Document:

Exhibit 10.49

 

	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Executive Incentive Plan (2009)

  
	
  Effective Date:

  	
   

  	
  November 2, 2008

  
	
   

  	
   

  	
   

  
	
  Document

  Owner:

  	
   

  	
  Human Resources Compensation

  
	
   

  	
   

  	
   

  
	
  Approvals:

  	
   

  	
  Bruce Chizen

  
	
   

  	
   

  	
  Chair, Compensation Committee

  

 

	
  Date

  	
   

  	
  Author

  	
   

  	
  Revision History

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 15, 2005

  	
   

  	
  J. Cleveland

  	
   

  	
  2005 Initial Plan

  
	
  March 20, 2006

  	
   

  	
  J. Collinson

  	
   

  	
  2006 Plan Updates

  
	
  October 30,
  2006

  	
   

  	
  S.
  Watanabe

  	
   

  	
  2007
  Plan Updates

  
	
  April 27,
  2007

  	
   

  	
  J.
  Liedtke

  	
   

  	
  Amendment
  to eligibility rules

  
	
  January 28,
  2008  

  	
   

  	
  S.
  Watanabe  

  	
   

  	
  2008
  Plan Updates

  
	
  November 23,
  2008

  	
   

  	
  J.
  Collinson

  	
   

  	
  2009
  Plan Updates

  

 

 

PLAN
OBJECTIVES:

 

This Synopsys Executive Incentive Plan (“EIP”
or the “Plan”) provides members of the Company’s senior management the
potential to earn variable compensation linked directly to individual
contribution toward:

 

1.               Driving the strategic direction of the
Company.

 

2.               Driving attainment of revenue and
operating margin targets.

 

3.               Reinforcing a culture of accountability
and performance excellence.

 

4.               Ensuring that the payment of all incentive
bonuses under the Plan qualify as “performance-based compensation” within the
meaning of Section 162(m) of the Internal Revenue Code (“Section 162(m)”),
and therefore not subject to the annual $1 million limitation on the income tax
deductibility of compensation paid per certain covered executive officers
imposed under Section 162(m). 
Accordingly, all payments under the Plan shall be made pursuant to the
terms and conditions of the Company’s 2006 Employee Equity Incentive Plan (2006
Equity Plan) approved by the Company’s stockholders, whether as “Performance
Cash Awards” or “Performance Stock Awards” thereunder.

 

ELIGIBILITY:

 

Subject to achievement as described below,
an employee is eligible to receive an EIP award if he or she is:

 

·                  a
Corporate Staff Member and Section 16(b) officer at any time in the
performance period a regular employee scheduled to work at least 20 hours per
week

 

·                  employed
by Synopsys as of the first working work day of the fourth quarter of the
fiscal year

 

·                  actively
employed through the day the incentive checks are distributed (or on an
approved leave of absence)

 

and

 

·                  does
not participate in a commission or other incentive plan (including, but not
limited to Sales, Applications Consultants, or incentive plans relating to  acquisitions)

 

·                  prepares
and delivers performance reviews for all direct reports eligible to receive
reviews by July 31, 2009 unless an exception to this requirement is
recommended by the SVP, Human Resources and Facilities and approved by the
Chairman of the Compensation Committee.

 

ADMINISTRATION:

 

The
Plan shall be administered by the Compensation Committee of the Board of
Directors (the “Committee”) that has been designated to administer programs
intended to qualify as “performance-based compensation” within the meaning of Section 162(m).  The Committee shall have authority to make rules and
adopt administrative procedures in connection with the Plan and shall have
discretion to provide for situations or conditions not specifically provided
for herein consistent with the purposes of the Plan.  The Committee shall determine the beginning
and ending dates for each performance period. 
Unless otherwise determined by the Committee, the performance period
shall correspond to the Company’s fiscal year. 
Notwithstanding any other provision of the Plan to the contrary, the
Plan shall be administered and its provisions interpreted so that payments
pursuant to the Plan qualify as “performance-based compensation” within the
meaning of Section 162(m). 
Determinations by the Committee shall be final and binding on the
Company and all participants.

