EXHIBIT 10.E
Non-Employee Director Stock Option
April 27, 1993
1
100,000 shares $1.00 per share
STOCK OPTION AGREEMENT
Mentor Graphics Corporation
1986 Stock Option Plan
October 19, 1993
Mentor Graphics Corporation
an Oregon corporation
8005 S.W. Boeckman Road
Wilsonville, Oregon 97070-7777 Company
Walden C. Rhines
9963 Rockbrook
Dallas, Texas 75220 Optionee
The Company is pleased to inform you that it has granted you a
nonqualified stock option to purchase shares under its 1986 Stock
Option Plan (1986 Plan). The 1986 Plan is administered by
the Compensation Committee (Committee) of the Board of Directors
for the benefit of non-employee directors of the Company.
The option agreement is as follows:
1. Grant of Option. The Company grants to you an option to
purchase 100,000 shares of the
Company's common stock for $1.00 per share.
2. Vesting Provisions; Change in Control.
2.1 This option is fully vested and will terminate on
October 19, 2003, unless it is
earlier terminated as provided below.
2.2 Until it expires or is terminated and except as
provided in 2.4 or 2.5, you may
exercise this option from time to time to purchase shares up to
the following limits:
Years After 4/27/93 Percent Exercisable
Less than 1 0%
1 to 2 20%
2 to 3 40%
3 to 4 60%
4 to 5 80%
over 5 100%
2.3 The table in 2.2 is based on an
Option Year. An Option Year is a 12-month period
starting on the date specified in the table or an anniversary of
that date.
2.4 On death the exercise limit will be at least 50
percent.
2.5 Upon the occurrence of a Change in
Control, this option shall automatically become exercisable in
full for the remainder of its term. "Change in Control" means the
occurrence of any of the following events:
2.5.1 the approval by the Company's shareholders
of:
(a) any consolidation, merger or plan of
share exchange involving the Company (Merger) in which the Company
is not the continuing or surviving corporation or
pursuant to which shares of Common Stock would be converted into
cash, securities or other property, other than a Merger involving
the Company in which the holders of the Company's Common Stock
immediately prior to the Merger have the same proportionate
ownership of Common Stock of the surviving corporation immediately
after the Merger;
(b) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of
the Company; or
(c) the adoption of any plan
or proposal for the liquidation or
dissolution of the Company;
2.5.2 at any time during a period of two
consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (Incumbent Directors) shall
cease for any reason to constitute at least a majority thereof,
unless each new director elected during such two-year period was
nominated or appointed by two-thirds of the Incumbent Directors
then in office and voting (new directors nominated or appointed by
two-thirds of the Incumbent Directors shall also be deemed to be
Incumbent Directors); or
2.5.3 any person (as such term is used in Section
13(d) of the Securities Exchange Act of 1934 (1934 Act) shall, as
a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, have
become the beneficial owner (within the meaning of Rule 13d-3
under the 1934 Act), directly or indirectly, of securities of the
Company ordinarily having the right to vote in the election of
directors (Voting Securities) representing twenty percent (20%) or
more of the combined voting power of the then outstanding Voting
Securities.
3. Limited Stock Appreciation Rights.
3.1 This option is granted in tandem with a limited stock
appreciation right.
3.2 The limited stock appreciation right shall entitle
you to receive from the Company an amount equal to the excess of
the fair market value at the time of exercise of one share of the
Company's Common Stock over the option price per share under this
option, multiplied by the number of shares exercised pursuant to
the limited stock appreciation right.
3.3 The limited stock appreciation right
shall be exercisable only during the 60 calendar
days immediately following a Change in Control and only if the
immediate resale of shares acquired upon exercise of this option
would subject you to liability under Section 16(b) of the 1934
Act, provided, however, that the limited stock appreciation right
may not be exercised within six months of its date of grant. Upon
exercise of the limited stock appreciation right, the option or
portion thereof to which the right relates must be surrendered.
3.4 Payment upon exercise of the limited
stock appreciation right by the Company may
be made only in cash.
3.5 The limited stock appreciation right
may not be assigned or transferred except on
death, by will or operation of law and may be exercised only by
you or by your successor or
representative after death.
4. Exercise Requirements.
4.1 If you cease to be a director for any reason, the
Company will establish an Option Reference Date. Any portion of
the option that is not exercisable on the Option Reference Date
will lapse. The Company will fix the Option Reference Date as
follows:
4.1.1 If you cease to be a director because of
death or disability, the first day of the next Option Year will be
the Option Reference Date. You are disabled if as a result of
illness or injury you suffer from a condition of mind or body that
permanently prevents you from serving in your capacity as a
director. The Committee will conclusively determine disability.
4.1.2 If 4.1.1 does not apply, the Option Reference
Date will be your last day as a director.
4.2 You may exercise any portion of the option that is
exercisable on the Option Reference Date up to the earlier of the
date in 2.1 or a date fixed as follows:
4.2.1 On death or disability - one year
after your last day as a director.
4.2.2 If 4.2.1 does not apply - one month after the
Option Reference Date.
5. Nonassignability. You may not assign or transfer
this option except on death, by will or
operation of law. Only you or your successor or representative
after death may exercise this
option.
6. Method of Exercise; Closing.
6.1 You may exercise this option by
written notice to the Company, attention: General Counsel, stating
the number of shares you want to buy and the proposed date of
closing. Unless otherwise agreed to by you and the Company, the
Company will fix the date of closing as the date
the Company receives your exercise notice or the date the Company
receives full payment for the shares, whichever is later.
6.2 You or your successor purchaser must
furnish to the Company before closing such
other documents or representations as the Company may require to
assure compliance with
applicable laws and regulations.
6.3 You must pay the full purchase price
in cash or by delivery of Company stock at or
before closing. The Company will not issue any of the purchased
shares and you will not have
shareholder rights in them until you have made full payment.
6.4 The Company will value stock you
deliver in payment of the option in accordance
with Section 7.5 of the Plan.
6.5 You, or your successor purchaser, must deposit
sufficient funds with the Company at closing to cover any income
or other taxes to be withheld on account of the exercise. If
funds are not deposited or other arrangements made forwithholding,
the Company may refuse to close or may retain shares having a
value equal to the amount it is required to withhold. If, after
closing, withholding becomes required beyond any amount deposited
at closing, you, or your successor purchaser, will pay such amount
to the Company on demand.
7. Changes in Capital Structure.
7.1 If any change is made in the outstanding common
shares of the Company without the Company's receiving any
consideration, the Company will make a corresponding change in the
shares under this option so that you will be in the same position
after exercise of the option as would have been the case if you
had exercised the option before the change. The Company will
not change the total purchase price for the unexercised portion of
the option. The Company will disregard fractional shares.
7.2 If the Company consolidates with another corporation
or merges into another corporation, this will be a change to which
7.1 applies. The new corporation will revise the option
or issue a new option giving you an equivalent right to buy the
shares of the new corporation.
7.3 The Board will make the adjustment under 7.1 or 7.2
and its determination will be conclusive.
8. Successorship. Subject to the limits in 5, this agreement
will be binding upon and benefit the parties, their successors and
assigns.
9. Notices. Any notices under this option must be in
writing and will be effective when actually delivered or, if
mailed, when deposited postpaid. Each party shall direct mail to
the address stated in this option or to such other address as a
party may certify by notice to the other party. Each party will
send notices to the Board at the Company's address
MENTOR GRAPHICS CORPORATION OPTIONEE
By:___________________________ ___________________________
Frank S. Delia Marsha B. Congdon
Vice President and Chief
Administrative Officer