DEF 14A 1 a2021proxystatementdef14a.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant   ☒
Filed by a Party other than the Registrant   ☐
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to §240.14a-12

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Synopsys, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)Title of each class of securities to which transaction applies:
(2)Aggregate number of securities to which transaction applies:
(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)Proposed maximum aggregate value of transaction:
(5)Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:


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2021
NOTICE OF ANNUAL
MEETING AND
PROXY STATEMENT




LETTER TO OUR STOCKHOLDERS
Dear Stockholder,
As Synopsys approaches our 35th anniversary in 2021, we want to thank you for your support and the trust you have placed in our team. From the beginning, our goal has been to manage the business for the long-term benefit of our customers, stockholders and employees. And we’re happy to say that during a momentous 2020, we continued to do just that.
We effectively navigated an unprecedented pandemic and geopolitical stress, delivering outstanding business results. Our employees’ agility and commitment were truly exemplary. Within a matter of a couple of weeks, we successfully completed transitioning nearly our entire team – more than 15,000 employees – to working remotely. We joined forces with our customers to ensure seamless collaboration and support.
Despite these challenges, we built considerable financial, technology and customer momentum. For the year, we delivered more than 20% non-GAAP earnings per share growth and record cash flow through nearly 10% revenue growth and substantial expansion of non-GAAP operating margin. In addition, significant non-cancellable backlog and a predominantly recurring revenue model provide a solid level of predictability not typically seen in software companies.
Contributing to these results were customer adoptions of key next-generation products introduced over the past few years, which have strengthened our long-standing technology and market leadership. Our objective is to further build on this momentum with several groundbreaking innovations that we launched in 2020.
Across the globe, our products are used to enable virtually every electronic device we rely on today to live, work and play – from enabling low-power computing for home and office, gaming and photo sharing; to bringing safety and security to automobiles; to ensuring healthcare providers can operate securely; to powering the wearables we use to track and improve our fitness and well-being.
But our strong belief is that it’s not sufficient to simply provide technology, however necessary and sophisticated it is. We must be responsible citizens and leaders in how we manage Synopsys' strategy and operations, how we act as stewards of our environment, and how we advance positive social impact.
In 2020, we made good progress across the board. You’ll read about many of these developments in this proxy and our upcoming second annual CSR Report, but let us highlight a few.
We are battling climate change through a combination of direct improvements in our operations and influence in our communities around the world. In 2020, we achieved CarbonNeutral certification for the second year in a row and announced a pledge to reduce our greenhouse gas emissions by 25% by 2024 over our 2018 baseline.
 
Our Technology
 
 
We focus our
technology around
three essential pillars.
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Silicon Design &
Verification
Build high-performance
silicon chips, faster
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Silicon IP
Integrate more
capabilities on SoCs
(system on chip),
faster
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Software Security
Quality
Build secure, high-
quality software, faster
Our Inclusion & Diversity program is built on the premise that our many perspectives inspire innovation. Our I&D efforts have led to notably expanded female representation across the company and enhanced gender diversity on our board, now with three female board members.
A key component to our business success is how much we value our team. To help us effectively manage our talent, we regularly track employee engagement through all-employee surveys. Our recent high scores were particularly gratifying during this unusual year. We also made it a priority to frequently reach out to our team on a variety of topics, including asking how we can help them increase productivity working from home, providing resources for physical and mental health, and giving managers tools they can use in their everyday interactions.
Future goals are as important as current achievements. As we move through 2021 and beyond, we are working diligently to help ensure a better, more sustainable future. Our objective is to set meaningful goals, take concrete actions, track our progress and report on our evolution to all of our stakeholders.
Our board of directors and executive team look forward to continuing our resolute efforts to bring ongoing, long-term value to our stockholders, employees, customers and communities. Thank you for your support.
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Aart de Geus
Co-Chief Executive Officer and
Chairman of the Board of Directors
Chi-Foon Chan
Co-Chief Executive Officer and
President
2021 Proxy Statement
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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
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Date and Time
April 8, 2021 (Thursday)
8:00 AM (Pacific Time)
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Location
Online at www.virtualshareholder
meeting.com/SNPS2021
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Who Can Vote
Stockholders as of
February 9, 2021 are
entitled to vote.
Dear Stockholder,
You are cordially invited to attend the 2021 Annual Meeting of Stockholders of Synopsys, Inc., a Delaware corporation, which will be held virtually via live webcast on April 8, 2021, at 8:00 a.m. Pacific Time. You will be able to attend and participate in the annual meeting online, vote your shares electronically, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/SNPS2021.
Due to the continued public health impact of the novel coronavirus (COVID-19) and to support the health and well-being of our stakeholders and their families, our Board of Directors has decided to hold a virtual annual meeting via live webcast. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting. If the public health conditions regarding COVID-19 improve, we intend to hold an in-person 2022 annual meeting of stockholders.
We are holding the meeting for the following purposes, which are more fully described in the attached Proxy Statement.
VOTING ITEMS
Proposals
Board Vote
Recommendation
For Further
Details
1.
To elect nine directors nominated by our Board of Directors to hold office until the next annual meeting of stockholders or until their successors have been elected
“FOR” each director nominee
Page 9
2.
To approve our 2006 Employee Equity Incentive Plan, as amended, in order to, among other items, increase the number of shares available for issuance under the plan by 4,700,000 shares“FOR”
Page 30
3.
To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this Proxy Statement“FOR”
Page 41
4.
To ratify the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 30, 2021“FOR”
Page 74
5.To vote on a stockholder proposal regarding special stockholder meetings, if properly presented at the meeting“AGAINST”
Page 77
We will also consider any other business that properly comes before the annual meeting or any adjournment or postponement thereof. As of the close of business on February 9, 2021, we are not aware of any other matters to be submitted for consideration at the annual meeting.
All of our stockholders of record at the close of business on February 9, 2021 are entitled to attend and vote at the annual meeting. A list of registered stockholders entitled to vote at the meeting will be available for ten days prior to the meeting. If you want to inspect this list, email our Investor Relations department at synopsys-ir@synopsys.com. The list will also be available during the meeting by following the instructions located at www.virtualshareholdermeeting.com/SNPS2021.
Whether or not you plan to attend the annual meeting, we urge you to cast your vote in advance of the annual meeting via the Internet, by telephone or by returning the proxy card or voting instructions. For most items being put to a vote, if you do not provide voting instructions in person (virtually), via the Internet, by telephone, or by returning the proxy card or voting instruction card, your shares will not be voted. Please vote as promptly as possible. Every stockholder vote is important.
Sincerely yours,
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John F. Runkel, Jr.
General Counsel and Corporate Secretary
Mountain View, California
February 18, 2021
HOW TO VOTE
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InternetTelephoneMail
www.proxyvote.com1-800-690-6903
Mark, sign, date and promptly mail the enclosed
proxy card in the postage-paid envelope
Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting to Be Held on April 8, 2021
The Proxy Statement and our 2020 Annual Report on Form 10-K will be available to stockholders at http://www.proxyvote.com on or
about February 22, 2021.
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TABLE OF CONTENTS
 
 
 
 
 
