CADENCE DESIGN SYSTEMS, INC. EMPLOYMENT AGREEMENT WITH KEVIN BUSHBY
Exhibit 10.10
THIS AGREEMENT (this “Agreement”), made effective as of July 29, 2008 (the “Effective Date”),
between CADENCE DESIGN SYSTEMS, INC., a Delaware corporation (the “Company”), and XXXXX XXXXXX
(“Executive”), supersedes any previous employment agreement between the parties.
WHEREAS, Executive is currently employed by the Company as Executive Vice President, Worldwide
Field Operations; and WHEREAS, the Company and Executive wish to enter into a formal employment
agreement on the terms and conditions as set forth herein.
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. The Company hereby continues to employ Executive and Executive hereby accepts continued
employment pursuant to the terms and provisions of this Agreement as of the Effective Date.
Executive has been employed and shall continue to be employed on an at-will basis, meaning that
either Executive or the Company may terminate Executive’s employment at any time, with or without
Cause (as defined in Section 4.2 hereof), in the manner specified herein.
1.2 SERVICES.
(a) Executive shall continue to have the title of Executive Vice President, Worldwide Field
Operations. Executive’s duties will be assigned to Executive by the Company’s Chief Executive
Officer (“CEO”).
(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 full 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 except as expressly authorized under 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 and that they comply with the
Company’s Code of Business Conduct.
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 his
services hereunder, compensation consisting of the following:
2.1 BASE SALARY. As of the Effective Date, the Company shall pay Executive a base salary of Five Hundred Thousand
Dollars ($500,000) 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. The Board of Directors of the Company (the “Board”) or the Compensation
Committee of the Board (the “Compensation Committee”) shall review the amount of the Base Salary
from time to time, but no less frequently than annually.
2.2 BONUS. Executive shall participate in the Company’s Senior Executive Bonus Plan or its successor (the
“Bonus Plan”) at an annual target bonus rate of not less than one hundred thirty percent (130%) of
Executive’s Base Salary (the “Target Bonus”) 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.
2.3 EQUITY GRANTS. Executive has previously been granted stock options by the Company which remain in full force
and effect in accordance with the terms of the stock option agreements documenting such grants.
Executive shall be eligible to receive additional grants of either restricted stock or stock
options, or both, as the Compensation Committee may determine from time to time. All stock options
shall be granted at not less than one hundred percent (100%) of the fair market value of the
Company’s common stock on the date of grant. Any awards shall vest in accordance with the
Company’s vesting policy for additional grants to executive officers of the Company in effect on
the date of the grant by the Compensation Committee, and shall contain such other terms and
conditions as shall be set forth in the agreement documenting the grant.
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, limited liability company,
partnership, joint venture or other entity 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 and
subject to the terms of the form of Indemnity Agreement 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
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duties hereunder. Executive shall first 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 full-time 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;
(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;
(c) The Company shall provide Executive with cost of living adjustment payments in the net
amount (after deduction of all applicable taxes and other withholdings) of $9,200 per month until
the later of (i) the end of the Transition Period defined in the Transition Agreement, or (ii) the
termination of Executive’s full-time employment for any reason;
(d) In the event Executive’s employment with the Company is terminated other than for Cause
(as defined in Section 4.2 hereof) or if Executive resigns his employment as a result of an event
constituting a Constructive Termination (as defined in Section 4.3 hereof), and Executive relocates
from the San Francisco Bay Area to the United Kingdom within twelve (12) months after such
termination of Executive’s full-time employment, or such other date agreed to in writing by the
Company in its sole discretion, the Company shall reimburse Executive for all reasonable, customary
and necessary moving and relocation expenses, including airfare for Executive’s family, incurred by
Executive;
(e) The Company shall provide, at its cost, the legal and other assistance necessary to
process “green cards” (or other permanent resident status) for Executive and the other members of
Executive’s immediate family, who are eligible as derivative beneficiaries, as well as to address
any other U.S. immigration issues that may arise for Executive and his family during Executive’s
employment with the Company, including during the Transition Period, if applicable, described in
the Executive Transition and Release Agreement, in the form attached hereto as Exhibit B. However,
this paragraph shall not be construed as a guarantee by the Company that the Executive will be able
to obtain a “green card”;
(f) The Company shall, pursuant to its standard tax equalization practices and subject to the
limitation set forth below, pay such additional amounts to Executive as may he necessary to cause
Executive’s overall income tax expense with respect to his (a) base salary and cash bonus received,
and ordinary income from the exercise of stock options during the year ended December 31, 2003, and
(b) base salary and cash bonus received from the Company
during the calendar years ended December 31, 2004 and 2005, to be no greater than what such
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income tax expense would have been with respect to such base salary, cash bonus and, in the case of
the year ended December 31, 2003, ordinary income from the exercise of stock options, had Executive
resided in the United Kingdom for the entirety of each such year. The equalization payments
hereunder shall be determined by taking into account such factors as the Company reasonably
determines are relevant to the determination of Executive’s overall tax cost and tax cost
applicable to base salary and cash bonus, and shall be grossed up as necessary to take into account
any taxes imposed on the amounts paid pursuant to the preceding sentence. Notwithstanding anything
in this paragraph to the contrary, the amount payable by the Company to Executive hereunder (not
including any “gross up” payment pursuant to the preceding sentence) with respect to each of the
years ended December 31, 2004 and 2005 shall in no event exceed the amount that would be payable
with respect to such year if the aggregate tax rate applicable to Executive for such year exceeded
the aggregate tax rate that would have been applicable to Executive had he been a resident of the
United Kingdom for the entirety of such year by no more than three percent (3%). In addition to
the foregoing, the Company shall pay to Executive, on an after-tax basis, the following (1) any
tines, penalties and interest incurred as a result of a delay in filing caused, or incorrect
information provided to Executive, by the Company, and (2) the reasonable cost incurred by
Executive to prepare his income tax returns for the taxable year ended December 31, 2003, and, to
the extent related to items pertaining solely to his income from the Company, for the taxable years
ended December 31, 2004 and 2005; and
(g)
The Company shall reimburse Executive for his reasonable
attorneys’ fees and any reasonable costs incurred in the negotiation and drafting of this Agreement
and its related documents.
3.3 XXXXXXXX-XXXXX 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 Xxxxxxxx-Xxxxx 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 immediately upon
delivery to Executive of written notice of termination by the Company subject to any cure period
specified below, upon the Company’s receipt of written notice of termination by Executive at least
thirty (30) days before the specified effective date of such termination, or upon Executive’s death
or Permanent Disability (as defined in Section 4.4 hereof). In the event of such termination,
except where Executive is terminated for Cause (as defined in Section 4.2 hereof) or as the result
of a Permanent Disability or death, or where Executive voluntarily terminates his employment other
than a Constructive Termination (as defined in Section 4.3 hereof), and upon execution by Executive
at or about the effective date of such termination of the Executive Transition and Release
Agreement, in the form attached hereto as Exhibit B (the
“Transition Agreement”), the Company shall provide Executive with the benefits as set forth in the
Transition Agreement.
