<PAGE> 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)
<TABLE>
<CAPTION>
DELAWARE 56-1546236
<S> <C>
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
</TABLE>
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
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
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
---------- ------------- --------- ------------ ------------
<S> <C> <C> <C> <C>
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
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(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.
<PAGE> 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.
<PAGE> 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
<PAGE> 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
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<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
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.
</TABLE>
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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/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
</TABLE>
II-4
<PAGE> 7
<TABLE>
<S> <C> <C>
/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)
</TABLE>
II-5
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
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.
</TABLE>
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Number of
On or after: But before: Shares:
<S> <C> <C>
[[Date]] [[Date]] [[Vesting]]
[[Date]] [[Date]] [[Vesting]]
[[Date]] [[Date]] [[Vesting]]
[[Date]] [[Vesting]]
TOTAL NUMBER OF SHARES: [[Total]]
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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)
<TABLE>
<CAPTION>
PRE-MERGER PRE-MERGER POST-MERGER POST-MERGER
OUTSTANDING OPTIONS EXERCISE PRICE OUTSTANDING OPTIONS EXERCISE PRICE
------------------- -------------- ------------------- --------------
<S> <C> <C> <C>
</TABLE>