 
2021 Proxy Statement
3


PROXY STATEMENT SUMMARY
We are providing these proxy materials to you in connection with Synopsys’ 2021 Annual Meeting of Stockholders to be held virtually via live webcast on Thursday, April 8, 2021 at 8:00 a.m. Pacific Time (the Annual Meeting). You will be able to access, participate in, and vote at the Annual Meeting at www.virtualshareholdermeeting.com/SNPS2021 by using the 16-digit control number included on the proxy card and voting instruction form. Non-stockholders may also access and listen to the virtual meeting via the link above. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the login page for the Annual Meeting. The solicitation by this Proxy Statement is made by Synopsys, Inc.
This Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully. You do not need to virtually attend the Annual Meeting in order to vote.
If your shares are held through a broker, bank, or other agent and not in your name and you do not provide voting instructions, your broker is not permitted to vote on your behalf on proposals where broker discretionary votes are not allowed, as indicated below. Therefore, for most items being put to a vote, if you do not provide voting instructions in person (virtually), via the Internet, by telephone, or by returning the proxy card or voting instruction card, your shares will not be voted.
We strongly encourage all stockholders to vote, and to do so as promptly as possible. The deadline for voting by Internet or phone is 11:59 p.m. Eastern Time on Wednesday, April 7, 2021.
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.
Questions and Answers about the Annual Meeting and Voting
Please see the “About the Annual Meeting” section beginning on page 83 for answers to common questions about the Annual Meeting, voting, attendance, submitting a proposal for next year’s annual meeting of stockholders, and other procedures.
A Note about Our Fiscal Year
Our fiscal year ends on the Saturday nearest to October 31. Fiscal 2020 ended on October 31, 2020. Fiscal 2021 will end on October 30, 2021.
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 Proxy Statement Summary
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Director Nominees
Committee Membership
Name and Primary OccupationDirector SinceACCCGC
Aart J. de Geus, 66
Co-Chief Executive Officer and Chairman of the Board of Directors, Synopsys
1986
Chi-Foon Chan, 71
Co-Chief Executive Officer and President, Synopsys
1998
Janice D. Chaffin, 66 image_311a.jpg
Group President (Retired), Consumer Business Unit, Symantec Corporation
2014
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Bruce R. Chizen, 65 image_311a.jpg
Senior Adviser and PGO Partner, Permira Advisers LLP
Venture Partner, Voyager Capital
2001
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Mercedes Johnson, 66 image_311a.jpg
Chief Financial Officer (Retired), Avago Technologies, Inc.
2017
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Chrysostomos L. “Max” Nikias, 68 image_311a.jpg
Professor of Electrical Engineering and President Emeritus, University of Southern California (USC)
2011
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Jeannine P. Sargent, 56 image_311a.jpg
Senior Advisor, Generation Investment Management LLP
Operating Partner and Sr. Advisor, Katalyst Ventures Management LLC
2020
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John Schwarz, 70 image_311a.jpg
Co-founder and Chairman, Visier, Inc.
2007
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Roy Vallee, 68 image_311a.jpg
Lead Independent Director, Synopsys
CEO and Chairman of the Board of Directors (Retired), Avnet, Inc.
2003
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ACAudit CommitteeCCCompensation CommitteeGCGovernance Committee
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IndependentMemberChairman
2021 Proxy Statement
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 Proxy Statement Summary
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Purpose
The primary goal of the amendment of our 2006 Employee Equity Incentive Plan (the 2006 Employee Plan) is to provide us with a sufficient reserve of common stock to offer appropriate incentives to our employees. Like other technology companies, we actively compete for highly qualified employees, especially technical employees. Our equity program is a key component of our strategy to attract and retain key individuals, and the share requirements of our equity program have grown along with our company.
Important Features of the 2006 Employee Plan
We also note that our 2006 Employee Plan includes additional provisions that are designed to protect our stockholders’ interests and to reflect corporate governance best practices, including:
Stockholder approval required for additional shares.
    
No discounted stock options or stock appreciation rights.
    
Repricing and cash-out of underwater options not allowed.
 
No liberal share recycling.
Seven-year maximum term for equity awards.
Full-value awards deplete share reserve at a higher multiple.
Limitations on dividends and dividend equivalents.
No liberal corporate transaction provisions.
Limit on stock awards granted to any participant.
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Compensation Governance and Our Compensation Philosophy
We have designed our executive compensation program to attract, motivate and retain a team of highly qualified executives who will drive technological and business success. In order to motivate and reward our named executive officers (NEOs) for work that improves our long-term business performance and increases stockholder value, we have set out the following objectives:
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 Proxy Statement Summary
Pay for Performance    Competitiveness    Outperformance
Align NEO compensation to the
success of our business objectives.
Provide competitive compensation that
attracts and retains top-performing NEOs.
Motivate NEOs to achieve results that
exceed our strategic plan targets.
 
Stockholder AlignmentBalanceInternal Pay Equity
Align the interests of NEOs and
stockholders through the managed
use of long-term incentives.
Set performance goals that reward an
appropriate balance of near- and
long-term results.
Promote teamwork among NEOs by
considering internal pay equity in setting
compensation levels.
Fiscal 2020 NEO Compensation Details
Our three core elements of NEO direct compensation are salary, an annual cash incentive opportunity and equity awards. The graphic below reflects the approximate general distribution of these three core elements of NEO target total direct compensation (Target TDC) awarded during fiscal 2020 as determined by our Compensation and Organizational Development Committee (the Compensation Committee).
CO-CEOsOTHER NEOs
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*Excludes Sassine Ghazi’s equity awards that were granted in connection with his promotion.
Our Compensation Practices
What We DoWhat We Don’t Do
Pay for Performance
Balanced Mix of Performance Goals
Double Trigger Change of Control Benefits
Maximum Payout Caps
Clawback Policy
Robust Stock Ownership Guidelines
Independent Compensation Committee
Independent Compensation Consultant
Annual advisory Say-on-Pay Vote
Equity Burn Rate Management
No Excessive Risks
No Excessive Change of Control Payments
No Excise Tax Gross Ups
No Excessive Perks
No Hedging or Pledging of our stock
No Repricing or Cash-out of Underwater Options
No Dividends on Unvested Equity Awards
No Executive Pension Plans or SERPs
2021 Proxy Statement
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 Proxy Statement Summary
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Fees and Services of Independent Registered Public Accounting Firm
The following table presents fees for professional audit services rendered by KPMG LLP for the audit of our annual financial statements and fees billed for all other services rendered by KPMG LLP during the following fiscal years.
Fiscal Year Ended
Oct. 31, 2020
      (in thousands)
Nov. 2, 2019
(in thousands)
Audit Fees(1)
$4,850$5,032
Audit-Related Fees(2)
— 140
Tax Fees(3)
1481
All Other Fees(4)
134
TOTAL FEES$4,877$5,257
(1)Audit fees consist of fees for the audit of Synopsys’ consolidated financial statements in our Annual Report on Form 10-K, review of Synopsys’ interim condensed consolidated financial statements in each of our Quarterly Reports on Form 10-Q, and services that are normally provided by KPMG LLP in connection with statutory and regulatory filings or engagements.
In fiscal 2020, audit fees also include fees related to the audit of our adoption of new lease accounting requirements pursuant to FASB ASC Topic 842 (Leases). In fiscal 2019, audit fees also include fees related to the audit of Synopsys’ adoption of new revenue recognition requirements pursuant to FASB ASC Topic 606 (Revenue from Contracts with Customers).
(2)Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of Synopsys’ consolidated financial statements and not reported under “audit fees”.
(3)Tax fees consist of fees for professional services for tax compliance, tax advice and tax planning. This category includes fees primarily related to assistance with international tax compliance services pertaining to certain foreign subsidiaries.
(4)All other fees consist primarily of fees for subscription to KPMG research software.
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We received a stockholder proposal that asks our Board of Directors to take the steps necessary to amend our governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. For the reasons set forth following the proponent’s proposal, our Board of Directors opposes adoption of the proposal and recommends that you vote AGAINST the proposal.
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CORPORATE GOVERNANCE
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We are asking our stockholders to vote “For” the election of nine directors at the Annual Meeting. We do not have a classified or staggered Board of Directors. Each of our directors stands for election on an annual basis, and of the ten current directors whose term expires in 2021, nine directors are standing for re-election. As previously announced, Steven Walske has decided not to stand for re-election at the end of his term at the Annual Meeting.
Following Mr. Walske’s decision not to stand for re-election in December 2020, the Board of Directors voted to reduce the size of the Board to nine members immediately following the expiration of Mr. Walske’s term at the Annual Meeting. Accordingly, only nine directors are nominated and eligible for election at the Annual Meeting.
The Corporate Governance and Nominating Committee of our Board of Directors (the Governance Committee), consisting solely of independent directors as determined by the Board of Directors under applicable Nasdaq listing standards, recommended each of our nine current directors (other than Mr. Walske) for nomination by our full Board of Directors. Based on that recommendation, our Board of Directors has nominated those nine current directors for election at the Annual Meeting.
Provided that there is a quorum at the Annual Meeting, a director nominee will be elected if the votes “For” the nominee exceed 50% of the number of votes cast on the issue of that nominee’s election (including votes “For” and votes “Against” with respect to that nominee’s election, but excluding any abstentions or broker non-votes).
In the event a nominee is unable or declines to serve as a director, the proxies will be voted at the Annual Meeting for any nominee who
may be designated by our Board of Directors to fill the vacancy. As of the date of this Proxy Statement, our Board of Directors is not aware
of any nominee who is unable or intends to decline to serve as a director. Each director to be elected at the Annual Meeting will serve until our next annual meeting of stockholders and until his or her successor is elected and qualified or, if earlier, the director’s death, resignation or removal.
You may either vote “For”, “Against,” or “Abstain” for any nominee you specify. Unless marked otherwise, proxies returned to us will be voted for each of the nominees named below. Broker non-votes and abstentions will have no effect on the vote for this Proposal 1. Therefore, if you hold your shares through a bank, a broker or other holder of record, you must instruct your bank, broker or other holder of record to vote such that your vote can be counted for this Proposal 1.
This Proposal 1 is an uncontested election. In addition to the voting requirements described above and further outlined in our Amended and Restated Bylaws, our Corporate Governance Guidelines provide that our Board of Directors will only nominate for election or reelection candidates who tender, prior to such nomination, an irrevocable resignation that will be effective upon both (i) the failure to receive the required majority vote at a meeting at which they stand for election and (ii) our Board of Directors’ acceptance of such resignation in the Board of Directors’ exclusive discretion. Synopsys will publicly disclose the decision reached by our Board of Directors and the reasons for such decision.
2021 Proxy Statement
9

