This offer provided on May 24, 1999 This offer is valid until June 15, 1999
EXECUTIVE TERMINATION AND RELEASE AGREEMENT
This Agreement is entered into between Xxxx X. Xxxxxxx ("Executive")
and Cadence Design Systems, Inc., a Delaware corporation (the "Company"), as
of this __ day of ______, 1999.
WHEREAS, the Executive and the Company desire to reach an agreement
concerning the circumstances under which the Executive's employment
relationship with the Company will terminate; and
WHEREAS, the Company desires to be relieved of any and all duties,
obligations, and/or liabilities, if any exist, with respect to Executive,
except for those obligations referred to herein;
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Executive and the
Company agree as follows:
1. Executive will no longer serve as President and Chief Executive
Officer of the Company after April 26, 1999. Executive's position as an
officer of the Company and member of the Board of Directors (the "Board")
terminated on the same day.
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2. Executive shall remain a full-time employee with the Company
until May 31, 1999. During this time, Executive will report to and cooperate
with the Board, and shall continue to receive his current base salary, and
shall remain eligible for standard employee benefits, including, but not
limited to, the continued vesting of his stock options and participation in
the Non-Qualified Deferred Compensation Plan ("NQDC"), and the medical and
dental insurance coverage which he elected and pays for under the Cadence
Composition plan.
3. Executive shall, by May 31, 1999, return to the Senior Vice
President of Human Services for the Company, all equipment provided to him by
the Company while he served as a full-time employee, including but not
limited to, any computer hardware or software, facsimile machines, printers,
and phones.
4. PART-TIME EMPLOYMENT PERIOD
4.1 Beginning on June 1, 1999, Executive shall convert from a
full-time to a part-time employee. The Executive will
continue to be employed by the Company as a part-time
employee through May 31, 2000, or until the Executive
resigns his employment in writing, or the Company
terminates Executive's employment for cause (as defined
below), whichever occurs first ("Employment Period"). The
Company shall not terminate Executive's employment during
the Employment Period, except for cause, which is defined
as: (1) Executive's material and willful breach of this
Agreement after written notice of such breach and a
reasonable opportunity to cure such breach; or (2)
Executive's material and willful breach of the
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Employee Invention and Confidential Information
Agreement, which Executive signed on October 28, 1996 (a
copy of which is attached hereto), after written notice
of such breach and a reasonable opportunity to cure such
breach. Unless terminated for cause (which results in
immediate termination), Executive's employment will
terminate at the conclusion of the Employment Period
(the "Termination Date"). Upon termination of
employment, vesting of Executive's stock options shall
cease (except as provided in paragraph 5(b) herein), as
will the company's obligation to provide salary to
Executive and to make COBRA payments on his behalf.
Executive's funds, invested in the NQDC, if any, shall
be treated in accordance with the NQDC.
4.2 During the Employment Period, Executive shall be
compensated at a rate of $2500.00 per month, subject to
standard withholdings and deductions. Such compensation
shall be paid on the Company's regular payroll schedule.
4.3 During the Employment Period, Executive shall report to the
Chairman of the Board, and shall provide such consultation,
advice and assistance as is reasonably requested of him to
ensure a smooth transition of his responsibilities, for up
to a maximum of twenty (20) hours per month. Executive will
be free to accept other employment or consulting
engagements during this period, so long as such employment
or consulting is not inconsistent with
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Executive's obligations under the Invention and
Confidential Information Agreement. The Company will not
require Executive to render services to the Company or
its Board at a time or in a manner which would interfere
with his ability to engage in such employment or
consulting opportunities.