 

INCENTIVE TARGET AWARDS:

 

The
individual’s incentive target award is determined by the Compensation Committee
within ninety (90) days of the beginning of the performance period or the
appointment as an Eligible Employee, as applicable (“Target Award”).  The Target Award is based upon a percentage
of annual base salary prorated for the number of months expected to work during
the performance period as an Eligible Employee.   Stock-based and other variable compensation
are not included in the target calculation.

 

 

PERFORMANCE
CRITERIA:

 

Payment
of the Target Award is determined by the Committee based on the Company’s
achievement of revenue and Non-GAAP operating margin targets as well as Revenue
Backlog targets (committed revenue for applicable future years), reinforcing
the Company’s ratable business model.  The
specific Corporate Financial Performance Goals and their relative weighting are
as follows:

 

FY2009 Revenue Target – 33.33%

 

FY2009 Non-GAAP Operating Margin Target –
33.33%

 

FY2010 Revenue Backlog Target – 33.34%

 

REVENUE
PREDICTABILITY FACTOR:

 

FY2011 Revenue Backlog Target

 

PAYOUT
FORMULA FOR
ACTUAL
AWARDS:

 

The Company must achieve a threshold of a
weighted average of 90% of the Corporate Financial Performance Goals before
payment of any portion of the Target Award is permitted. Achievement of 90% or
more of the Corporate Financial Performance Goals results in the applicable
Corporate Financial Payout Factor set forth in Exhibit A. For illustration
purposes, Exhibit A, the Corporate Financial Payout Factor Schedule, sets
forth achievement percentages at increments of one percentage.  The actual Payout Factor will be calculated
based upon one-quarter percentage point increments of achievement to plan.  Achievement of 90% or more of target FY2011
Revenue Backlog Goal results in the applicable Revenue Predictability Payout
Factor set forth in Exhibit B.  The
Revenue Predictability Payout Factor will be calculated based upon one-half
percent increments of achievement to plan. 
Notwithstanding the foregoing,
the maximum Preliminary Award for any individual is 200% of the Target Award
and the Company has the option to fund achievement in excess of the Target
Award with cash, Restricted Stock Units (RSUs), or Restricted Stock.

 

Payouts
of actual awards are determined by the Compensation Committee following a
recommendation by executive management.  Subject to the Committee’s discretion as
set forth under “Final Awards” below, the
payout formula for each Preliminary Award is as follows:

 

Preliminary Award =

Target Award x Corporate Financial Payout Factor x
Revenue Predictability Payout Factor (if any)

 

FINAL
AWARDS:

 

No later
than thirty (30) days after the receipt by the Committee of the financial
statements for a performance period the Committee shall determine whether the
established performance criteria were achieved. 
Executive management will make recommendations to the Committee
regarding 

 

 

individual
payouts based upon the individual’s relative performance against the Corporate
Financial Performance Goals and the Revenue Predictability Goal.   The Committee shall have full discretion to
reduce individual Preliminary Awards based on individual performance, EPS
considerations, or as it otherwise considers appropriate in the circumstances
in order to determine final actual awards (“Actual Awards”).  The Committee shall not have discretion to
increase Preliminary Awards for a performance period.  In addition and in accordance with the 2006
Equity Plan, the maximum Actual Award for any individual is $2,000,000 in cash
and 1,000,000 shares of RSUs or Restricted Stock in any calendar year.

 

PAYMENT
SCHEDULE:

 

Payment of Actual Awards will occur within thirty
(30) days following the certification by the Committee that the performance and
other criteria for payment have been satisfied (the “Certification Date”) and
final determination of the Actual Award. 
Actual Awards are subject to the Compensation Recapture Policy.