Corporate Governance
Board of Directors
Board Snapshot
GENDER
DIVERSITY
ETHNIC
DIVERSITY
TENUREINDEPENDENCE
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SKILLS AND EXPERIENCE
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Each director candidate nominated for election at the Annual Meeting is an existing director seeking re-election to our Board of Directors and, except for Ms. Sargent who was appointed to our Board of Directors in September 2020, was previously elected by our stockholders.

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Corporate Governance
Our Director Nominees
Information regarding our nominees, including information they have furnished as to their principal occupations, certain other directorships they hold, or have held, and their ages as of the Record Date, February 9, 2021, is set forth below. The section titled “Identifying New Directors/Stockholder Nominations” on page 16 of this Proxy Statement provides additional information on the director nomination process. The nominee descriptions below contain information about the experience, qualifications and skills that led the Governance Committee to determine that these nominees should serve as our directors.
Other than Dr. de Geus and Dr. Chan, all nominees are independent as determined by the Board of Directors under applicable federal securities law and the listing standards of the Nasdaq Global Select Market. There are no family relationships among any of the director nominees, directors and/or any of Synopsys’ executive officers. In addition, no nominee has an arrangement or understanding with another person under which he or she was or is to be selected as a director or nominee.
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AART J. DE GEUS | AGE: 66
DIRECTOR SINCE: 1986
Co-Chief Executive Officer and Chairman of the Board of Directors
Current Public Company Directorships:
Applied Materials, Inc.
Professional Experience
Co-founded Synopsys and has served as Chairman of our Board of Directors since February 1998 and Chief Executive Officer since January 1994.
Has served as co-Chief Executive Officer with Dr. Chi-Foon Chan since May 2012.
Has held a variety of positions, including President, Senior Vice President of Engineering and Senior Vice President of Marketing, since the inception of Synopsys in December 1986.
Has served as a director since 1986, and served as Chairman of our Board of Directors from 1986 to 1992 and again from 1998 until present.
Has also served on the board of directors of Applied Materials, Inc. since July 2007.
Relevant Skills
As a co-founder of Synopsys, Dr. de Geus has led Synopsys for over 34 years and is considered a pioneer in the EDA industry. Dr. de Geus brings to our Board of Directors a unique and thorough understanding of our business, industry and culture. He provides strong executive leadership and vision and maintains a global network of customer and industry relationships. Dr. de Geus also provides our Board with public company board experience.

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CHI-FOON CHAN | AGE: 71
DIRECTOR SINCE: 1998
Co-Chief Executive Officer and President
Professional Experience
Has served as our co-Chief Executive Officer since May 2012 and as our President and a member of our Board of Directors since February 1998.
Served as our Chief Operating Officer from April 1997 to August 2020.
Joined Synopsys in May 1990 and, in addition to serving as our Chief Operating Officer, has held various senior management positions, including Executive Vice President, Office of the President from September 1996 to February 1998 and Senior Vice President, Design Tools Group from February 1994 to April 1997.
Previously held senior management and engineering positions at NEC Electronics and Intel Corporation.
Relevant Skills
Dr. Chan brings to our Board of Directors senior executive-level leadership, strategic, and operational experience with Synopsys as well as within the overall EDA industry. Dr. Chan has been with Synopsys for over 30 years and served as our Chief Operating Officer and President for over 15 years before being appointed co-Chief Executive Officer, thus providing our Board of Directors with a thorough understanding of our business, operations and technology strategies. He has broad knowledge of the overall EDA industry landscape, and he provides particular expertise in the Asia-Pacific region. Dr. Chan also provides our Board of Directors extensive research and development and engineering experience in the semiconductor industry gained from his leadership positions at NEC and Intel.
2021 Proxy Statement
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Corporate Governance
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JANICE D. CHAFFIN | AGE: 66
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DIRECTOR SINCE: 2014
Synopsys Board Committees:
Compensation
Governance (Chair)
Current Public Company Directorships:
PTC Inc.
Former Public Company Directorships Held in Last Five Years:
Electronics for Imaging, Inc.
Professional Experience
Was appointed to our Board of Directors in December 2014.
Held several senior executive positions with Symantec Corporation, most recently as Group President, Consumer Business Unit, from April 2007 to March 2013, and previously as Executive Vice President and Chief Marketing Officer from 2006 to 2007 and Senior Vice President and Chief Marketing Officer from 2003 to 2006.
Spent more than twenty years with Hewlett-Packard Company in a variety of management and marketing leadership positions before joining Symantec.
Has served on the board of directors of PTC Inc. since August 2013.
Previously served on the board of directors of International Game Technology from September 2010 to April 2015 and on the board of directors of Electronics for Imaging, Inc. from November 2018 to July 2019.
Relevant Skills
Ms. Chaffin has extensive senior management experience with large technology companies. As the former Group President, Consumer Business Unit, of Symantec Corporation, a provider of security, storage and systems management solutions, Ms. Chaffin provides our Board of Directors with demonstrated expertise in strategic marketing and global operations in the software industry, as well as significant experience with cybersecurity matters. Ms. Chaffin also provides our Board of Directors with significant public company board experience, serving as a director of PTC Inc. and previously as a director of Electronics for Imaging, Inc. and International Game Technology.

