CADENCE DESIGN SYSTEMS, INC.
EMPLOYMENT AGREEMENT
WITH H. RAYMOND BINGHAM
THIS AGREEMENT (the "Agreement") is made effective as of April 26, 1999,
between CADENCE DESIGN SYSTEMS, INC., a Delaware corporation ("Company"), and H.
RAYMOND BINGHAM ("Executive").
WHEREAS, the Company is engaged in the electronic design automation software
business;
WHEREAS, Executive is currently employed by the Company as a senior
executive; and
WHEREAS, the Company desires to secure the services of Executive as
President and Chief Executive Officer, and Executive desires to perform such
services for the Company, on the terms and conditions as set forth herein;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements set forth below, it is mutually agreed as follows:
1. EFFECTIVE DATE AND DUTIES.
1.1 EFFECTIVE DATE. The at-will employment of Executive by the Company
hereunder shall commence upon the effective date of this Agreement (the
"Commencement Date") and shall continue thereafter on the same terms and
conditions until terminated.
1.2 DUTIES. Executive shall have such duties as the Board of Directors
of the Company (the "Board") may from time to time prescribe consistent with his
position as President and Chief Executive Officer of the Company (the
"Services"). Executive shall report directly to the Board.
1.3 DEVOTION OF TIME. Executive shall devote his full business time,
attention, energies and best efforts to the business of the Company; provided,
however, that Executive may (1) maintain, and be re-elected to, any seats
Executive currently holds on the board of directors of one or more corporations,
(2) sit on the board of directors of one or more additional corporations with
the reasonable approval of the Board, (3) engage in charitable work, (4) manage
Executive's own investments, and (5) conduct any other activities; provided,
however, that any such activities do not materially conflict with or materially
adversely affect Executive's duties as President and Chief Executive Officer of
the Company.
1.4 OFFICE. The Company shall maintain an office for Executive at the
Company's corporate headquarters, which currently are located in San Jose,
California.
1.5 POSITIONS. The Board has elected Executive to the Board on or
before the Commencement Date and the Board and the Company shall use their best
efforts to have Executive elected and re-elected to the Board at each future
Annual Stockholder Meeting at which Executive's membership on the Board shall be
submitted to the Company's stockholders for their approval which is held during
Executive's period of service as President and Chief Executive Officer of the
Company.
2. COMPENSATION. The Company shall pay to Executive, and Executive shall
accept as full consideration for the Services, compensation consisting of the
following:
2.1 BASE SALARY. Company shall pay Executive Seven Hundred Thousand
Dollars ($700,000) per year base salary ("Base Salary"), payable in installments
in accordance with the Company's normal payroll practices, less such deductions
or withholdings required by law or authorized by Executive. The Board or the
Compensation Committee of the Board (the "Compensation Committee") shall review
the amount of the Base Salary from time to time, but no less frequently than
annually. Any increase approved during the first four (4) months of the
Company's fiscal year shall become retroactively effective as of the beginning
of such fiscal year, and any increase approved thereafter shall become effective
on the date determined by the Board or the Compensation Committee, as
appropriate.
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2.2 BONUS. Executive shall participate in the Company's Senior
Executive Bonus Plan, or its successor (the "Bonus Plan") at an annual target
bonus of one hundred percent (100%) of Executive's Base Salary for the Company's
fiscal year with respect to which such bonus shall be determined pursuant to the
terms of such Bonus Plan. Such bonus shall be prorated from the Commencement
Date for the remainder of 1999.
2.3 STOCK OPTIONS. Executive shall be entitled to a grant of an
additional nonqualified stock option for Eight Hundred Fifty Thousand (850,000)
shares under the Company's 1987 Stock Option Plan (the "Stock Option Plan"),
which was awarded by the Compensation Committee on May 7, 1999 (the "Option").
The Option shall be granted at one hundred percent (100%) of the fair market
value of the Company's common stock on the date of grant, shall vest in
accordance with the Company's vesting policy for additional grants to executive
officers of the Company in effect on the date of the grant of the Option by the
Compensation Committee, and shall contain such other terms and conditions as
shall be set forth in that agreement documenting the Option.
2.4 INDEMNIFICATION. In the event Executive is made, or threatened to
be made, a party to any legal action or proceeding, whether civil or criminal,
by reason of the fact that Executive is or was a director or officer of the
Company or serves or served any other corporation or other person which is at
least fifty percent (50%) or more owned by the Company or controlled by the
Company in any capacity at the Company's request, Executive shall be indemnified
by the Company, and the Company shall pay Executive's related expenses when and
as incurred, all to the fullest extent not prohibited by law, as more fully
described in that Indemnification Agreement attached as Exhibit A.
