EXHIBIT 10-F
EMPLOYMENT AGREEMENT
The parties to this Agreement are R. Douglas Norby ("Employee") and Mentor
Graphics Corporation, an Oregon corporation (the "Company").
The Company desires to secure the services of Employee to serve in an
executive capacity, and Employee is willing to accept such employment upon
the terms and conditions set forth in this Agreement. Therefore, the
parties agree as follows:
1. Employment. The Company employs Employee to render services to the
Company as Senior Vice President and Chief Financial Officer and to perform
such duties as he shall reasonably be directed to perform by the Chief
Executive Officer (CEO) of the Company. Employee accepts employment by the
Company and agrees to render the services described in this Agreement.
2. Duties and Responsibilities. Employee will perform such duties and
responsibilities under this Agreement as the CEO of the Company shall
reasonably assign to him. He will perform his duties and responsibilities
in an ethical and professional manner in accordance with the policies and
objectives established by the Board of Directors of the Company and all
applicable laws and regulations. He will not perform services for any other
business or entity during the term of this Agreement and will devote full
time to his employment by the Company and will work as many hours as the
business of the Company may reasonably demand.
Notwithstanding the above, Employee may (i) engage in personal
investment activities in charitable or community service, (ii) serve as a
director of LSI Logic Corporation, Epitope, Inc. and Pharmetrix Corporation,
and (iii) complete certain job related obligations to Pharmetrix Corporation,
provided that after the date Employee begins full time regular employment
with the Company, those engagements will not materially interfere with
Employee's duties under this Agreement. With the consent of the CEO,
Employee may serve on the boards of other corporations.
3. Term. The term of this Agreement shall be two years, commencing on
Employee's hire date and expiring at the close of business on the second
anniversary of that date, unless this Agreement is sooner terminated.
4. Compensation.
(a) The Company will pay Employee a base annual salary of $235,000,
payable in equal bimonthly installments, as compensation for all services
to be rendered by Employee under this Agreement, subject to annual review
by the Compensation Committee of the Board of Directors of the Company.
(b) The Company will pay Employee an annual incentive bonus with a
target payout of $100,000 to be paid on performance during the previous
fiscal year. Any incentive bonus payout for 1993 would be prorated from
Employee's hire date.
(c) The Company will pay Employee a hiring bonus of $50,000
(which will not be tax protected) within 30 days of Employee's hire date.
5. Stock Options.
(a) Option Grant. The Company will grant to Employee stock options
to purchase 100,000 shares of its common stock at an exercise price of
$10.375, or the price approved at the July 1993 meeting of the Compensation
Committee of the Board of Directors, whichever is lower. The Compensation
Committee of the Company's Board of Directors, in its sole discretion will
determine whether Employee will receive incentive or nonqualified stock
options. Vesting will begin on Employee's hire date. The options will vest
with continued employment in equal 20 percent increments on the first five
anniversaries of the date of grant and will be ten year options
(subject to earlier termination in the event of termination of employment).
The options will vest in full in the event of a change in control of the
Company as defined in the Company's 1982 Stock Option Plan, including any
amendments to that plan adopted before, but not after, a change in
control. If Employee's employment is terminated under paragraph 6(c) during
the term of this Agreement, 100% of the options will immediately vest and be
exercisable. This clause (a) shall survive termination of this Agreement.
(b) Special Option Grant. The Company will grant to Employee stock
options to purchase 150,000 shares of its common stock at an exercise price
of $10.375, or the price approved at the July 1993 meeting of the
Compensation Committee of the Board of Directors, whichever is lower.
The Compensation Committee of the Company's Board of Directors, in it's
sole discretion, will determine whether Employee will receive incentive or
nonqualified stock options. Vesting will begin on Employee's hire date.