 

In the event the Committee does not specify the form
of the payment at the time the Committee establishes the Target Award, the form
of payment of the Actual Award shall be: (a) cash in an amount not to
exceed the amount of the Target Award, and (b) Restricted Stock Units,
100% of which will vest on the one-year anniversary of the effective grant date
provided the recipient is providing continuous services on such date, the value
of which would equal no more the amount by which the Actual Award exceeds the
Target Award increased by a reasonable rate of interest to account for the time
value of money.  The Committee may
determine (a “Retroactive Determination”) on or before the Certification Date
that the form of the entire Actual Award payment will only be cash.  In the event the Committee makes a
Retroactive Determination, the total value of the cash payment shall not exceed
the amount of the Actual Award.

 

Cash, RSUs or Restricted Stock issued hereunder
shall be deemed issued pursuant to the 2006 Employee Equity Incentive Plan
unless otherwise determined by the Committee. 
Actual Awards are subject to the Compensation Recovery Policy, adopted December 2008.

 

IMPORTANT NOTES ABOUT THE PLAN:

 

This Plan supersedes and replaces all
prior executive incentive plans.  The
Committee reserves the right to terminate and or make changes to the Plan at
any time, with or without notice.  The
Committee may likewise terminate an individual’s participation in the Plan at
any time, with or without notice. 
Nothing in this Plan shall be construed to be a guarantee that any
participant will receive all or part of an incentive award or to imply a
contract between the Company and any participant.   The Committee may reduce the incentive
payout based on achievement of publicly announced targets, product milestones,
strategic goals, cross-functional teamwork and collaboration, and unforeseen
changes in the economy and/or geopolitical climate.

 

Notwithstanding the foregoing, the
performance criteria may be modified by the Committee to take into consideration
one or more of the following: (1) changes in accounting principles that
become effective during the performance period in accordance with US GAAP
Accounting, (2) extraordinary, unusual or infrequently occurring events, (3) the
disposition of a business or significant assets, (4) gains or losses from
all or certain claims and/or litigation and insurance recoveries, (5) the
impact of impairment of intangible assets, (6) restructuring activities, (7) the
impact of investments or acquisitions, and/or (8) changes in corporate
capitalization such as stock splits and certain reorganizations; provided
however, that any such modification are consistent with Section 162(m) and
the regulations issued thereunder. 
Notwithstanding the foregoing, the Committee must select criteria that
collectively satisfy the requirements of performance-based compensation for the
purposes of Section 162(m), including by establishing the targets at a
time when the performance relative to such targets is substantially uncertain.

 

 

	
  Approvals:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Compensation Committee,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Bruce
  Chizen

  	
   

  	
  Date

  
	
   

  	
  Chair, Compensation Committee

  	
   

  	
   

  
					

 

 

Executive Incentive Plan (2009)

Exhibit A – Corporate Financial Payout Factor Schedule

 

	
  % Achievement of Plan

  	
   

  	
  Payout Factor *

  
	
  90%

  	
   

  	
  50%

  
	
  91%

  	
   

  	
  55%

  
	
  93%

  	
   

  	
  65%

  
	
  95%

  	
   

  	
  75%

  
	
  97%

  	
   

  	
  85%

  
	
  99%

  	
   

  	
  95%

  
	
  100%

  	
   

  	
  100%

  
	
  101%

  	
   

  	
  108%

  
	
  103%

  	
   

  	
  124%

  
	
  105%

  	
   

  	
  138%

  
	
  107%

  	
   

  	
  151%

  
	
  109%

  	
   

  	
  159%

  
	
  111%

  	
   

  	
  165%

  
	
  113%

  	
   

  	
  169%

  
	
  115%

  	
   

  	
  173%

  
	
  117%

  	
   

  	
  177%

  
	
  119%

  	
   

  	
  181%

  
	
  >=120%

  	
   

  	
  183%

  

 

*The Payout Factor column represents payout factors based
upon whole percentage increments of achievement to plan.  The actual payout Factor will be interpolated
based upon one-quarter percent increments of achievement.  For example, if percent achievement to plan
is 101.5% the Actual Payout Factor would be 110.5%.