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4.2 DEFINITION OF CAUSE. For purposes of this Agreement, “Cause” shall be deemed to 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 identifying such breach and his 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) and, where such breach is
curable, if such breach is not cured within thirty (30) days following delivery of written notice
thereof from the Company; (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,
and, where such breach is curable, if such breach is not cured within thirty (30) days following
delivery of written notice thereof from the Company.
4.3 CONSTRUCTIVE TERMINATION. Notwithstanding anything in this Section 4 to the contrary, Executive may, upon at least thirty
(30) days’ written notice to the Company, voluntarily end his employment upon or within ninety (90)
days following the occurrence of an event constituting a Constructive Termination and be eligible
to receive the benefits set forth in the Transition Agreement in exchange for executing and
delivering that agreement in accordance with Section 9.3 hereof. For purposes of this Agreement,
“Constructive Termination” shall mean:
(a) a material adverse change, without Executive’s written consent, in Executive’s authority,
duties or 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;
(b) any change, without Executive’s written consent, to Executive’s reporting structure
causing Executive to no longer report to the CEO of 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;
(c) 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) under the Bonus Plan;
(d) a relocation of Executive’s principal place of employment by more than thirty
(30) miles unless Executive consents in writing to such relocation;
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(e) 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;
(f) any failure by the Company to obtain the written assumption of this Agreement by any
successor to the Company; or
(g) in the event Executive, prior to a Change in Control (as defined in Section 4.5 hereof),
is identified as an executive officer of the Company for purposes of the rules promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and following a
Change in Control in which the Company or any successor remains a publicly traded entity, Executive
is not identified as an executive officer for purposes of Section 16 of the Exchange Act at any
time within one (1) year after the Change in Control.
In the event of an event or circumstance constituting Constructive Termination, the Company
may notify Executive at any time prior to expiration of the cure period that it will not cure the
circumstance, in which case the cure period shall end immediately upon such notification.
4.4 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 all of the essential functions of his
position pursuant to this Agreement, with or without reasonable accommodation.
4.5 CHANGE IN CONTROL.
(a) Should there occur a Change in Control (as defined below) and if within three (3) months
prior to or thirteen (13) months following the Change in Control either (i) Executive’s employment
under this Agreement is terminated without Cause or (ii) Executive resigns his employment as a
result of an event constituting a Constructive Termination, then, in exchange for executing and
delivering the Transition Agreement, and subject to the terms of the Transition Agreement except as
otherwise provided in this Section 4.5(a), Executive shall be entitled to all of the benefits set
forth therein, except that (1) in addition to the amount of the payment described in paragraph 5(a)
of the Transition Agreement, Executive shall be entitled to an additional amount equal to fifty
percent (50%) of Executive’s annual Base Salary at the highest annual Base Salary rate in effect at
any time during the term of this Agreement (the “Highest Base Salary”), which amount shall be paid
at the same time as the payment under such paragraph 51 a); (2) in addition to the amount of the
payment described in paragraph 6(a) of the Transition Agreement, Executive shall be entitled to an
additional amount equal to sixty five percent (65%) of Executive’s Highest Base Salary; and (3) in
lieu of the acceleration described in paragraph 4(a) of the form of Transition Agreement attached
hereto, all unvested equity compensation awards (including stock options, restricted stock, and
restricted stock units) that
are outstanding and held by Executive on the Transition Commencement Date shall immediately
vest and become exercisable in full on the Transition Commencement Date, provided, that, if
Executive’s termination of employment without Cause or by reason of Constructive Termination
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occurs
within three months prior to a Change in Control, any unvested equity compensation awards that do
not vest on the Transition Commencement Date shall vest in full immediately prior to the effective
time of the Change in Control. Any acceleration of vesting pursuant to this Section 4.5(a) shall
have no effect on any other provisions of the equity compensation awards or the plans governing
such awards.
(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 Securities Exchange
Act of 1934, as amended) other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), 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 or any “person” acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person) ownership of securities of the Company representing
thirty percent (30%) or more of the total voting power; or
(ii) during any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new director whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute
a majority thereof; or
(iii) the stockholders of the Company approve a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) at
least 80% of the total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company’s assets.
4.6 TERMINATION FOR CAUSE, VOLUNTARY TERMINATION, OR TERMINATION ON ACCOUNT OF DEATH OR
PERMANENT DISABILITY.
(a) In the event Executive’s employment is terminated for Cause or Executive voluntarily
terminates his employment with the Company other than in connection with a Constructive
Termination, then Executive will be paid only (i) any earned but unpaid Base Salary and any
outstanding expense reimbursements submitted and approved pursuant to Section
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3.1 hereof, and (ii)
other unpaid vested amounts or benefits under the Company compensation, incentive and benefit plans
in which Executive participates, in each case under this clause (ii) as of the effective date of
such termination; and
(b) In the event Executive’s employment is terminated on account of death or
Permanent Disability, then, in addition to all amounts payable pursuant to Section 4.6(a), upon
execution by Executive or Executive’s representative or a representative of Executive’s estate, as
soon as reasonably practicable but in no event later than one hundred eighty (180) days following
the date of Executive’s termination of employment, of the Release Agreement, in the form attached
hereto as Exhibit C, and such Release Agreement becoming effective, the Company shall provide
Executive or his estate, as the case may be, the following benefits to which Executive would not
otherwise be entitled: (i) all unvested equity compensation awards (including stock options,
restricted stock and restricted stock units) outstanding and held by Executive on the date of his
termination that would have vested over the twelve (12) months following the date of termination
had Executive continued in employment under his Employment Agreement during that period shall
immediately vest and become exercisable in full on the date of such termination, such equity
compensation awards and all previously vested equity compensation awards shall remain exercisable
for twenty-four (24) months from the date of such termination (hut not later than the expiration of
the term of the applicable equity compensation award), and there shall be no further vesting of any
equity compensation awards thereafter; provided that this acceleration will have no effect on any
other provisions of the awards; and (ii) solely in the event of termination on account of Permanent
Disability, if Executive elects to continue coverage under Cadence’s medical, dental and vision
insurance plans pursuant to COBRA, Cadence will pay Executive’s COBRA premiums for twelve (12)
months following such termination. In the event that Executive performs full-time or part-time
employment or consulting services during the 12-month period following his termination on account
of Permanent Disability without the written consent of the Company, then all equity compensation
awards the vesting of which had been accelerated pursuant to the preceding sentence shall be
forfeited and Executive shall return to the Company all stock obtained or on which restrictions
terminated upon such vesting and the proceeds from the sale of any such stock, and all stock, net
of exercise price, obtained upon the exercise of options that vested pursuant to the preceding
sentence and the proceeds, net of exercise price, from the sale of any such stock.
(c) In the event Executive’s employment is terminated for Cause, or on account of death or
Permanent Disability, or Executive voluntarily terminates his employment with the Company other
than in connection with a Constructive Termination, Executive shall not become a party to the
Transition Agreement and shall not be bound by any of the terms and provisions thereof.
5. EXCISE TAX.
In the event that any benefits payable to Executive pursuant to 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
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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 and Executive shall have no right to Termination Benefits in excess of
the amount so determined. 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 the cost of all fees the Accountants charge in connection with
any calculations contemplated by this Section 5.
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,
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.
