EXHIBIT 10.12
December 15, 2000
Dear Lavi,
On behalf of Cadence, I am pleased to offer you an interim position of Senior
Vice President and Deputy General Manager of the EDA IC Division. This position
will report to Jim Hogan, Senior Vice President Business Development and General
Manager EDA IC Division. Effective April 1, 2001, you will assume the role of
Senior Vice President and General Manager of the EDA IC Division, reporting to
Ray Bingham. As a senior officer of the company, your compensation will include
an annualized base salary of $350,000 and an annualized target bonus of
$250,000. In addition, you will be issued an option to purchase 300,000 shares
of Cadence Design Systems common stock. You will also receive an interest-free
real estate loan of $500,000, forgivable in full on February 1, 2003. In the
event you terminate employment (for reasons other than cause), prior to February
1, 2002, the loan becomes due and payable in full within six months. In the
event you terminate employment (for reasons other than cause), prior to February
1, 2003, one half of the loan ($250,000) will be due and payable within six
months after your termination date. You will be responsible for paying taxes, if
any, associated with the forgiveness of the loan and it's interest-free nature.
The loan will be secured against your home at _____________________. You will be
provided an Executive Retention Agreement, as is provided for our senior
officers, but which will also include forgiveness of the real estate loan noted
above in the event of change of control.
Please read the additional details for incentives in the attached "Employment
Terms". This offer is contingent upon successfully passing the Cadence
background verification.
Cadence offers a comprehensive Employee Benefits package including: VP vacation
plan; eight paid holidays per year and three floating paid holidays per calendar
year; 401(k); non-qualified deferred compensation (NQDC Plan); and an Employee
Stock Purchase Plan. We also provide a wide variety of health and welfare
benefits through Cadence Compositions, our cafeteria-style benefits plan. Under
this plan, you will be able to choose from several different options in each
benefit area, including Medical, Dental, Vision, Life and Disability Insurance.
Additional details on all these benefits can be found in the "Employee Benefits"
pamphlet and will be discussed in depth at your "New Employee Orientation"
during your first week of employment. Please keep in mind that Cadence is an at
will employer as described in the attached "Employment Terms".
New Employee Orientations will be conducted by Cadence Human Resources at 2670
Seely Road, Bldg. #11, every Monday at 8:00 A.M. If you are not going to be in
San Jose, you can dial-in on Tuesday at 11 A.M. PST by calling 888/710-8640 and
use the pass code "Orientation". It is important to schedule your start date on
Monday or Tuesday for payroll purposes. During this session, benefits, payroll,
policies and procedures, and the email and phone systems will be covered. Please
be prepared to provide proper identification in order to complete the United
States Immigration forms.
December 15, 2000
Lavi Lev
Lavi, if you have any questions, please do not hesitate to contact me. We look
forward to having you on our team!
Sincerely,
/s/ Ron Kirchenbauer
Sr. Vice President Employee and Workplace Services, and CIO
Cc: Ray Bingham
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December 15, 2000
Lavi Lev
EMPLOYMENT TERMS
NON-QUALIFIED DEFERRED COMPENSATION (NQDC) PLAN
As a participant of the Non-Qualified Deferred Compensation Plan (NQDC), you
will be eligible to defer up to 80% of your salary and 100% of your bonus income
- - without the annual IRS limitations imposed on tax-qualified retirement plans,
such as the 401 (k) plan. By deferring income into the NQDC plan, you can
substantially reduce your taxable wage base. Taxes on both the deferred income
and earnings on investments are not assessed until you begin to receive
distributions. New participants are eligible to enroll twice each year, January
1 and July 1. Participants will automatically receive enrollment and detailed
plan information during the stated enrollment periods.
VP VACATION PLAN
As a participant in the vice president vacation plan, personal time off may be
taken at the discretion of you and your manager. There will be no need to submit
vacation request forms, there will be no set limits, and no need to carry over
or accrue vacation days. In short, this flexible policy represents an efficient
and simple way to put the responsibility for time away from Cadence squarely in
your hands.
