What is the primary purpose of the new 2006 Employee Equity Incentive Plan?

The primary purpose of the 2006 Employee Equity Incentive Plan is to provide Synopsys with a consolidated and flexible framework for granting various forms of equity compensation, including stock options, restricted stock awards, and performance-based awards, to its employees. It aims to incentivize employees and align their interests with those of shareholders.

How does the new employee plan affect existing stock options?

The new 2006 Employee Plan does not impact options that have already been granted under previous plans. However, any options outstanding under the terminated 1992 Stock Option Plan, 1998 Non-Statutory Stock Option Plan, and 2005 Assumed Stock Option Plan that expire unexercised will become available for future grants under the new 2006 Employee Plan.

What changes were made to the plan for non-employee directors?

The 2005 Non-Employee Directors Equity Incentive Plan was amended to increase the number of shares reserved for issuance by 450,000 and extend the plan's expiration date to the company's 2010 Annual Meeting of Stockholders. This ensures the company can continue to provide equity compensation to its directors.

How are non-employee directors compensated with equity?

Non-employee directors receive automatic stock awards upon appointment or election. They are granted an initial option upon joining, and ongoing compensation can be in the form of stock options or restricted stock, with the value tied to their annual cash retainer. For 2006, the elected equity component for non-employee directors was restricted stock, with each receiving 5,752 shares on April 25, 2006.

SNPS 8-K: Material Agreements

Summary

Synopsys, Inc. (SNPS) filed an 8-K report on April 27, 2006, detailing material definitive agreements approved by its stockholders at the Annual Meeting on April 25, 2006. The key event was the approval of the Synopsys, Inc. 2006 Employee Equity Incentive Plan, which will govern future equity compensation for employees. This new plan replaces several previous stock option plans, consolidating future equity grants and reserving a substantial number of shares for issuance. Additionally, an amendment to the 2005 Non-Employee Directors Equity Incentive Plan was approved, increasing the share reserve and extending its term. This amendment ensures continued equity compensation for the Board of Directors, with specific provisions for initial and ongoing grants to non-employee members. The report highlights the company's ongoing strategy to incentivize and retain talent through equity-based compensation.

Key Highlights

1Approval of the Synopsys, Inc. 2006 Employee Equity Incentive Plan by stockholders.
2Reservation of 47,497,248 shares of common stock for issuance under the new 2006 Employee Plan.
3Termination of previous equity plans (1992 Stock Option Plan, 1998 Non-Statutory Stock Option Plan, 2005 Assumed Stock Option Plan) for future grants, with outstanding options still valid.
4Amendment to the 2005 Non-Employee Directors Equity Incentive Plan to increase share reserve by 450,000 shares.
5Extension of the 2005 Non-Employee Directors Equity Incentive Plan term until the date of the Company’s 2010 Annual Meeting of Stockholders.
6Details on equity grant structures for non-employee directors, including stock awards and options, with a focus on fair market value alignment.
7Non-employee directors received grants of 5,752 restricted shares on April 25, 2006, as the elected equity component for 2006.

SYNOPSYS INC 8-K Report, Material Agreement (Apr 27, 2006)

Summary

Key Highlights

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