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The parties agree that they will be allowed to engage in adequate discovery, the scope of which
will he 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 prevailing party in any arbitration
pursuant to this Section 6 shall be entitled to recover from the losing party its reasonable
attorneys’ fees and costs (including expert fees and costs).
(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 AFTER TERMINATION OF THE EMPLOYMENT PERIOD.
Following his termination of full-time employment for any reason (other than death), Executive
shall provide the Company with reasonable cooperation 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 or any of its affiliates 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 and documented 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 time
of the termination of his full-time employment, except to the extent that the Company determines
that retention of any of such property is necessary, 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.
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8. PROPRIETARY INFORMATION AGREEMENT.
The Executive’s Employee Proprietary Information and Inventions Agreement was executed on May
26, 2004 in the form attached hereto as Exhibit D (the “Proprietary Information Agreement”).
9. GENERAL.
9.1 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.
9.2 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.
9.3 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 that 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, or (d) upon delivery by email, if addressed to the Company to
xxxxxxxxxxxxxx@xxxxxxx.xxx and if addressed to Executive to such email address as Executive
may specify by notice to the Company.
9.4 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 constitute 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.
9.5 ENTIRE AGREEMENT. The parties hereto acknowledge that each has read this Agreement, understands it, arid agrees to
be bound by its terms. The parties further agree that this Agreement, the exhibits to this
Agreement, any existing equity compensation 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 supersedes all proposals (oral or written), understandings, agreements, representations,
conditions, covenants, and all other communications between the parties relating to the subject
matter hereof; provided, however, that the Proprietary Information Agreement, 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
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Conduct, as amended from
time to time, remain in full force and effect and govern Executive’s conduct from the date of
execution of such agreements until the Effective Date of this Agreement.
9.6 GOVERNING LAW. This Agreement shall be governed by the laws of the State of California, without regard to its
conflict of laws principles.
9.7 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, to his estate or designated beneficiary, or as
otherwise agreed to by the Company.
9.8 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.
9.9 TERMINATION AND SURVIVAL OF CERTAIN PROVISIONS. This Agreement shall terminate upon the termination of Executive’s full-time employment for any
reason; provided, however, that the following provisions of this Agreement shall survive its
termination: Executive’s obligations under Section 7 hereof; the Company’s obligations to provide
compensation earned through the termination of the employment relationship plus all reimbursements
to which Executive is entitled, under Sections 2 and 3 hereof; the Company’s obligations and
Executive’s obligations under Section 5 hereof; the Company’s obligations and Executive’s
obligations enumerated in the Transition Agreement, if applicable; the Company’s obligation to
indemnify Executive pursuant to Section 2.4 hereof and the referenced Indemnity Agreement; the
dispute resolution provisions of Section 6 hereof; and, to the extent applicable, this Section 9.
9.10 FORMER EMPLOYERS. Executive represents and warrants to the Company that he is not subject to any
employment, confidentiality or other agreement or restriction that would prevent him from
fully satisfying his duties under this Agreement or that would be violated if he did so.
Without the Company’s prior written approval, Executive will not:
(a) disclose any proprietary information belonging to a former employer or other entity
without its written permission;
(b) contact any former employer’s customers or employees to solicit their business or
employment on behalf of the Company in violation of Executive’s existing obligations to his former
employer; or
(c) distribute announcements about or otherwise publicize Executive’s employment with the
Company.
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Executive shall indemnify and hold the Company harmless from any liabilities, including
reasonable defense costs, it may incur because he is alleged to have broken any of these promises
or improperly revealed or used such proprietary information or to have threatened to do so, or if a
former employer challenges Executive’s entering into this Agreement or rendering services pursuant
to it.
9.11 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.
9.12 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.
9.13 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.
9.14 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 resulting from Executive’s
termination of employment provided for in this Agreement or the Transition Agreement constitutes a
“deferral of compensation” and that the Executive is a “specified employee,” both within the
meaning of Section 409A of the Code, no such amounts shall be payable to Executive pursuant to this
Agreement or the Transition Agreement prior to the earliest of (a) Executive’s death following the
Termination Date (as such term is defined in the Transition Agreement) or (b) 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 addition, with regard to any provision herein or in the
Transition Agreement that provides for reimbursement of costs and expenses or in-kind benefits,
except as permitted by Section 409A of the Code, (i) the right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable
year, provided that the foregoing clause (ii) shall not be deemed to be violated with regard to
expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such
expenses are subject to a limit related to the period the arrangement is in effect and (iii) such
payments shall be made on or before the last day of Executive’s taxable year following the taxable
year in which the expense occurred.
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IN WITNESS WHEREOF, the parties have executed this Agreement on this 29th day of
July 2008.
| CADENCE DESIGN SYSTEMS, INC. | EXECUTIVE | |||||
By:
|
/s/ Xxxxxx X. Xxxxxx
|
/s/ Xxxxx Xxxxxx
|
||||
| President and Chief Executive Officer | ||||||
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EXHIBIT A
INDEMNITY AGREEMENT
INDEMNITY AGREEMENT
This Indemnity Agreement (this “Agreement”), dated as of July 29, 2008, is made by and between
Cadence Design Systems, Inc., a Delaware corporation (the “Company”), and Xxxxx Xxxxxx, an
Executive Vice President, Worldwide Field Operations 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 and indemnification, due to increased exposure to litigation costs and risks resulting
from their service to such corporations;
B. 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;
C. The Company believes that its directors and officers and the directors and officers of its
subsidiaries should be able to serve as such, and in such other capacities as the Company may
request, as the case may be, free from undue concern about the risk of large judgments and other
expenses that may be incurred as a result of the good faith performance of their duties to the
Company or its subsidiaries;
D. The Company recognizes that the long period of time that may elapse before the trial or
other disposition of legal proceedings may extend beyond the normal time for retirement for such
director or officer, with the result that the Indemnitee, after retirement or in the event of the
Indemnitee’s death, the Indemnitee’s spouse, heirs, executors or administrators, may be faced with
limited ability and undue hardship in maintaining an adequate defense, which may discourage such
director or officer from serving in that position;
E. 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 directors and certain officers 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, and in the best interests of the Company and its stockholders, for
the Company to contractually indemnify such individuals, and to assume for itself maximum liability
for claims against such persons in connection with their service;
F. The Company desires and has requested the Indemnitee to serve or continue to serve as a
director and/or an 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
G. The Indemnitee is willing to serve, or to continue to serve, the Company and/or the
subsidiaries of the Company provided that the Indemnitee 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) Change
in Control. For purposes of this Agreement, a “change in control” shall be deemed to have occurred if
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of the Company, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of the Company representing 20% or more of the
total voting power represented by the Company’s then outstanding voting securities; or (ii) during
any period of two consecutive years, individuals who at the beginning of such period constitute the
Board and any new director whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a majority thereof; or
(iii) the stockholders of the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation that would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) at least 80% of
the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the sale or disposition
by the Company (in one transaction or a series of transactions) of all or substantially all of the
Company’s assets.
(b) Covered
Person. For purposes of this Agreement, a “covered person” shall include the Indemnitee and any
heir, executor, administrator or other legal representative of the Indemnitee following the
Indemnitee’s death or incapacity.