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BRUCE R. CHIZEN | AGE: 65
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DIRECTOR SINCE: 2001
Synopsys Board Committees:
Compensation
Governance
Current Public Company Directorships:
Oracle Corporation
Professional Experience
Has been a member of our Board of Directors since April 2001.
Currently an independent consultant and has served as Senior Adviser since July 2008 and PGO Partner since June 2018 to Permira Advisers LLP, and Venture Partner with Voyager Capital since July 2009.
Served as a strategic adviser to Adobe Systems Incorporated, a provider of design, publishing and imaging software for print, Internet and dynamic media production from November 2007 to November 2008.
Served as Adobe’s Chief Executive Officer from December 2000 to November 2007 and served as its President from April 2000 to January 2005.
Previously held various other positions at Adobe dating back to 1994.
Has served on the board of directors of Oracle Corporation since July 2008, and previously served on the board of directors of Adobe from December 2000 to April 2008.
Relevant Skills
Mr. Chizen has significant expertise in the management of complex global organizations. As the former Chief Executive Officer of Adobe, Mr. Chizen provides our Board of Directors with executive-level insight into the challenges associated with operating a multi-billion dollar company in a high technology industry. Additionally, Mr. Chizen brings significant financial, product management and marketing expertise, which he gained through various leadership positions at Adobe. Mr. Chizen also provides extensive public company board experience to our Board of Directors.

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Corporate Governance
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MERCEDES JOHNSON | AGE: 66
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DIRECTOR SINCE: 2017
Synopsys Board Committees:
Audit (Chair)
Current Public Company Directorships:
Maxim Integrated Products, Inc.
Millicom International Cellular S.A.
Teradyne, Inc.
Former Public Company Directorships Held in Last Five Years:
Intersil Corporation
Juniper Networks, Inc.
Micron Technology, Inc.
Professional Experience
Has been a member of our Board of Directors since February 2017.
Previously served as Interim Chief Financial Officer of Intersil Corporation from April 2013 to September 2013, Chief Financial Officer of Avago Technologies, Inc. from 2005 to 2008, and Senior Vice President, Finance and Chief Financial Officer of Lam Research Corporation from 1997 to 2004.
Has served as a board member for a number of public companies including Storage Technology Corporation, Intersil Corporation, Micron Technology, Inc., and Juniper Networks, Inc. for 16 years.
Has served on the boards of directors of Teradyne, Inc., since July 2014, Millicom International Cellular S.A. since May 2019, and Maxim Integrated Products, Inc. since September 2019.
Relevant Skills
Ms. Johnson brings a wealth of experience from her current and previous board and chief financial officer roles at public and private companies. She provides both a domestic and international perspective having served on the boards and audit committees of multi-billion dollar technology companies with a worldwide presence. Besides financial expertise, Ms. Johnson brings significant information technology and semiconductor experience, which she gained through various leadership positions at Avago Technologies, Inc., Lam Research Corporation and Applied Materials, Inc.
 
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CHRYSOSTOMOS L. “MAX” NIKIAS | AGE: 68
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DIRECTOR SINCE: 2011
Synopsys Board Committees:
Compensation (Chair)
Professional Experience
Has been a member of our Board of Directors since July 2011.
Served as President of the University of Southern California (USC) from August 2010 to August 2018.
Currently serves as Professor of Electrical Engineering, is the holder of the Malcolm R. Currie Chair in Technology and the Humanities, and is a Life Trustee of USC.
Served as USC’s provost from 2005 through 2010 and as dean of USC’s Viterbi School of Engineering from 2001 through 2005.
Was the founding director of the National Science Foundation-funded Integrated Media Systems Center from 1996 through 2001.
Has worked as a consultant for numerous corporations and the U.S. government, including the U.S. Department of Defense.
Is a member of the National Academy of Engineering, a fellow of the American Academy of Arts & Sciences, a life fellow of the Institute of Electrical and Electronics Engineers (IEEE), a fellow of the American Association for the Advancement of Science (AAAS), and a charter fellow of the National Academy of Inventors.
Has received the IEEE Simon Ramo medal for exceptional achievement in systems engineering.
Relevant Skills
Dr. Nikias has extensive experience in directing engineering research and development programs, as well as a deep understanding of global technology trends. A recognized scholar in the fields of digital signal processing and communications systems, among others, Dr. Nikias provides our Board of Directors with broad engineering knowledge.

2021 Proxy Statement
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Corporate Governance
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JEANNINE P. SARGENT | AGE: 56
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DIRECTOR SINCE: 2020
Synopsys Board Committees:
Audit
Current Public Company Directorships:
Fortive Corporation
Queen's Gambit Growth Capital
Former Public Company Directorships Held in Last Five Years:
Cypress Semiconductor Corporation
Professional Experience
Has served as a member of our board of directors since August 2020.
Has served as a Senior Advisor at Generation Investment Management LLP, an investment firm focused on sustainable companies, since November 2017.
Held multiple leadership roles at Flex Ltd., a leading contract design, engineering and manufacturing company, including President of Innovation and New Ventures and President of Flex’s Energy business, from January 2012 to October 2017.
Previously served as Chief Executive Officer at both Oerlikon Solar AG, a thin-film silicon solar photovoltaic module manufacturer, and Voyan Technology, an embedded systems software provider.
Has served on the board of directors of Proterra Inc. since October 2018, Fortive Corporation since February 2019 and Queen’s Gambit Growth Capital since January 2021, and served as a member of the board of directors of Cypress Semiconductor Corporation from December 2017 until its acquisition by Infineon Technologies AG in April 2020.
Relevant Skills
Ms. Sargent has over 30 years of experience encompassing leadership, operations, marketing and engineering roles with a diverse mix of high technology hardware and software companies across various industries. Ms. Sargent has significant experience with the development and global launch of disruptive technology, executing investment and acquisition strategies, corporate governance, cybersecurity and executive compensation, having served as the Chief Executive Officer and board member of multiple companies.

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JOHN SCHWARZ | AGE: 70
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DIRECTOR SINCE: 2007
Synopsys Board Committees:
Governance
Current Public Company Directorships:
Avast PLC
Teradata Corporation
Professional Experience
Has been a member of our Board of Directors since May 2007.
Currently the Chairman of Visier, Inc, a business analytics cloud-based software firm, and served as its co-founder and Chief Executive Officer from May 2010 to May 2020.
Previously served on the executive board of SAP AG from March 2008 to February 2010.
Was the Chief Executive Officer of Business Objects S.A., a provider of business intelligence software and services, from September 2005 through its acquisition by SAP in January 2008, and served as the Chief Executive Officer of SAP’s Business Objects unit through February 2010.
Served on Business Objects’ board of directors from January 2006 until its acquisition in January 2008.
Has also served as the President and Chief Operating Officer of Symantec Corporation and as President and Chief Executive Officer of Reciprocal Inc.
Previously spent 25 years at IBM Corporation, where he was most recently General Manager of IBM’s Industry Solutions Unit.
Has served as a director at Teradata Corporation since September 2010, a director at Avast PLC since December 2011, and the Chairman of Avast’s board of directors since 2014.
Relevant Skills
As the former Chief Executive Officer of Business Objects S.A., Mr. Schwarz led a large international software company and brings to our Board of Directors extensive management expertise and knowledge of the software industry. Furthermore, Mr. Schwarz provides significant cybersecurity experience to our Board of Directors through his previous role at Symantec Corporation and his current roles at Avast PLC and Visier, Inc. Mr. Schwarz understands the complexities of leading a global organization and operating in international markets. Mr. Schwarz also provides our Board of Directors with public company board experience.
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Corporate Governance
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ROY VALLEE | AGE: 68
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DIRECTOR SINCE: 2003
Lead Independent Director
Synopsys Board Committees:
Audit
Current Public Company Directorships:
Teradyne, Inc.
Professional Experience
Has been a member of our Board of Directors since February 2003.
Served as Executive Chairman of the board of directors of Avnet, Inc., a global semiconductor/electronics products and IT distributor, from July 2011 to November 2012.
Served as Avnet’s Chief Executive Officer and Chairman of the board of directors from July 1998 to June 2011.
Also previously served as Avnet’s Vice Chairman, President, and Chief Operating Officer.
Has served on the board of directors of Teradyne, Inc. since February 2000, and has been Chairman of Teradyne’s board of directors since May 2014.
Served on the board of directors of the Federal Reserve Bank of San Francisco from January 2013 to December 2016, and as Chairman of the board of directors from January 2015 to December 2016.
Relevant Skills
Mr. Vallee provides our Board of Directors with significant executive-level leadership expertise, as well as thorough knowledge of the semiconductor industry. Mr. Vallee led Avnet for over 14 years, as CEO and Executive Chairman, and understands the challenges of managing a public technology company in a highly competitive industry. Mr. Vallee also brings public company board experience to our Board of Directors and insight into macroeconomic conditions through his previous board role with the Federal Reserve.