The options will vest as set forth below:
Years after Hire Date Percent Exercisable 30-day Average Common
stock Price
3 1/3 $25
4 1/3 $30
5 1/3 $40
No portion of the option will be exercisable until the third anniversary of
Employee's hire date. After the third anniversary, 1/3 of the options will
be exercisable provided that during any 30 consecutive calendar day period
beginning after the third anniversary the Company's average closing common
stock price is equal to or greater than $25.00. After the fourth anniversary,
1/3 of the options will be exercisable provided that during any 30
consecutive calendar day period beginning after the third anniversary the
Company's average closing common stock price is equal to or greater than
$30.00. After the fifth anniversary, 1/3 of the options will be exercisable
provided that during any 30 consecutive calendar day period beginning after
the third anniversary the Company's average closing common stock price is
equal to or greater than $40.00. The options will be ten year options
(subject to earlier termination in the event of termination ofemployment).
The special option grant is intended to compensate Employee for the value of
certain equity Employee will likely be leaving at Pharmetrix Corporation,
his prior employer. The Company and Employee agree that they intend to
reduce, on a dollar for dollar basis, the value of Employee's special option
grant if Employee obtains all or any portion of the value of his equity in
Pharmetrix Corporation before December 31, 1994. If Employee obtains any
portion of the value of his equity in Pharmetrix Corporation before December
31, 1994, Employee will notify the CEO in writing. The CEO (or his designee)
and Employee will then negotiate in good faith to appropriately reduce the
value of the special option grant. If the parties are unable to agree upon
the reduction within 30 days, the dispute shall be settled by binding
arbitration conducted in accordance with the commercial rules of the AAA.
6. Termination.
(a) Termination by the Company for Cause. For purposes of this
Agreement the Company shall have "cause" to terminate the employment of
Employee if Employee (i) commits a material breach of this Agreement or
any material written rules of the Company, (ii) commits an act involving
moral turpitude, or (iii) fails in a significant way, in the judgment of the
CEO and the Board of Directors of the Company, to perform the duties and
responsibilities assigned to him by this Agreement or by the CEO of the
Company.
The Company may terminate this Agreement and the employment of Employee
immediately at any time for cause by written notice to Employee stating with
particularity the alleged cause. Upon such termination, the Company shall
have no further obligation to Employee except for payment of that portion of
his salary earned to the date of termination.
(b) Termination by Employee for Cause. If the Company commits a
material breach of this Agreement, Employee may terminate this Agreement
immediately by written notice to the Company stating with particularity the
alleged breach. Thereafter, the Company will pay Employee's salary for a
period not to exceed one year from the date of hire in bimonthly installments
as provided for in paragraph 4(a), together with a lump sum payment intended
to compensate Employee for one year of health insurance costs under COBRA.
If Employee subsequently obtains alternative employment, the Company may
reduce the salary otherwise payable to him under this Agreement by amounts
earned from such employment. Employee will not be entitled to any other
payments under the terms of this Agreement.
(c) Termination by the Company Without Cause. The Company may
terminate this Agreement at any time without cause by written notice to
Employee. Thereafter, the Company will pay Employee's base salary for a
period not to exceed two years from the termination date in bimonthly
installments as provided for in paragraph 4(a), together with intended to
compensate Employee for two years of health insurance costs under COBRA.
If Employee subsequently obtains alternative employment or associates with
a company that does not directly compete with Mentor Graphics, the Company
may reduce the salary otherwise payable to him under this Agreement by
amounts earned from such employment. If Employee subsequently obtains
alternative employment or associates with a company that directly competes
with Mentor Graphics without first obtaining the written consent of Mentor
Graphics, the Company may immediately cease further payments of Employee's
base salary. Employee will not be entitled to any other payments under the
terms of this Agreement.
(d) Termination by Employee Without Cause. Employee may terminate
this Agreement without cause at any time by written notice to the Company.
Upon such termination, the Company shall have no further obligation to
Employee except for payment of that portion of his salary earned to the date
of termination.
(e) Resignation. Upon termination of this Agreement for any reason,
Employee will be required to resign as an officer of the Company (and as an
officer or director of any of the Company's subsidiaries or affiliates,
if applicable) and in any such case Employee will resign.