(c) Disinterested
Directors. For purposes of this Agreement, “disinterested directors” mean any director of the Company
who is not or was not a party to the proceeding in respect of which indemnification is being sought
by a covered person.
(d) Expenses. For purposes of this Agreement, “expenses” include 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 a covered person in connection with
either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to
indemnification or advancement under this Agreement, Section 145 of the Delaware General
Corporation Law or otherwise.
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(e) Independent
Legal Counsel. For purposes of this Agreement, “independent legal counsel” means a law firm or a member of a
law firm that neither is presently nor in the past five years has been retained to represent (i)
the Company or a covered person in any matter material to either such party, or (ii) any other
party to the proceeding giving rise to a claim for indemnification or advancement hereunder.
“Independent legal counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the
Company or the covered person in an action to determine such covered person’s right to
indemnification or advancement under this Agreement.
(f) Proceeding. For purposes of this Agreement, “proceeding” means any threatened, pending or completed action,
suit or other proceeding, whether civil, criminal, administrative, legislative, investigative or of
any other type whatsoever, and including any of the foregoing commenced by or on behalf of the
Company, derivatively or otherwise.
(g) Subsidiary. For 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, 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 the Company and/or its subsidiaries in
the Indemnitee’s present capacity, so long as the Indemnitee is duly appointed or elected or until
such time as the Indemnitee tenders a written resignation; provided, however, that nothing
contained in this Agreement is intended to create any right to continued employment or other form
of service for the Company or its subsidiaries 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 officer or director of the Company or any of its subsidiaries, and thereafter so long
as the Indemnitee shall be subject to any possible proceeding by reason of such service, the
Company, subject to Section 3(b), shall use reasonable efforts to obtain and maintain in full force
and effect directors’ and officers’ liability insurance (“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.
(a) Right
to Indemnification. In the event a covered person was or is made a party or is threatened to he made a party to or
is involved in any proceeding, by reason of the fact that the Indemnitee is or was a director,
officer, employee or agent of the Company (including
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any subsidiary or affiliate thereof or any
constituent corporation or any of the foregoing absorbed in any merger) or is or was serving at the
request of the Company (including such subsidiary, affiliate or constituent corporation) as a
director, officer, employee or agent of another corporation, or of a partnership, joint venture,
trust or other entity, including service with respect to employee benefit plans, such person shall
be indemnified and held harmless by the Company to the fullest extent permitted by applicable law
and the Company’s Bylaws, against all expenses, liability and loss (including, without limitation,
attorneys’ fees, judgments, fines, forfeitures, ERISA excise and other taxes and penalties, and
amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such
person in connection therewith. Such indemnification shall continue after the Indemnitee has
ceased to serve in such capacity and shall inure to the benefit of the Indemnitee’s heirs,
executors, administrators and other legal representatives; provided, however, that except for a
proceeding pursuant to Section 7, the Company shall indemnify any such person in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board.
(b) Exception
for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company shall not be obligated to indemnify a covered person
for expenses or liabilities of any type whatsoever (including, but not limited to, attorneys’ fees,
judgments, fines, forfeitures, ERISA excise and other taxes and penalties, and amounts paid or to
be paid in settlement) which have been paid directly to such person or a third party on the covered
person’s behalf by D&O Insurance.
(c) Partial
Indemnification; Successful Defense. If a covered person 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, attorneys’ fees, judgments, fines, forfeitures, ERISA excise and other taxes and
penalties, and amounts paid or to be paid in settlement) incurred by the covered person in the
investigation, defense, settlement or appeal of a proceeding, but not entitled, however, to
indemnification for the total amount thereof, the Company shall nevertheless indemnify such person
for such total amount, except as to the portion thereof to which the covered person is not entitled
by applicable law, the Company’s Bylaws or this Agreement. Notwithstanding any other
provision of this Agreement to the extent that a covered person has been successful, on the merits
or otherwise, in whole or in part, in the defense of a proceeding, or in the defense of any claim,
issue or matter therein, including, without limitation, the dismissal of any action without
prejudice, the covered person shall be indemnified against the total amount of any expenses
actually and reasonably incurred or suffered by such person in connection therewith.
5. Mandatory Advancement of Expenses. The Company shall pay all expenses incurred by a covered person in advance of the final
disposition of a proceeding as they are incurred; provided, however, that if the Delaware General
Corporation Law then so requires, the payment of such expenses incurred in advance of the final
disposition of such proceeding shall be made only upon delivery to the Company of an undertaking,
by or on behalf of such covered person, to repay all amounts so advanced if it should be determined
ultimately, after a final adjudication (including all appeals), that such person is not entitled to
the payment of such expenses by the Company.
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6. Notice and Procedures for Obtaining Indemnification and Advancement.
(a) Promptly after receipt by a covered person of notice of the commencement of or the threat
of commencement of any proceeding, such person shall, if such person believes that indemnification
or advancement with respect thereto may be sought from the Company under this Agreement, notify the
Company of the commencement or threat of commencement thereof; provided, however, that the failure
to notify the Company shall not relieve the Company of any liability it may have to such covered
person under this Agreement.
(b) Upon written request by a covered person for indemnification pursuant to Section 4(a), the
entitlement of such covered person to indemnification, to the extent not provided pursuant to the
terms of this Agreement, shall be determined and such indemnification shall be paid in full within
sixty (60) days after a written request for indemnification has been received by the Company. Such
request shall include documentation or information which is necessary for such determination and
which is reasonably available to the covered person. Upon making a request for indemnification, a
covered person shall he presumed to be entitled to indemnification hereunder and the Company shall
have the burden of proving that the covered person is not entitled to be indemnified. If the
person or persons empowered to make such determination pursuant to Section 6(c) fail to make the
requested determination with respect to indemnification within sixty (60) days after a written
request for indemnification has been received by the Company, a requisite determination of
entitlement to indemnification shall be deemed to have been made and the covered person shall be
absolutely entitled to such indemnification, absent actual and material fraud in the request for
indemnification.
(c) The determination of entitlement to indemnification pursuant to Section 6(b) shall be made
by the following person or persons who shall be empowered to make such determination: (i) the
Board, by a majority vote of disinterested directors, whether or not such majority constitutes a
quorum; (ii) a committee of disinterested directors designated by a majority vote of such
directors, whether or not such majority constitutes a quorum; (iii) if there are no disinterested
directors, or if the disinterested directors so direct, by independent legal counsel in a written
opinion to the Board, a copy of which shall be delivered to the covered
person; or (iv) the stockholders of the Company. If a change in control has occurred and
results in individuals who were directors prior to the circumstances giving rise to the change in
control ceasing for any reason to constitute a majority of the Board, such determination shall be
made by independent legal counsel of a reputable national law firm in a written opinion, and such
independent counsel shall render its written opinion to the Company and to the covered person. The
Company agrees to pay the reasonable fees of such independent legal counsel and to indemnify fully
such independent legal counsel against any and all expenses (including attorneys’ fees), claims,
liabilities, loss and damages arising out of or relating to this Agreement or the engagement of
such independent legal counsel pursuant hereto. The independent legal counsel shall he selected by
the Board and approved by the covered person; provided, however, that if a change in control has
occurred, such independent legal counsel shall be selected by the covered person and approved by
the Company (such approval not to be unreasonably withheld or delayed).