2021 Proxy Statement
15

Corporate Governance
Board Refreshment/Succession Planning
The Governance Committee is responsible for identifying and recommending to the Board of Directors candidates for Board of Directors membership. The Governance Committee is committed to continuing board refreshment and actively evaluates the current mix of director skills on a periodic basis to assess if there are any skill sets that are not represented on the current Board of Directors. The Governance Committee considers the Board of Directors’ composition, skills, experience, qualifications, and attributes to determine whether they are aligned with our long-term business strategy as well as our goals for boardroom diversity. In addition, the Governance Committee considers the Board of Directors’ skills and other attributes as a component of succession planning for leadership of the Board of Directors and its committees.
Identifying New Directors/Stockholder Nominations
A top priority for the Governance Committee is to ensure that the Board of Directors is comprised of directors that bring diverse viewpoints and perspectives and exhibit a variety of skills, professional experiences and backgrounds, in order to effectively represent the long-term interests of stockholders. To achieve this, the Governance Committee works with our Board of Directors to determine the appropriate skills, experience, qualifications and attributes that we seek in Board of Directors members in light of our business environment and existing Board of Directors composition. When evaluating a particular candidate for Board of Directors membership, the Governance Committee and our Board of Directors consider many factors, including an understanding of the EDA, semiconductor, electronics, software or technology industries; sufficient experience in business operations, finance, marketing, strategic planning and other relevant disciplines; professional background such as executive leadership experience and other public company board service; and operational expertise in our industry. They also consider diversity in their assessment of potential candidates, including diversity of personal background and professional experience, qualifications and skills as well as gender and ethnic diversity. In addition, in evaluating a particular candidate for Board of Directors membership, the Governance Committee and our Board of Directors consider personality characteristics to ensure that the candidate will be a collaborative and constructive member of our cohesive Board of Directors. The Governance Committee actively focuses on board refreshment through an ongoing year-round process, which includes the annual Board of Directors evaluation, discussed below.
All candidates for election or re-election are expected to fully participate in Board of Directors activities, including preparation for, attendance at and active participation in meetings of our Board of Directors, refrain from holding positions that would conflict with their responsibilities to us, have a high degree of personal integrity and interpersonal skills, and represent the best interests of all of our stockholders and not just certain constituencies.
The Governance Committee and Board of Directors believe that a significant majority of the members of our Board of Directors should qualify as independent directors in accordance with our corporate governance guidelines and the listing standards of the Nasdaq Global Select Market. They also deem it appropriate for certain of our executive officers to serve on the Board of Directors to provide a first-hand perspective on the operations, management and culture of our business. The Governance Committee and Board of Directors believe that it is beneficial for at least one member, and preferably multiple members, of our Board of Directors to meet the criteria for an “audit committee financial expert” as defined by the applicable rules of the Securities and Exchange Commission.
We place great emphasis on Board of Directors diversity and compliance with legal requirements concerning director diversity, and actively consider diversity in the recruitment and nomination of directors. The Governance Committee believes that the current composition of the Board of Directors reflects the success of those efforts.
Stockholders seeking to recommend a prospective nominee should follow the instructions under the headings “Stockholder Communications with our Board of Directors” and “About the Annual Meeting— How can I make a proposal to be voted on at next year’s annual meeting of stockholders?” Stockholder submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the stockholder submitting the recommendation is a beneficial or record owner of our stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. Stockholders who wish to nominate a candidate for election must follow the procedures described in our Amended and Restated Bylaws.
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Corporate Governance
DIRECTOR NOMINATION PROCESS
1. IDENTIFY2. EVALUATE
The Governance Committee considers candidates for Board of Directors membership suggested by our Board of Directors members and management. The Governance Committee has retained third-party executive search firms to identify independent director candidates. The Governance Committee will consider persons recommended by our stockholders in the same manner as a nominee recommended by Board members, management, or a third-party executive search firm.
The Governance Committee evaluates suggested candidates against its set criteria, such as the appropriate experience, qualifications, skills and attributes that we seek in Board of Directors members in light of our business environment and existing Board of Directors composition, and against any legal requirements concerning Board composition.
 
3. RECOMMEND4. NOMINATE
After completing the evaluation and review, the Governance Committee makes a recommendation to the full Board of Directors as to the persons who should be nominated to our Board of Directors.
Our Board of Directors determines and approves the nominees after considering the recommendation and report of the Governance Committee.
Director Tenure
While the Governance Committee and our Board of Directors prioritize maintaining a board that comprises directors with a diverse set of skills, experiences, and perspectives, they also recognize the importance of balancing these qualifications with the overall tenure of directors in their long-term approach to board refreshment. The fresh viewpoints and philosophies newer directors bring, coupled with the valuable experience and institutional knowledge the longer-tenured directors possess, improve the independent oversight of management and ensure a focus on Synopsys’ business strategy.
In the past several years, the Board of Directors has appointed new diverse and highly-qualified directors. To supplement these directors, our longer-tenured directors have extensive knowledge of our operations and have the perspective of overseeing our business activities through economic cycles and across differing competitive environments. While continuing to monitor this aspect, particularly in light of new and evolving regulations concerning director diversity, we believe the current mix of our Board of Directors members is the appropriate blend of experience and diverse perspectives that play a critical role in supporting us as we continue to compete in existing semiconductor, electronic design and software security industries as well as new and emerging market segments such as mobile, automotive, digital home, Internet of Things (IoT), and cloud computing.
Board of Directors Role and Responsibilities
Overview
The role of our Board of Directors is to oversee our business and operations for the benefit of our stockholders and other stakeholders and the communities in which we operate. Our Board of Directors strives to propel the success and growth of our business and operations through the selection of qualified management, oversight of our strategic goals, and ongoing monitoring designed to assure that our operations are conducted in a responsible manner.
2021 Proxy Statement
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Corporate Governance
Response to COVID-19 Pandemic
Along with our management, our Board of Directors rapidly identified the unprecedented nature of the COVID-19 pandemic and its potential to impact the global economic environment, the industry in which we operate and the way that we conduct our business. In response to the quickly changing and high-impact nature of the COVID-19 pandemic, our Board of Directors instituted a number of changes to its normal operations in order to be strategically aligned with our management concerning our strategy and operations, including ongoing informal interim calls with management to review operations and personnel safety. These changes assisted the Board of Directors in being able to adapt to the changing nature of the global business in a manner that is in the best interests of our stockholders, employees, customers and other stakeholders.
Risk Oversight
Our Board of Directors is responsible for the oversight of our company-wide risk management efforts and delegates the assessment and implementation of our day-to-day risk management policies to our management. Our Board of Directors is directly involved in risk management issues related to significant matters such as our overall business strategy, major strategic transactions, and executive officer succession through its regular communications with management.
 
