-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TyQR0R1qe5nNdbC3W2KddGHz8OgwibItAblCtiMYPsgYvSIUemvMHKVTqV18XET0 vFXwdcHFlxfda+1Bg+vQ4w== 0000891618-99-001818.txt : 19990428 0000891618-99-001818.hdr.sgml : 19990428 ACCESSION NUMBER: 0000891618-99-001818 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990427 EFFECTIVENESS DATE: 19990427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNOPSYS INC CENTRAL INDEX KEY: 0000883241 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 561546236 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-77127 FILM NUMBER: 99602121 BUSINESS ADDRESS: STREET 1: 700 E MIDDLEFIELD RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043-4033 BUSINESS PHONE: 4159625000 MAIL ADDRESS: STREET 1: 700 E MIDDLEFIELD RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043-4033 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on April 27, 1999 Registration No. 333-____________ . ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 SYNOPSYS, INC. (Exact name of registrant as specified in its charter)
DELAWARE 56-1546236 (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization)
700 EAST MIDDLEFIELD ROAD MOUNTAIN VIEW, CALIFORNIA 94043 (Address of principal executive offices) (Zip Code) GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK OPTION PLAN AART J. DE GEUS CHIEF EXECUTIVE OFFICER SYNOPSYS, INC. 700 EAST MIDDLEFIED ROAD MOUNTAIN VIEW, CALIFORNIA 94043 (Name and address of agent for service) (650) 962-5000 (Telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------- Proposed Proposed Title of Maximum Maximum Securities Amount Offering Aggregate Amount of to be to be Price Offering Registration Registered Registered(1) per Share Price Fee ---------- ------------- --------- ------------ ------------ Gambit Automated Design, Inc. 1990 Stock Option Plan Common Stock, $0.01 par value 78,227 shares $8.35(2) $635,195.45(2) $ 181.59 - ----------------------------------------------------------------------------------------------------------------------------
(1) This Registration Statement shall also cover any additional shares of Registrant's Common Stock which become issuable under the Gambit Automated Design, Inc. 1990 Stock Option Plan. 2 by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the Registrant's receipt of consideration which results in an increase in the number of the Registrant's outstanding shares of Common Stock. (2) Calculated solely for purposes of this offering under Rule 457(h) of the Securities Act of 1933, as amended (the "1933 Act"), on the basis of the weighted average exercise price of the outstanding options. 3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference Synopsys, Inc. (the "Registrant") hereby incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the "Commission"): (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1998 filed with the Commission on December 23, 1998, pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the "1934 Act"); (b) The Registrant's Quarterly Report on Form 10-Q for the period ending January 2, 1999 filed with the Commission on February 10, 1999; (c) The Registrant's Current Reports on Form 8-K filed with the Commission on January 25, 1999 and on April 23, 1999; (d) The Registrant's Registration Statement on Form 8-A, filed with Commission on January 17, 1992, as amended by Form 8-A/A, filed with Commission on February 20, 1992, pursuant to Section 12(g) of the 1934 Act, in which there is described the terms, rights and provisions applicable to the Registrant's Common Stock; and (e) The Registrant's Registration Statement on Form 8-A, filed with the Commission on October 31, 1997, pursuant to Section 12(g) of the 1934 Act, in which there is described the terms, rights and provisions applicable to the Registrant's Preferred Share Purchase Rights. All reports and definitive proxy or information statements filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which de-registers all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities Not Applicable. Item 5. Interests of Named Experts and Counsel Not Applicable. Item 6. Indemnification of Directors and Officers Section 145 of the Delaware General Corporation Law permits a corporation to include in its charter documents, and in agreements between the corporation and its directors and officers, provisions expanding the scope of indemnification beyond that specifically provided by the current law. Article X of the Registrant's Restated Certificate of Incorporation provides for the indemnification of directors to the fullest extent permissible under Delaware Law. Article VII of the Registrant's Bylaws provides for the indemnification of officers, directors and third parties to the fullest extent permissible under Delaware Law, which provisions are deemed to be a contract between the Registrant and each director and officer who serves in such capacity while such bylaw is in effect. II-1 4 The Registrant has entered into indemnification agreements with its directors and executive officers, in addition to the indemnification provided for in the Registrant's Bylaws, and intends to enter into indemnification agreements with any new directors and executive officers in the future. The Registrant has also obtained liability insurance for the benefit of its directors and officers. Item 7. Exemption from Registration Claimed Not Applicable. Item 8. Exhibits
Exhibit Number Exhibit - -------------- ------- 4 Instruments Defining the Rights of Stockholders. Reference is made to the Registrant's Registration Statements on Form 8-A, including the exhibits thereto, incorporated herein by reference pursuant to Items 3(d) and 3(e) of this Registration Statement. 5 Opinion and consent of Brobeck, Phleger & Harrison LLP. 23.1 Consent of KPMG LLP, Independent Auditors. 23.2 Consent of Deloitte & Touche LLP, Independent Accountants. 23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. 99.1 Gambit Automated Design, Inc. 1990 Stock Option Plan (As Amended October 1998). 99.2 Form of Stock Option Grant. 99.3 Form of Stock Option Exercise Notice and Agreement. 99.4 Form of Stock Option Assumption Agreement.
