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This excerpt taken from the CDNS DEF 14A filed Apr 2, 2007. INCENTIVE
STOCK AWARD PROVISIONS
The following describes the permissible terms of incentive stock
awards granted under the 1987 Plan.
Sales Price and Payment of Sales Price. The
sales price, if any, at which shares of incentive stock will be
sold or awarded to a participant under the 1987 Plan will be
determined by the Board. The sales price may vary among
participants and may be below the fair market value of the
shares of common stock on the grant date. The Board also will
determine the form of consideration that may be used to pay the
sales price, if any, of shares of incentive stock.
Vesting. The grant, issuance, retention and
vesting of shares of incentive stock granted under the 1987 Plan
will be at the times and in the installments as determined by
the Board. The timing of the grant, the issuance, the ability to
retain shares and the vesting of shares of incentive stock may
be subject to continued service, the passage of time
and/or the
performance criteria as the Board deems appropriate as described
below. However, if the vesting of the incentive stock is based
solely on continued service, an award of incentive stock may not
vest in full sooner than three years after the grant date and
may not have a vesting schedule more favorable, at any point in
time, than what would become vested under a monthly pro rata
vesting schedule (i.e., 1/36th per month) over those three
years. If vesting is also subject to the achievement of
performance criteria, the award may not vest sooner than one
year after the grant date. The Board may accelerate the vesting
of an incentive stock award in the event of a participant’s
termination of service as an employee or consultant, a change in
control of Cadence or a similar event, provided that, in the
case of incentive stock awards that are intended to qualify as
“performance based compensation” under
Section 162(m) of the Code, the acceleration complies with
the regulations relating to Section 162(m).
Qualifying Performance Criteria. The
performance criteria for any incentive stock award that is
intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code will be
any one or more of the following performance criteria as
determined pursuant to an objective formula, either
individually, alternatively or in any combination, applied
either to Cadence as a whole or to a Cadence business
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unit, segment or subsidiary, either individually, alternatively
or in any combination, and measured over a performance period
determined by the Board, on an absolute basis or relative to a
pre-established target, to previous results or to a designated
comparison group, in each case as specified by the Board in the
incentive stock award:
The Board, in its discretion, may reduce the number of shares
granted, issued, retainable
and/or
vested under an incentive stock award on account of either
financial performance or personal performance evaluations,
despite the satisfaction of any performance criteria. In
addition, the Board may appropriately adjust any evaluation of
performance under qualifying performance criteria to exclude any
of the following events that occurs during a performance period:
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