 

 

Executive Incentive Plan (2009)

Exhibit B – Revenue Predictability Payout Factor Schedule

 

	
  Percent of FY2011 Revenue Backlog

  Achieved

  	
   

  	
  Payout Factor *

  
	
  <95%

  	
   

  	
  100.0%

  
	
  96%

  	
   

  	
  100.5%

  
	
  97%

  	
   

  	
  101.0%

  
	
  98%

  	
   

  	
  101.5%

  
	
  99%

  	
   

  	
  102.0%

  
	
  100%

  	
   

  	
  102.5%

  
	
  101%

  	
   

  	
  108.0%

  
	
  102%

  	
   

  	
  113.5%

  
	
  103%

  	
   

  	
  119.0%

  
	
  104%

  	
   

  	
  124.5%

  
	
  105%

  	
   

  	
  130.0%

  
	
  106%

  	
   

  	
  135.5%

  
	
  107%

  	
   

  	
  141.0%

  
	
  108%

  	
   

  	
  146.5%

  
	
  >109%

  	
   

  	
  150.0%

  

 

*The Payout Factor column represents payout factors
based upon whole percentage increments of achievement to plan.  The actual payout Factor will be interpolated
based upon one-half percent increments of achievement.  For example, if percent achievement to plan
is 101.5% the Actual Payout Factor would be 110.8%.matechexh4_1.htm

    
      
        
 
Exhibit 4.1

     

     

    MATERIAL
TECHNOLOGIES, INC.

    (a
Delaware corporation)

     

    CLASS A
CONVERTIBLE PREFERRED STOCK

    CERTIFICATE
OF DESIGNATIONS

     

    Material
Technologies, Inc., organized and existing under Delaware General Corporation
Law (the "Corporation") by its President and Secretary, does hereby certify
that, pursuant to authority conferred on the Board of Directors (the
"Board")
by Paragraph 4 of the Corporation's Certificate of Incorporation authorizing
a class of Nine Hundred Thousand (900,000) shares Preferred Stock with a
par value of one mill ($.001) per share, and pursuant to Section 151 of
the
Delaware General Corporation  Law, as amended, the Board duly adopted
a resolution
providing as follows for the issuance out of such class the series of
up to
three hundred fifty thousand (350,000) shares of Class A Convertible
Preferred
Stock, and setting forth the designations and powers, preferences and
rights,
including voting rights, if any, and the qualifications, limitations or
restrictions
thereof:

     

    WHEREAS,
the Corporation's Certificate of Incorporation states, among other things,
that the Corporation is authorized to issue up to Nine Hundred Thousand
(900,000)
shares of Preferred Stock, of the par value of one mill ($.001) per share,
and that the Board is granted the authority to fix, by resolution, the
designations
and powers, preferences, and rights, including voting rights, if any, and
the qualifications, limitations or restrictions thereof, if any, of such
shares;

     

    NOW,
THEREFORE, BE IT RESOLVED that the Board does hereby designate Three
Hundred
fifty Thousand (350,000) shares of its authorized but previously unissued
Preferred Stock as "Class A Convertible Preferred Stock" which may be
issued
from time to time.  The designations and the powers, preferences and
rights,
including voting rights of the Class A Convertible Preferred Stock and
the
qualifications, limitations and restrictions thereof, shall be as
follows::

     

    1.    
LIQUIDATION PREFERENCE

     

    1.1   
In the event of liquidation, dissolution or winding up of the Corporation,
whether such be voluntary or involuntary, the holders of shares of
Class A Convertible Preferred Stock (the "Shares") shall be entitled
to receive out of the Corporation's assets, an amount equal to seventy-two
cents ($.72) per Share (the "Liquidation Preference").  Such
amount
shall be paid upon all outstanding Shares before any payment shall be made
or any assets distributed to the holders of shares of common stock or any
other stock of any other series or class ranking junior to the Shares as
to dividends or assets.  The holders of Shares shall not be
entitled
to any further payment.