Item 9. Undertakings A. The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"), (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference into this Registration Statement; (2) that for the purpose of determining any liability under the 1933 Act each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the Gambit Automated Design, Inc. 1990 Stock Option Plan. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference into this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 5 C. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers or controlling persons of the Registrant pursuant to the indemnification provisions summarized in Item 6 or otherwise, the Registrant has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. II-3 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8, and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mountain View, State of California on this 27th day of April , 1999. ---- ------- SYNOPSYS, INC. By: /s/ Aart J. de Geus ---------------------------------- Aart J. de Geus Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Aart J. de Geus and David M. Sugishita, and each of them, as such person's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in such person's name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature Title Date - --------- ----- ---- /s/ Aart J. de Geus Chief Executive Officer April 27, 1999 - ---------------------------- (Principal Executive Officer) and ---------- Aart J. de Geus Chairman of the Board of Directors /s/ Chi-Foon Chan President, Chief Operating Officer April 27, 1999 - ---------------------------- and Director ---------- Chi-Foon Chan /s/ William W. Lattin Executive Vice President and April 27, 1999 - ---------------------------- Director ---------- William W. Lattin
II-4 7 /s/ Andy D. Bryant Director April 27, 1999 - ---------------------------- ---------- Andy D. Bryant /s/ Deborah A. Coleman Director April 27, 1999 - ---------------------------- ---------- Deborah A. Coleman /s/ Harvey C. Jones, Jr. Director April 27, 1999 - ---------------------------- ---------- Harvey C. Jones, Jr. /s/ A. Richard Newton Director April 27, 1999 - ---------------------------- ---------- A. Richard Newton /s/ Sasson Somekh Director April 27, 1999 - ---------------------------- ---------- Sasson Somekh /s/ Steven C. Walske Director April 27, 1999 - ---------------------------- ---------- Steven C. Walske /s/ David M. Sugishita Senior Vice President, Finance April 27, 1999 - ---------------------------- and Operations, and ---------- David M. Sugishita Chief Financial Officer (Principal Financial and Accounting Officer)
II-5 8 EXHIBIT INDEX
Exhibit Number Exhibit - -------------- ------- 4 Instruments Defining the Rights of Stockholders. Reference is made to the Registrant's Registration Statements on Form 8-A, including the exhibits thereto, incorporated herein by reference pursuant to Items 3(d) and 3(e) of this Registration Statement. 5 Opinion and consent of Brobeck, Phleger & Harrison LLP. 23.1 Consent of KPMG LLP, Independent Auditors. 23.2 Consent of Deloitte & Touche LLP, Independent Accountants. 23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. 99.1 Gambit Automated Design, Inc. 1990 Stock Option Plan (As Amended October 1998). 99.2 Form of Stock Option Grant. 99.3 Form of Stock Option Exercise Notice and Agreement. 99.4 Form of Stock Option Assumption Agreement.
EX-5 2 OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON 1 EXHIBIT 5 OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP April 27, 1999 Synopsys, Inc. 700 East Middlefield Road Mountain View, CA 94043 Re: Synopsys, Inc. - Registration Statement for Offering of 78,227 Shares of Common Stock Dear Ladies and Gentlemen: We have acted as counsel to Synopsys, Inc., a Delaware corporation (the "Company"), in connection with the registration on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended, of 78,227 shares of common stock (the "Shares") and related stock options under the Gambit Automated Design, Inc. 1990 Stock Option Plan (the "Gambit Plan"). This opinion is being furnished in accordance with the requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K. We have reviewed the Company's charter documents and the corporate proceedings taken by the Company in connection with the assumption of the Gambit Plan and the options outstanding thereunder. Based on such review, we are of the opinion that if, as and when the Shares are issued and sold (and the consideration therefor received) pursuant to the provisions of option agreements duly authorized under the Gambit Plan and in accordance with the Registration Statement, such Shares will be duly authorized, legally issued, fully paid and nonassessable. We consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement. This opinion letter is rendered as of the date first written above and we disclaim any obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Gambit Plan or the Shares. Very truly yours, /s/ Brobeck, Phleger & Harrison LLP ----------------------------------- BROBECK, PHLEGER & HARRISON LLP EX-23.1 3 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.1 CONSENT OF KPMG LLP The Board of Directors Synopsys, Inc. We consent to incorporation herein by reference of our reports dated October 26, 1998, relating to the consolidated balance sheets of Synopsys, Inc. and subsidiaries as of September 30, 1997 and 1998, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended September 30, 1998, and the related schedule, which reports appear in the September 30, 1998, Annual Report on Form 10-K of Synopsys, Inc. /s/ KPMG LLP KPMG LLP Mountain View, California April 26, 1999 EX-23.2 4 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.2 CONSENT OF DELOITTE & TOUCHE LLP We consent to the incorporation by reference in this Registration Statement of Synopsys, Inc. on Form S-8 of our report dated October 11, 1996 (relating to the consolidated financial statements of EPIC Design Technology, Inc. not presented separately therein), appearing in and incorporated by reference in the Annual Report on Form 10-K of Synopsys, Inc. for the year ended September 30, 1998. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP San Jose, California April 26, 1999 EX-99.1 5 GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK PLAN 1 EXHIBIT 99.1 GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK OPTION PLAN - ---------------------------- ---------------------- GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK OPTION PLAN AS AMENDED OCTOBER 1998 1. PURPOSE. This Stock Option Plan ("Plan") is established to provide incentives for selected persons to promote the financial success and progress of GAMBIT AUTOMATED DESIGN, INC., a California Corporation (the "Company"), by granting such persons options to purchase shares of stock of the Company. 2. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become effective on the date that it is adopted by the Board of Directors (the "Board") of the Company. This Plan shall be approved by the unanimous written consent of the shareholders or the affirmative vote at a meeting of the holders of a majority of the outstanding shares of the Company within twelve months before or after the date this Plan is adopted by the Board. 3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the "Options") may be either (a) incentive stock options ("ISOs") within the meaning of Section 422A of the Internal Revenue Code of 1986 (the "Code"), or (b) nonqualified stock options ("NQSOs"), as designated at the time of grant. The shares of stock that may be purchased upon exercise of Options granted under this Plan (the "Shares") are shares of the common stock of the Company. 4. NUMBER OF SHARES. The maximum number of Shares that may be issued pursuant to Options granted under this Plan is 7,500,000 Shares, subject to adjustment as provided in this Plan. If any Option is terminated in whole or in part for any reason without being exercised in whole or in part, the Shares thereby released from such Option shall be available for purchase under other options subsequently granted under this plan. At all times during the term of this plan, the Company shall reserve and keep available such number of Shares as shall be required to satisfy the requirements of outstanding Options under this Plan. 5. ADMINISTRATION. This Plan shall be administered by the Board or by a committee of the Board appointed to administer this Plan (the "Committee"). As used in this Plan, references to the Committee shall mean either such Committee or the Board if no committee has been established. The interpretation by the Committee of any of the provisions of this Plan or any Option granted under this Plan shall be final and binding upon the Company and all persons having an interest in any option or any Shares purchased pursuant to an Option. 6. ELIGIBILITY. Options may be granted only to such employees, officers, directors, consultants and independent contractors of the Company or any Parent, Subsidiary or Affiliate of the Company (as defined below) as the Committee shall select from time to time in its sole discretion ("Optionees"), provided that only employees of the Company or a Parent or Subsidiary of the Company shall be eligible to receive ISOs. An Optionee may be granted more than one Option under this Plan. As used in this Plan, the following terms shall have the following meanings: (a) "PARENT" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the granting of the Option, each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (b) "SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (c) "AFFILIATE" means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with another corporation, where "control" (including the terms "controlled by" and "under common control with") means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. 7. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine whether each Option is to be an ISO or an NQSO, the number of Shares for which the Option shall be granted, the exercise price of the Option, the periods during which the Option may be exercised and all other terms and conditions of the Option, subject to the following terms and conditions: (a) FORM OF OPTION GRANT. Each option granted under this Plan shall be evidenced by a written Stock Option Grant ("Grant") in such form (which need not be the same for each Optionee) as the Committee shall from time to time approve, which Grant shall comply with and be subject to the terms and conditions of this Plan. Page 1 of 3 2 GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK OPTION PLAN - ---------------------------- ---------------------- (b) EXERCISE PRICE. The exercise price of an Option shall be not less than the fair market value of the Shares, at the time that the Option is granted, as determined by the Committee in good faith. The exercise price of any Option granted to a person owning more than IO% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company ("Ten Percent Shareholder") shall not be less than 110% of the fair market value of the Shares at the time of the grant, as determined by the Committee in good faith. (c) EXERCISE PERIOD. Options shall be exercisable within the times or upon the events determined by the Committee as set forth in the Grant, provided, however, that no Option shall be exercisable after the expiration of ten years from the date the Option is granted, and provided further that no Option granted to a Ten Percent Shareholder shall be exercisable after the expiration of five years from the date the Option is granted. (d) LIMITATIONS ON ISOs. The aggregate fair market value (determined as of the time an Option is granted) of stock with respect to which ISOs are exercisable for the first time by an optionee during any calendar year (under this Plan or under any other incentive stock option plan of the Company or any Parent or Subsidiary of the Company) shall not exceed $100,000. (e) DATE OF GRANT. The date of grant of an Option shall be the date on which the Committee makes the determination to grant such Option unless otherwise specified by the Committee. The Grant representing the Option shall be delivered to the Optionee within a reasonable time after the granting of the Option. 8. EXERCISE OF OPTIONS. (a) NOTICE. Options may be exercised only by delivery to the Company of a written notice and exercise agreement in a form approved by the Committee, stating the number of Shares being purchased, the restrictions imposed on the Shares and such representations and agreements regarding the Optionee's investment intent and access to information as may be required by the Company to comply with applicable securities laws, together with payment in full of the exercise price for the number of Shares being purchased. (b) PAYMENT. Payment for the Shares may be made (i) in cash (by check), (ii) by surrender of shares of common stock of the Company having a fair market value equal to the exercise price of the Option; (iii) where permitted by applicable law and approved by the Committee in its sole discretion, by tender of a full recourse promissory note having such terms as may be approved by the Committee; or (iv) by any combination of the foregoing where approved by the Committee in its sole discretion. Optionees who are not employees or directors of the Company shall not be entitled to purchase Shares with a promissory note unless the note is adequately secured by collateral other than the Shares. (c) WITHHOLDING TAXES. Prior to issuance of the Shares upon exercise of an Option, the Optionee shall pay or make adequate provision for any federal or state withholding obligations of the Company, if applicable. (d) LIMITATIONS ON EXERCISE. Notwithstanding the exercise periods set forth in the Grant, exercise of an Option shall always be subject to the following limitations: (i) An Option shall not be exercisable unless such exercise is in compliance with the Securities Act of 1933, as amended, and all applicable state securities laws, as they are in effect on the date of exercise. (ii) The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent the Optionee from exercising the full number of Shares as to which the Option is then exercisable. 