CONFIDENTIALITY AND NON-DISCLOSURE
Cadence has a policy of non-disclosure to anyone within our company of any
confidential and/or proprietary information regarding your current employer
and/or anyone else with whom you have by reason of your employment signed or are
covered by a non-disclosure or similar agreement. Accordingly, please do not
use, or disclose to Cadence any proprietary information belonging to your
employer or any other person or company with which you have signed an agreement.
EMPLOYMENT
Cadence is an at-will employer. You are not being promised any particular term
of employment. The employment relationship may be terminated by either you or
Cadence at any time for any reason, with or without cause, and with or without
notice. No one at Cadence is empowered, unless specifically authorized in
writing by the Sr. VP of Employee and Workplace Services, to make any promise,
express or implied, that employment is for any minimum or fixed term or that
cause is required for the termination of employment relationship.
Please take your time reading through this entire packet. Should you have any
questions regarding it's content, feel free to give me a call. Kindly
sign/complete and return the following documents:
Original Offer Letter and Employment Terms
Employee Profile
Employee Proprietary Information and Inventions Agreement
Employment Application
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This is to verify my acceptance of the above stated offer and employment terms:
/s/ Lavi Lev 12/15/00 2/5/00
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Lavi Lev Today's Date Desired Start Date
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PROMISSORY NOTE
$500,000.00 February 6, 2001
CITY: Saratoga COUNTY: Santa Clara
STATE: California
FOR VALUE RECEIVED, the undersigned, Lavi A. Lev and Sarah Lev ("BORROWER")
hereby promises to pay to the order of Cadence Design Systems, Inc., ("LENDER")
having its principal office at 2655 Seely Road, in San Jose, California in
lawful money of the United States of America, the sum of Five Hundred Thousand
Dollars and Zero Cents ($500,000.00) plus interest at the rate as described
below on the unpaid balance with principal and interest to be paid on the terms
and conditions set forth below in this Promissory Note (the "NOTE").
1. ADDITIONAL DEFINITIONS.
(a) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(b) "APPLICABLE FEDERAL RATE" shall mean the short-term applicable
Federal rate (as defined in the CODE) for monthly compounding that is in effect
as of the date of this agreement.
(c) "PRINCIPAL RESIDENCE" shall mean the personal residence to be
purchased and used by EMPLOYEE as a principal residence within the meaning of
Section 217 of the CODE and the Regulations thereunder, which PRINCIPAL
RESIDENCE is described in the Deed of Trust attached hereto as EXHIBIT A,
provided that EMPLOYEE acquires a fifty percent (50 %) or greater interest in
such personal residence.
(d) "TERMINATION OF EMPLOYMENT" shall mean the termination of EMPLOYEE's
employment relationship with LENDER for any reason or no reason, with or without
cause, including the death or retirement of EMPLOYEE.
(e) "DUE DATE" shall mean the second (2nd) year anniversary of the date
of this NOTE or, if earlier occurring, the date of an event causing acceleration
under Section 6 of this NOTE.
2. INTEREST.
(a) Except as provided in Section 2.c., this NOTE shall bear the
interest rate of zero percent (0.00 %) per annum. Payments of interest only, if
more than zero percent (0.00 % ), are due monthly.
(b) Except as provided in Section 2.c, no payment of principal shall be
due and payable until the DUE DATE, at which time all unpaid accrued interest
and the principal balance of this NOTE shall be due and payable.
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(c) Upon the DUE DATE, interest on the unpaid principal balance of this
NOTE shall accrue at the APPLICABLE FEDERAL RATE, compounded monthly.
(d) All payments shall be applied first against accrued interest, and
second against principal.
