EMPLOYMENT AGREEMENT
This Employment Agreement is being entered into as of October 2, 1996 by
and between Cadence Design Systems, Inc., a Delaware corporation ("Employer")
and Robert P. Wiederhold ("Employee").
AGREEMENT
In consideration of the mutual covenants and agreements contained herein,
the parties agree as follows:
1. TERM. This Employment Agreement will become effective on the
date (the "Effective Date") that Employer's subsidiary merges into High Level
Design Systems, Inc. ("HLD"). Employee agrees to serve as an employee of
Employer during the period commencing on the Effective Date and terminating on
the first anniversary of the Effective Date (the "Employment Period"). On the
Effective Date, in addition to becoming an employee of Employer, Employee will
be exchanging his stock interest in HLD for stock and stock options of Employer.
During the Employment Period, Employee shall serve in such
capacity as Employer may specify from time to time and shall have such
responsibilities as may be assigned to Employee by Employer. Employee agrees to
serve Employer to the best of Employee's ability and to devote substantially all
of Employee's working time and efforts during the Employment Period to the
business and affairs of Employer.
2. SALARY. In consideration of the services to be rendered by
Employee to Employer during the Employment Period, Employer shall pay to
Employee a salary of one hundred and fifty thousand dollars ($150,000) per annum
(as may be increased from time to time in accordance with Employer's normal
compensation practices), payable at such times as other salaried employees of
Employer receive their regular salary payments. In addition, Employee will be
eligible to receive additional bonuses and other compensation (if any) as
Employee and Employer may agree. Employer shall be entitled to withhold from
the salary payments such amounts as Employer is required to withhold under
applicable tax laws and other applicable legal requirements.
3. BENEFITS. During the Employment Period, Employer shall provide
to Employee the same benefits that Employer makes generally available to
similarly situated employees during the Employment Period, provided that
Employee meets the standard eligibility requirements for such benefits.
4. TERMINATION.
(a) VOLUNTARY TERMINATION. If Employee shall voluntarily
terminate his employment with Employer during the Employment Period, vesting
shall stop permanently with respect to any options which remain unexercisable as
of the date of termination of employment and
all obligations of Employer to Employee, including any obligation to pay salary
or other compensation to Employee, shall immediately end upon such termination.
Any options which are vested at the time of such voluntary termination must be
exercised, if at all, in accordance with the terms of the stock option plan
under which they were issued and the stock option agreement by which they are
evidenced.
In the event that during the one year period immediately
following the Employment Period, Employee (after negotiating in good faith with
Employer to remain in the employ of, or to act as a consultant to, Employer)
voluntarily terminates his employment with Employer and does not accept
Employer's offer to become a consultant to Employer, Employer shall continue to
pay Employee his salary as described in Section 2 above (but not any bonuses or
other compensation) until the first to occur of: (a) Employee's violation of
Section 5 below, (b) Employee becoming an employee of, or a full-time
consultant to, a company (other than in violation of Section 5 below), or (c)
the expiration of two years from the Effective Date. In addition, Employer
shall permit Employee to remain in a limited consulting or other arrangement
with Employer as necessary to permit Employee's options to remain outstanding in
accordance with the terms (including the vesting schedule) of the stock option
plan under which they were issued and the stock option agreement by which they
are evidenced. Any options which are vested at the time of such voluntary
termination or which vest thereafter must be exercised, if at all, in accordance
with the terms of the stock option plan under which they were issued and the
stock option agreement by which they are evidenced, except that Employee's
options shall terminate upon the first to occur of the expiration date of such
options or 30 days following the date on which such options become fully vested
for exercise.
(b) INVOLUNTARY TERMINATION. Employer may terminate Employee's
employment, with or without cause, at any time during the Employment Period by
delivering written notice of such termination to Employee. If Employer
terminates Employee's employment without "cause" during the Employment Period or
during the one year immediately following the Employment Period, Employer shall
continue to pay Employee his salary (as described in Section 2 above) (but not
any bonuses or other compensation) until the first to occur of: (i) Employee
becoming an employee of, or full-time consultant to, a company (other than in
violation of Section 5 below), or (ii) the expiration of two years from the
Effective Date. In addition, except as otherwise provided below, Employer
shall permit Employee to remain in a limited consulting or other arrangement
with Employer as necessary to permit Employee's options to remain outstanding in
accordance with the terms (including the vesting schedule) of the stock option
plan under which they were issued and the stock option agreement by which they
are evidenced, except that Employee's options shall terminate upon the first to
occur of the expiration date of such options or 30 days following the date on
which such options become fully vested for exercise.
Notwithstanding anything to the contrary contained herein or
in the stock option plan under which Employee's options were issued or the stock
option agreement by which they are evidenced, if Employee shall violate Section
5 below, Employee's options shall cease to vest and shall terminate as to any
vested but unexercised options within 30 days from the date of such violation.
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If Employee is terminated by Employer for "cause", all
obligations of Employer to Employee, including any obligation to pay salary or
other compensation to Employee, shall immediately end, and Employee's options
shall cease to vest and shall terminate as to any vested but unexercised options
within 30 days from the date of such termination. Employee shall be considered
to have been terminated for "cause" if Employee's employment is terminated for
(a) any gross misconduct, fraud or bad faith in the performance of Employee's
employment, (b) Employee's conviction or guilty plea with respect to any felony,
(c) Employee's material breach of this agreement, or (d) Employee's repeated and
substantial failure to perform any reasonable duties assigned to Employee by
Employer despite written notice delivered to Employee of such failure.
5. NON-COMPETITION PROVISION. In connection with the acquisition of
all of Employee's stock in HLD for stock in Employer, Employee agrees that for a
period of two years after the Effective Date, Employee will not own (except for
a less than 5% stock ownership in a publicly traded corporation), manage, join,
control, be employed by, provide services to or be connected with any electronic
design automation company that Employer, acting in good faith and after
consultation with Employee, determines to be competitive with Employer.
6. CONFIDENTIAL INFORMATION AGREEMENT. Employee agrees to sign an
Employee Invention and Confidential Information Agreement, a copy of which is
attached hereto.
7. GOVERNING LAW. This agreement shall be governed by the laws of
the state of California.
Please acknowledge your acceptance of this offer and intention to be bound
by its terms by signing and dating it below. We look forward to working with
you.
Sincerely,
Cadence Design Systems, Inc.
By: ____________________________
Acknowledged and agreed:
________________________________
Robert P. Wiederhold
Date: October ___, 1996
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