(d) Expenses incurred by a covered person in advance of the final disposition of a proceeding
shall be paid by the Company at the request of the covered person, each such
5
payment of expenses to
be made within twenty (20) days after a written request for such payment has been received by the
Company. Such request shall reasonably evidence the expenses incurred by the covered person and,
to the extent required pursuant to Section 5, shall include or be accompanied by an undertaking by
or on behalf of such covered person, to repay all amounts so advanced if it should be determined
ultimately, after a final adjudication (including all appeals), that such person is not entitled to
the payment of such expenses by the Company.
(e) Any expenses incurred by a covered person in connection with a request for indemnification
or advancement of expenses hereunder, under any other agreement, any provision of the Company’s
Bylaws or any D&O insurance, shall be borne by the Company.
(f) If, at the time of the receipt of a notice of the commencement of a proceeding, 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 covered person, all amounts payable as a result of such
proceeding in accordance with the terms of such policies.
(g) In the event the Company shall be obligated to advance the expenses for any proceeding
against the covered person, the Company, if appropriate, shall be entitled to assume the defense of
such proceeding, with counsel approved by the covered person (such approval not to be unreasonably
withheld or delayed), upon the delivery to the covered person of written notice of its election so
to do. After delivery of such notice, approval of such counsel by the covered person and the
retention of such counsel by the Company, the Company shall not be liable to the covered person
under this Agreement for any fees of counsel subsequently incurred by the covered person with
respect to the same proceeding, provided that (i) the covered person shall have the right to employ
separate counsel in any such proceeding at the covered person’s expense; and (ii) if (A) the
employment of counsel by the covered person has been previously authorized by the Company, (B) the
Company shall not, in fact, have employed counsel to assume the defense of such proceeding, or (C)
it is determined by legal counsel for the Company and the covered person that a conflict of
interest exists requiring the covered person to retain
separate counsel, the fees and expenses of the covered person’s counsel shall be at the
expense of the Company. If the Company has assumed the defense of a proceeding, the Company shall
not be liable to indemnify a covered person under this Agreement for any amounts paid in settlement
of any proceeding effected without the Company’s written consent; provided, however, that if a
change in control has occurred, the Company shall be liable for indemnification for amounts paid in
settlement if independent legal counsel has approved the settlement. The Company shall not settle
any proceeding in any manner that would impose any penalty or limitation on, or disclosure
obligation with respect to, a covered person without the covered person’s written consent. Neither
the Company nor a covered person shall unreasonably withhold or delay its consent to any proposed
settlement.
7. Right of Covered Person to Bring Suit. If (a) indemnification is not paid in full by the Company within sixty (60) days after a written
request for indemnification has been received by the Company pursuant to Section 6(b); (b) a
determination is made pursuant to Section 6(c) that a covered person is not entitled to
indemnification; or (c) a written request for an advancement of expenses is not paid in full by the
Company within twenty (20) days after a
6
written request for such payment has been received by the
Company pursuant to Section 6(d), the covered person may at any time thereafter bring suit against
the Company to recover the unpaid amount of any claim for indemnification or advancement. If
successful in whole or in part in any such suit, or in a suit brought by the Company to recover an
advancement of expenses pursuant to the terms of an undertaking, the covered person shall be
entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by
a covered person to enforce a right to indemnification hereunder (but not in a suit brought by a
covered person to enforce a right to an advancement of expenses) it shall be a defense that
indemnification is not permitted by applicable law. Further, in any suit by the Company to recover
an advancement of expenses pursuant to the terms of an undertaking, the Company shall be entitled
to recover such expenses upon a final adjudication (including all appeals) by asserting that
indemnification is not permitted by applicable law. Neither the failure of the Company (including
the Board, a committee thereof, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the covered person is
proper in the circumstances because the Indemnitee has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an actual determination by the Company
(including the Board, a committee thereof, independent legal counsel or its stockholders) that the
Indemnitee has not met the applicable standard of conduct, shall create a presumption that the
covered person is not entitled to indemnification or, in the case of such a suit brought by a
covered person be a defense to such suit. If a determination is made or deemed to have been made
pursuant to the terms of Section 6 that a covered person is entitled to indemnification, the
Company shall be bound by such determination and shall be precluded from asserting that such
determination has not been made or that the procedure by which such determination was made is not
valid, binding and enforceable. In any suit brought by a covered person to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the Company to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the
covered person is not entitled to be indemnified, or to such advancement of expenses, shall be on
the Company.
8. 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 of its subsidiaries against the Indemnitee, the Indemnitee’s 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 (a) the
date the Company or any subsidiary of the Company discovers such facts, or (b) 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 8
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 or any of its subsidiaries has
no actual knowledge apart from the Indemnitee’s knowledge.
9. 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
7
Indemnitee or any covered person may have
under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the
Company’s disinterested directors or stockholders, other agreements, or otherwise, both as to acts
or omissions in the Indemnitee’s official capacity and to acts or omissions in another capacity
while occupying the Indemnitee’s position as an officer, director or employee of the Company and/or
its subsidiaries, and the Indemnitee’s right hereunder shall continue after the Indemnitee has
ceased to serve the Company or any of its subsidiaries and shall inure to the benefit of any heir,
executor, administrator or other legal representative of the Indemnitee. Notwithstanding the
foregoing, this Agreement shall supersede and replace any prior indemnification agreements entered
into between the Company and the Indemnitee, and any such prior agreements shall be terminated upon
execution of this Agreement.
10. Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so
as to provide indemnification and advancement to the Indemnitee to the fullest extent now or
hereafter permitted by law.
11. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever, (a) 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 (b) 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 Section 10 hereof.
12. 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.
13. 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.
14. Notice. All notices, requests, demands and other communications under this Agreement shall be in writing
and shall be deemed duly given (a) upon receipt, if delivered by hand, or (b) on the third business
day after the mailing date, if mailed by certified or registered mail with postage prepaid.
Addresses for notice to either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice.
15. 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 within Delaware.
8
16. 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.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
9
The parties hereto have entered into this Indemnity Agreement effective as of the date first
above written.
| CADENCE DESIGN SYSTEMS, INC. | ||||
| By: | ||||
| Name: Xxxxx X. Xxxxx | ||||
| Title: Senior Vice President and | ||||
| General Counsel | ||||
| Address: 0000 Xxxxx, Xxxxxxxx 0 | ||||
| Xxx Xxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Office of the General Counsel | ||||
| INDEMNITEE | ||||
| By: | ||||
| Name: Xxxxx Xxxxxx | ||||
| Title: | ||||
| Address: | ||||
10
EXHIBIT B
EXECUTIVE TRANSITION AND RELEASE AGREEMENT
EXECUTIVE TRANSITION AND RELEASE AGREEMENT
This Executive Transition and Release Agreement (this “Agreement”) is entered into between
Xxxxx Xxxxxx (“Executive”) and Cadence Design Systems, Inc. (“Cadence” or the “Company”).
1. TRANSITION COMMENCEMENT DATE. As of <<Transition Commencement Date>> (the “Transition Commencement Date”),
Executive will no longer hold the position of Executive Vice President, Worldwide Field Operations
and will be relieved of all of Executive’s authority and responsibilities in that position.
