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EXHIBIT 10.1
SYNOPSYS, INC.
EMPLOYEE STOCK PURCHASE PLAN
(As amended on August 1, 1999, January 11, 2000
and March 8, 2000)
I. PURPOSE
The Synopsys, Inc. Employee Stock Purchase Plan (the "Plan") is intended to
provide Eligible Employees of the Company and one or more of its Corporate
Affiliates with the opportunity to acquire a proprietary interest in the Company
through the periodic application of their payroll deductions to the purchase of
shares of the Company's common stock.
II. DEFINITIONS
For purposes of plan administration, the following terms shall have the
meanings indicated.
Base Salary means all compensation paid as wages, salaries, commissions,
overtime, and bonuses, but excluding all of the following items (even if
included in taxable income): reimbursements, car allowances or other expense
allowances, severance pay, fringe benefits (cash and noncash), moving expenses,
deferred compensation, income attributable to stock options, restricted stock
grants, SARs and other equity-related incentive programs, and welfare benefits.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Company means Synopsys, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Synopsys,
Inc. which shall by appropriate action adopt the Plan.
Common Stock means shares of the Company's common stock.
Corporate Stock means shares of the Company's common stock.
Corporate Affiliate means any company which is a parent or subsidiary
corporation of the Company (as determined in accordance with Code Section 424),
including any parent or subsidiary corporation which becomes such after the
Effective Date.
Effective Date means the first day of the initial offering period scheduled
to commence upon the later of (i) February 1, 1992 or (ii) the effective date of
the S-8 Registration Statement
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covering the share of Common Stock issuable under the Plan. However, for any
Corporate Affiliate which becomes a participating Company in the Plan after the
first day of the initial offering period, a subsequent Effective Date shall be
designated with respect to participation by its Eligible Employees.
Eligible Employee means any person who is engaged, on a regularly-scheduled
basis of more than twenty (20) hours per week and more than five (5) months per
calendar year, in the rendition of personal services to the Company or any other
Participating Company for earnings considered wages under Section 3121(a) of the
Code.
Enrollment Date has the meaning ascribed to it in Section V.A.
Participant means any Eligible Employee of a Participating Company who is
actively participating in the Plan.
Participating Company means the Company and such Corporate Affiliate or
Affiliates as may be designated from time to time by the Board.
Semi-Annual Entry Date means (i) during 1999 and each preceding calendar
year within an offering period in effect under the Plan, the first business day
of May and the first business day of November and (ii) during 2000 and all
subsequent calendar years within an offering period under the Plan, the first
business day of March and the first business day of September. The earliest
Semi-Annual Entry Date under the Plan shall be November 2, 1992.
Semi-Annual Period of Participation means each period for which the
Participant actually participates in an offering period in effect under the
Plan. There shall be a maximum of four (4) periods of participation within each
offering period. Except as otherwise designated by the Plan Administrator, each
such period shall commence on the applicable Semi-Annual Entry Date.
Semi-Annual Purchase Date means (i) during 1999 and each preceding year on
which shares of Common Stock are automatically purchased for Participants under
the Plan, the last business day of April and October, and (ii) during 2000 and
each subsequent year on which shares of Common Stock are automatically purchased
for Participants under the Plan, the last business day of February and August.
III. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company or
a committee that will satisfy Rule 16b-3 of the Securities and Exchange
Commission, as in effect with respect to
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the Company from time to time (in either case, the "Board"). The Board may from
time to time select a committee or persons (the "Plan Administrator") to be
responsible for any transactions not subject to Rule 16b-3. Subject to the
express provisions of the Plan, to the overall supervision of the Board, and to
the limitations of Section 423 of the Code, the Plan Administrator may
administer and interpret the Plan in any manner it believes to be desirable
(including the designation of a brokerage firm at which accounts for the holding
of shares purchased under the Plan must be established by each employee desiring
to participate in the Plan), and any such interpretation shall be final and
binding on all parties who have an interest in the Plan.
IV. OFFERING PERIODS
The Plan shall be implemented in a series of offering periods. Each
offering period shall be of a duration of twenty-four (24) months or less as
designated by the Plan Administrator prior to the start date of any offering
period, except that offering periods that include the Semi-Annual Entry Date on
November 1, 1999 shall be of a duration of twenty-two (22) months. Within each
offering period, there shall be a maximum of four (4) Semi-Annual Periods of
Participation.
