Relationship
	 
	 	 	 	 	 	 
	1.
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	2.
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	3.
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 

	 	o	 	Additional sheets attached.

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Print Name of Employee:                                         	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:

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