Executive will be paid (a) any earned but unpaid base salary for his services as an officer of the
Company prior to the Transition Commencement Date and any outstanding expense reimbursements
submitted and approved pursuant to Section 3.1 of Executive’s Employment Agreement with the Company
dated as of [______, 2008] (the “Employment Agreement”); and (b) other unpaid vested amounts or
benefits under the compensation, incentive and benefit plans of the Company in which Executive
participates, in each case under this clause (b) as of the Transition Commencement Date, The
payment of the foregoing amounts shall be made to Executive by no later than the next regular
payroll date following the Transition Commencement Date. As of the first day of the month
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 under this Agreement 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 material breach by
Executive of Executive’s duties or obligations under this Agreement after written notice delivered
to Executive identifying such breach and his failure to cure such breach, if curable, within thirty
(30) days following delivery of such notice; 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 <<New
Position Title>>. In this position, Executive will render those services requested by
Cadence’s <<Management Representative» on an as-needed basis at mutually-convenient times.
Executive’s time rendering those services shall not exceed twenty (20) hours per month. Except as
otherwise provided in paragraph 3(b) of this Agreement, Executive’s obligations hereunder will not
preclude Executive from accepting and holding full-time employment elsewhere. Neither party
expects that Executive
will resume employment with Cadence in the future at a
level that exceeds the level set forth in this Section 3(a) and it is the parties’ intent that
Executive will have experienced a “separation from service” as defined in Section 409A of the Code
as of the Transition Commencement Date.
b. As a Cadence <<New position>>, 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, 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 venturer, corporate officer or director, on behalf of any
corporation, limited liability company, partnership, or other entity or person or successor thereto
that (i) is engaged in any business in which Cadence or any of its affiliates is engaged on the
Transition Commencement Date or has been engaged at any time during the 12-month period immediately
preceding the Transition Commencement Date, whether in the EDA industry or otherwise, anywhere in
the world (a “Cadence Business”), or (ii) produces, markets, distributes or sells any products,
directly or indirectly through intermediaries, that are competitive with Cadence or any of its
affiliates. 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, during the Transition Period, 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 CEO
before accepting said offer.
c. During the Transition Period, Executive will be prohibited, to the fullest 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, recruiting, attempting to recruit, soliciting or
attempting to solicit or participating in any way in hiring or retaining 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; (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), except that Executive may solicit or accept business, in a line of business engaged in by
Cadence or a Cadence affiliate, from a former or present client, if and only if Executive had
previously provided consulting services in such line of business, to such client, prior to ever
being employed by Cadence, but in no event may Executive violate paragraph 3(b) hereof.
13
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 and Inventions
Agreement, dated as of May 26, 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, past, present or future. 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 Id 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, except to the extent retained pursuant to
Section 7 of the Employment Agreement:
a. all of the unvested equity compensation awards (including stock options, restricted stock
and restricted stock units) that are not performance-based within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”), that are outstanding and held by
Executive on the Transition Commencement Date and that would have vested over the twelve (12)
months following the Transition Commencement Date had Executive continued to serve as an executive
of the Company pursuant to his Employment Agreement, shall immediately vest and become exercisable
in full on the Effective Date of this Agreement, and there shall be no further vesting of those
equity compensation awards during or after the Transition Period, notwithstanding any provision in
any equity compensation award to the contrary, except as otherwise provided by paragraph 7 hereof.
Provided Executive continues in
employment under this Agreement through the end of the applicable performance period, unvested
equity compensation awards that are performance-based within the meaning of Section
14
162(m) of the
Code and that are outstanding and held by Executive on the Transition Commencement Date shall
continue to vest though the end of the applicable performance period provided any such performance
period ends within twelve (12) months following the Transition Commencement Date, but only to the
extent justified by the satisfaction of the performance goals prescribed for such equity awards.
Upon the conclusion of the performance period, such awards shall immediately vest to the extent
they would have vested over the twelve (12) months following the Transition Commencement Date had
Executive continued to serve as an executive of the Company pursuant to his Employment Agreement,
and there shall be no further vesting of such awards during or after the Transition Period except
as otherwise provided by paragraph 7 hereof. Any acceleration pursuant to this paragraph 4(a) will
have no effect on any other provisions of the stock awards;
b. Executive’s employment pursuant to this Agreement shall be considered a continuation of
employee status and continuous service for all purposes under any equity compensation awards
previously granted to Executive by the Company and outstanding on the Transition Commencement Date;
and
c.
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.
Except as so provided or as otherwise set forth in paragraphs 5 and 7 hereof, 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 under this Agreement and
Cadence does not terminate Executive’s employment with Cadence pursuant to paragraph 2(b) due to a
material breach by Executive of Executive’s duties under this Agreement, and in consideration for,
and subject to, Executive’s execution and acceptance of and adherence to 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 the following termination payment, to which Executive would not otherwise be entitled, in
each case, so long as the revocation period of the Release of Claims (as defined in that document)
has expired prior to the date of payment:
a.
a lump-sum payment of
$______ [amount equal to 100% of
Executive’s annual Base Salary at the highest rate in effect during Executive’s employment with the
Company], less applicable tax deductions and withholdings, payable on the thirtieth (30th) day
following the date that is six months after the Transition Commencement Date; 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 thirty (30) days following the date that is six months after the Transition Commencement Date.
6. SECOND TERMINATION PAYMENT AND BENEFITS; REFUND OF PAYMENTS.
a. Provided that Executive does not resign from employment with Cadence under this Agreement
and Cadence does not terminate Executive’s employment with Cadence
15
pursuant to paragraph 2(b) due
to a material breach by Executive of Executive’s duties under this Agreement, on the thirtieth
(30th) day following the Termination Date, and in consideration for, and subject to, Executive’s
execution and acceptance of and adherence to 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
the following termination payment, to which Executive would not otherwise be entitled, so long as
the revocation period of the Release of Claims (as defined in that document) has expired prior to
the date of payment:
i. a
lump-sum payment of $______ [amount equal to 130% of Executive’s annual Base Salary
at the highest rate in effect during Executive’s employment with the Company], less applicable tax
deductions and withholdings.
b. If the Company should terminate Executive’s employment with the Company due to a breach by
Executive of Executive’s duties or obligations under this Agreement, Executive shall promptly
refund to the Company any and all amounts theretofore paid to Executive pursuant to paragraph 5(a),
with interest on any such amount of eight percent per annum, compounded monthly.
c. Notwithstanding anything in this Agreement to the contrary, to the extent that the Company
in good faith determines that any payment resulting from Executive’s termination of employment
provided for in this Agreement constitutes a “deferral of compensation” and that Executive is a
“specified employee”, both within the meaning of Section 409A of the Code, no such amounts shall be
payable to Executive pursuant to the Agreement prior to the earlier of (1) Executive’s death
following the Transition Commencement Date or (2) 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).
