Option No. RP1247
CADENCE DESIGN SYSTEMS, INC.
NONQUALIFIED STOCK OPTION REGRANT AGREEMENT
CADENCE DESIGN SYSTEMS, INC., a Delaware corporation (the "Company"),
hereby grants as of 04/26/93 ("Date of Grant") to XXXXXX X. XXXXXXXX (the
"Optionee") to purchase a total of 500000 shares of Common Stock of the Company
(the "Shares"), at an exercise price of $8.8125 per share ("Exercise Price")
subject to the terms, definitions and provisions of this Option and the
Company's 1987 Stock Option Plan (the "Plan") which is incorporated herein by
reference. The terms defined in the Plan shall have the same defined meanings
herein. Vesting of this Option shall commence on 04/26/93 ("Vesting
Commencement Date").
1. DATE OF THE OPTION. This Option is a nonqualified stock option and is
not intended to qualify as an incentive stock option as defined in Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code").
2. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of Section 9 of the Plan as follows:
(i) RIGHT TO EXERCISE.
(a) This option shall become exercisable as to 33% of the Shares
one year after the Vesting Commencement Date and as to an additional 1/36th of
the Shares per month thereafter.
(b) This Option may not be exercised for a fraction of a share.
(c) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 9 of the Plan and Section 5 and 6 below.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by delivery
to the Company of an executed written notice as approved by the Company, which
shall state the election to exercise the option, the number of Shares in respect
of which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such shares of
Common Stock as may be required by the Company pursuant to the provisions of the
Plan. Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company and
shall be accompanied by payment of the Exercise Price.
3. METHOD OF PAYMENT. Payment of the Exercise Price shall be made as
follows: (i) by cash or check; or (ii) by delivery of an irrevocable written
commitment from a broker-dealer approved by the Company that is a member in good
standing of the New York Stock Exchange ("NYSE DEALER") to deliver the exercise
price directly to the Company upon receipt of the Shares or, in the case of a
margin loan, upon receipt of a copy of the notice of exercise of this Option.
4. RESTRICTIONS ON EXERCISE. This Option may not be exercised unless
such exercise, the issuance of the Shares upon such exercise and the method of
payment of consideration for the Shares are in compliance with (i) the
Securities Act of 1933, (ii) all applicable state securities laws, (iii) all
other applicable federal and state laws and regulations and (iv) the rules of
any stock exchange or national market system upon which the Shares may then be
listed, as such laws, regulations and rules are in effect on the date of
exercise. As a condition to the exercise of this Option, the Company may
require Optionee to make any representation and warranty to the Company as may
be required by any applicable law or regulation.
5. TERMINATION OF STATUS AS AN EMPLOYEE. If Optionee ceases to serve as
an Employee, Optionee may, but only within thirty (30) days after the date
Optionee ceases to be an Employee of the Company, exercise this Option to the
extent that Optionee was entitled to exercise it on the date of such
termination. To the extent that Optionee was not entitled to exercise this
Option on the date of such termination, or if Optionee does not exercise this
Option within the time specified herein, the Option shall terminate.
6. DEATH OF OPTIONEE. In the event of the death of Optionee:
(i) During the term of this Option and while an Employee of the
Company and having been in Continuous Status as an Employee since the date of
grant of the Option, the Option may be exercised, at any time within three (3)
months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that would have accrued had Option
continued living three (3) months after the date of death; or
(ii) Within one (1) month after the termination of Optionee's
Continuous Status as an Employee, the Option may be exercised, at any time
within three (3) months following the date of death, by Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the right to exercise had accrued at
the date of termination.
7. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws or
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descent or distribution and may be exercised during the lifetime of Optionee
only by Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. TERM OF OPTION. Notwithstanding any other provision of this Option,
this Option may not be exercised more than ten years from the Date of grant of
this Option, and may be exercised during such term only in accordance with the
Plan and the terms of this Option.
9. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
of this Option of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.
(i) EXERCISE OF NONQUALIFIED STOCK OPTION. If, on the date the
Option is exercised, the fair market value of the Shares is greater than the
Exercise Price, Optionee will then incur a regular federal income tax liability
and a California income tax liability. Optionee will be treated as having then
received compensation income (taxable at ordinary income tax rates) equal to the
excess of the fair market value of the Shares on the date of exercise over the
Exercise Price. The Company will be required to withhold from Optionee's
compensation or collect from Optionee and pay to the applicable taxing
authorities such amounts as are required by applicable federal and state tax
laws.
(ii) DISPOSITION OF SHARES. If the Shares are held for at least one
year, any gain or loss realized on disposition of the Shares will be treated as
long term capital gain or loss for federal and California income tax purposes.
As of the Date of Grant, capital gains are taxed at the same rates as ordinary
income for federal and California tax purposes. Capital gains, however, may be
offset by capital losses.
CADENCE DESIGN SYSTEMS, INC.
a Delaware corporation
By: /s/ illegible
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Its:Vice President and
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General Counsel
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Optionee represents that she/he is familiar with the terms and
provisions, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee acknowledges that in electing to have stock
options previously granted under the Plan cancelled or reduced in number
in exchange for the Options granted under this Agreement, the Optionee is not
receiving an agreement or guaranty for Optionee's continued employment or a
change in the terms, including the at-will nature of Optionee's employment.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.
Optionee acknowledges that there may be adverse tax consequences upon exercise
of this Option or disposition of the Shares and that Optionee should consult a
tax adviser prior to such exercise or disposition.
Dated: 7/10/93
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/s/ Xxxxxx X. Xxxxxxxx
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Optionee
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