8-KMaterial AgreementsExhibits & Filings

CADENCE DESIGN SYSTEMS INC 8-K Report, Material Agreement (Dec 15, 2004)

Filed December 15, 2004For Securities:CDNS

Summary

Cadence Design Systems, Inc. (CDNS) filed an 8-K on December 15, 2004, to disclose a material definitive agreement: an Employment Agreement with H. Raymond Bingham, the Executive Chairman of the Board, effective October 1, 2004. This agreement formalizes Mr. Bingham's role and compensation, including a base salary of $800,000 annually, eligibility for the Senior Executive Bonus Plan, and standard executive indemnification. The agreement also outlines specific severance and change-in-control provisions. In the event of termination without cause, death, disability, or constructive termination, Mr. Bingham is entitled to certain benefits. Notably, a termination within a specific window around a change in control significantly enhances these benefits, including accelerated vesting of stock options and awards, and a larger severance payment (250% of base salary and target bonus). This filing provides transparency regarding executive compensation and termination arrangements.

Key Highlights

  • 1Cadence entered into a formal Employment Agreement with Executive Chairman H. Raymond Bingham, effective October 1, 2004.
  • 2Mr. Bingham's initial base salary is set at $800,000 per year, subject to periodic review.
  • 3He remains eligible for the Senior Executive Bonus Plan with an annual target bonus equal to his base salary.
  • 4The agreement includes standard executive indemnification for Mr. Bingham.
  • 5Specific severance benefits are detailed for termination scenarios including 'cause', disability, death, or 'constructive termination'.
  • 6Enhanced severance and accelerated vesting of unvested stock options/awards are provided if termination occurs within a defined 'change in control' period (3 months prior to 13 months after).
  • 7The agreement mandates non-solicitation and non-competition clauses and a release of claims from Mr. Bingham in exchange for benefits.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose Cadence Design Systems, Inc.'s entry into a material definitive agreement, specifically an Employment Agreement with its Executive Chairman, H. Raymond Bingham.

Mr. Bingham's compensation includes an initial base salary of $800,000 per year, participation in the Senior Executive Bonus Plan with a target bonus equal to his base salary, and benefits comparable to the President and CEO. The agreement also outlines potential severance benefits.

The agreement details benefits upon termination without cause, disability, death, or constructive termination. If such termination occurs within a specific window around a 'change in control', Mr. Bingham is entitled to significantly enhanced benefits, including full vesting of unvested stock options/awards and a severance payment equal to 250% of his base salary and target bonus.

Yes, in exchange for the severance benefits, Mr. Bingham must execute a Transition Agreement that includes compliance with non-solicitation and non-competition provisions, and a release of Cadence from all employment-related claims.