3. BENEFITS. Executive shall receive the same or greater pension, profit
sharing, welfare benefits, fringe benefits, and other benefits and perquisites,
valued in the aggregate, as the Board or the Compensation Committee provides to
another key executive of the Company on the Commencement Date, and shall also
receive any enhancements to any such benefit or perquisite that the Board or the
Compensation Committee may determine to provide to a key executive of the
Company in the future.
4. BENEFITS UPON TERMINATION OF EMPLOYMENT. Executive's employment by the
Company shall terminate immediately upon Executive's receipt of written notice
of termination by the Company, upon the Company's receipt of written notice of
termination by Executive, or upon Executive's death or permanent disability.
Further, at the time of termination of employment, if requested by the Board,
Executive shall submit his written resignation from the Board. "Permanent
disability" shall mean any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months and which
renders Executive unable to perform effectively the duties and responsibilities
of his office. Except in connection with a termination for Cause (as defined in
Section 4.2), or on account of permanent disability (as defined above) or death,
or a voluntary termination by Executive other than upon or following
Constructive Termination (as defined in Section 4.3), upon execution by
Executive of an effective release of claims substantially in the form attached
as Exhibit B, the final wording of which shall be determined by the Company (the
"Release"), the Company shall provide Executive with termination benefits upon
termination of employment as follows:
4.1 TERMINATION BENEFITS.
(a) The Company shall pay Executive an amount equal to one hundred
and eighty percent (180%) of his Base Salary and annual target bonus in one lump
sum amount. The Company shall use Executive's highest Base Salary and annual
target bonus in effect at any time during the term of this Agreement for
purposes of calculating the payment to Executive under this Section 4.1. All
such amounts shall be paid by the Company as soon as administratively possible
(i.e., no later than fifteen (15) days) following the first point in time that
the Company is no longer prohibited from deducting such payments for income tax
purposes under the provisions of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), but not prior to the eighth day following
Executive's execution of the Release.
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Amounts not paid to Executive within fifteen (15) days of Executive's
termination of employment as a result of the application of the preceding
sentence shall be credited to Executive's account under the Company's 1994
Nonqualified Deferred Compensation Plan. Upon payment, such amounts shall be
reduced by applicable withholding taxes and other deductions required by law or
authorized by Executive.
(b) All of the unvested options and other stock awards held by
Executive on the date of such termination (including unvested options and other
stock awards outstanding on the Commencement Date) that would have vested over
the succeeding thirty month (30 month) period had Executive continued to provide
the Services during that period shall immediately vest and become exercisable in
full on the date of Executive's termination of employment. This acceleration
will have no effect on any other provisions of the stock awards, including but
not limited to the provisions of the performance options dealing with the
acceleration of vesting upon the achievement of performance milestones.
(c) For a period of twelve (12) months following termination of
employment, the Company shall continue to provide Executive with, and pay the
full cost of, health, disability and life insurance coverage for Executive, his
spouse and dependents that is commensurate with the coverage then provided to
Executive, his spouse and dependents at the time of termination. The Company
shall structure such health, disability and life insurance coverage as
nontaxable benefits to the maximum extent possible, including, but not limited
to, by characterizing such benefits as coverage to a former employee.
Specifically for health insurance coverage, to the extent permitted by the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and by the
Company's group health insurance policies, the Executive shall elect COBRA
continuation coverage and the Company shall pay Executive and his covered
dependents' COBRA continuation premiums for twelve (12) months following the
date of termination of employment. Executive agrees to notify the General
Counsel of the Company, in writing, immediately upon the commencement of health
benefit coverage which would cause Executive's COBRA continuation coverage to
cease.
This Section 4.1(c) provides only for the Company's payment of COBRA
continuation premiums for the periods specified above. This Section 4.1(c) is
not intended to affect, nor does it affect, the rights of Executive, or
Executive's covered dependents under any applicable law with respect to health
insurance continuation coverage.
(d) The Company shall also provide Executive with the benefits
described in Section 5.5, but only in the event of Executive's involuntary
termination of employment with the Company without Cause.