7. Benefits. Employee shall be entitled to all of the employee benefits
normally afforded to other employees and other executive employees of the
Company, including vacation and participation in incentive bonus plans.
Nothing in this Agreement shall be construed to prevent the Company from
reducing or otherwise changing the benefits normally afforded to employees
and executive employees of the Company and thus afforded to Employee under
this Agreement.
8. Repayment of Costs. If Employee terminates his employment with the
Company for any reason other than death or disability during the first year
following his hire date, Employee will reimburse the Company for all
relocation costs incurred by the Company.
9. Assignability. This Agreement shall be personal to Employee and
may not be assigned by him without the written consent of the Company. This
Agreement shall be binding upon the Company, its successors and assigns.
10. Severability. If any provisions of this Agreement are found to be
unenforceable, the remaining provisions shall be enforceable and shall be
construed as if the unenforceable provisions were deleted.
11 Integrated Agreement. This Agreement constitutes the entire agreement
between the parties concerning its subject matter, and there are no prior
or contemporaneous oral or written agreements, understandings, restrictions,
warranties or representations between the parties concerning the subject
matter of this Agreement other than those set forth or provided for the
Agreement. This Agreement shall be in lieu of any other claims of Employee
relating to his employment or benefits, including any claims relating to
termination of employment.
12. Amendments. This Agreement may be amended or modified only by a
written agreement signed by the parties or their duly authorized
representatives.
13. Waiver. No party shall be deemed to have waived any rights under
this Agreement unless the waiver is in writing and is signed by the party or
the party's representative. No delay or omission of any party in exercising
any right shall operate as a waiver of that right or any other right.
A waiver by any party of a breach of a provision of this Agreement shall not
constitute a waiver of or prejudice the party's right otherwise to demand
strict compliance with that provision or any other provision.
14. Notices. All notices, requests, demands and other communications
given under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered personally or when deposited into the United
States mail as certified mail, postage prepaid, to the following addresses:
If to the Company: If to Mr. Norby:
Mentor Graphics Corporation 3055 Pacific Avenue
8005 SW Boeckman Road San Francisco, CA 94115
Wilsonville, OR 97070-7777
Attention: Vice President and
Chief Administrative Officer
or to such other addresses as may be known by the parties or as the parties
may designate in writing in accordance with the provisions of this paragraph.
15. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oregon.
16. Representation by Counsel. During the negotiation and at the time
of execution of this Agreement, both parties were represented by competent
legal counsel (or had the opportunity and ability to be so represented).
MENTOR GRAPHICS CORPORATION
/s/ Frank S. Delia /s/ R. Douglas Norby
Frank S. Delia R. Douglas Norby
Vice President and
Chief Administrative Officer
Dated: July 7, 1993 Dated: July 2, 1993
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement is effective July 5, 1994
between Mentor Graphics Corporation, an Oregon corporation (Mentor Graphics),
and R. Douglas Norby (Employee).
BACKGROUND
The parties entered into an Employment Agreement dated July 7, 1993
(Agreement), and now desire to amend the Agreement as provided in this
Amendment.
AGREEMENT
1. Special Option Grant. Paragraph 5(b) of the Agreement is amended by
adding a new sentence immediately after the table describing the vesting of
Employee's 150,000 special stock option grant (Granted Shares):
"Subject to the provisions of Employee's stock option agreement,
this Agreement and Mentor Graphics' 1982 Stock Option Plan, any
of Employee's Granted Shares not otherwise vested as provided in
this paragraph 5(b) shall immediately vest and become exercisable
nine years and six months after Employee's hire date."
2. Confirmation of Agreement. Except as expressly modified by this
Agreement, the parties ratify and confirm all agreements and commitments set
forth in the Agreement.
R. DOUGLAS NORBY MENTOR GRAPHICS CORPORATION
/s/ R. Douglas Norby By: /s/ Frank S. Delia
(Authorized Representative)
Name: Frank S. Delia
Title: Vice President and Chief
Administrative Officer