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Cybersecurity
Information technology and data security, particularly cybersecurity, is a top area of focus for our Board of Directors, which views our diligence in these areas as essential for the success of our company and the broader technology industry in which we operate. Our Board of Directors is actively involved in overseeing cybersecurity risk management, both through annual presentations given by members of management during Board of Directors meetings as well as biannual reports from the Governance Committee on its cybersecurity risk oversight activities. The Governance Committee, which comprises multiple individuals with significant experience in cybersecurity and related matters, meets with members of management to review our information technology and data security policies and practices, and to assess current and projected threats, cybersecurity incidents, and related risks. We have a dedicated Chief Security Officer whose team advises the company on cybersecurity risks and assesses the effectiveness of information technology and data security processes. The Chief Security Officer reports directly to our executive management team and regularly leads discussions about cybersecurity risk management with our Board of Directors.
Additionally, each of our standing Board of Directors committees has individual oversight responsibilities:
COMMITTEE     PRIMARY AREAS OF RISK OVERSIGHT
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Risks related to financial reporting and controls.
Supervise the work performed by our independent registered public accounting firm and our internal audit function.
Supervise our anonymous and confidential ethics reporting system, which encourages and allows any employee to submit concerns directly to senior management and the Audit Committee.
Risks relating to our investments, financing activities, taxes, and world-wide insurance programs.
Review and approve of related person transactions.
Evaluate enterprise risk issues associated with financial reporting, accounting, auditing and tax matters.
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Risks related to our cash and equity compensation programs and practices.
Conduct an annual review of our company-wide compensation arrangements.
Oversee risks related to organizational development matters, as requested by the Board of Directors from time to time.
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Risks related to our overall corporate governance, including our governance policies and principles.
Risks related to the composition and structure of our Board of Directors and its committees, which includes annual evaluation of our Board of Directors and Board of Directors committees and periodic review of Board of Directors member and executive officer succession plans.
Risks related to information technology security and data security.
Risks relating to corporate social responsibility and sustainability performance, including environmental, social and governance matters.

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Corporate Governance
Management Succession Planning
Our Board of Directors believes that effective management of succession planning, particularly for our executive officers, has played an important role in the past successful transitions of executive officers and is important for the continued advancement of our company. Among the responsibilities of the Governance Committee is the review of succession planning for our executive officers and recommending to our Board of Directors candidates for successors to the Co-CEOs and other executive officers. Our Co-CEOs make detailed presentations to our Board of Directors on executive officer plans and individual development plans for identified successors. The Governance Committee is responsible for follow-up actions with respect to succession planning, as may be delegated by our Board of Directors from time to time.
Corporate Social Responsibility
Code of Ethics and Business Conduct
As integrity is one of Synopsys' foundational values, acting responsibly and ethically above reproach is fundamental to our company. Our Board of Directors is committed to ethical business practices and, therefore, we have adopted a Code of Ethics and Business Conduct applicable to all of our Board of Directors members, employees and executive officers, including our co-Chief Executive Officers (Co-Principal Executive Officers), Chief Financial Officer (Principal Financial Officer) and Chief Accounting Officer (Principal Accounting Officer). The Code of Ethics and Business Conduct is available on our website at: www.synopsys.com/company/corporate-governance-ethics/code-of-ethics.html.
Synopsys intends to satisfy the public disclosure requirements regarding (1) any amendments to the Code of Ethics and Business Conduct, or (2) any waivers under the Code of Ethics and Business Conduct given to Synopsys’ Principal Executive Officers, Principal Financial Officer and Principal Accounting Officer by posting such information on our website.
Our Corporate Social Responsibility Approach
We recognize that our significant role in shaping a future of "Smart Everything" brings important responsibilities – the future is not smart if it is not sustainable, fair, and secure. Our "Smart Future" Corporate Social Responsibility (CSR) program provides a focus and structure for how we address both our own operational impact on the world and our ability to influence others around us. Through CSR, we are committed to taking action on important Environmental, Social and Governance (ESG) matters, including in the fight against climate change, driving diversity and inclusion initiatives throughout our workforce and on our Board of Directors, and supporting the needs of the local communities in which we live and work. Additional information about our approach to CSR and to ESG issues is available on our CSR website, including our Environmental Policy, our CSR Report, and our CDP Climate Change Questionnaire.(1)
Our Smart Future commitment also means applying our problem-solving approach, people, technology, and other resources to influence those around us—including our customers, partners and suppliers—to join us in driving positive change in the world. Synopsys technology is in action in countless ways: from bringing safety and security to the driverless car revolution to enabling the technologies that are an increasingly vital component of protecting human health and well-being. As the role of computing in our society and our day-to-day lives increases exponentially, IoT, 5G and machine learning applications risk driving similarly exponential energy consumption and carbon emissions. This makes our work to enable low-power computing at the device level and in the cloud especially critical to the industry’s energy sustainability. At the same time, we are advancing global supply chain sustainability as a member of the Responsible Business Alliance. Furthermore, our Synopsys for Good program combines volunteer time, our technological expertise, and financial donations to bring STEM education and other support to the communities in which we work.












(1)The contents of our CSR website, available at: www.synopsys.com/company/corporate-social-responsibility.html, including our Environmental Policy, our Corporate Social Responsibility Report, our CDP Climate Change Questionnaire, our Political Activities Policy and the listing of contributions, are referenced for general information only and are not incorporated into this Proxy Statement.
2021 Proxy Statement
19

Corporate Governance
How We Drive CSR
The Governance Committee oversees our CSR policies and practices and our sustainability performance. The Compensation Committee oversees key human capital management issues such as diversity and inclusion and pay equity. Our CSR Leadership Committee, which comprises senior leaders across our business, drives ESG performance, goals, strategy, and reporting, including regularly reporting to our Governance Committee and the full Board of Directors. CSR engagement is a key contributing component to our Smart Future commitment through volunteerism, community and environmental initiatives, focused management and employee development, and other campaigns to engage and inform our employees as part of our broader communities.
 
OVERSIGHT AND MANAGEMENT ON ENVIRONMENTAL, SOCIAL, AND GOVERNANCE MATTERS
 
 
We have been expanding and elevating our oversight and management of environmental, social, and governance matters:
Updated our Board of Directors committee charters to include reviewing risks related to ESG matters, including cybersecurity risks, and to ensure oversight of Inclusion & Diversity as well as organizational development.
Continued engagement with stockholders and potential investors about ESG strategy, performance, and disclosures.
Enhanced ESG reporting through leading external frameworks, including the GRI Standards: core option and with consideration of the recommended disclosures in the Sustainability Accounting Standards Board (SASB) Software and Services Standard.
We undertook a materiality assessment with stakeholders in 2018 and refreshed its findings in 2020.
 