9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee. No Option may be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution. 10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the rights of a shareholder with respect to any Shares subject to an Option until the Option has been validly exercised. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date of exercise, except as provided in this Plan. The Company shall provide to each Optionee a copy of the annual financial statements of the Company, at such time after the close of each fiscal year of the Company as they are released by the Company to its shareholders. 11. ADJUSTMENT OF OPTION SHARES. In the event that the number of outstanding shares of common stock of the Company is changed by a stock dividend, stock split, reverse stock split, combination, reclassification or similar change in the capital structure of the Company without consideration, the number of Shares available under this Plan and the number of Shares subject to outstanding Options and the exercise price per share of such Options shall be proportionately adjusted, subject to any required action by the Board or shareholders of the Company and compliance with applicable securities laws; provided, however, that no certificate or scrip representing fractional shares shall be issued upon exercise of any Option and any resulting fractions of a Share shall be ignored. Page 2 of 3 3 GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK OPTION PLAN - ---------------------------- ---------------------- 12. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted under this Plan shall confer on any Optionee any right to continue in the employ of the Company or any Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company to terminate the Optionee's employment at any time with or without cause. 13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of Shares upon exercise of any Options shall be subject to and conditioned upon compliance with all applicable requirements of law, including without limitation compliance with the Securities Act of 1933, as amended, any required approval by the Commissioner of Corporations of the State of California, compliance with all other applicable state securities laws and compliance with the requirements of any stock exchange an which the Shares may be listed. The Company shall be under no obligation to register the Shares with the Securities and Exchange Commission or to effect compliance with the registration or qualification requirement of any state securities laws or stock exchange. 14. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may reserve to itself or its assignee(s) in the Grant (a) a right of first refusal to purchase all Shares that an Optionee (or a subsequent transferee) may propose to transfer to a third party and (b) a right to repurchase all Shares held by an Optionee upon the Optionee's termination of employment or service with the Company or its Parent, Subsidiary or Affiliate of the Company for any reason within a specified time as determined by the Committee at the time of grant at (i) the Optionee's original purchase price (provided that the right to repurchase at such price shall lapse at the rate of at least 20% per year from the date of grant), (ii) the fair market value of such Shares as determined by the Committee in good faith or (iii) a price determined by a formula or other provision set forth in the Grant. 15. ASSUMPTION OF OPTIONS BY SUCCESSORS. In the event of a dissolution or liquidation of the Company, a merger in which the Company is not the surviving corporation, a transaction in which 100% of the then outstanding voting stock is sold or otherwise transferred, or the sale of substantially all of the assets of the Company, any or all outstanding Options shall, notwithstanding any contrary terms of the Grant, accelerate and become exercisable in full at least ten days prior to (and shall expire on) the consummation of such dissolution, liquidation, merger, sale of stock or sale of assets on such conditions as the Committee shall determine unless the successor corporation assumes the outstanding Options or substitutes substantially equivalent options. The aggregate fair market value (determined at the time an Option is granted) of stock with respect to ISOs which first become exercisable in the year of such dissolution, liquidation, merger, sale of stock or sale of assets cannot exceed $100,000. Any remaining accelerated ISOs shall be NQSOs. 16. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time terminate or amend this Plan in any respect (including, but not limited to, any form of Grant, agreement or instrument to be executed pursuant to this Plan), provided, however, that the Committee shall not, without the approval of the shareholders of the Company within twelve months before or after the date of such amendment, increase the total number of Shares available under this Plan (except by operation of the provisions of this Plan) or change the class of persons eligible to receive Options. In any case, no amendment of this Plan may adversely affect any then outstanding Options or any unexercised portions thereof without the written consent of the Optionee. 17. TERM OF PLAN. Options may be granted pursuant to this Plan from time to time within a period of ten years from the date this Plan is adopted by the Board of Directors. Page 3 of 3 EX-99.2 6 FORM OF STOCK OPTION GRANT 1 EXHIBIT 99.2 GAMBIT AUTOMATED DESIGN, INC. STOCK OPTION GRANT #[[OPTION NO]] Optionee: [[NAME]] Identification: ______________________________ Total Options Granted: [[TOTAL]] Exercise Price Per Share: [[PRICE]] Date of Grant: [[DATE]] Vesting Commencement Date: [[VESTING DATE]] Expiration Date: [[DATE]] Type of Stock Option (check one):___________ Incentive___________ Nonqualified Acceptable Consideration: Cash________ Stock________ Promissory Note 1. GRANT OF OPTION. GAMBIT AUTOMATED DESIGN, INC, a California corporation (the "Company"), hereby grants to the optionee named above ("Optionee") an option (this "Option") to purchase the total number of shares of common stock of the Company set forth below (the "Shares") at the exercise price per share set forth above (the "Exercise Price"), subject to all of the terms and conditions of this Option and the Company's 1990 Stock Option Plan (the "Plan"). If designated as an Incentive Stock Option above, this Option is intended to qualify as an "incentive stock option" ("ISO") within the meaning of Section 422A of the Internal Revenue Code of 1986 (the "Code"). 2. EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of the Plan and this Option, this Option shall become exercisable as to portions of the Shares as follows:
Number of On or after: But before: Shares: [[Date]] [[Date]] [[Vesting]] [[Date]] [[Date]] [[Vesting]] [[Date]] [[Date]] [[Vesting]] [[Date]] [[Vesting]] TOTAL NUMBER OF SHARES: [[Total]]
Provided, however, that this Option shall expire on the Expiration Date set forth above and must be exercised, if at all, on or before the Expiration Date and provided further that the Option shall become exercisable as to at least 20% of the Shares each year for five (5) years. 3. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the following limitations: (a) This Option may not be exercised unless such exercise is in compliance with the Securities Act of 1933, as amended, and all applicable state securities laws, as they are in effect on the date of exercise. (b) This Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all Shares as to which this Option is then exercisable. Page 1 of 3 2 GAMBIT AUTOMATED DESIGN, INC. STOCK OPTION GRANT 4. TERMINATION OF OPTION. Except as provided below in this Section, this Option shall terminate and may not be exercised if Optionee ceases to be employed by the Company or any Parent or Subsidiary of the Company (or in the case of a nonqualified stock option, an Affiliate of the Company). Optionee shall be considered to be employed by the Company if Optionee is an officer, director or full-time employee of the Company, or any Parent, Subsidiary or Affiliate of the Company or if the Board of Director determines that Optionee is rendering substantial services as a part-time employee, consultant or independent contractor to the Company or any Parent, Subsidiary or Affiliate of the Company. The Board of Directors of the Company shall have discretion to determine whether Optionee has ceased to be employed by the Company or any Parent, Subsidiary or Affiliate of the Company and the effective date on which such employment terminated (the "Termination Date"). (a) If Optionee ceases to be employed by the Company or any Parent, Subsidiary or Affiliate of the Company for any reason except death or disability, this Option, to the extent (and only to the extent that it would have been exercisable by Optionee on the Termination Date, may be exercised by Optionee within three (3) months after the Termination Date, but in any event no later than the Expiration Date. (b) If Optionee's employment with the Company or any Parent, Subsidiary or Affiliate of the Company is terminated because of the death of Optionee or disability of Optionee within the meaning of Section 22(e)(3) of the Code, this Option, to the extent that it is exercisable by Optionee on the Termination Date, may be exercised by Optionee (or Optionee's legal representative) within twelve (12) months after the Termination Date, but in any event no later than the Expiration Date. Nothing in the Plan or this Grant shall confer on Optionee any right to continue in the employ of the Company or any Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate of the Company to terminate Optionee's employment at any time, with or without cause. 5. MANNER OF EXERCISE. (a) This Option shall be exercisable by delivery to the Company of an executed written Notice and Agreement in the form attached hereto as Exhibit A, or in such other form as may be approved by the Company, which shall set forth Optionee's election to exercise this Option, the number of Shares being purchased, any restrictions imposed on the Shares and such other representations and agreements regarding Optionee's investment intent and access to information as may be required by the Company to comply with applicable securities laws. (b) Such Notice and Agreement shall be accompanied by full payment of the Exercise Price for the Shares being purchased (i) in cash (by check); (ii) by surrender of Shares of Common Stock of the Company having a fair market value equal to the Exercise Price; (iii) where permitted by applicable law, by tender of a full recourse promissory note having such terms as the Board of Directors or the committee thereof that administers the Plan may approve; or (iv) by any combination thereof. (c) Prior to the issuance of the Shares upon exercise of this Option, Optionee must pay or make adequate provision for any applicable federal or state withholding obligations of the Company. (d) Provided that such notice and payment are in form and substance satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name of Optionee or Optionee's legal representative. 6. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the date of this grant, and (2) the date one year after transfer of such Shares to the Optionee upon exercise of the ISO, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee from the early disposition by payment in cash or out of the current earnings paid to the Optionee. 7. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of Shares shall be subject to compliance by the Company and the Optionee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company's common stock may be listed at the time of such Page 2 of 3 3 GAMBIT AUTOMATED DESIGN, INC. STOCK OPTION GRANT issuance or transfer. Optionee understands that the Company is under no obligation to register or qualify the Shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance. 8. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of this Option shall be binding upon the executors, administrators, successors and assigns of the Optionee. 9. TAX CONSEQUENCES. Set forth below is a brief summary as of the date of this Option of some of the federal and California tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. (a) EXERCISE OF ISO. If this Option qualifies as an ISO, there will be no regular federal income tax liability or California income tax liability upon the exercise of the Option, although the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price will be treated as a tax preference item for federal income tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise. (b) EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option does not qualify as an ISO, there may be a regular federal income tax liability and a California income tax liability upon the exercise of the Option. The optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price. The Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. 10. INTERPRETATION. Any dispute regarding the interpretation of this agreement shall be submitted by Optionee or the Company forthwith to the Company's Board of Directors or the committee thereof that administers the Plan, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Board at committee shall be final and binding on the Company and on Optionee. 