V. ELIGIBILITY AND PARTICIPATION
A. Each Eligible Employee will be automatically enrolled in the Plan in
the offering period that begins on the first Semi-Annual Entry Date following
the commencement of employment; thereafter, any Eligible Employee may enroll or
re-enroll in the Plan in the offering period that begins as of any Semi-Annual
Entry Date, or such other days as may be established by the Board from time to
time (each, an "Enrollment Date"). To participate, an Eligible Employee must
complete, sign, and submit to the Company an enrollment form prescribed by the
Plan Administrator. Any enrollment form received by the Company by the 15th day
of the month preceding an Enrollment Date (or by the Enrollment Date in the case
of employees hired after such 15th day), or such other date established by the
Plan Administrator from time to time, will be effective on that Enrollment Date.
Enrollment or re-enrollment by a Participant in the Plan on an Enrollment Date
will constitute the grant by the Company to the Participant of an option to
purchase shares of Common Stock from the Company under the Plan. At the end of
each offering period, each Participant who has not withdrawn from the Plan will
automatically be re-enrolled in the Plan in the offering period that begins on
the Enrollment Date immediately following the date on which the option expires.
Furthermore, except as may otherwise be determined by the Plan Administrator,
each Participant who has not withdrawn from the Plan will automatically be
re-enrolled in the Plan in each offering period that begins on an Enrollment
Date on which the fair market value per share of the Company's Common Stock is
lower than the fair market value per share of the
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Company's Common Stock on the Enrollment Date for the offering period in which
the Participant is then enrolled. Notwithstanding anything in the Plan to the
contrary, if the fair market value (the "Authorization Date FVM") on the date
(the "Authorization Date") on which additional shares of Common Stock are
authorized for issuance hereunder by the Company's shareholders is higher than
the fair market value at the beginning of any Offering Period that commenced
prior to the Authorization Date, then, with respect to any of such authorized
shares available to be issued on Purchase Dates relating to such Offering
Period, the Authorization Date FMV shall be used instead of the fair market
value on the Enrollment Date for the purposes of the preceding sentence,
provided that the Plan Administrator, in its discretion, may waive application
of this sentence with respect to the first Purchase Date occurring after the
Authorization Date.
B. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be zero percent (0%) or any
whole multiple of one percent (1%) of the Base Salary paid to the Participant
during each Semi-Annual Period of Participation within the offering period, up
to a maximum of ten percent (10%). The deduction rate so authorized shall
continue in effect for the entire Semi-Annual Period of Participation and for
each successive Semi-Annual Period of Participation unless (i) the Participant
shall change the rate for a subsequent Semi-Annual Period of Participation by
filing the appropriate form with the Plan Administrator prior to the
commencement of that Semi-Annual Period of Participation or (ii) the Participant
shall change the rate within a Semi-Annual Period of Participation by filing the
appropriate form with the Plan Administrator. The new rate shall become
effective as soon as practicable following the filing of such form. A
Participant may not increase or decrease the deduction rate more than once per
Semi-Annual Period of Participation in addition to fixing the rate at the
beginning of the Semi-Annual Period of Participation. Payroll deductions,
however, will automatically cease upon the termination of the Participant's
purchase right in accordance with Article VII below.
C. In no event may any Participant's payroll deductions for any one
Semi-Annual Period of Participation exceed Seven Thousand Five Hundred Dollars
($7,500.00).
VI. STOCK SUBJECT TO PLAN
A. The Common Stock purchasable by Participants under the Plan shall,
solely in the discretion of the Plan Administrator, be made available from
either authorized but unissued shares of the Common Stock or from shares of
Common Stock reacquired by the Company, including shares of Common Stock
purchased on the open market. The total number of shares which may be issued
under the Plan shall not exceed 5,850,000 shares, less any shares sold
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under the Synopsys, Inc. International Employee Stock Purchase Plan (subject to
adjustment under Section VI.B below). B. In the event any change is made to the
Company's outstanding Common Stock by reason of any stock dividend, stock split,
combination of shares or other change affecting such outstanding Common Stock as
a class without receipt of consideration, then appropriate adjustments shall be
made by the Plan Administrator to (i) the class and maximum number of shares
issuable over the term of the Plan, (ii) the class and maximum number of shares
purchasable per Participant during each Semi-Annual Period of Participation,
(iii) the class and maximum number of shares purchasable in the aggregate by all
Participants on any one purchase date under the Plan and (iv) the class and
number of shares and the price per share of the Common Stock subject to each
purchase right at the time outstanding under the Plan. Such adjustments shall be
designed to preclude the dilution or enlargement of rights and benefits under
the Plan.
