8-K/ALeadership ChangesExhibits & Filings

SYNOPSYS INC 8-K/A Report, Executive Changes (Dec 21, 2023)

Filed December 21, 2023For Securities:SNPS

Summary

This 8-K/A filing from Synopsys (SNPS) serves as an amendment to a previous report, detailing the formalization of employment agreements for Sassine Ghazi and Dr. Aart de Geus following a CEO transition. Effective January 1, 2024, Sassine Ghazi will assume the role of President and CEO, while Dr. de Geus will transition to Executive Chairperson of the Board. The filing outlines Mr. Ghazi's new compensation package, including an annual base salary of $840,000 and a target bonus of 200% of his base salary. It also details significant equity awards granted to him in connection with his promotion and for fiscal year 2024, totaling over $18 million in grant date fair value across performance-based RSUs, time-based RSUs, and stock options. Dr. de Geus's agreement as Executive Chairperson specifies an initial annual base salary of $725,000 and also includes substantial equity awards for fiscal year 2024, with a total grant date fair value of $8 million. Both agreements include provisions for severance and accelerated equity vesting under specific termination scenarios, particularly during a change of control period, along with restrictive covenants such as non-competition and non-solicitation. Investors should note these executive compensation details and transition arrangements as key components of Synopsys's leadership evolution and governance.

Key Highlights

  • 1Formalization of employment agreements for incoming CEO Sassine Ghazi and Executive Chairperson Dr. Aart de Geus, effective January 1, 2024.
  • 2Sassine Ghazi appointed President and CEO, with an annual base salary of $840,000 and a 200% target annual bonus.
  • 3Significant equity awards granted to Sassine Ghazi totaling approximately $18 million (grant date fair value) for promotion and FY2024.
  • 4Dr. Aart de Geus appointed Executive Chairperson, with an annual base salary of $725,000.
  • 5Dr. de Geus receives FY2024 equity awards totaling approximately $8 million (grant date fair value).
  • 6Detailed severance packages and accelerated equity vesting provisions for both executives under specific termination conditions, including change of control.
  • 7Both executives are subject to restrictive covenants including non-competition and non-solicitation clauses.

Frequently Asked Questions

This 8-K/A filing amends a prior report to provide the full details of the employment agreements for Sassine Ghazi, the incoming CEO, and Dr. Aart de Geus, the new Executive Chairperson, outlining their compensation, equity awards, and terms of employment as they transition into their new roles effective January 1, 2024.

Sassine Ghazi received a promotion-based performance-based restricted stock unit (PRSU) award valued at $8,000,000 and fiscal year 2024 equity awards consisting of $7,500,000 in PRSUs, $3,750,000 in time-based RSUs, and $3,750,000 in stock options. The total grant date fair value of these equity awards is approximately $23 million.

If terminated involuntarily (without cause) outside of a change of control period, Mr. Ghazi is entitled to 150% of his base salary as cash severance over 12 months, a pro-rated target bonus, 18 months of COBRA premium coverage, and accelerated vesting of time-based equity awards by 12 months. If terminated involuntarily during a change of control period, he is entitled to 200% of his base salary plus 200% of his target bonus as a lump sum, a pro-rated target bonus, 18 months of COBRA premiums, and full acceleration of all outstanding equity awards (performance awards vesting at target).

Dr. de Geus will serve as Executive Chairperson and receives an initial annual base salary of $725,000. He also received fiscal year 2024 equity awards including $4,000,000 in PRSUs, $2,000,000 in RSUs, and $2,000,000 in stock options. His agreement also includes severance and equity acceleration provisions similar to Mr. Ghazi's under specific termination events, particularly during a change of control, and he is subject to the same restrictive covenants.