11. ENTIRE AGREEMENT. The Plan and the Notice and Agreement attached as Exhibit A are incorporated herein by reference. This Option, the Plan and the Notice and Agreement constitute the entire agreement of the parties and supersede all prior undertakings and agreements with respect to the subject matter hereof. GAMBIT AUTOMATED DESIGN, INC. By:______________________________ Its:_____________________________ ACCEPTANCE Optionee hereby acknowledges receipt of a copy of the Plan, represents that Optionee has read and understands the terms and provisions thereof, and accepts this Option subject to all the terms and conditions of the Plan and this Grant. OPTIONEE ACKNOWLEDGES THAT THERE MAY BE ADVERSE TAX CONSEQUENCES UPON EXERCISE OF THIS OPTION OR DISPOSITION OR THE SHARES AND THAT OPTIONEE SHOULD CONSULT A TAX ADVISER PRIOR TO SUCH EXERCISE OR DISPOSITION. ______________________________ Optionee Page 3 of 3 EX-99.3 7 FORM OF STOCK OPTION EXERCISE NOTICE AND AGREEMENT 1 EXHIBIT 99.3 STOCK OPTION EXERCISE NOTICE AND AGREEMENT Secretary GAMBIT AUTOMATED DESIGN, INC. ______________________________________ ______________________________________ 1. EXERCISE OF OPTION. The undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase shares of the common stock (the "Shares") of GAMBIT AUTOMATED DESIGN, INC., a California Corporation (the "Company"), under and pursuant to the Company's 1990 Stock Option Plan (the "Plan") and the [ ] Incentive/[ ] Nonqualified Stock Option Grant dated ________, 19__ (the "Option"). 2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has received, read and understood the Plan and the Option and agrees to abide by and be bound by their terms and conditions. Optionee represents that Optionee is purchasing the Shares for Optionee's own account for investment and not with a view to, or for sale in connection with, a distribution of any of such Shares. 3. COMPLIANCE WITH SECURITIES LAWS. Optionee understands and acknowledges that the Shares have not been registered under the Securities Act of 1933, as amended (the "1933 Act"), and, notwithstanding any other provision of the Grant to the contrary, the exercise of any rights to purchase any Shares are expressly conditioned upon compliance with the Act and all applicable state securities laws. Optionee agrees to cooperate with the Company to ensure compliance with such laws. The Shares are being issued under the 1933 act pursuant to (check applicable box): [ ] the exemption provided by Rule 504; [ ] the exemption provided by Rule 701; or [ ] section 4(2) of the 1933 Act. 4. FEDERAL RESTRICTIONS ON TRANSFER. Optionee understands that the Shares must be held indefinitely unless they are registered under the 1933 Act or unless an exemption from such registration is available and that the certificate(s) representing the Shares may bear a legend to that effect. Optionee understands that the Company is under no obligation to register the Shares and that an exemption may not be available or may not permit Optionee to transfer Shares in the amounts or at the times proposed by Optionee. (a) RULE 144. Optionee has been advised that Rule 144 promulgated under the 1933 Act, which permits certain resales of unregistered securities, is not presently available with respect to the Shares and, in any event, requires that the Shares be paid for and then held for a minimum of two years before they may be resold under Rule 144. Prior to an initial public offering of the Company's stock, only Rule 144(k), which requires that the Shares be paid for and held for a minimum of three years, will be available. Additional restrictions apply to sales of the Shares by officers, directors or major shareholders of the Company ("affiliates"). (b) RULE 701. If the exemption relied upon for exercise of the Shares is Rule 701, the Shares will become freely tradeable, subject to limited conditions regarding the method of sale by non-affiliates 90 days after the first sale of common stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the SEC, subject to any lengthier market standoff agreement contained in this Agreement or entered into by the Optionee. Affiliates must comply with the provisions (other than the holding period requirements) of Rule 144. 5. STATE LAW RESTRICTIONS ON TRANSFER. Optionee understands that transfer of the Shares may be restricted by Section 260.141.11 of the Rules of the California Commissioner of Corporations, a copy of which is attached hereto, and that the certificate(s) representing the Shares may bear a legend to that effect. Page 1 of 3 2 GAMBIT AUTOMATED DESIGN, INC. STOCK OPTION EXERCISE NOTICE AND AGREEMENT - ------------------------------------------------------------------------------- 6. MARKET STANDOFF AGREEMENT. Optionee agrees in connection with any registration of the Company's securities that, upon the request of the Company or the underwriters managing any public offering of the Company's securities, Optionee will not sell or otherwise dispose of any Shares without the prior written consent of the Company or such underwriters, as the case may be, for a period of time (not to exceed 180 days) from the effective date of such registration as the Company or the underwriters may specify for employee shareholders generally. 7. COMPANY'S RIGHT OF FIRST REFUSAL. Before any Shares held by Optionee or any transferee (either being sometimes referred to herein as the "Holder") may be sold or otherwise transferred (including transfer by gift or operation of law), the Company shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section (the "Right of First Refusal"). (a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall deliver to the Company a written notice (the "Notice") stating: (i) the Holder's bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the holder proposes to transfer the Shares (the "Offered Price"); and the Holder shall offer to sell the Shares at the Offered Price to the Company. (b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within 30 days after receipt of the Notice, the Company may, by giving written notice to the Holder, elect to purchase all of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below. (c) PURCHASE PRICE. The purchase price for the Shares purchased under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith. (d) PAYMENT. Payment of the purchase price shall be made, at the option of the Company, either (i) in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company, or by any combination thereof within 60 days after receipt of the Notice or (ii) in the manner and at the time(s) set forth in the Notice. (e) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in the Notice to be transferred to a given proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 120 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company shall again be offered the Right of First Refusal, before any Shares held by the Holder may be sold or otherwise transferred. (f) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the contrary contained in this Section notwithstanding, the transfer of any or all of the Shares during the Optionee's lifetime or on Optionee's death by will or intestacy to Optionee's immediate family or a trust for the benefit of Optionee or Optionee's immediate family shall be exempt from the provisions of this Section. As used herein, "immediate family" shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister or anyone else approved in advance by the Board of Directors. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section. (g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First Refusal shall terminate as to any Shares 90 days after the first sale of common stock of the Company to the general public pursuant to a registration statement filed with and declared effected by the Securities and Exchange Commission (other than a registration statement solely covering an employee benefit plan or corporate reorganization) Page 2 of 3 3 GAMBIT AUTOMATED DESIGN, INC. STOCK OPTION EXERCISE NOTICE AND AGREEMENT - ------------------------------------------------------------------------------- 8. LEGENDS. Optionee understands and agrees that the Shares are subject to a right of first refusal held by the Company (or its assignee(s)) as set forth herein and that the certificate(s) representing the Shares will bear the following legends: "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND TRANSFER AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AND MAY NOT BE TRANSFERRED EXCEPT AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES." "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH." The California Commissioner of Corporations may require that the following legend also be placed upon the share certificate(s) evidencing ownership of the Shares: "IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES." Optionee acknowledges receipt of a copy of Section 260.141.11 of the Rules of the California Corporations Commissioner, a copy of which is attached hereto. 9. STOP-TRANSFER NOTICES. Optionee understands and agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop-transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 10. TAX CONSEQUENCES. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultant(s) Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice. 11. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the aggregate purchase price of the Shares that Optionee has elected to purchase and has made provision for the payment of any federal or state withholding taxes required to be paid or withheld by the Company. 12. ENTIRE AGREEMENT. The Plan and Option are incorporated herein by reference. This Agreement, the Plan and the Option constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and is governed by California law except for that body of law pertaining to conflict of laws. Submitted by: Accepted by: OPTIONEE: GAMBIT AUTOMATED DESIGN, INC. By: ____________________________ Address: ____________________________ Its: ____________________________ ____________________________ Dated: ____________________________ Dated: ____________________________ Page 3 of 3 EX-99.4 8 FORM OF STOCK OPTION ASSUMPTION AGREEMENT 1 EXHIBIT 99.4 SYNOPSYS, INC. STOCK OPTION ASSUMPTION AGREEMENT GAMBIT AUTOMATED DESIGN, INC. 1990 STOCK OPTION PLAN OPTIONEE: [[Employee]] STOCK OPTION ASSUMPTION AGREEMENT effective as of the 23rd day of March, 1999 by Synopsys, Inc., a Delaware corporation ("Synopsys"). WHEREAS, the undersigned individual ("Optionee") holds one or more outstanding options to purchase shares of the common stock of Gambit Automated Design, Inc., a California corporation ("Gambit"), which were granted to Optionee under the Gambit Automated Design, Inc. 1990 Stock Option Plan (the "Plan") and are evidenced by a Stock Option Grant Agreement (the "Option Agreement") between Gambit and Optionee. WHEREAS, Gambit has been acquired by Synopsys through the purchase by Synopsys of all of the issued and outstanding shares of capital stock of Gambit (the "Acquisition") pursuant to the Securities Purchase Agreement, dated as of February 17, 1999 (as amended), by and between Synopsys, Gambit, certain Gambit Securityholders, the Gambit Securityholder Representatives and the Gambit Noteholder Representative (the "Purchase Agreement"). WHEREAS, the provisions of the Purchase Agreement require Synopsys to assume all obligations of Gambit under all outstanding options under the Plan at the consummation of the Acquisition and to issue to the holder of each outstanding option an agreement evidencing the assumption of such option. WHEREAS, pursuant to the provisions of the Purchase Agreement, the exchange ratio (the "Exchange Ratio") in effect for the Acquisition is 0.03118080 of a share of Synopsys common stock ("Synopsys Stock") for each outstanding share of Gambit common stock ("Gambit Stock"). WHEREAS, this Agreement is effective as of the consummation of the Acquisition, which occurred on March 23, 1999 (the "Effective Time"), in order to reflect certain adjustments to Optionee's outstanding options under the Plan which have become necessary by reason of the assumption of those options by Synopsys in connection with the Acquisition. NOW, THEREFORE, it is hereby agreed as follows: 1. The number of shares of Gambit Stock subject to the options held by Optionee immediately prior to the Effective Time (the "Gambit Options") and the exercise price payable per share are set forth in one or more Exhibits A hereto. Synopsys hereby assumes, as of 2 the Effective Time, all the duties and obligations of Gambit under each of the Gambit Options. In connection with such assumption, the number of shares of Synopsys Stock purchasable under each Gambit Option hereby assumed and the exercise price payable thereunder have been adjusted to reflect the Exchange Ratio. Accordingly, the number of shares of Synopsys Stock subject to each Gambit Option hereby assumed shall be as specified for that option in attached Exhibit(s) A, and the adjusted exercise price payable per share of Synopsys Stock under the assumed Gambit Option shall also be as indicated for that option in attached Exhibit(s) A. 2. The intent of the foregoing adjustments to each assumed Gambit Option is to assure that the spread between the aggregate fair market value of the shares of Synopsys Stock purchasable under each such option and the aggregate exercise price as adjusted pursuant to this Agreement will, immediately after the consummation of the Acquisition, be not less than the spread which existed, immediately prior to the Acquisition, between the then aggregate fair market value of the Gambit Stock subject to the Gambit Option and the aggregate exercise price in effect at such time under the Option Agreement. Such adjustments are also intended to preserve, immediately after the Acquisition, on a per share basis, the same ratio of exercise price per option share to fair market value per share which existed under the Gambit Option immediately prior to the Acquisition. Such adjustments are also intended to preserve, to the extent applicable, the Incentive Stock Option status of the assumed Gambit Options. 