4.4 As a part-time employee, Executive will continue to
receive, if he so elects, the same medical and dental
insurance coverage as is currently in effect for Executive,
at the Company's expense, but will not accrue vacation or
be eligible for any other Company benefits, including but
not limited to, the Employee Stock Purchase Plan, 401(k),
life, and disability insurance, dependent life, and
participation in the NQDC. All such other benefits will
terminate on May 31, 1999, except that Executive's stock
options provided to him under grant numbers 008395, 008901,
009304 and 010775, shall continue to vest during the
Employment Period in accordance with the plans under which
the options were granted. Employee's performance-based
stock options (i.e., option grant numbers 010221 and
010779) shall cease vesting on May 31, 1999. After the
Termination Date, Executive may elect to continue to
receive, at his own expense, the same medical and dental
insurance coverage which the Executive previously elected
for the remainder of the COBRA period.
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4.5 Executive shall fully cooperate with the Company in all
matters relating to the winding up of his pending work on
behalf of the company.
5. EXECUTIVE SEVERANCE AGREEMENT
(a) The parties intend and agree to modify the cash payment
provision of paragraph 4 of the Employment Agreement between Executive
and the Company, dated October 19, 1997 (the "First Agreement") as
follows: Eight days after the execution of this Agreement, Executive
shall receive a lump sum payment in the amount of [$2.1] million, less
taxes and deductions required by law to be withheld. Such payment shall
fully satisfy the company's obligation with respect to the payment of
cash (salary and bonus) detailed in paragraph 4 of the First Agreement.
(b) It is the parties' intent not to modify in any way the stock
acceleration provision in paragraph 4 of the First Agreement.
Accordingly, upon the termination of Executive's employment at the end of
the Employment Period, for any reason, all of the unvested options held
by Executive on the date of such termination that would have vested over
the succeeding twenty-four month period shall immediately vest and become
exercisable in full. However, should a Change in Control (as defined in
the First Agreement) occur during the Employment Period, the stock
acceleration provision of paragraph 4 of the First Agreement shall not
apply. Instead, and in accordance with the First Agreement, all of
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Executive's unvested options shall immediately vest in accordance with
paragraph 5.2 (b) of the First Agreement. In either case, the options
shall remain exercisable for thirty (30) days following Executive's
Termination Date. The acceleration of vesting does not apply to
performance-based stock option grants, specifically, grant numbers 010221
and 010779.
6. GENERAL RELEASE BY EXECUTIVE
(a) The Executive agrees that the payments and benefits provided
herein are in full satisfaction of all obligations of the Company to the
Executive arising out of or in connection with the Executive's employment
and termination of his employment including, without limitation, all
salary, bonuses, accrued vacation, sick pay, and reimbursement of
expenses and two weeks salary as standard termination notice period, and
that the payments and benefits provided herein constitute consideration
for the covenants and releases of the Executive as set forth herein.
The Executive acknowledges that the Executive has no claims
against the Company based on the Executive's employment by the Company or
the Executive's separation therefrom and irrevocably, fully and finally
releases the Company, its subsidiaries and its affiliates, directors,
officers, agents and employees ("Releasees") from all causes of action,
claims, suits, demands or other obligations or liabilities, whether known
or unknown, that Executive ever had, or now has, including but not
limited to, any claims that may be alleged to arise out of or in
connection
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with the Executive's employment with the Company, or separation
therefrom, including, not by way of limitation, any claims for wages,
bonuses, or expense reimbursement, and any claims that any terms of
the Executive's employment with the Company or any circumstances of
the Executive's separation were wrongful, in breach of any obligation
of the Company or in violation of any rights, contractual, statutory,
in tort or otherwise, of the Executive, including but not limited to
rights arising under Title VII of the Civil Rights Act of 1964, as
amended, the California Fair Employment and Housing Act, as amended,
the California Labor Code, the Age Discrimination in Employment Act of
1967, as amended, the Americans with Disabilities Act, the Equal Pay
Act, the Fair Labor Standards Act, as amended, the Executive
Retirement Income and Security Act of 1974, as amended, (except for
Executive's rights under COBRA and Executive's rights to the money in
Executive's 401(k) plan account and deferred compensation plan
account), and any other local, state, or federal law, or law of any
country, governing discrimination in employment, the payment of wages
or benefits, or any other aspect of employment (collectively,
"Claims").
