8-KMaterial AgreementsExhibits & Filings

CADENCE DESIGN SYSTEMS INC 8-K Report, Material Agreement (Feb 13, 2006)

Filed February 13, 2006For Securities:CDNS

Summary

Cadence Design Systems, Inc. (CDNS) filed an 8-K on February 13, 2006, detailing actions taken by its Compensation Committee on February 8, 2006. The committee established performance criteria for the Senior Executive Bonus Plan for the first half of 2006, primarily focusing on achieving a minimum non-GAAP operating income target. The total bonus pool is capped at 5% of the first-half non-GAAP operating income, with individual maximums set. This move signals management's focus on profitability metrics and provides a framework for executive compensation tied to specific financial outcomes. Furthermore, the Compensation Committee approved the form of Incentive Stock Award Agreement for performance-based vesting under the company's 1987 Stock Incentive Plan. This indicates a continued emphasis on aligning executive and shareholder interests through equity compensation tied to performance. Additionally, specific bonus targets were increased for two key executives: William Porter, SVP and CFO, and James S. Miller, Jr., SVP, Development, with their target bonuses set at 100% of their base salaries.

Key Highlights

  • 1Cadence's Compensation Committee set performance criteria for the Senior Executive Bonus Plan for H1 2006, with a minimum non-GAAP operating income target as a prerequisite for bonuses.
  • 2The aggregate bonus pool is capped at 5% of Cadence's non-GAAP operating income for H1 2006.
  • 3Individual executive bonus payments are capped at the lesser of $5 million or a designated percentage of the bonus pool.
  • 4The Compensation Committee retains discretion to reduce bonuses based on factors like total revenue, net bookings, or operating margin.
  • 5Approved the form of Incentive Stock Award Agreement with performance-based vesting under the 1987 Stock Incentive Plan.
  • 6Increased target bonuses for SVP and CFO William Porter and SVP, Development James S. Miller, Jr. to 100% of their base salaries.
  • 7The company is actively using both cash bonuses and stock awards tied to performance to incentivize executive leadership.

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