4.2 DEFINITION OF CAUSE. For purposes of this Agreement, "Cause" shall
be limited to (1) Executive's gross misconduct or fraud in the performance of
the Services; (2) Executive's conviction or guilty plea with respect to any
felony related to his employment (except for motor vehicle violations); or (3)
Executive's material breach of this Agreement or the Employee Proprietary
Information and Inventions Agreement referred to in Section 8 after written
notice delivered to Executive of such breach and failure to cure such breach
within thirty (30) days following Executive's receipt of such notice. The
Company may not terminate Executive's employment for Cause unless and until
there shall have been delivered to Executive a copy of a resolution duly adopted
by the affirmative vote of at least a majority of the Board at a meeting of the
Board called and held for the purpose (after reasonable notice to Executive and
an opportunity for Executive, together with Executive's counsel, to be heard
before the Board), finding that in the good faith opinion of the Board,
Executive was culpable for the conduct constituting "Cause" and specifying the
particulars thereof.
4.3 CONSTRUCTIVE TERMINATION. Notwithstanding anything in Section 4 or
Section 5 to the contrary, Executive may voluntarily end his employment upon or
within ninety (90) days following the occurrence of an event constituting a
Constructive Termination with full payment of the termination
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benefits and option vesting described in Section 4.1. For purposes of this
Agreement, "Constructive Termination" shall mean:
(a) a material adverse change in Executive's position (including
Executive's authority, powers, duties, responsibilities, title and/or reporting
relationship to the Board) causing Executive's position to be of materially less
stature or responsibility, unless Executive consents in writing to such change,
and such a material adverse change shall in all events be deemed to occur if
Executive no longer serves as President and Chief Executive Officer reporting to
the Board, unless Executive consents in writing to such change;
(b) a reduction, without Executive's written consent, in
Executive's level of base compensation (including Base Salary as well as
benefits and perquisites) in effect on the Commencement Date (or such higher
level as may be in effect in the future) by more than ten percent (10%) or a
reduction by more than ten percent (10%) in Executive's target bonus in effect
on the Commencement Date (or such greater target bonus amount as may be in
effect in the future) under the Bonus Plan;
(c) a relocation of Executive's principal place of employment by
more than thirty (30) miles, unless Executive consents in writing to such
relocation;
(d) any material breach by the Company of any provision of this
Agreement after written notice delivered to the Company of such breach and a
reasonable opportunity to cure such breach (which opportunity shall not extend
beyond a period of thirty (30) days from the date of delivery of written
notice); or
(e) any failure by the Company to obtain the assumption of this
Agreement by any successor to the Company.
5. CHANGE IN CONTROL BENEFITS.
5.1 During the period (if any) upon or following a Change in Control
that Executive shall continue to provide the Services, then the terms and
provisions of this Agreement shall continue in full force and effect, the Bonus
Plan shall be interpreted and/or amended to evaluate Executive's achievement of
goals as if the Company continued as an independent entity (unless Executive
agrees in writing to a different form of cash incentive compensation plan), and
Executive shall continue to vest in all of his unvested stock options and other
stock awards as specified in the agreements documenting such options and stock
awards.
Should there occur a Change in Control (as defined below) and
Executive's employment terminates for any reason upon or within three
(3) months prior to the Change in Control or upon or before thirteen (13) months
following a Change in Control, then the following provisions shall become
applicable in lieu of severance benefits otherwise payable under Section 4.
5.2 In the event of (y) a termination of Executive's employment by the
Company other than either for Cause or on account of permanent disability or
death, or (z) a Constructive Termination of employment, upon execution by
Executive of the Release, all the following benefits shall become due and
payable:
(a) The Company shall pay to Executive as severance pay in one lump
sum amount, an amount equal to two hundred and fifty percent (250%) of
Executive's Base Salary and annual target bonus in effect immediately prior to
the time of such termination. The Company shall use Executive's highest Base
Salary and annual target bonus in effect at any time during the term of this
Agreement for purposes of calculating the payment to Executive under this
Section 5.2(a). All such amounts shall be paid by the Company as soon as
administratively possible following such termination (i.e., no later than
fifteen (15) days following such termination or on the date of the closing of a
transaction constituting a Change in Control if at the time of termination the
occurrence of the Change in Control remains uncertain), but not prior to the
eighth day following Executive's execution of the Release. Upon payment, such
amounts shall
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be reduced by applicable withholding taxes and all other deductions required by
law or authorized by Executive.