3. The following provisions shall govern each Gambit Option hereby assumed by Synopsys: (a) Unless the context otherwise requires, all references in each Option Agreement and in the Plan (as incorporated into such Option Agreement) (i) to the "Company" shall mean Synopsys, (ii) to "Stock" and "Shares" shall mean shares of Synopsys Stock, (iii) to the "Board" shall mean the Board of Directors of Synopsys and (iv) to the "Committee" shall mean the Compensation Committee of the Synopsys Board of Directors. (b) The grant date and the expiration date of each assumed Gambit Option and all other provisions which govern either the exercise or the termination of the assumed Gambit Option shall remain the same as set forth in the Option Agreement applicable to that option, and the provisions of the Option Agreement shall accordingly govern and control Optionee's rights under this Agreement to purchase Synopsys Stock. (c) Each Gambit Option held by Optionee shall be assumed by Synopsys as of the Effective Time. The shares subject to each such assumed Gambit Option shall continue to vest in accordance with the same installment vesting schedule in effect under the applicable Option Agreement immediately prior to the Effective Time, with the number of shares of Synopsys Stock subject to each such installment adjusted to reflect the Exchange Ratio. Accordingly, no acceleration of vesting under each Gambit Option held by Optionee shall be 2. 3 deemed to occur by reason of the Acquisition, and the vesting dates under each applicable Option Agreement shall remain the same following the Acquisition. (d) For purposes of applying any and all provisions of the Option Agreement and the Plan relating to Optionee's status as an employee of Gambit, Optionee shall be deemed to continue in such status as an employee for so long as Optionee renders services as an officer, director or full-time employee, or in the Committee's determination renders substantial services as a part-time employee, consultant or independent contractor, of Synopsys or any Synopsys parent, subsidiary or affiliate controlled by Gambit. Accordingly, the provisions of the Option Agreement governing the termination of the assumed Gambit Options upon Optionee's cessation of employment with Gambit shall hereafter be applied on the basis of Optionee's cessation of services as an officer, director or full-time employee, or the cessation of substantial services as a part-time employee, consultant or independent contractor, of Synopsys or any Synopsys parent, subsidiary or affiliate controlled by Gambit. Each assumed Gambit Option shall accordingly terminate, within the designated time period in effect under the Option Agreement for that option, following such cessation of services as an officer, director or full-time employee, or the cessation of substantial services as a part-time employee, consultant or independent contractor, of Synopsys or any Synopsys parent, subsidiary or affiliate controlled by Gambit. (e) The adjusted exercise price payable for the Synopsys Stock subject to each assumed Gambit Option shall be payable in any of the forms authorized under the Option Agreement applicable to that option, provided that any shares of Synopsys Stock delivered in payment of the exercise price must have been held for six (6) months. For purposes of determining the holding period of any shares of Synopsys Stock delivered in payment of such adjusted exercise price, the period for which such shares were held as Gambit Stock prior to the Acquisition shall be taken into account. (f) In order to exercise each assumed Gambit Option, Optionee must deliver to Synopsys a written notice of exercise in which the number of shares of Synopsys Stock to be purchased thereunder must be indicated. The exercise notice must be accompanied by payment of the adjusted exercise price payable for the purchased shares of Synopsys Stock and should be delivered to Synopsys at the following address: Synopsys, Inc. 700 East Middlefield Road Mountain View, California 94043-4033 Attention: Option Plan Administrator 4. Except to the extent specifically modified by this Option Assumption Agreement, all of the terms and conditions of each Option Agreement as in effect immediately 3. 4 prior to the Acquisition shall continue in full force and effect and shall not in any way be amended, revised or otherwise affected by this Stock Option Assumption Agreement. IN WITNESS WHEREOF, Synopsys, Inc. has caused this Stock Option Assumption Agreement to be executed on its behalf by its duly-authorized officer as of the 23rd day of March, 1999. SYNOPSYS, INC. By:___________________________________ Title:________________________________ ACKNOWLEDGMENT The undersigned acknowledges receipt of the foregoing Stock Option Assumption Agreement and understands that all rights and liabilities with respect to each of his or her Gambit Options hereby assumed by Synopsys are as set forth in the Option Agreement, the Plan and such Stock Option Assumption Agreement, and no other agreements exist with respect to his or her Gambit Options. The undersigned also acknowledges that except to the extent specifically modified by this Stock Option Assumption Agreement, all of the terms and conditions of the Option Agreement as in effect immediately prior to the Effective Time shall continue in full force and effect and shall not in any way be amended, revised or otherwise affected by this Stock Option Assumption Agreement. The undersigned further acknowledges that the Gambit Options described in Exhibit(s) A hereto constitute all of the options or other rights to purchase Gambit Stock that he or she owned immediately prior to the Effective Time. ___________________________________ [[EMPLOYEE]], OPTIONEE DATED: __________________, 1999 4. 5 EXHIBIT A [[EMPLOYEE]] Optionee's Outstanding Options to Purchase Shares of Gambit Automated Design, Inc. Common Stock (Pre-Merger) and Optionee's Outstanding Options to Purchase Shares of Synopsys, Inc. Common Stock (Post-Merger)
PRE-MERGER PRE-MERGER POST-MERGER POST-MERGER OUTSTANDING OPTIONS EXERCISE PRICE OUTSTANDING OPTIONS EXERCISE PRICE ------------------- -------------- ------------------- --------------
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