EXHIBIT 10-A
MENTOR GRAPHICS CORPORATION
1982 STOCK OPTION PLAN
Mentor Graphics recognizes that its continuing success depends upon the
initiative, ability and significant contributions of officers and key
employees. Mentor Graphics believes that by affording such employees the
opportunity to purchase shares in Mentor Graphics it will its ability to
attract and retain such employees and will provide an incentive for them
to exert their best efforts on its behalf.
The Plan is as follows:
1. Shares Subject to Option.
1.1 Options granted under this Plan shall be for authorized but
unissued or reacquired common stock of Mentor Graphics.
1.2 Options may be granted under paragraph 4 of the Plan and stock
appreciation rights may be granted under paragraph 8.2 of the Plan
for a total of not more than 18,670,000 shares of common stock,
subject to adjustment under paragraph 9. Shares subject to
appreciation rights granted under paragraph 8.2 that are terminated
or expire without being exercised, other than options that are
surrendered on exercise of a stock appreciation right granted under
paragraph 8.1, shall be added to the shares remaining or future
options and stock appreciation rights.
1.3 No employee may be granted options or stock appreciation rights
under the Plan for more than an aggregate of 500,000 shares
of Common Stock in any calendar year.
2. Effective Date; Duration.
This Plan shall be effective January 1, 1982 and shall continue until
all shares available for issuance under the Plan have been issued,
unless sooner terminated by the Board of Directors of Mentor Graphics
(Board of Directors). Expiration or termination of the Plan shall not
affect outstanding options, bonus rights or stock appreciation rights.
3. Administration.
3.1 The Plan shall be administered by a compensation committee
appointed by the Board of Directors (Committee). The Committee
may delegate any of its administrative duties to one or more
agents and may retain advisors to assist it.
3.2 The Committee shall have general responsibility to interpret
and administer the Plan. Any decision by the Committee shall
be final and bind all parties. Notwithstanding the foregoing the
Committee's exclusive power to make final and binding
interpretations of the Plan shall immediately terminate upon
the occurrence of a Change in Control (as defined in paragraph 7.2).
The Committee shall keep adequate records of options, bonus rights
and stock appreciation rights granted under the Plan and shall be
responsible for communication with optionees.
3.3 No Committee member shall participate in the decision of any
question relating exclusively to an option, bonus right or stock
appreciation right granted to the member.
3.4 The Board of Directors may appoint a committee of two or more
executive officers of the Company and delegate to it the authority
to grant options and take all other actions permitted to
the Committee under paragraphs 4 through 8; provided, however,
that the committee of executive officers shall not be authorized
to approve or take any other action with respect to grant
persons who are executive officers, and the Board of Directors
may further limit the authority of the committee.
4. Grant of Options.
4.1 Options granted under the Plan may be either incentive stock
options within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the Code), or options other
than incentive stock options (nonqualified stock options). No
incentive stock options may be granted under the Plan on or after
the tenth anniversary of the last action by the Board of
Directors approving an increase in the number of shares available
for issuance under the Plan, which action was subsequently
approved within 12 months by the shareholders.
4.2 Options may be granted to any officer or key employee of Mentor
Graphics and any subsidiary of Mentor Graphics and may be granted
in substitution for outstanding options of another corporation by
reason of merger, consolidation, acquisition of property
reorganization between such other corporation and Mentor Graphics
or any subsidiary of Mentor Graphics. Additional options may be
granted to existing optionees and may be granted in exchange for
outstanding options.
4.3 The Committee shall designate persons to receive grants, and as
to each option shall specify the number of shares, the option
price and term, the time or times at which the option may
be exercised, whether the option is an incentive stock option or
a nonqualified stock option and all other terms and conditions
of the option.
44.4 No employee may be granted incentive stock options under the Plan
such that the aggregate fair market value, on the date of grant,
of the shares with regard to which incentive stock options are
exercisable for the first time by that employee during any
the Plan and under any other stock option plan of Mentor Graphics
or any parent or subsidiary of Mentor Graphics exceeds $100,000.
Fair market value shall be determined under subparagraph
5.1(c) as of the date of each grant.
5. Option Terms.
5.1 The option price shall be fixed by the Committee as follows:
(a) Subject to (b) the option price for an incentive stock option
shall be not less than the fair market value of the shares on
the date of grant. The option price for a nonqualified stock
option shall be not less than 50% of the fair market value of
the shares on the date of grant.
(b) If the optionee at the time of grant owns stock possessing more
than 10 percent of the combined voting power of all classes of
stock of Mentor Graphics, the option price for an incentive
stock option shall be not less than 110 percent of the fair
market value of the shares on the date of grant. Stock owned
by the optionee shall include for this purpose, and for purposes
of paragraph 5.2, stock attributed to the optionee pursuant to
applicable provisions of the Code.