VII. PURCHASE RIGHTS
An Employee who participates in the Plan for a particular offering period
shall have the right to purchase shares of Common Stock, in a series of
successive installments during such offering period, upon the terms and
conditions set forth below and shall execute a purchase agreement embodying such
terms and conditions and such other provisions (not inconsistent with the Plan)
as the Plan Administrator may deem advisable.
Purchase Price. Common Stock shall be issuable on each Semi-Annual Purchase
Date at a purchase price equal to 85 percent of the lower of (i) the fair market
value per share on the Participant's Enrollment Date or (ii) the fair market
value per share on the Semi-Annual Purchase Date. Notwithstanding anything in
the Plan to the contrary, if the Authorization Date FVM is higher than the fair
market value at the beginning of any Offering Period that commenced prior to the
Authorization Date, then, with respect to any of such authorized shares
available to be issued on Purchase Dates relating to such Offering Period, the
Authorization Date FMV shall be used instead of the fair market value on the
Enrollment Date for the purposes of clause (i) of the preceding sentence,
provided that the Plan Administrator, in its discretion, may waive application
of this sentence with respect to the first Purchase Date occurring after the
Authorization Date.
Valuation. For purposes of determining the fair market value per share of
Common Stock on any relevant date, the following procedures shall be in effect:
(i) If such fair market value is to be determined on any date on or
after the date the Common Stock is first registered under Section 12(g) of the
Securities Exchange Act of 1934, then the fair market value shall
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be the closing selling price on that date, as officially quoted on the Nasdaq
National Market System. If there is no quoted selling price for such date, then
the closing selling price on the next preceding day for which there does exist
such a quotation shall be determinative of fair market value.
(ii) If such fair market value is to be determined on any date prior
to the time of such Section 12(g) registration of the Common Stock, then the
fair market value of the Common Stock on such date shall be determined by the
Plan Administrator, after taking into account such factors as the Plan
Administrator deems appropriate.
Number of Purchasable Shares. The number of shares purchasable per
Participant on each Semi-Annual Purchase Date shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the corresponding Semi-Annual Period of Participation
by the purchase price in effect for the Semi-Annual Purchase Date. However, no
Participant may, during any Semi-Annual Purchase Period, purchase more than
2,000 shares of Common Stock, subject to periodic adjustment under Section VI.B.
Under no circumstances shall purchase rights be granted under the Plan to
any Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or other
rights to purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of
its Corporate Affiliates.
Payment. Payment for the Common Stock purchased under the Plan shall be
effected by means of the Participant's authorized payroll deductions. Such
deductions shall begin on the first pay day coincident with or immediately
following the Participant's Enrollment Date and shall (unless sooner terminated
by the Participant) continue through the pay day ending with or immediately
prior to the last day of the offering period.
The amounts so collected shall be credited to the Participant's book
account under the Plan, but no interest shall be paid on the balance from time
to time outstanding in such account. The amounts collected from a Participant
may be commingled with the general assets of the Company and may be used for
general corporate purposes.
Termination of Purchase Right. The following provisions shall govern the
termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the last five (5)
business days of the Semi-Annual Period
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of Participation, terminate his/her outstanding purchase right under the Plan by
filing the prescribed notification form with the Plan Administrator. No further
payroll deductions shall be collected from the Participant with respect to the
terminated purchase right, and any payroll deductions collected for the
Semi-Annual Period of Participation in which such termination occurs shall, at
the Participant's election, be immediately refunded or held for the purchase of
shares on the next Semi-Annual Purchase Date. If no such election is made, then
such funds shall be refunded as soon as possible after the close of such
Semi-Annual Period of Participation.
(ii) The termination of such purchase right shall be irrevocable, and
the Participant may not subsequently rejoin the offering period for which such
terminated purchase right was granted. In order to resume participation in any
subsequent offering period, such individual must re-enroll in the Plan in
accordance with Section V.A.