7. CHANGE
IN CONTROL. If this Agreement is executed by Executive in connection with his termination without Cause (as
defined in the Employment Agreement) or Constructive Termination (as defined in the Employment
Agreement) occurring within thirteen (13) months following a Change in Control (as defined in the
Employment Agreement) or if a Change in Control occurs within three (3) months following his
termination without Cause or Constructive Termination, in which case the Company shall promptly
notify Executive of the occurrence of such Change in Control, then:
a. Section 4.5(a)(3) of the Employment Agreement shall apply in lieu of paragraph 4(a) of this
Agreement; and
b. Sections 4.5(a)(1) and 4.5(a)(2) of the Employment Agreement shall apply in addition to
paragraphs 5(a) and 6(a) of this Agreement.
For the
avoidance of doubt, if this Agreement has already been executed by
Executive and Cadence and within three (3) months following the
Transition Commencement Date a Change in Control occurs (a “Post-Termination Timely Change in Control”), then paragraphs 7(a) and 7(b) of
this Agreement shall take effect immediately upon the effectiveness of the Post-Termination Timely
Change in Control.
8. 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
16
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 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 pursuant to the
provisions of this Agreement or pursuant to the provisions designated in Section 9.9 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;
(iv) any rights that Executive has or may have to be indemnified by Cadence pursuant to any
contract, statute, or common law principle; and
(v) any other rights or claims that Executive has or may have that cannot, as a matter of law,
be waived.
b. Executive represents and warrants that he has not filed any claim, charge or complaint
against any of the Releasees based upon any of the matters released above.
c. Executive acknowledges that the payments provided in this Agreement constitute adequate
consideration for the release set forth in this paragraph 8.
d. Executive intends that this release of claims cover all claims described above, 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:
17
A general release does not extend to claims which the creditor does not know or suspect to
exist in his or her favor at the time of executing the release, 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.
9. 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.
10. 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, if California law is preempted, 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. The prevailing party in any arbitration pursuant to this paragraph 10 shall be
entitled to recover from the losing party its reasonable attorneys’ fees and costs (including
expert fees and costs).
11. 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.
12. 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
18
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.
13. 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.
14. 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.
15. 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.
16. 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 not materially reduce the benefits provided to Executive pursuant to this Agreement
without the Executive’s consent.
17. 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.
18. 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.
19
19. 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.
EXECUTION OF AGREEMENT
The parties execute this Agreement to evidence their acceptance of it.
| Dated: | Dated: | |||
| XXXXX XXXXXX | CADENCE DESIGN SYSTEMS, INC. | |||
| By: | ||||
20
ATTACHMENT A
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 or 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 my 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 I have 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 which I am or become entitled to receive pursuant to the
provisions of my Executive Transition and Release Agreement with Cadence or pursuant to the
provisions designated in Section 9.9 of my Employment Agreement with Cadence 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;
(iv) any rights that I have or may have to be indemnified by Cadence pursuant to any contract,
statute, or common law principle; and
(v) any other rights or claims that I have or may have that cannot, as a matter of law, be
waived.
2. I intend that this Release cover all claims described above, whether or not known to me, I
further recognize the risk that, subsequent to the execution of this Release, 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 at the time of executing the release, 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 |
22
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 or 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 my 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 I have 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 which I am or become entitled to receive pursuant to the provisions
of my Executive Transition and Release Agreement with Cadence or pursuant to the provisions
designated in Section 9.9 of my Employment Agreement with Cadence 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;
iv.
any rights that I have or may have to be indemnified
by Cadence pursuant to any contract, statute, or common law principle; and
v. any other rights or
claims that I have or may have that cannot, as a matter of law, be waived.
2. I intend that this Release cover all claims described above, whether or not known to me. I
further recognize the risk that, subsequent to the execution of this Release, I may incur loss,
damage or injury which 1 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 at the time of executing the release, 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 |
24
EXHIBIT C
RELEASE AGREEMENT
(DEATH or PERMANENT DISABILITY)
(DEATH or PERMANENT DISABILITY)
RELEASE AGREEMENT
1. GENERAL RELEASE OF CLAIMS.
a. Xxxxx Xxxxxx or, in the event of his incapacity due to Permanent Disability as defined in
his Employment Agreement, his legal representative acting on his behalf, or, in the event of his
death, his estate (all of which are hereafter referred to as “Executive” as the context requires),
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 Release Agreement which
relate to his hiring or 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 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 which Executive is or becomes entitled to receive pursuant to the
provisions of this Release Agreement, pursuant to Section 4.6(b) of Executive’s Employment
Agreement with Cadence, or pursuant to the provisions designated in Section 9.9 of that 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;
iv. any rights that Executive has or may have to he indemnified by Cadence pursuant to any
contract, statute, or common law principle; and
v. any other rights or claims that Executive has or may have that cannot, as a matter of law,
be waived.
b. Executive represents and warrants that he has not filed any claim, charge or complaint
against any of the Releasees based upon any of the matters released above.
c. Executive acknowledges that the payments and benefits described in paragraph 1(a)(i)
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 Release
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 Release
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 at the time of executing the release, 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.
f. The undersigned represents that he is the individual executive, his legal representative or
the executor or administrator of his estate, and that he or it is authorized to bind the individual
executive or his estate, as applicable.
2. REVIEW OF RELEASE AGREEMENT; REVOCATION OF ACCEPTANCE. Executive has been given at least 21 days in which to review and consider this Release
Agreement, although Executive is free to accept this Release Agreement anytime within that 21-day
period. Executive is advised to consult with an attorney about the Release Agreement. If
Executive accepts this Release Agreement, Executive will have an additional 7 days from the date
that Executive signs this Release 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 Release 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 Release
Agreement.
The undersigned has executed this Release Agreement on this ___day of ,
.
27
EXHIBIT D
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
CADENCE DESIGN SYSTEMS, INC.
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by Cadence Design Systems, Inc. (the
“Company”), and the compensation now and hereafter paid 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), except as such disclosure, use or
publication may be required in connection with my work for the Company, or unless an officer of the
Company expressly authorizes such in writing. I will obtain Company’s written approval before
publishing or submitting for publication any material (written, verbal, or otherwise) that relates
to my work at Company and/or incorporates any Proprietary Information. I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information and recognize 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 of, or acquired by, 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, ideas, algorithms, techniques, develop-mental or experimental work,
improvements 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; and (c) information regarding the skills and compensation of other employees of the
Company. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use
information which is generally known in the trade or industry, which is not gained as result of a
breath of this Agreement, and my own, skill, knowledge, know-how and experience to whatever extent
and in whichever way I wish.
1.3 Third Party Information. I understand, in addition, that the Company has received and in
the future will receive from third parties confidential or proprietary information (“Third Party
Information”) subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest confidence and will not disclose
to anyone (other than Company personnel who need to know such information in connection with their
work for the Company) or use, except in connection with my work for the Company, Third Party
Information unless expressly authorized by an officer of the Company in writing.
1.4 No Improper Use of Information of Prior Employers and Others. During my employment by
the Company I will not improperly use or disclose any confidential information or trade secrets, if
any, of any former employer or any other person to whom I have an obligation of confidentiality,
and I will not bring onto the premises of the Company any unpublished documents or any property
belonging to my former employer or any other person to whom I have an obligation of confidentiality
unless consented to in writing by that former employer or person. I will use in the performance of
my duties only information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or otherwise legally in
the public domain, or which is otherwise provided or developed by the Company.
