In a continuing effort to align the interests of the non-employee members of Synopsys, Inc.'s (the "Company") Board of Directors ("Board") and senior executives with the interests of the Company's shareholders, the Board hereby establishes the stock ownership guidelines below.
Covered Persons
- Non-employee members of the Board
- The Company's Chief Executive Officer
- The Company's Chief Operating Officer
- All Senior Vice Presidents of the Company
Ownership Guidelines
Executive Officers
Recommended Ownership Level. The Board recommends that the Covered Persons who are executive officers achieve the share ownership levels shown below, and hold the number of shares recommended for so long as they are Covered Persons with the Company:
- Chief Executive Officer: 50,000 shares
- Chief Operating Officer: 25,000 shares
- Senior Vice Presidents: 10,000 shares
Covered Persons may accumulate shares of the Company's Common Stock through stock option exercises, purchases under the Company's Employee Stock Purchase Plan, through open market purchases made in compliance with applicable securities laws, or through any other equity plans the Company may adopt from time to time.
Recommended Compliance Period. The Company recommends that Covered Persons who are executive officers meet the applicable guidelines by August 31, 2007, or for an individual who becomes a Covered Person after the date these revised guidelines were adopted, within four years after the date of his or her qualification as a Covered Person. In no event, however, will any Covered Person be required to exercise stock options or to purchase Company shares on the open market solely to meet these guidelines.
Non-Employee Board members
Recommended Ownership Level. The Board recommends that the Covered Persons who are non-employee Board members achieve and maintain a share ownership level with a value equal to three times the amount of the annual cash retainer paid to such persons (excluding any Board committee service fees) for as long as they serve as members of the Board. Such Covered Persons may accumulate shares of the Company's Common Stock through stock option exercises, receipt of restricted stock, through open market purchases made in compliance with applicable securities laws, or through any other equity plans the Company may adopt from time to time and under which non-employee members of the Board may receive equity compensation.
Recommended Compliance Period. The Company recommends that Covered Persons who are non-employee Board members meet the applicable guidelines by May 31, 2008, or for an individual who becomes a non-employee Board member after the date these revised guidelines were adopted, within three years after the date of his or her appointment or election to the Board. The value of shares held by non-employee Board members shall be measured on the date of each annual meeting of stockholders. In no event, however, will any Covered Person be required to exercise stock options or to purchase Company shares on the open market solely to meet these guidelines.
Equity Compensation Retention Guideline
If a Covered Person exercises a stock option or stock appreciation right, vests in restricted stock, stock bonus or phantom stock, or otherwise receives shares of Company common stock as compensation from the Company, and at the time of such exercise, vesting or receipt has not attained the applicable stock ownership level described above, the Covered Person should retain in such transaction the lesser of the following:
- A number of shares equal to twenty-five percent (25%) of the net value of shares acquired or vested (after deducting the exercise price, if any, and taxes at an assumed tax rate of forty percent (40%); or
- A number of shares necessary to reach the applicable stock ownership guideline amount for such Covered Person.
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