(iii) Should a Participant cease to remain an Eligible Employee while
his/her purchase right remains outstanding or should there otherwise occur a
change in such individual's employee status so that he/she is no longer an
Eligible Employee while holding such purchase right, then such purchase right
shall immediately terminate upon such termination of service or change in status
and all sums previously collected from the Participant during the Semi-Annual
Period of Participation in which the purchase right so terminates shall be
promptly refunded to the Participant. However, should the Participant die or
become permanently disabled while in service or should the Participant cease
employment by reason of a leave of absence, then the Participant (or the person
or persons to whom the rights of the deceased Participant under the Plan are
transferred by will or the laws of inheritance) shall have the election,
exercisable up until the end of the Semi-Annual Period of Participation in which
the Participant dies or becomes permanently disabled or in which the leave of
absence commences, to (i) withdraw all the funds credited to the Participant's
account at the time of his/her cessation of service or at the commencement of
such leave or (ii) have such funds held for the purchase of shares of Common
Stock at the next Semi-Annual Purchase Date. If no such election is made, then
such funds shall automatically be held for the purchase of shares of Common
Stock at the next Semi-Annual Purchase Date. In no event, however, shall any
further payroll deductions be added to the Participant's account
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following his/her cessation of service or the commencement of such leave. Should
the Participant return to active service following a leave of absence, then
his/her payroll deductions under the Plan shall automatically resume at the rate
in effect at the time the leave began, provided such return to service occurs
prior to the end of the offering period in which such leave began. For purpose
of the Plan: (i) the Participant shall be considered to remain in service for so
long as such Participant remains in the active employ of the Company or one or
more other Participating Companies and (ii) the Participant shall be deemed to
be permanently disabled if he/she is unable to engage in any substantial gainful
employment, by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of at
least twelve (12) months.
Stock Purchase. Shares of Common Stock shall automatically be purchased on
behalf of each Participant (other than Participants whose payroll deductions
have previously been refunded or set aside for refund in accordance with the
"Termination of Purchase Right" provisions above) on each Semi-Annual Purchase
Date. The purchase shall be effected by applying each Participant's payroll
deductions for the Semi-Annual Period of Participation ending on such
Semi-Annual Purchase Date () to the purchase of whole shares of Common Stock
(subject to the limitation on the maximum number of purchasable shares set forth
above) at the purchase price in effect for such Semi-Annual Period of
Participation. Any payroll deductions not applied to such purchase (a) because
they are not sufficient to purchase a whole share or (b) by reason of the
limitation on the maximum number of shares purchasable by the Participant for
that Semi-Annual Period of Participation shall be promptly refunded to the
Participant.
Proration of Purchase Rights. Not more than 500,000 shares of Common Stock,
subject to periodic adjustment under Section VI.B, may be purchased in the
aggregate by all Participants on any one Semi-Annual Purchase Date. Should the
total number of shares of Common Stock which are to be purchased pursuant to
outstanding purchase rights on any particular date exceed either (i) the maximum
limitation on the number of shares purchasable in the aggregate on such date or
(ii) the number of shares then available for issuance under the Plan, the Plan
Administrator shall make a pro-rata allocation of the available shares on a
uniform and non-discriminatory basis, and the payroll deductions for each
Participant, to the extent in excess of the aggregate purchase price payable for
the Common Stock pro-rated to such individual, shall be refunded to such
Participant.
Rights as Stockholder. A Participant shall have no stockholder rights with
respect to the shares subject to his/her
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outstanding purchase right until the shares are actually purchased on the
Participant's behalf in accordance with the applicable provisions of the Plan.
No adjustments shall be made for dividends, distributions or other rights for
which the record date is prior to the date of such purchase.
Assignability. No purchase right granted under the Plan shall be assignable
or transferable by the Participant other than by will or by the laws of descent
and distribution following the participant's death, and during the Participant's
lifetime the purchase right shall be exercisable only by the Participant.
Change in Ownership. Should the Company or its stockholders enter into an
agreement to dispose of all or substantially all of the assets or outstanding
capital stock of the Company by means of:
(i) a sale, merger or other reorganization in which the Company will
not be the surviving corporation (other than a reorganization effected primarily
to change the State in which the Company is incorporated), or
(ii) a reverse merger in which the Company is the surviving
corporation but in which more than fifty percent (50%) of the Company's
outstanding voting stock is transferred to holders different from those who held
the stock immediately prior to the reverse merger, then all outstanding purchase
rights under the Plan shall automatically be exercised immediately prior to the
consummation of such sale, merger, reorganization or reverse merger by applying
the payroll deductions of each Participant for the Semi-Annual Period of
participation in which such transaction occurs to the purchase of whole shares
of Common Stock at eighty-five percent (85%) of the lower of (i) the fair market
value of the Common Stock on the Participant's Enrollment Date for the offering
period in which such transaction occurs or (ii) the fair market value of the
Common Stock immediately prior to the consummation of such transaction. However,
the applicable share limitations of Articles VII and VIII shall continue to
apply to any such purchase, and the clause (i) amount above shall not, for any
Participant whose Enrollment Date for the offering period is other than the
start date of such offering period, be less than the fair market value of the
Common Stock on such start date.