IN THIS REGARD THE EXECUTIVE 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 FAVOR WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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(b) The release set forth in section (a) above does not and shall
not extend to any obligations of the Company incurred under this
Agreement or to any claims, cross-claims or rights of indemnification
and/or contribution arising from federal securities laws or their state
law counterparts or arising under the Indemnification Agreement referred
to in paragraph 7 below.
(c) The Executive understands that he may take twenty-one (21)
days to consider this Agreement and that he has been advised that he
should consult with an attorney, if he desires to do so, prior to
executing this Agreement. The Executive further acknowledges that he
understands that he may revoke this Agreement within seven (7) days of
his execution of this document and that the consideration to be paid to
the Executive pursuant to this Agreement will be paid only after that
seven (7) day revocation period.
7. Executive shall continue to receive the benefits, and be
subject to the obligations, of the Indemnification Agreement signed by him in
October of 1997, to the extent and for the time period provided for in that
agreement. (A copy of the agreement is attached hereto.) Executive shall
cooperate fully with the Company in defending against any litigation matters
that may be filed or threatened against him or the Company.
8. Executive further agrees that, during the first six (6) months
of the Employment Period, Executive will not and Executive will not assist or
induce any of his affiliates (defined as an employee directly supervised by
Executive, or
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Executive's agent, business partner or co-owner) to, personally or through
others, induce, attempt to induce, solicit or attempt to solicit (on
Executive's own behalf or on behalf of any other person or entity) anyone who
is employed at that time by the Company to leave his or her employment with
the Company, without the prior written approval of the Company's Senior Vice
President of Human Services.
9. Executive further agrees that, for one (1) year following the
execution of this Agreement, Executive will not and Executive will not assist
or induce any of his affiliates (defined as an employee directly supervised
by Executive, or Executive's agent, business partner or co-owner) to, without
the prior written approval of the Company's Senior Vice President of Human
Services, personally or through others, use any trade secret or proprietary
information of the Company or any other improper means to interfere or
attempt to interfere with the relationship or prospective relationship of the
Company with any person or entity that to Executive's knowledge is on the
date of the Agreement, or is expected to become, a customer or client of the
Company.
10. GENERAL RELEASE BY THE COMPANY
(a) The Company acknowledges that the Company is not aware of
the existence of any claims it has against the Executive based on any acts or
omissions arising from or related to the Executive's employment by the
Company or the Executive's separation therefrom and irrevocably, fully and
finally releases the Executive and his heirs, legal representatives and
agents ("Releasees") from all causes of action, claims, suits, demands or
other obligations or liabilities, whether known or unknown, that the Company
ever had,
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or now has, including but not limited to, any claims that may be alleged to
arise out of or in connection with the Executive's employment with the
Company, or separation therefrom, except for claims which may be alleged to
arise out of Executive's unauthorized use or disclosure of the Company's
confidential or proprietary information ("Claims").
IN THIS REGARD, THE COMPANY 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 FAVOR WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
(b) The release set forth in section (a) above does not and
shall not extend to any obligations of the Executive incurred under this
Agreement or the Invention and Confidential Information Agreement and shall
not be construed as granting the Executive any license to use any
intellectual property of the Company.
11. The Executive and the Company's officers agree to keep the fact
and terms of this Agreement, including the amount paid to the Executive
pursuant hereto, confidential, except as to Executive's legal advisors, tax
advisors, and spouse, and except for those terms required by law to be
publicly disclosed.
12. Executive and the Company represent and warrant that there has
been no assignment or other transfer of any interest in any Claims which
either party may have against the other.