2. ASSIGNMENT OF INVENTIONS
2.1 Proprietary Rights. The term “Proprietary Rights” shall mean all trade secret, patent,
copyright, mask work and other intellectual property rights throughout the world.
2.2
Prior Inventions. Inventions, if any, patented or unpatented, which I made prior to the
commencement of my employment with the Company are excluded from the scope of this Agreement. To
preclude any possible uncertainty, I have set forth on Exhibit B (Previous Inventions) attached
hereto a complete list of all inventions that I have, alone or jointly with others, conceived,
developed or reduced to practice or caused to be
conceived, developed or reduced to practice prior to the commencement of my employment with the
Company, that I consider to be my that I wish to have excluded from the scope of this Agreement
(collectively referred to as “Prior
Inventions”). If disclosure of any such Prior Invention(s) would cause me to violate any prior
confidentiality agreement, 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. If, in the course of my employment with the Company,
I incorporate a Prior Invention into a Company product, process or machine, the Company is hereby
granted and shall have 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 Invention. Notwithstanding the foregoing, I agree that I will not incorporate,
or permit to be incorporated, Prior Inventions in any Company Inventions without the Company’s
prior written consent.
2.3 Assignment of Inventions. Subject to Sections 2.4, and 2.6, I hereby assign and agree to
assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice
or first fixed in a tangible medium, as applicable) to the Company all my right, title and interest
in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by me, either alone or jointly with others, during the period of my employment
with the Company. Inventions assigned to the Company, or to a third party as directed by the
Company pursuant to this Section 2, are hereinafter referred to as “Company Inventions.”
2.4 Nonassignable Inventions. This Agree-ment does not apply to an Invention which qualifies
fully as a nonassignable Invention under Section 2870 of the California Labor Code (hereinafter
“Section 2870”). I have reviewed the notification on Exhibit A (Limited Exclusion Notification)
and agree that my signature acknowledges receipt of the notification,
2.5 Obligation to Keep Company Informed. During the period of my employment I will promptly
disclose to the Company fully and in writing all Inventions authored, conceived or reduced to
practice by me, either alone or jointly with others. In addition, I will promptly disclose to the
Company all patent applications filed by me or on my behalf during my employment. At the time of
each such disclosure, I will advise the Company in writing of any Inventions that I believe fully
qualify for protection under Section 2870; and I will at that time provide to the Company in
writing all evidence necessary to substantiate that belief. The Company will keep in confidence
and will 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 Inventions
that qualify fully for protection under the provisions of Section 2870. I will preserve the
confidentiality of any Invention that does not fully qualify for protection under Section 2870.
For one (1) year following my termination of employment any and all patent applications filed by me
or by a third party based on my work will be presumed to be owned by the Company. I can rebut this
presumption by providing evidence sufficient to establish ownership by the party applying for the
patent.
2.6 Government or Third Party. I also agree to assign all my right, title and interest in
and to any particular Invention to a third party, including without limitation the United States,
as directed by the Company.
2.7 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. 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, United States
and foreign Proprietary Rights relating to Company inventions in any and all countries. To that
end I will execute, verify and deliver such documents and perform such other acts (including
appearances as a witness) as the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment
thereof. In addition, I will execute, verify and deliver assignments of such Proprietary Rights to
the Company or its designee. My obligation to assist the Company with respect to Proprietary
Rights relating to such Company Inventions in any and all countries shall continue beyond the
termination of my employment.
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, which
appointment is coupled with an interest, to act for and in 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. 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 and in any other form that may be required by the Company) of all Proprietary
Information developed by me and all Inventions made by me during the period of my employment at the
Company, which records shall be available to and remain the sole property of the Company at all
times.
4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the Company I will
not, without the Company’s express written consent, engage in any employment or business activity
which is competitive with, or would otherwise conflict with, my employment by the Company.
5. NO SOLICITATION. I agree that (1) 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 solicit, 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; and (2) 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
solicit the business (selling of products or services that compete with products or services
offered lay the Company) 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.
6. NO
CONFLICTING OBLIGATION. I represent that my performance of all the terms of this
Agreement, and of my duties as an employee of the Company, does not and will not breach any
agreement to keep in confidence information acquired by me in confidence or in trust prior to my
employment by the Company. I have not entered into, and I agree I will not enter into, any
agreement either written or oral in conflict herewith.
7. RETURN OF COMPANY DOCUMENTS AND PROPERTY. When I leave the employ of the Company, I will
deliver to the Company any and all drawings, notebooks, notes, memoranda, source code,
specifications, devices, formulas, records, manuals, reports and documents, together with all
copies thereof, and any other material containing or disclosing any Company Inventions, Third
Party Information or Proprietary Information of the Company, that is within my possession, custody
or control Further, upon termination of employment I also will return any and all Company property
or equipment in my possession, custody or control. Prior to leaving, I will cooperate with the
Company in completing and signing the Company’s trade secret acknowledgement form.
8. NON-PRIVATE NATURE OF COMPANY PROPERTY. I understand that I have no expectation of privacy in
the voicemail and electronic mail provided to me by the Company or in any property situated on the
Company’s premises and/or owned by the Company, including disks and other storage media, filing
cabinets or other work areas. I further understand that such property, including voicemail and
electronic mail, is subject to inspection by Company personnel at any time.
9. AT-WILL EMPLOYMENT. I agree and understand 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 understand that, other than the
Company’s Vice President of Human Resources, no manager, supervisor, employee or any other
representative or agent of the Company has the authority to enter into an agreement to the
contrary. I further understand that an agreement to the contrary by the Vice President of Human
Resources is not valid unless it is in writing.
10. NOTICES. Any notices required or permitted hereunder shall be given to the appropriate party
at the address specified below or at such other address as the party shall specify in writing.
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
consent to the notification of 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. I hereby expressly consent to the personal jurisdiction of the state and federal courts
located in Santa Xxxxx 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 one or more of the provisions contained in this Agreement
shall, for any reason, be 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 one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to
the extent compatible with the applicable law as it shall then appear.
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. The obligations pursuant to Sections 1 and 2 of this Agreement shall
apply to any time during which I was previously employed, or am in the future employed, by the
Company as a consultant if no other agreement governs nondisclosure and assignment of inventions
during such period. This Agreement is the final, complete and exclusive agreement of the parties
with respect to the subject matter hereof and supersedes all prior discussions between us, except
that the Cadence Code of Conduct and my offer letter, both of which signed, are incorporated
herein. 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 party to be charged. 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 today’s date, namely:
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT
EXHIBIT B TO THIS AGREEMENT.
Dated:
| Signature | ||||
| (Printed Name) | ||||
| ACCEPTED AND AGREED TO: | ||||
| CADENCE DESIGN SYSTEMS, INC. | ||||
By: |
||||
Title:
|
||||
Date: |
||||
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.
I ACKNOWLEDGE RECEIPT of a copy of this notification.
| By: | ||||
| Print Name of Employee: | ||||
| (printed name of employee) | ||||
| Date: | ||||
WITNESSED BY: |
||||
EXHIBIT B
TO:
|
Cadence Design Systems, Inc. | |||
FROM: |
||||
DATE: |
||||
SUBJECT:
|
Previous 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: | ||||||
| (printed name of employee) | ||||||
| Date: | ||||||
