1
EXHIBIT 99.10
SYNOPSYS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
SYSTEMS SCIENCE INC.
1998 STOCK OPTION PLAN
OPTIONEE: XXXX XXXXXXXXX
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 21st day of
July, 1998 by Synopsys, Inc., a Delaware corporation ("Synopsys").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the common stock of Systems
Science Inc., a California corporation ("SSI"), which were granted to Optionee
under the Systems Science Inc. 1998 Stock Option Plan (the "Plan") and are
evidenced by (i) a Stock Option Agreement (the "Option Agreement") between SSI
and Optionee and (ii) a letter dated November 5, 1997 from SSI (the "Letter"),
which in part amends or modifies the Option Agreement. The Option Agreement as
amended by the Letter shall be referred to in this document as the "Modified
Option Agreement."
WHEREAS, SSI has this day been acquired by Synopsys through
Synopsys's purchase of all of the issued and outstanding shares of capital stock
of SSI (the "Acquisition") pursuant to the Stock Purchase Agreement, dated as of
July 17, 1998, by and between Synopsys, SSI and the SSI Securityholders (the
"Purchase Agreement").
WHEREAS, the provisions of the Purchase Agreement require
Synopsys to assume all obligations of SSI under all outstanding options under
the Plan at the consummation of the Acquisition and to issue to the holder of
each outstanding option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Purchase Agreement,
the exchange ratio (the "Exchange Ratio") in effect for the Acquisition is
0.0096566 of a share of Synopsys common stock ("Synopsys Stock") for each
outstanding share of SSI common stock ("SSI Stock").
WHEREAS, this Agreement is to become effective immediately upon
the consummation of the Acquisition (the "Effective Time") in order to reflect
certain adjustments to Optionee's outstanding options under the Plan which have
become necessary by reason of the assumption of those options by Synopsys in
connection with the Acquisition.
2
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Synopsys Stock subject to the stock
options held by Optionee under the Plan immediately prior to the Effective Time
(the "SSI Options") and the exercise price payable per share are set forth in
Exhibit A hereto. Synopsys hereby assumes, as of the Effective Time, all the
duties and obligations of SSI under each of the SSI Options. In connection with
such assumption, the number of shares of Synopsys Stock purchasable under each
SSI Option hereby assumed and the exercise price payable thereunder have been
adjusted to reflect the Exchange Ratio. Accordingly, the number of shares of
Synopsys Stock subject to each SSI Option hereby assumed shall be as specified
for that option in attached Exhibit A, and the adjusted exercise price payable
per share of Synopsys Stock under the assumed SSI Option shall be as indicated
for that option in attached Exhibit A.
2. The following provisions shall govern each SSI Option hereby
assumed by Synopsys:
(a) Unless the context otherwise requires, all
references in each Modified Option Agreement and in the Plan (as
incorporated into such Modified Option Agreement) (i) to the
"Company" shall mean Synopsys, (ii) to "Stock" shall mean shares
of Synopsys Stock, (iii) to the "Board" shall mean the Board of
Directors of Synopsys and (iv) to the "Committee" shall mean the
Compensation Committee of the Synopsys Board of Directors.
(b) The grant date and the expiration date of each
assumed SSI Option and all other provisions which govern either
the exercisability or the termination of the assumed SSI Option
shall remain the same as set forth in the Modified Option
Agreement applicable to that option and shall accordingly govern
and control Optionee's rights under this Agreement to purchase
Synopsys Stock.
(c) Synopsys has retained Optionee as an employee
of SSI after the Acquisition in an equivalent position to what
Optionee held prior to the Acquisition and the shares subject to
each assumed SSI Option held by Optionee shall continue to vest
in accordance with the same installment vesting schedule in
effect under the applicable Modified Option Agreement immediately
prior to the Effective Time, with the number of shares of
Synopsys Stock subject to each such installment adjusted to
reflect the Exchange Rate. Accordingly, no acceleration of
vesting under the SSI Options held by Optionee shall be deemed to
occur under any Modified Option Agreement by reason of the
Acquisition, and the vesting dates under each applicable Modified
Option Agreement shall remain the same following the Acquisition.
(d) For purposes of applying any and all provisions
of the Modified Option Agreement relating to Optionee's status as
an employee or a consultant of SSI, Optionee shall be deemed to
continue in such status as an
2.
3
employee or a consultant for so long as Optionee renders services
as an employee or a consultant to Synopsys or any present or
future Synopsys subsidiary. Accordingly, the provisions of the
Modified Option Agreement governing the termination of the
assumed SSI Options upon Optionee's cessation of service as an
employee or a consultant of SSI shall hereafter be applied on the
basis of Optionee's cessation of employee or consultant status
with Synopsys and its subsidiaries, and each assumed SSI Option
shall accordingly terminate, within the designated time period in
effect under the Modified Option Agreement for that option,
following such cessation of service as an employee or a
consultant of Synopsys and its subsidiaries. A change in status
from an employee to a consultant or from a consultant to an
employee will not constitute an interruption of continuous status
as an employee or a consultant.
(e) The adjusted exercise price payable for the
Synopsys Stock subject to each assumed SSI Option shall be
payable in any of the forms authorized under the Modified Option
Agreement applicable to that option. For purposes of determining
the holding period of any shares of Synopsys Stock delivered in
payment of such adjusted exercise price, the period for which
such shares were held as SSI Stock prior to the Acquisition shall
be taken into account.
(f) In order to exercise each assumed SSI Option,
Optionee must deliver to Synopsys a written notice of exercise in
which the number of shares of Synopsys Stock to be purchased
thereunder must be indicated. The exercise notice must be
accompanied by payment of the adjusted exercise price payable for
the purchased shares of Synopsys Stock and should be delivered to
Synopsys at the following address:
Synopsys, Inc.
000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Option Plan Administrator
3. Except to the extent specifically modified by this Stock
Option Assumption Agreement, all of the terms and conditions of each Modified
Option Agreement as in effect immediately prior to the Acquisition shall
continue in full force and effect and shall not in any way be amended, revised
or otherwise affected by this Stock Option Assumption Agreement.
3.
4
IN WITNESS WHEREOF, Synopsys has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly authorized officer
as of the ____ day of ____________________, 1998.
SYNOPSYS, INC.
By:_____________________________________
Title:__________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands and acknowledges that all rights and
liabilities with respect to each of his or her SSI Options hereby assumed by
Synopsys are as set forth only in the Modified Option Agreement, the Plan and
such Stock Option Assumption Agreement and no other agreements exist with
respect to his or her SSI Options. The undersigned also acknowledges that except
to the extent specifically modified by this Stock Assumption Agreement, all of
the terms and conditions of the Modified Option Agreement as in effect
immediately prior to the effective time shall continue in full force and effect
and shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement. The undersigned further acknowledges that the SSI
Option or Options described in Exhibit A hereto constitute all of the options or
other rights to purchase SSI Stock that he or she owned immediately prior to the
Effective Time.
________________________________________
XXXX XXXXXXXXX, OPTIONEE
DATED: __________________, 1998
4.
5
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares
of Systems Science Inc. Common Stock (Pre-Acquisition)
and
Optionee's Outstanding Options to Purchase Shares
of Synopsys, Inc. Common Stock (Post-Acquisition)