(b) All of the unvested options and other stock awards held by
Executive on the date of such Change in Control (including performance options
without regard as to whether or not any of the performance criteria have been
satisfied and including all other stock awards outstanding on the Commencement
Date) shall immediately vest and become exercisable in full on the date of
Executive's termination of employment, but not prior to the eighth (8th) day
following Executive's execution of the Release, and shall remain exercisable for
the period specified in the applicable option grant.
(c) In the event that Executive's termination occurs within three
(3) months prior to the occurrence of a Change in Control and Executive receives
termination payments pursuant to Section 4 of this Agreement, any payments to
which Executive may be entitled under this Section 5 shall be reduced by the
payments received under Section 4. Notwithstanding the foregoing, for purposes
of this Agreement, any payments made under Section 4 in these circumstances
shall be treated as paid pursuant to this Section 5.
(d) For purposes of this Section 5, a Change in Control shall be
deemed to occur upon the consummation of any one of the following events:
(i) a sale, lease or other disposition of all or substantially
all of the assets of the Company;
(ii) a merger or consolidation in which the Company is not the
surviving corporation and the stockholders of the Company immediately prior to
the merger or consolidation fail to possess direct or indirect ownership of more
than eighty percent (80%) of the voting power of the securities of the surviving
corporation (or if the surviving corporation is a controlled affiliate of
another entity, then the required beneficial ownership shall be determined with
respect to the securities of that entity which controls the surviving
corporation and is not itself a controlled affiliate of any other entity)
immediately following such transaction;
(iii) a merger or consolidation in which the Company is the
surviving corporation and the stockholders of the Company immediately prior to
such transaction fail to possess direct or indirect beneficial ownership of more
than eighty percent (80%) of the securities of the Company (or if the Company is
a controlled affiliate of another entity, then the required beneficial ownership
shall be determined with respect to the securities of that entity which controls
the Company and is not itself a controlled affiliate of any other entity)
immediately following the transaction;
(iv) any transaction or series of related transactions after
which any person (as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
subsidiary of the Company, becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of
voting securities of the Company representing twenty percent (20%) or more of
the combined voting power of all of the voting securities of the Company;
(v) in the event that the individuals who, as of the date
immediately following the Company's 1999 Annual Meeting of Stockholders, are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least fifty percent (50%) of the Board. (If the election, or nomination for
election by the Company's stockholders, of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new director shall be
considered as a member of the Incumbent Board.); or
(vi) the liquidation or dissolution of the Company.
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For purposes of Section 5.2(d)(ii) and Section 5.2(d)(iii) above, any
person who acquired securities of the Company prior to the occurrence of the
specified transaction in contemplation of such transaction and who immediately
after such transaction possesses direct or indirect beneficial ownership of at
least ten percent (10%) of the securities of the Company or the surviving
corporation, as appropriate, (or if the Company or the surviving corporation is
a controlled affiliate, then of the appropriate entity as determined above)
shall not be included in the group of stockholders of the Company immediately
prior to such transaction.
5.3 In the event that the benefits payable hereunder to Executive (i)
constitute "parachute payments" within the meaning of Section 280G of the Code,
or any comparable successor provisions, and (ii) but for this Section 5.3 would
be subject to the excise tax imposed by Section 4999 of the Code, or any
comparable successor provisions (the "Excise Tax"), then Executive's benefits
hereunder shall be either
(i) provided to Executive in full, or
(ii) provided to Executive as to such lesser extent which would
result in no portion of such benefits being subject to the
Excise Tax,
whichever of the foregoing amounts, when taking into account applicable federal,
state, local and foreign income and employment taxes, the Excise Tax, and any
other applicable taxes, results in the receipt by Executive, on an after-tax
basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under the Excise Tax. Unless the Company
and Executive otherwise agree in writing, any determination required under this
Section 5.3 shall be made in writing in good faith by a nationally recognized
accounting firm which is then serving as the Company's independent auditors (the
"Accountants"). In the event of a reduction of benefits hereunder, Executive
shall be given the choice of which benefits to reduce. If Executive does not
provide written identification to the Company of which benefits he chooses to
reduce within ten (10) days of his receipt of the Accountants' determination,
and Executive has not disputed the Accountants' determination, then the Company
shall select the benefits to be reduced. For purposes of making the calculations
required by this Section 5.3, the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of the Code, and other
applicable legal authority. The Company and Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section 5.3. The Company
shall bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 5.3.