3. FORGIVENESS/REPAYMENT OF LOAN.
(a) For each full year lapsing from the date of this NOTE during which
EMPLOYEE has remained continuously employed by LENDER, LENDER shall forgive a
principal amount in accordance with the following schedule:
Anniversary of Date of NOTE Amount Forgiven
First $250,000.00
Second $250,000.00
(b) Any amount forgiven may be deemed as compensation to EMPLOYEE on the
date forgiven. LENDER will report and withhold the amount of all such
compensation to the Internal Revenue Service and any such state and local taxing
authorities as is required by law; however, on the date an amount is forgiven
EMPLOYEE will pay to Lender an amount equal to Lender's withholding obligation
for taxes attributable to any taxable income arising out of the forgiveness of
this loan or any portion thereof.
(c) This forgiveness schedule will cease upon the earlier of the DUE
DATE or the date of TERMINATION OF EMPLOYMENT.
(d) Except as forgiven pursuant to this NOTE, the entire unpaid
principal balance of this NOTE, together with any accrued interest, is due and
payable as of the DUE DATE.
4. PREPAYMENT. EMPLOYEE may prepay all or part of this NOTE without
penalty, fee or acceleration of the due date of this NOTE.
5. SECURITY. This NOTE shall be secured by a Deed of Trust (attached
hereto as EXHIBIT A) the EMPLOYEE's PRINCIPAL RESIDENCE. Such Deed of Trust
shall be executed by EMPLOYEE and, if EMPLOYEE has a spouse, EMPLOYEE's spouse.
6. ACCELERATION OF DUE DATE. The entire remaining principal balance of this
NOTE and accrued interest thereon, shall, at the election of LENDER (however,
the election to accelerate shall be automatic if an order for relief described
in Section 6.j. has been entered), become immediately due and payable upon the
occurrence of any of the following, irrespective of the DUE DATE as otherwise
defined in this NOTE:
(a) One Hundred and Eighty Days (180) following TERMINATION OF
EMPLOYMENT of EMPLOYEE.
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(b) The refinancing of any loan secured by a Deed of Trust on the
PRINCIPAL RESIDENCE, except when EMPLOYEE refinances the loan secured by the
first Deed of Trust on EMPLOYEE's PRINCIPAL RESIDENCE under the following
conditions:
(i) The amount refinanced must not exceed the current principal
balance on the loan secured by the first Deed of Trust on EMPLOYEE's
PRINCIPAL RESIDENCE; and
(ii) The Deed of Trust securing this NOTE must remain in effect
and in at least the same position with respect to its priority.
(c) The placement of any further encumbrance on the PRINCIPAL RESIDENCE,
whether voluntary or involuntary, and whether junior or senior to the Deed of
Trust securing EMPLOYEE's obligations pursuant to this NOTE.
(d) The sale, conveyance, alienation, or other transfer by EMPLOYEE of
all or any portion of its interest in the PRINCIPAL RESIDENCE, whether voluntary
or involuntary, by act of law or otherwise (except to a living or revocable
trust of which EMPLOYEE is a trustee).
(e) Any other change that removes EMPLOYEE as a holder of record of
title to the PRINCIPAL RESIDENCE.
(f) EMPLOYEE ceases to occupy the PRINCIPAL RESIDENCE as EMPLOYEE's
principal residence for any reason.
(g) Any failure on the part of the EMPLOYEE to make any payment when the
same is due.
(h) Any failure on the part of the EMPLOYEE (i) to perform or observe
any of its covenants or other obligations under the Deed of Trust securing this
NOTE, and (ii) to commence and proceed diligently to cure such default within
fifteen (15) days after written notice thereof is given by LENDER, and in any
event to cure such default within thirty (30) days after the date on which such
notice is given.
(i) The destruction or condemnation of the real property subject to the
Deed of Trust or any material portion thereof.
(j) If there is entered against EMPLOYEE an order for relief under Title
11 of the United States Code (Bankruptcy).
(k) Any default by EMPLOYEE of EMPLOYEE's covenants or other obligations
under this NOTE.