(c) "Fair market value" means an amount determined by, or in an
manner approved by, the Committee. The Committee may appoint
and rely on one or more qualified independent appraisers to
value the stock or use such other evaluation as it considers
appropriate.
5.2 The Committee shall fix a time limit of not over 10 years after
the date of grant for exercise of an incentive stock option.
The Committee shall fix a time limit of not over 10 years
plus seven days after the date of grant for exercise of a
nonqualified stock option. For a more than 10 percent shareholder
the maximum limit for exercise of an incentive stock option shall
be 5 years. The Committee may make the option exercisable in full
immediately or in graduated amounts over the option term.
5.3 The option shall be evidenced by a stock option agreement executed
by Mentor Graphics and the optionee in a form prescribed by the
Committee.
5.4 The option may not be assigned or transferred except on death, by
will or operation of law, or pursuant to a qualified domestic
relations order as defined under the Code or Title I of the
Employee Retirement Income Security Act. The option may be
exercised only by the optionee or by a successor or representative
after death.
5.5 Unless otherwise determined by the Committee, if an officer of
Mentor Graphics subject to Section 16 of the Securities Exchange
Act of 1934 (1934 Act) exercises an option within six
months of the grant of the option, the shares acquired upon
exercise of the option may not be sold until six months after the
date of grant of the option.
6. Bonus Rights.
6.1 The Committee may grant bonus rights in connection with
nonqualified stock options granted under the Plan. Bonus rights
may be granted with the related option or at a later time
bonus right may not be assigned or transferred except on death,
by will or operation of law, or pursuant to a qualified domestic
relations order as defined under the Code or Title I of the
Employee Retirement Income Security Act. Bonus rights will be
subject to such rules, terms, and conditions as the Committee may
prescribe.
6.2 A bonus right will entitle an optionee to a cash bonus in
connection with the exercise in whole or in part of the related
option. Subject to paragraph 6.3, the amount of the bonus
determined by multiplying the applicable bonus percentage by the
amount by which the fair market value, on the exercise date, of
the shares received on exercise of the related option exceeds the
option price. The cash bonus will be payable within 30 days
following the date as of which its amount is determined. For the
purpose of this paragraph, fair market value shall be
determined according to subparagraph 5.1(c). The bonus percentage
applicable to a bonus right shall be determined by the Committee,
but shall in no event exceed 100 percent.
6.3 The Committee may set a maximum dollar limit on the amount of
cash to be paid under any bonus right.
7. Acceleration Upon Change in Control.
7.1 The Committee may grant acceleration rights to holders of options
or stock appreciation rights which will provide that the options
or stock appreciation rights will become exercisable in
full for the remainder of their terms upon the occurrence of a
Change in Control. Acceleration rights may be granted with an
option or stock appreciation right or at a later time by amendment
of outstanding options or stock appreciation rights.
7.2 "Change in Control" means the occurrence of any of the following
events, unless prior to the occurrence of the event, the
Committee determines that the specific event shall not be
considered a Change in Control:
(a) the shareholders of Mentor Graphics shall approve:
(i) any consolidation, merger or plan of share exchange involving
Mentor Graphics (Merger) in which Mentor Graphics 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 Mentor Graphics
in which the holders of Mentor Graphics' common stock
immediately prior to the Merger have the same proportionate
ownership of common stock of the surviving corporation
immediately after the Merger;
(ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially
all, the assets of Mentor Graphics; or
(iii) the adoption of any plan or proposal for the liquidation or
dissolution of Mentor Graphics;
(b) 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 elected by
two-thirds of the Incumbent Directors then in office and
voting (new directors nominated or elected by two-thirds of the
Incumbent Directors shall also be deemed to be Incumbent
Directors); or
(c) any person (as such term is used in Section 13(d) of the 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
Mentor Graphics 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.
8. Stock Appreciation Rights.
8.1 (a) The Committee, in its sole discretion, may grant both
"general" and "limited" stock appreciation rights with all or any part of
an incentive stock option or a nonqualified stock option granted under the
Plan. Stock appreciation rights may be granted with the any later time
during the term of the option.
(b) A general stock appreciation right granted with all or any part
of an option shall be exercisable only at the time or times established by
the Committee and only to the extent that the related option could be
exercised. A 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 the related
option would subject the optionee to liability under Section 16(b) of the
1934 Act; provided, however, that a limited stock appreciation right
may not be exercised within six months of its date of grant. Upon exercise
of a stock appreciation right, the option or portion thereof to which the
stock appreciation right relates must be surrendered. The shares subject to
an option or portion thereof that is surrendered upon exercise of a stock
appreciation right shall not be available for future option or stock
appreciation right grants under the Plan.