If, notwithstanding any reduction described in this Section 5.3, the IRS
determines that Executive is liable for the Excise Tax as a result of the
receipt of the payment of benefits as described above, then Executive shall be
obligated to pay back to the Company, within thirty (30) days after a final IRS
determination or in the event that Executive challenges the final IRS
determination, a final judicial determination, a portion of the payment equal to
the "Repayment Amount." The Repayment Amount with respect to the payment of
benefits shall be the smallest such amount, if any, as shall be required to be
paid to the Company so that Executive's net after-tax proceeds with respect to
any payment of benefits (after taking into account the payment of the Excise Tax
and all other applicable taxes imposed on such payment) shall be maximized. The
Repayment Amount with respect to the payment of benefits shall be zero if a
Repayment Amount of more than zero would not result in Executive's net after-tax
proceeds with respect to the payment of such benefits being maximized. If the
Excise Tax is not eliminated pursuant to this paragraph, Executive shall pay the
Excise Tax.
Notwithstanding any other provision of this Section 5.3, if (i) there is
a reduction in the payment of benefits as described in this Section 5.3, (ii)
the IRS later determines that Executive is liable for the Excise Tax, the
payment of which would result in the maximization of Executive's net after-tax
proceeds (calculated as if Executive's benefits had not previously been
reduced), and (iii) Executive pays the Excise Tax, then the Company shall pay to
Executive those benefits which were reduced pursuant to this
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subsection contemporaneously or as soon as administratively possible after
Executive pays the Excise Tax so that Executive's net after-tax proceeds with
respect to the payment of benefits are maximized.
5.4 For a period of twelve (12) months following termination of
employment, the Company shall continue to provide Executive with, and pay the
full cost of, health, disability and life insurance coverage for Executive, his
spouse and dependents that is commensurate with the coverage then provided to
Executive at the time of termination. The Company shall structure such health,
disability and life insurance coverage as nontaxable benefits to the maximum
extent possible, including, but not limited to, by characterizing such benefits
as coverage, to a former employee. Specifically for health insurance coverage,
to the extent permitted by the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") and by the Company's group health insurance policies, the
Executive shall elect COBRA continuation coverage and the Company shall pay
Executive and his covered dependents' COBRA continuation premiums for twelve
(12) months following the date of termination of employment. Executive agrees to
notify the General Counsel of the Company, in writing, immediately upon the
commencement of health benefit coverage, which would cause Executive's COBRA
continuation coverage to cease.
This Section 5.4 provides only for the Company's payment of COBRA
continuation premiums for the periods specified above. This Section 5.4 is not
intended to affect, nor does it affect, the rights of Executive, or Executive's
covered dependents under any applicable law with respect to health insurance
continuation coverage.
5.5 If Executive is involved in any actual or threatened legal
proceeding to enforce or defend his contractual rights under this Agreement upon
or following the occurrence of a Change in Control, the Company shall reimburse
Executive for all of the reasonable attorney fees and costs and other expenses
incurred by Executive in connection therewith.
6. DISPUTE RESOLUTION. The Company and Executive agree that any dispute
regarding the interpretation or enforcement of this Agreement or any dispute
arising out of Executive's employment or the termination of that employment with
the Company, except for disputes regarding the interpretation of those
agreements referred to in Section 9 and disputes involving the protection of the
Company's intellectual property, shall be decided by confidential, final and
binding arbitration conducted by the American Arbitration Association ("AAA"),
under the then-existing AAA rules, rather than by litigation in court, trial by
jury, administrative proceeding, or in any other forum.
7. COOPERATION WITH THE COMPANY AFTER TERMINATION OF THE EMPLOYMENT PERIOD.
Following termination of employment by Executive, Executive shall cooperate
with the Company in all matters relating to the winding up of his pending work
on behalf of the Company and the orderly transfer of any such pending work to
other employees of the Company as may be designated by the Company, which period
shall not exceed forty-five (45) days. Executive also agrees to participate as a
witness in any litigation or agency proceeding to which the Company is a party
at the request of the Company upon delivery to Executive of reasonable advance
notice. Furthermore, Executive agrees to return all property of the Company in
his possession or control to the Company within ten (10) days of his termination
of employment, except to the extent that retention of any of such property is
necessary or desirable or convenient in order to permit Executive to satisfy his
obligations under this Section 7.
8. CONFIDENTIALITY. Executive agrees to execute the Employee Proprietary
Rights and Inventions Agreement, attached hereto as Exhibit C, modified as
mutually agreed by Executive and the Company in order to avoid any conflict with
the terms of this Agreement.