     

    1.2   
A merger or consolidation of the Corporation with another corporation
shall not
be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section 1.

     

    1.3   
While the Shares are outstanding the Corporation shall not, without the prior
consent of the holders of a majority of the outstanding Shares, issue any
Preferred Stock which is senior to or parri passu with the Shares with
respect to liquidation preference.

     

    2.    
CONVERSION

     

    2.1   
RIGHT TO CONVERT: CONVERSION PRICE   Subject to and upon
compliance with this
Section 2, at the option of the holder thereof, each outstanding Share may
at any time be converted into duly authorized, validly issued, fully
paid and nonassessable shares of the Corporation's common stock, par
value one
Mil ($.001) per share ("Common Stock") at Seventy-two cents ($.72)
per share (The "Initial Conversion Price") or, in case an adjustment
in the
conversion price has taken place pursuant to Section 3 below, then at the
applicable conversion price as so adjusted (the "Conversion Price"),
upon
surrender of the certificate

     

     

    
      
         

      

      
        1

        
          
 

      

      
         

      

    

     

    representing
the Shares to be converted to the Corporation at any time during
usual business hours at the Corporation's principal executive, accompanied
by a written notice of election to convert as provided in Section
2.2 below.  All Shares surrendered for conversion shall be restored
to the
status of authorized but unissued and undesignated shares of Preferred
Stock.  The number of shares of Common Stock to be issued on
conversion
shall be determined by dividing (i) an amount equal to the sum of the
aggregate Liquidation Preference of the converted Shares by (ii) the
Conversion
Price as in effect on the date the Shares are surrendered for conversion.

     

    2.2    ISSUANCE
OF COMMON STOCK ON CONVERSION.  As promptly as practicable
after
surrender of any Shares for conversion, the Corporation shall deliver
or cause
to be delivered to, or upon the written order of, the holder of surrendered
Shares a certificate or certificates representing the number of duly
authorized, validly issued, fully paid, and nonassessable shares of Common
Stock into which such Shares have been converted in accordance with this
Section 2.  Prior to delivery of such certificate or certificates, the
Corporation
shall require written notice at its said office from the holder of the
Shares so surrendered stating that the holder irrevocably elects to convert
such shares.  Such notice shall also state the name or names (with
address
and social security or other taxpayer identification number) in which
said certificate or certificates are to be issued.  Such conversion
shall be
deemed to have been made at the time that such shares shall have been
surrendered for conversion and such notice shall have been received by
the
Corporation (the "Conversion Date").  The Corporation shall have the
right to
pay cash or to round up to the next whole share in lieu of issuing fractional
shares of Common Stock.

     

    3.    
ADJUSTMENT OF CONVERSION PRICE.  The kind of securities issuable upon
conversion
of Shares and Conversion Price shall be subject to adjustment from time to
time upon the happening of certain events as follows:

     