(c) Each stock appreciation right granted with all or any part of an
option shall entitle the holder to receive from Mentor Graphics
an amount equal to the excess of the fair market value at
the time of exercise of one share of Mentor Graphics common stock
over the option price per share under the related option,
multiplied by the number of shares covered by the related option
or portion of the related option.
(d) The terms of a limited stock appreciation right granted with a
nonqualified stock option may provide, if so determined by the
Committee, that the fair market value of the common stock for
purposes of subparagraph 8.1(c) shall be equal to the higher of:
(i) the highest reported sales price of the common stock during
the 60-day period ending on the date the limited stock appreciation
right is exercised;
(ii) the highest per share price paid for shares of common stock
purchased in any tender or exchange offer during the 60 calendar days
preceding the exercise of the limited stock appreciation right;
(iii) the fixed or formula price to be received by holders of
shares of common stock in or as a result of any transaction described
in subparagraph 7.2(a) if such price is determinable on the date of
exercise, provided that any securities or other property are part of
the fixed or formula price shall be valued at the highes securities
or property in any communication to the shareholders of Mentor Graphics
by any party to the transaction; and
(iv) the highest price per share shown on a Schedule 13D, or any
amendment thereto, filed by the holder or holders of the specified
percentage of common stock whose acquisition gives rise to the
exercisability of the limited stock appreciation right.
8.2 (a) The Committee may grant general stock appreciation rights
without related options under the Plan to any officer or key employee of
Mentor Graphics and any subsidiary of Mentor Graphics. Such stock
appreciation rights may be granted in substitution for outstanding stock
appreciation rights of another corporation by reason of merger,
consolidation, acquisition of property or stock, or other reorganization
between such other corporation and Mentor Graphics or any subsidiary of
Mentor Graphics. Additional stock appreciation rights may be granted to
existing holders of stock appreciation rights and may be granted in
exchange for outstanding stock appreciation rights.
(b) The Committee shall designate persons to receive grants of
stock appreciation rights, and as to each stock appreciation right shall
specify the number of shares, the stock appreciation right price, the term,
the time or times at which the stock appreciation right all other terms and
conditions of the stock appreciation right. The stock appreciation right
price shall not be less than 50% of the fair market value of the shares on
the date of grant.
(c) Each stock appreciation right granted without a related
option shall entitle the holder to receive from Mentor Graphics an amount
equal to the excess of the fair market value at the time of exercise of one
share of Mentor Graphics common stock over the stock appreciation right
price, multiplied by the number of shares covered by the stock appreciation
right or portion thereof that is exercised. The shares subject to a stock
appreciation right or portion thereof that is exercised shall not be
available for future option or stock appreciation right grants under the Plan.
8.3 (a) Payment upon exercise of a general stock appreciation right
by Mentor Graphics may be made in shares of Mentor Graphics common stock
valued at fair market value, or in cash, or partly in shares and partly
in cash. The Committee shall either specify the form of payment or
retain the power to disapprove any election by a holder to receive cash
appreciation right. For the purpose of this paragraph, fair market value
shall be determined according to subparagraph 5.1(c).
(b) Payment upon exercise of a limited stock appreciation right by
Mentor Graphics may be made only in cash.
8.4 No fractional shares shall be issued upon exercise of a stock
appreciation right. In lieu thereof, cash may be paid in an amount equal
to the value of the fraction or, in the discretion of the Committee, the
number of shares may be rounded to the next whole share.
8.5 Stock appreciation rights will be subject to such rules, terms,
and conditions, and shall be evidenced by an agreement in such form, as
the Committee may prescribe prior to the occurrence of a Change in Control.
8.6 Stock appreciation rights may not be assigned or transferred
except on death, by will or operation of law, or pursuant to a qualified
domestic relations order as defined under the Code or Title I of the
Employee Retirement Income Security Act. Stock appreciation rights may be
exercised only by the holder or by a successor or representative after death.
8.7 Unless otherwise determined by the Committee, no stock appreciation
right may be exercised by an officer of Mentor Graphics subject to Section
16 of the 1934 Act during the first six months following the date of grant.
9. Changes in Capital Structure.
If any change is made in the outstanding common stock without Mentor
Graphics' receiving any consideration, such as a stock split, reverse stock
split, stock dividend, or combination or reclassification of the common
stock, a corresponding change shall be made in the number of shares
remaining available for grants of options or stock appreciation rights
under paragraph 1, disregarding fractional shares, without any further
approval of the shareholders. The adjustment shall be made by the Committee
whose determination shall be conclusive.
10. Amendment or Termination of the Plan.
10.1 The Board of Directors may amend or terminate this Plan at any
time subject to paragraph 10.2.
10.2 Unless the amendment is approved by the shareholders, no amendment
shall be made in the Plan that would:
(a) Increase the total number of shares available for options or
stock appreciation rights;
(b) Increase the maximum option term; or
(c) Modify the requirements for eligibility under the Plan.