The Company shall use its best efforts to provide at least ten (10) days'
advance written notice of the occurrence of any such sale, merger,
reorganization or reverse merger, and
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Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights in accordance with the applicable
provisions of this Article VII.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (I) rights to purchase Common Stock
accrued under any other purchase right outstanding under this Plan and (II)
similar rights accrued under other employee stock purchase plans (within the
meaning of Section 423 of the Code) of the Company or its Corporate Affiliates,
would otherwise permit such Participant to purchase more than $25,000 worth of
stock of the Company or any Corporate Affiliate (determined on the basis of the
fair market value of such stock on the date or dates such rights are granted to
the Participant) for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the right to
acquire Common Stock pursuant to each purchase right outstanding under the Plan
shall accrue as follows:
(i) The right to acquire Common Stock under each such purchase right
shall accrue in a series of successive semi-annual installments as and when the
purchase right first becomes exercisable for each semi-annual installment on the
last business day of each Semi-Annual Period of Participation for which the
right remains outstanding.
(ii) No right to acquire Common Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued in the same
calendar year the right to acquire $25,000 worth of Common Stock (determined on
the basis of the fair market value on the date or dates of grant) pursuant to
one or more purchase rights held by the Participant during such calendar year.
(iii) If by reason of such accrual limitations, any purchase right of
a Participant does not accrue for a particular Semi-Annual Period of
Participation, then the payroll deductions which the Participant made during
that Semi-Annual Period of Participation with respect to such purchase right
shall be promptly refunded.
C. In the event there is any conflict between the provisions of this
Article VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.
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IX. STATUS OF PLAN UNDER FEDERAL TAX LAWS
The Plan is designed to qualify as an employee stock purchase plan under
Code Section 423.
X. AMENDMENT AND TERMINATION
A. The Board may amend, alter, suspend, discontinue, or terminate the
Plan at any time, including amendments to outstanding options/purchase rights.
However, the Board may not, without the approval of the Company's stockholders:
(i) increase the number of shares issuable under the Plan or the
maximum number of shares which may be purchased per Participant or in the
aggregate during any one Semi-Annual Period of Participation under the Plan,
except that the Plan Administrator shall have the authority, exercisable without
such stockholder approval, to effect adjustments to the extent necessary to
reflect changes in the Company's capital structure pursuant to Section VI.B;
(ii) alter the purchase price formula so as to reduce the purchase
price payable for the shares issuable under the Plan; or
(iii) materially increase the benefits accruing to Participants under
the Plan or materially modify the requirements for eligibility to participate in
the Plan.
B. The Board may elect to terminate any or all outstanding purchase
rights at any time. In the event the Plan is terminated, the Board may also
elect to terminate outstanding purchase rights either immediately or upon
completion of the purchase of shares on the next Semi-Annual Purchase Date, or
may elect to permit purchase rights to expire in accordance with their terms
(and participation to continue through such expiration dates). If purchase
rights are terminated prior to expiration, all funds contributed to the Plan
that have not been used to purchase shares shall be returned to the Participants
as soon as administratively feasible.
IX. GENERAL PROVISIONS
A. The Plan shall become effective on the designated Effective Date,
provided that no offering period shall commence, and no shares of Common Stock
shall be issued hereunder, until (i) the Plan shall have been approved by the
stockholders and (ii) the Company shall have complied with all applicable
requirements of the Securities Act of 1933 (as amended), all applicable listing
requirements of any securities exchange on
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which shares of the Common Stock are listed and all other applicable
requirements established by law or regulation. In the event such stockholder
approval is not obtained, or such Company compliance is not effected, within
twelve (12) months after the date on which the Plan is adopted by the Board, the
Plan shall terminate and have no further force of effect.
B. All costs and expenses incurred in the administration of the Plan
shall be paid by the Company.
C. Neither the action of the Company in establishing the Plan, nor any
action taken under the Plan by the Board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the Company or any of its Corporate Affiliates
for any period of specific duration, and such person's employment may be
terminated at any time, with or without cause.
D. The provisions of the Plan shall be governed by the laws of the State
of California without resort to that State's conflict-of-laws rules.
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