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13. The parties agree that if either party hereafter commences,
joins in, or in any manner seeks relief through any suit, claim, demand,
charge, complaint or otherwise to enforce this Agreement or, if Executive or
the Company in any manner seek relief for actions arising out of, based upon,
or relating to any of the Claims released hereunder or in any manner asserts
against the Releasees any of the Claims released hereunder, then the
non-prevailing party will pay to the prevailing party in addition to any
other damages caused thereby, all reasonable attorneys' fees incurred by the
prevailing party in bringing, defending or otherwise responding to said suit
or Claim.
14. The Executive agrees not to make any statement, written or
oral, which disparages the Company or any of the Company's employees or
representatives, products, or business practices. Likewise, the Company's
CEO, executive officers, corporate vice presidents, and the members of its
Board shall not make any statement, written or oral, which disparages the
Executive.
15. The Executive acknowledges that during the Executive's
employment with the Company, the Executive has had access to confidential
and/or proprietary information of the Company and of third parties and
acknowledges the Executive's obligation by agreement and/or at common law to
continue to hold such information in confidence and neither disclose and/or
use such information, notwithstanding the termination of the Executive's
employment, and that the Executive has, to the best of his knowledge,
returned to the Company all copies and records in any form of such
information.
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16. The parties further understand and agree that nothing contained
in this Agreement shall constitute or be construed in any way as an admission
of any wrongdoing or liability whatsoever by the Company or the Executive.
17. This Agreement shall be governed and enforced in accordance
with the laws of the State of California.
18. The Company and Executive agree that any dispute regarding the
interpretation or enforcement of this Agreement or any dispute arising out of
Executive's employment following the execution of this Agreement or the
termination of that employment with the Company, except for disputes
regarding the interpretation of the Employee Invention and Confidential
Information Agreement, which Executive signed on October 28, 1996, and
disputes involving the protection of the Company's intellectual property,
shall be decided by confidential, final and binding arbitration conducted by
Judicial Arbitration and Mediation Services ("JAMS") under the then-existing
JAMS rules, rather than by litigation in court, trial by jury, administrative
proceeding, or in any other forum.
19. In the event that any part of this agreement is found to be
void or unenforceable then (a) such provision or part thereof shall, with
respect to such circumstances and in such jurisdiction, be deemed amended to
conform to applicable laws so as to be valid and enforceable to the fullest
possible extent, (b) the invalidity or unenforceability or such provision or
part thereof under such circumstances and in such jurisdiction shall not
affect the validity or enforceability of such provision or part thereof under
any other circumstances or in any other jurisdiction, and (c) such invalidity
or enforceability of such
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provision or part thereof shall not affect the validity or enforceability of
the remainder of such provision or the validity or enforceability of any
other provision of this Agreement as each provision is separable from every
other part of such provision.
20. The Company shall have the right to assign its rights and
obligations under this Agreement only to an entity which acquires
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 permitted 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 by will or
the laws of descent and distribution.
21. Executive represents and acknowledges that the Executive's
decision to enter into this Agreement has been made voluntarily, knowingly,
and without coercion of any kind.
22. This Agreement is intended by the parties to be a complete and
final expression of their rights and duties respecting the employment of the
Executive by the Company, and the separation of the Executive from the
Company, except that nothing herein is intended to negate the Executive's
continuing obligations under the Company's Employee Invention and
Confidential Information Agreement referenced in paragraph 4.1 above and
nothing herein is intended to negate the Company's and the Executive's
continuing obligations under the Indemnification Agreement referred to in
paragraph 7 above or the stock options referenced in paragraph 5(b) above,
nor is
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it intended to waive any of Executive's obligations under state and federal
trade secret laws. This Agreement may not be modified unless such
modification is embodied in writing, signed by the party against whom the
modification is sought to be enforced.
In witness whereof, the parties hereto have executed this Employment
Termination and Release Agreement, effective eight (8) days after the date it
is signed by Executive below.
XXXX X. XXXXXXX CADENCE DESIGN SYSTEMS, INC.
By:
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XXX XXXXXXXXXXXX
Date: Date:
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