CSR Highlights
Human Capital
We are at the forefront of innovation, and much of what the tech sector commits to – in AI, cloud, mobile, automotive and beyond - depends on our ability to act as exponential catalysts. We can only fulfill our critical role of innovation for the technology sector if we attract, engage and retain the brightest and best talent. Investing in our team members is a critical success factor and key component of our CSR strategy.
Our talent attraction and retention strategy and programs are designed to support employees throughout their tenure at Synopsys, from recruitment and onboarding through to their retirement. We strive to engage and optimize our employees’ experiences throughout their careers with us as we pursue a culture characterized by capable, connected and resilient team members. Among other initiatives, we use employee feedback to drive and improve processes that support our customers and ensure a deep understanding of our culture and vision among our employees, including a biannual employee survey and a focus on compensation equity.
In 2020, the COVID-19 global pandemic provided unique challenges for our employees, underscoring the importance of our employee wellness initiatives. Our priority during the COVID-19 pandemic was to first and foremost safeguard the health of our employees and their families. We refined and refocused our wellness program to support employees working from home during the pandemic, including resources to encourage physical and mental health and well-being, financial health planning, and homeschooling support.
Additionally, the heightened awareness of social inequalities and the unrest that marked 2020 highlighted the importance of our Inclusion & Diversity (I&D) commitment. We aim to be a company where different perspectives and backgrounds are leveraged and celebrated. We believe that our focus and investment on I&D positions Synopsys for just, inclusive, and long-term growth.
A few of our CSR highlights in 2020 are noted below.
 
DIVERSE HIRING
  
ENGAGEMENT
 
 
As of fiscal year end, 23% of our employees were women. During 2020, we attained an external hiring rate of 27% women and 29% early career (hired within one year of the candidate’s most recent academic degree).
A record-breaking 90% of our employees participated in our engagement survey, providing more than 6,000 comments. Our overall engagement score was 79, well above the top technology industry benchmark score of 74, with 84% of our employees agreeing or strongly agreeing that Synopsys is a great place to work.
 
 
 
COMMITMENT AND SATISFACTION
TRAINING & DEVELOPMENT
 
 
Even with significant growth (41% increase in headcount over the last five years), our average tenure has remained constant. As of fiscal year end, our average tenure was 6.4 years.
75% of our employees elected to utilize our robust digital platform for career and skills development.
 
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Corporate Governance
ENVIRONMENT
Sustainable growth that meets the needs of all stakeholders requires efficient use and responsible management of natural resources. Our environmental commitment is embodied in our Environmental Policy available on our website at: https://www.synopsys.com/company/corporate-social-responsibility/environment/environmental-policy.html. We coordinate robust environmental management procedures and actively monitor the environmental performance of our operations. We review the effectiveness of our ESG management system each year to create a loop of continuous improvement and make adjustments as needed.
2020 was a milestone year for our environmental efforts, specifically around climate change. We committed to ambitious environmental goals, including a pledge to reduce our Scope 1 and Scope 2 greenhouse gas emissions by 25% by 2024, as compared with our 2018 baseline. We are working to deliver on this ambitious target through a virtual power purchase agreement that will enable new renewable energy capacity in North America. We have also achieved CarbonNeutral® company certification across our global operations for the second consecutive year. Additional detail on our proactive efforts to address climate change is included in our Corporate Social Responsibility Report, in our CDP Climate Change Questionnaire, and on our website.
Our technology is at the heart of our efforts to influence and support our partner and customer sustainability goals. A key focus area of our Low Power Task Force is enabling at least a 25% reduction in power for system-on-chips (SoC) over the solutions and flows currently used by our customers. Our software-driven low-power flow spans software to silicon, and its impact on semiconductor design can advance sustainability throughout the entire electronics industry.
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EMISSIONS
REDUCTION TARGET
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ANNUAL CARBON
NEUTRALITY
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VIRTUAL POWER
PURCHASE AGREEMENT
SOCIAL IMPACT
Our Synopsys for Good program generates positive impact in the community to help address social challenges around the world and create access to opportunity. As a leader in bringing smart technology to life, we act as a catalyst for change by preparing students for the future with STEM education, addressing essential needs and inequities in the community, and fostering a sustainable environment. We leverage our resources, including leadership, employee volunteer time and giving, philanthropy, technology expertise, and partnerships, to address systemic issues where we operate. 2020 required a tremendous amount of adaptability from both our employees and community partners. We are proud of how our global teams and individuals provided meaningful contributions where and when it was needed most. Synopsys, directly and through the Synopsys Foundation, donated approximately $3,600,000 to nonprofit organizations around the world in 2020.
Political Activities and Contributions
With respect to political activities undertaken on behalf of Synopsys, we are committed to compliance with applicable laws, rules, and regulations including lobbying registration and disclosure laws, ethics rules, the Foreign Corrupt Practices Act, and anti-bribery laws worldwide. While no lobbying activity was undertaken in 2020, procedures and approvals for such political activity are established under our Political Activities Policy. We also engage with trade and industry associations in the United States and abroad, which may undertake advocacy on behalf of their members.
Synopsys does not contribute to political parties or candidates, nor do we contribute to political action committees. We may contribute periodically to local ballot initiatives in California that are consistent with our quality of life goals. For the purpose of transparency, all contributions are disclosed on our website at: www.synopsys.com/company/corporate-governance-ethics/government-affairs.html.
Stockholder Engagement
Synopsys is committed to regular, proactive engagement with our stockholders, as we believe that understanding our current and potential stockholders’ perspectives is important to strengthening our corporate governance and building long-term value for our stockholders. The view of our stockholders on important issues such as corporate social responsibility, executive compensation and business strategy, among others, and the feedback that we receive — through these meetings, regular investor outreach, and perception surveys — helps to strengthen our corporate practices over time.
In 2020, we continued our proactive investor outreach program, including discussions with the corporate governance leaders of our institutional stockholders. During the year, we had multiple meetings with a majority of our top-20 stockholders; provided regular updates to stockholders to keep them informed about business developments and strategy; conducted our periodic investor survey; published our inaugural Corporate Social Responsibility report; and added significant new disclosures through our website and industry ratings platforms. In response to stockholder feedback, we enhanced our corporate governance through the institution of a majority voting standard for director elections and the adoption of the ability to call a special meeting of stockholders.
Stockholder Communications with our Board of Directors
Stockholders who wish to communicate with our Board of Directors or one or more individual members of our Board of Directors may do so by sending written communications addressed to: Corporate Secretary, Synopsys, Inc., 690 East Middlefield Road, Mountain View, California 94043. All stockholder communications we receive at this address that are addressed to our Board of Directors will be compiled by our Corporate Secretary and forwarded to the specified director, if any. If the correspondence is not addressed to a particular director, such correspondence will be forwarded, depending on the subject matter, to the Chairperson of the Audit Committee, Compensation Committee, or Governance Committee.
2021 Proxy Statement
21

Corporate Governance
Board of Directors Structure
Board of Directors Leadership Structure
The Chairman of our Board of Directors is appointed periodically by the Board of Directors based on the recommendation of the Governance Committee. Our Board of Directors believes it is important to have flexibility in selecting our Chairman and board leadership structure. Therefore, our Corporate Governance Guidelines provide that the position of Chairman of the Board of Directors and Chief Executive Officer (or Co-Chief Executive Officer, as the case may be) may be held by the same person. In the event that such positions are held by the same person, the Board of Directors will appoint a Lead Independent Director based on the recommendation of the Governance Committee.
The Board of Directors believes that it is currently in the best interest of Synopsys and its stockholders for Dr. de Geus to serve as both Chairman and Co-Chief Executive Officer. Dr. de Geus co-founded Synopsys and has extensive knowledge of Synopsys, its industry and its culture. He has successfully guided Synopsys through both strong and challenging periods, and his ability to speak as both Chairman and co-Chief Executive Officer provides strong, consistent leadership for Synopsys.
 
