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EXHIBIT 99.4
SYNOPSYS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
SYSTEMS SCIENCE INC.
1998 STOCK OPTION PLAN
OPTIONEE: 1~
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 21st day of
July, 1998 by Synopsys, Inc., a Delaware corporation ("Synopsys").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the common stock of Systems
Science Inc., a California corporation ("SSI"), which were granted to Optionee
under the Systems Science Inc. 1998 Stock Option Plan (the "Plan") and are
evidenced by a Stock Option Agreement (the "Option Agreement") between SSI and
Optionee.
WHEREAS, SSI has this day been acquired by Synopsys through
Synopsys's purchase of all of the issued and outstanding shares of capital stock
of SSI (the "Acquisition") pursuant to the Stock Purchase Agreement, dated as of
July 17, 1998, by and between Synopsys, SSI and the SSI Securityholders (the
"Purchase Agreement").
WHEREAS, the provisions of the Purchase Agreement require
Synopsys to assume all obligations of SSI under all outstanding options under
the Plan at the consummation of the Acquisition and to issue to the holder of
each outstanding option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Purchase Agreement,
the exchange ratio (the "Exchange Ratio") in effect for the Acquisition is
0.0096566 of a share of Synopsys common stock ("Synopsys Stock") for each
outstanding share of SSI common stock ("SSI Stock").
WHEREAS, this Agreement is to become effective immediately upon
the consummation of the Acquisition (the "Effective Time") in order to reflect
certain adjustments to Optionee's outstanding options under the Plan which have
become necessary by reason of the assumption of those options by Synopsys in
connection with the Acquisition.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Synopsys Stock subject to the stock
options held by Optionee under the Plan immediately prior to the Effective Time
(the "SSI Options") and the exercise price payable per share are set forth in
Exhibit A hereto. Synopsys hereby assumes, as
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of the Effective Time, all the duties and obligations of SSI under each of the
SSI Options. In connection with such assumption, the number of shares of
Synopsys Stock purchasable under each SSI Option hereby assumed and the exercise
price payable thereunder have been adjusted to reflect the Exchange Ratio.
Accordingly, the number of shares of Synopsys Stock subject to each SSI Option
hereby assumed shall be as specified for that option in attached Exhibit A, and
the adjusted exercise price payable per share of Synopsys Stock under the
assumed SSI Option shall be as indicated for that option in attached Exhibit A.
2. The following provisions shall govern each SSI Option hereby
assumed by Synopsys:
(a) Unless the context otherwise requires, all
references in each Option Agreement and in the Plan (as
incorporated into such Option Agreement) (i) to the "Company"
shall mean Synopsys, (ii) to "Stock" shall mean shares of
Synopsys Stock, (iii) to the "Board" shall mean the Board of
Directors of Synopsys and (iv) to the "Committee" shall mean the
Compensation Committee of the Synopsys Board of Directors.
(b) The grant date and the expiration date of each
assumed SSI Option and all other provisions which govern either
the exercisability or the termination of the assumed SSI Option
shall remain the same as set forth in the Option Agreement
applicable to that option and shall accordingly govern and
control Optionee's rights under this Agreement to purchase
Synopsys Stock.
(c) The shares subject to each assumed SSI Option
held by Optionee shall continue to vest in accordance with the
same installment vesting schedule in effect under the applicable
Option Agreement immediately prior to the Effective Time, with
the number of shares of Synopsys Stock subject to each such
installment adjusted to reflect the Exchange Rate. Accordingly,
no acceleration of vesting under the SSI Options held by Optionee
shall be deemed to occur by reason of the Acquisition, and the
vesting dates under each applicable Option Agreement shall remain
the same following the Acquisition.
(d) For purposes of applying any and all provisions
of the Option Agreement relating to Optionee's status as an
employee or a consultant of SSI, Optionee shall be deemed to
continue in such status as an employee or a consultant for so
long as Optionee renders services as an employee or a consultant
to Synopsys or any present or future Synopsys subsidiary.
Accordingly, the provisions of the Option Agreement governing the
termination of the assumed SSI Options upon Optionee's cessation
of service as an employee or a consultant of SSI shall hereafter
be applied on the basis of Optionee's cessation of employee or
consultant status with Synopsys and its subsidiaries, and each
assumed SSI Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement for
that option, following such cessation of service as an
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employee or a consultant of Synopsys and its subsidiaries. A
change in status from an employee to a consultant or from a
consultant to an employee will not constitute an interruption of
continuous status as an employee or a consultant.
(e) The adjusted exercise price payable for the
Synopsys Stock subject to each assumed SSI Option shall be
payable in any of the forms authorized under the Option Agreement
applicable to that option. For purposes of determining the
holding period of any shares of Synopsys Stock delivered in
payment of such adjusted exercise price, the period for which
such shares were held as SSI Stock prior to the Acquisition shall
be taken into account.
(f) In order to exercise each assumed SSI Option,
Optionee must deliver to Synopsys a written notice of exercise in
which the number of shares of Synopsys Stock to be purchased
thereunder must be indicated. The exercise notice must be
accompanied by payment of the adjusted exercise price payable for
the purchased shares of Synopsys Stock and should be delivered to
Synopsys at the following address:
Synopsys, Inc.
700 East Middlefield Road
Mountain View, California 94043-4033
Attention: Option Plan Administrator
3. Except to the extent specifically modified by this Stock
Option Assumption Agreement, all of the terms and conditions of each Option
Agreement as in effect immediately prior to the Acquisition shall continue in
full force and effect and shall not in any way be amended, revised or otherwise
affected by this Stock Option Assumption Agreement.
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IN WITNESS WHEREOF, Synopsys has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly authorized officer
as of the ____ day of ____________________, 1998.
SYNOPSYS, INC.
By:_____________________________________
Title:__________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands and acknowledges that all rights and
liabilities with respect to each of his or her SSI Options hereby assumed by
Synopsys are as set forth only in the Option Agreement, the Plan and such Stock
Option Assumption Agreement and no other agreements exist with respect to his or
her SSI Options. The undersigned also acknowledges that except to the extent
specifically modified by this Stock Assumption Agreement, all of the terms and
conditions of the Option Agreement as in effect immediately prior to the
effective time shall continue in full force and effect and shall not in any way
be amended, revised or otherwise affected by this Stock Option Assumption
Agreement. The undersigned further acknowledges that the SSI Option or Options
described in Exhibit A hereto constitute all of the options or other rights to
purchase SSI Stock that he or she owned immediately prior to the Effective Time.
______________________________________________
1~, OPTIONEE
DATED: __________________, 1998
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EXHIBIT A
Optionee's Outstanding Options to Purchase Shares
of Systems Science Inc. Common Stock (Pre-Acquisition)
and
Optionee's Outstanding Options to Purchase Shares
of Synopsys, Inc. Common Stock (Post-Acquisition)