    3.1   
RECLASSIFICATION, CONSOLIDATION OF MERGER.  In case of any
reclassification
or change of outstanding securities of the class of securities
which are issuable upon conversion of the Shares (other than as a result
of subdivision or combination or an increase or decrease in the number of
such securities outstanding) or in case of any consolidation or merger of
the Corporation with or into another corporation (other than a merger
with another corporation in which the Corporation is the surviving corporation
and which does not result in any reclassification or change, other
than a subdivision or combination of outstanding securities issuable
upon the
conversion of Shares or an increase or decrease in the number of such
securities outstanding), or in case of any sale or transfer to another
corporation
of all or substantially all of the Corporation's assets, the holders
of the Shares shall have the right to receive upon conversion, in lieu of
Common Stock issuable upon such conversion, the kind and amount of shares of
stock, other securities, money, or property receivable upon such reclassification,
change, consolidation, merger, sale, or transfer by the holder of
shares of Common Stock issuable upon conversion of such Shares had such
Shares been converted immediately prior to such reclassification, change,
consolidation, merger, sale, or transfer.  The Corporation shall
not
permit any such reclassification, change, consolidation, merger, sale,
or
transfer to take place without adequate and lawful provisions to protect
the
rights of the holders of Shares, including provisions assuring that this
Section 3 shall thereafter be applicable, as nearly as may be, with respect
to shares of stock, securities, or assets deliverable upon conversion
of the Shares.  This Section 3.1 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales, and transfers.

     

    3.2   
SUBDIVISION OR COMBINATION.  If the Corporation at any time while
Shares
are outstanding, shall subdivide or combine its outstanding securities
of the class of securities which are issuable upon conversion of Shares,
the conversion price shall be proportionately reduced, in case of subdivision
of such securities, as of the effective date of such subdivision,
or shall be proportionately increased, in the case of combination
of such securities, as of the effective date of such combination.

     

    3.3   
STOCK DIVIDENDS.  If the Corporation at any time while Shares are
outstanding
shall pay a dividend or make any other distribution on its Common
Stock payable in shares of its common stock, then the conversion price
shall be adjusted, as of the date of such payment or other distribution
to that price determined by multiplying the conversion price in effect
immediately prior to such payment or other distribution by a fraction
(a) the numerator of which shall be the total number of shares of Common
Stock

     

    
      
         

      

      
        2

        
          
 

      

      
         

      

    

     

    outstanding
immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.

     

    3.4   
NOTICE OF ADJUSTMENTS.  Whenever the Conversion Price shall be
adjusted
under Section 3 hereof, the Corporation shall make a certificate signed by
its president or a vice president and by its chief financial officer,
treasurer, assistant treasurer, secretary or assistant secretary setting
forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the conversion price after giving effect to such adjustment,
and shall cause copies of such certificate to be mailed (by first
class mail postage prepaid) to the holders of Shares promptly after each
adjustment.  A determination of any adjustment to the Conversion Price
or the
number or kind of shares or other securities issuable upon conversion
of Shares, by independent certified public accountants selected by the
Corporation, shall be final and binding on all parties.

     

    4.  VOTING
RIGHTS.  Each holder of Shares shall have the right to vote on all
matters
on which the holders of Common Stock have the right to vote and to cast
that
number of votes which the holder would have been entitled to cast had such
holder
converted his Shares immediately prior to the record  date for such
vote (or if
there be no record date, immediately prior to the vote).

     

    5.  DIVIDENDS.  The
Shares shall participate in all dividends declared and paid with
respect to the Common Stock to the same extent as if the Shares had been
converted
immediately prior to the record date for the payment of such dividend
(or if
there be no record date, immediately prior to the dividend), except for
dividends
or distributions on the Common Stock payable in shares of Common Stock
(to which
Section 3.3 applies) and dividends or distributions in liquidation or
partial
liquidation (to which Section 3.4 applies).

     

    IN
WITNESS WHEREOF, Material Technologies, Inc., has caused this certificate of
Designation
to be signed by its President and attested by its Secretary on this 9th day
of March, 1997, and each of such persons hereby affirms under penalty of
perjury
that this Certificate of Designation is the act and deed of Material
Technologies,
Inc. and that the facts stated herein are true and correct.

     

     

    MATERIAL
TECHNOLOGIES, INC.

     

    By /s/
Robert M.
Bernstein             

    Robert M.
Bernstein, President

     

     

    Attest:

     

    /s/
Joel R.
Freedman                         

    Joel R.
Freedman, Secretary

     

     

     

    
      
         

      

      
        3

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