9. GENERAL.
9.1 WAIVER. Neither party shall, by mere lapse of time, without giving
notice or taking other action hereunder, be deemed to have waived any breach by
the other party of any of the provisions of this Agreement. Further, the waiver
by either party of a particular breach of this Agreement by the other shall
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neither be construed as, nor constitute, a continuing waiver of such breach or
of other breaches of the same or any other provision of this Agreement.
9.2 SEVERABILITY. If for any reason a court of competent jurisdiction
or arbitrator finds any provision of this Agreement to be unenforceable, the
provision shall be deemed amended as necessary to conform to applicable laws or
regulations, or if it cannot be so amended without materially altering the
intention of the parties, the remainder of the Agreement shall continue in full
force and effect as if the offending provision were not contained herein.
9.3 ATTORNEY FEES. The Company shall pay or reimburse Executive for
all reasonable expenses incurred by Executive in connection with the
negotiation, creation and implementation of this Agreement and any other
agreements contemplated by this Agreement.
9.4 MITIGATION. Executive shall not be required to mitigate damages or
reduce the amount of any payment provided under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by Executive as a result of
employment by another employer or by retirement benefits after the date of
termination, or otherwise.
9.5 NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
considered effective either (a) upon personal service or (b) upon delivery by
facsimile and depositing such notice in the U.S. Mail, postage prepaid, return
receipt requested and addressed to the Company in care of the Chairman of the
Board at the Company's principal corporate address, and to Executive at his most
recent address shown on the Company's corporate records, or at any other address
which Executive may specify in any appropriate notice to the Company, or (c)
upon only depositing such notice in the U.S. Mail as described in (b) above.
9.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together constitutes one and the same instrument and in making proof hereof it
shall not be necessary to produce or account for more than one such counterpart.
9.7 ENTIRE AGREEMENT. The parties hereto acknowledge that each has
read this Agreement, understands it, and agrees to be bound by its terms. The
parties further agree that this Agreement, the exhibits to this Agreement, and
the documents, plans and policies referred to in this Agreement (which are
hereby incorporated by reference) constitute the complete and exclusive
statement of the agreement between the parties and supersedes all proposals
(oral or written), understandings, representations, conditions, covenants, and
all other communications between the parties relating to the subject matter
hereof.
9.8 GOVERNING LAW. This Agreement shall be governed by the law of the
State of California.
9.9 ASSIGNMENT AND SUCCESSORS. The Company shall have the right to
assign its rights and obligations under this Agreement to an entity that
acquires all or substantially all of the assets of the Company. The rights and
obligations of the Company under this Agreement shall inure to the benefit and
shall be binding upon the successors and assigns of the Company. Executive shall
not have any right to assign his obligations under this Agreement and shall only
be entitled to assign his rights under this Agreement upon his death, as
permitted by this Agreement, or as otherwise agreed to by the Company.
9.10 DURATION. This Agreement is for no specific term, and either
Executive or the Company may terminate this Agreement in writing at any time,
for any reason or for no reason, with or without prior notice.
9.11 AMENDMENTS. This Agreement and the terms and conditions of the
matters addressed in this Agreement may only be amended in writing executed both
by the Executive and a duly authorized representative of the Company.
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9.12 SURVIVAL OF CERTAIN PROVISIONS. Notwithstanding the termination
of this Agreement in accordance with the provisions of Section 9.10 of the
Agreement, the following provisions of the Agreement shall survive its
termination: Executive's obligations under Sections 7 and 8, the Company's
obligations to provide compensation earned through the termination of the
employment relationship under Sections 2 and 3, the Company's obligation to
provide severance benefits under Sections 4 and 5, the Company's obligation to
indemnify Executive pursuant to Section 2.4 and the referenced Indemnification
Agreement, the Company's obligation to reimburse Executive for expenses related
to actual or threatened legal proceedings to the extent provided in
Section 5.5, and the dispute resolution provisions of Section 6.
IN WITNESS WHEREOF, the parties have executed this Agreement on this 16th
day of September, 1999.
CADENCE DESIGN SYSTEMS, INC. EXECUTIVE
By: /s/ R. L. Smith McKeithen /s/ H. Raymond Bingham
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H. Raymond Bingham
Name: R. L. Smith McKeithen
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Title: Sr. VP & General Counsel
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