7. MAXIMUM INTEREST AMOUNT. If fulfillment of any obligation under this
NOTE shall be prohibited by law at the time performance of such obligation is
due, the obligation to be fulfilled shall be reduced to the maximum not so
prohibited, and if from any circumstance LENDER should ever receive as interest
an amount that would exceed the highest lawful interest rate applicable to this
NOTE, such amount as would be excessive interest shall be applied to the
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reduction of the unpaid principal balance and not to the payment of interest.
This provision shall control every other provision of this NOTE and all other
agreements between EMPLOYEE and LENDER.
8. COLLECTION COSTS BORNE BY EMPLOYEE. In the event of any failure on the
part of EMPLOYEE to make any payment when the same is due, LENDER shall be
entitled to recover from EMPLOYEE all costs of effecting collection of the same,
including reasonable attorneys' fees and all costs of collection. Unpaid
principal and interest subject to collection shall bear interest at the
APPLICABLE FEDERAL RATE.
9. CODE SECTION 7872 COVENANTS OF EMPLOYEE. EMPLOYEE covenants the
following:
(a) EMPLOYEE will apply the loan proceeds exclusively towards payoff of
existing loans secured against EMPLOYEE's PRINCIPAL RESIDENCE:
(b) EMPLOYEE will perform substantial services for LENDER throughout the
term of this NOTE.
(c) EMPLOYEE reasonably expects to be entitled to and will itemize
deductions for each year during which this loan is outstanding.
10. GOVERNING LAW. This NOTE shall be enforced in accordance with the laws
of the State of Texas and shall be construed in accordance therewith without
regard to principles of conflicts of laws.
11. NOTICE. All notices or other communications required or given hereunder
shall be in writing and shall be deemed effectively given when presented
personally or on the date of receipt if sent by courier service or U.S. Mail
(certified or registered, postage prepaid, return receipt requested) to the
parties at the addresses given below or such other addresses as the parties may
hereafter designate in writing. The date shown on the courier's confirmation of
delivery or return receipt shall be conclusive as to the date of receipt.
EMPLOYEE : Lavi A. Lev
LENDER: Cadence Design Systems, Inc.
2655 Seely Road
San Jose, CA
12. MERGER AND INTEGRATION. This NOTE (including the Deed of Trust referred
to in Section 5) contains the entire agreement between EMPLOYEE and LENDER on
the terms of this loan, and is the complete, final, and exclusive embodiment of
their agreement with regard to this loan. EMPLOYEE acknowledges and represents
that this NOTE is entered into without reliance on any promise or representation
other than those expressly contained herein and that this NOTE cannot be
modified except in a writing signed by both EMPLOYEE and LENDER.
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13. WAIVER. Failure by LENDER to enforce any provision or provisions of this
NOTE shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent LENDER thereafter from enforcing each and every other
provision of this NOTE. The rights granted LENDER herein are cumulative and
shall not constitute a waiver of LENDER's right to assert all other legal
remedies available to it under the circumstances.
14. SUCCESSORS. This NOTE shall be binding upon and shall inure to the
benefit of the parties hereto and their respective representatives, heirs,
administrators, successors and assigns except as otherwise provided herein.
15. NO ASSIGNMENT. In no event shall the benefits of this NOTE be
transferred or assigned by EMPLOYEE.
IN WITNESS WHEREOF, EMPLOYEE has set its hand to this NOTE effective as
of the date set forth above.
/s/ Lavi A. Lev /s/ Sarah Lev
- ----------------------------- -----------------------------
Lavi A. Lev Sarah Lev
STATE OF CALIFORNIA )
)ss
COUNTY OF SANTA CLARA)
On 2-10-01 before me, Judy Coulter personally appeared
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Lavi A. Lev and Sarah Lev known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) are subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacity(ies), and that by their signatures) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal
Signature /s/ Judy Coulter
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Commission Expires Mar. 11, 2004
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