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EXHIBIT 99.4
SYNOPSYS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
GAMBIT AUTOMATED DESIGN, INC.
1990 STOCK OPTION PLAN
OPTIONEE: [[Employee]]
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 23rd day of
March, 1999 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 Gambit
Automated Design, Inc., a California corporation ("Gambit"), which were granted
to Optionee under the Gambit Automated Design, Inc. 1990 Stock Option Plan (the
"Plan") and are evidenced by a Stock Option Grant Agreement (the "Option
Agreement") between Gambit and Optionee.
WHEREAS, Gambit has been acquired by Synopsys through the
purchase by Synopsys of all of the issued and outstanding shares of capital
stock of Gambit (the "Acquisition") pursuant to the Securities Purchase
Agreement, dated as of February 17, 1999 (as amended), by and between Synopsys,
Gambit, certain Gambit Securityholders, the Gambit Securityholder
Representatives and the Gambit Noteholder Representative (the "Purchase
Agreement").
WHEREAS, the provisions of the Purchase Agreement require
Synopsys to assume all obligations of Gambit 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
0.03118080 of a share of Synopsys common stock ("Synopsys Stock") for each
outstanding share of Gambit common stock ("Gambit Stock").
WHEREAS, this Agreement is effective as of the consummation of
the Acquisition, which occurred on March 23, 1999 (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 Gambit Stock subject to the options
held by Optionee immediately prior to the Effective Time (the "Gambit Options")
and the exercise price payable per share are set forth in one or more Exhibits A
hereto. Synopsys hereby assumes, as of
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the Effective Time, all the duties and obligations of Gambit under each of the
Gambit Options. In connection with such assumption, the number of shares of
Synopsys Stock purchasable under each Gambit 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
Gambit Option hereby assumed shall be as specified for that option in attached
Exhibit(s) A, and the adjusted exercise price payable per share of Synopsys
Stock under the assumed Gambit Option shall also be as indicated for that option
in attached Exhibit(s) A.
2. The intent of the foregoing adjustments to each assumed Gambit
Option is to assure that the spread between the aggregate fair market value of
the shares of Synopsys Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Acquisition, be not less than the
spread which existed, immediately prior to the Acquisition, between the then
aggregate fair market value of the Gambit Stock subject to the Gambit Option and
the aggregate exercise price in effect at such time under the Option Agreement.
Such adjustments are also intended to preserve, immediately after the
Acquisition, on a per share basis, the same ratio of exercise price per option
share to fair market value per share which existed under the Gambit Option
immediately prior to the Acquisition. Such adjustments are also intended to
preserve, to the extent applicable, the Incentive Stock Option status of the
assumed Gambit Options.
3. The following provisions shall govern each Gambit 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" and "Shares" 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
Gambit Option and all other provisions which govern either the
exercise or the termination of the assumed Gambit Option shall
remain the same as set forth in the Option Agreement applicable
to that option, and the provisions of the Option Agreement shall
accordingly govern and control Optionee's rights under this
Agreement to purchase Synopsys Stock.
(c) Each Gambit Option held by Optionee shall be assumed by
Synopsys as of the Effective Time. The shares subject to each
such assumed Gambit Option 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 Ratio.
Accordingly, no acceleration of vesting under each Gambit Option
held by Optionee shall be
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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 and the Plan relating to Optionee's status as an
employee of Gambit, Optionee shall be deemed to continue in such
status as an employee for so long as Optionee renders services as
an officer, director or full-time employee, or in the Committee's
determination renders substantial services as a part-time
employee, consultant or independent contractor, of Synopsys or
any Synopsys parent, subsidiary or affiliate controlled by
Gambit. Accordingly, the provisions of the Option Agreement
governing the termination of the assumed Gambit Options upon
Optionee's cessation of employment with Gambit shall hereafter be
applied on the basis of Optionee's cessation of services as an
officer, director or full-time employee, or the cessation of
substantial services as a part-time employee, consultant or
independent contractor, of Synopsys or any Synopsys parent,
subsidiary or affiliate controlled by Gambit. Each assumed Gambit
Option shall accordingly terminate, within the designated time
period in effect under the Option Agreement for that option,
following such cessation of services as an officer, director or
full-time employee, or the cessation of substantial services as a
part-time employee, consultant or independent contractor, of
Synopsys or any Synopsys parent, subsidiary or affiliate
controlled by Gambit.
(e) The adjusted exercise price payable for the Synopsys
Stock subject to each assumed Gambit Option shall be payable in
any of the forms authorized under the Option Agreement applicable
to that option, provided that any shares of Synopsys Stock
delivered in payment of the exercise price must have been held
for six (6) months. 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 Gambit Stock prior to the Acquisition shall be taken
into account.
(f) In order to exercise each assumed Gambit 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
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately
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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.
IN WITNESS WHEREOF, Synopsys, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 23rd day of March, 1999.
SYNOPSYS, INC.
By:___________________________________
Title:________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Gambit Options hereby assumed by Synopsys are as
set forth in the Option Agreement, the Plan and such Stock Option Assumption
Agreement, and no other agreements exist with respect to his or her Gambit
Options. The undersigned also acknowledges that except to the extent
specifically modified by this Stock Option 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 Gambit Options
described in Exhibit(s) A hereto constitute all of the options or other rights
to purchase Gambit Stock that he or she owned immediately prior to the Effective
Time.
___________________________________
[[EMPLOYEE]], OPTIONEE
DATED: __________________, 1999
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EXHIBIT A
[[EMPLOYEE]]
Optionee's Outstanding Options to Purchase Shares
of Gambit Automated Design, Inc.
Common Stock (Pre-Merger)
and
Optionee's Outstanding Options to Purchase Shares
of Synopsys, Inc.
Common Stock (Post-Merger)
PRE-MERGER PRE-MERGER POST-MERGER POST-MERGER
OUTSTANDING OPTIONS EXERCISE PRICE OUTSTANDING OPTIONS EXERCISE PRICE
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