 
Lead Independent Director
Mr. Vallee has served as our Lead Independent Director since February 2017. The responsibilities of our Lead Independent Director include:
Establishing the agenda for regular Board of Directors meetings with the Chairman;
Reviewing and advising on the schedule of regular Board of Directors meetings with the Chairman;
Serving as chairperson of regular Board of Directors meetings when the Chairman is unavailable;
Calling executive sessions of the independent directors, and establishing the agenda for, and presiding at, such sessions;
Providing feedback from executive sessions to management;
Serving as liaison between the co-CEOs and the independent directors;
Participating in the annual performance evaluation of the co-CEOs;
Encouraging dialogue between the independent directors and management; and
Consulting with stockholders at management’s request.
Our Board of Directors believes the role of Lead Independent Director provides an appropriate balance in Synopsys’ leadership to the combined role of Chairman and co-CEO, and that the responsibilities assigned to the Lead Independent Director help ensure a strong, independent and active Board of Directors.
 
Director Independence
Our Corporate Governance Guidelines require that a majority of our Board of Directors qualifies as independent directors in accordance with applicable federal securities laws and the listing standards of the Nasdaq Global Select Market. Currently, each member of our Board of Directors, other than our co-Chief Executive Officer and Chairman of the Board of Directors, Aart de Geus, and co-Chief Executive Officer and President, Chi-Foon Chan, is an independent director. All standing committees of the Board of Directors are composed entirely of independent directors, in each case under Nasdaq's independence definition. The Nasdaq definition includes a series of objective tests to determine independence, including that the director not be an employee of the company and not have engaged in certain types of business dealings with the company. In addition, the Board of Directors has made a subjective determination as to each independent director that no relationship exists which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board of Directors reviewed and discussed information provided by the directors and Synopsys with regard to each director’s business and other outside activities as they may relate to Synopsys and our management. This information included commercial transactions that we entered into, or proposed entering into, in fiscal 2020 with Maxim Integrated Products, Inc.; Oracle Corporation; PTC Inc.; Teradata Corporation; Teradyne, Inc.; and Visier, Inc. Certain of our non-employee directors or their immediate family members have relationships with these companies. We consider each of these transactions to be at arms’ length and in the ordinary course of business. We do not consider any of these transactions to be related party transactions requiring disclosure under the applicable rules of the Securities and Exchange Commission.
Based on this review and consistent with our independence criteria, the Board of Directors has affirmatively determined that all of the directors who are standing for election to our Board of Directors except for Dr. de Geus and Dr. Chan are independent.
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Corporate Governance
Executive Sessions
The independent directors meet in executive sessions without management present. These sessions take place prior to or following regularly scheduled Board of Directors meetings. The non-employee directors met four times in such sessions during fiscal 2020.
Standing Committees of the Board of Directors
During the year, our Board of Directors maintained an Audit Committee, a Compensation Committee, and a Corporate Governance and Nominating Committee. All such committees have written charters which are available on our website at: https://www.synopsys.com/company/corporate-governance-ethics/board-committees.html.
The following table summarizes the composition of our Board of Directors committees as of the date of our 2021 Annual Meeting of Stockholders:
Director
Audit
Committee
Compensation
Committee
Governance
Committee
Aart J. de Geus, Chairman of the Board
Chi-Foon Chan
Janice D. Chaffin
Chair
Bruce R. Chizen
Mercedes Johnson(1)
Chair
Chrysostomos L. “Max” NikiasChair
Jeannine P. Sargent(1)
John Schwarz
Roy Vallee, Lead Independent Director(1)
Total committee meetings held in fiscal 2020
1065
(1)Our Board of Directors has determined that Ms. Johnson, Ms. Sargent, and Mr. Vallee each qualify as an “audit committee financial expert” within the meaning of the regulations of the Securities and Exchange Commission.
The principal responsibilities of each Board of Directors committee are summarized below. For a more extensive description of committee functions, please refer to the committee charters.
AUDIT COMMITTEE
Members   Mercedes Johnson (Chair), Jeannine P. Sargent and Roy Vallee
Number of fiscal
2020 meetings
Ten
Responsibilities
The Audit Committee acts on behalf of our Board of Directors, performing financial oversight responsibilities relating to the integrity of our financial statements, financial reporting processes and systems of internal accounting and financial controls, our internal audit function, the annual independent audit of our financial statements, and the engagement of our independent registered public accounting firm and evaluation of their performance and independence, as well as compliance with legal and regulatory requirements that pertain to our financial statements, internal controls over financial reporting, and disclosure controls.
IndependenceAll members of our Audit Committee are considered independent under the applicable requirements of the Securities and Exchange Commission and the listing standards of the Nasdaq Global Select Market.
Audit Committee financial expertsOur Board of Directors has determined that Ms. Johnson, Ms. Sargent and Mr. Vallee each qualify as an “audit committee financial expert” within the meaning of the regulations of the Securities and Exchange Commission.

2021 Proxy Statement
23

Corporate Governance
COMPENSATION COMMITTEE
Members   Chrysostomos L. “Max” Nikias (Chair), Janice D. Chaffin and Bruce Chizen
Number of fiscal
2020 meetings
Six
Responsibilities
The Compensation Committee primarily reviews and approves our general compensation policies, sets compensation levels for our executive officers (including our co-CEOs), and administers our equity incentive plan, employee stock purchase plan, deferred compensation plans and 401(k) plan. The Compensation Committee also reviews our non-employee director compensation and recommends any changes to the Board of Directors for approval, and reviews our organizational development activities.
IndependenceAll members of our Compensation Committee are considered independent under the applicable requirements of the Securities and Exchange Commission and the listing standards of the Nasdaq Global Select Market. Each member of the Compensation Committee is also a “non-employee director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act).

GOVERNANCE COMMITTEE
Members   
Janice D. Chaffin (Chair), Bruce Chizen and John Schwarz
Number of fiscal
2020 meetings
Five
Responsibilities
The Governance Committee identifies and recommends to our Board of Directors candidates for membership on our Board of Directors and Board of Directors committees, reviews Board of Directors performance, oversees corporate governance matters, environmental, social and governance matters and cybersecurity risk matters, and reviews such other matters relating to our management as it deems appropriate. Our Governance Committee also reviews and discusses with management our strategy regarding mergers and acquisitions and strategic investments.

Our Governance Committee’s policy regarding consideration of director candidates submitted by stockholders is set forth below under “Identifying New Directors/Stockholder Nominations.” The Governance Committee recommended the nine nominees for election to our Board at the Annual Meeting.
IndependenceAll members of our Governance Committee are considered independent under the applicable requirements of the SEC and the listing standards of the Nasdaq Global Select Market.
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Corporate Governance
Board of Directors Practices, Policies and Processes
Our Commitment to Good Governance Practices
Synopsys has a history of strong corporate governance practices, and our Board of Directors is committed to such practices that promote the best interests of our stockholders, employees, customers and the communities in which we operate. In furtherance of such practices, we amended our bylaws to adopt a majority voting standard as well as the right for stockholders to call a special meeting in December 2020. We continue to evaluate our governance practices and to tailor them to be flexible and to evolve in response to ever-changing business, legal and social environments.
BEST PRACTICES OF THE
BOARD OF DIRECTORS
BOARD OF DIRECTORS COMMITTEE
PRACTICES
STOCKHOLDER
ENGAGEMENT
78% independent directors
33% female directors
Strong lead independent director role
Annual director evaluation and director election
Commitment to corporate social responsibility
Majority standard in uncontested elections
Expansive Board of Directors oversight, including over corporate social responsibility
Fully independent committees
Annual committee evaluations
All current Audit Committee members meet the Nasdaq listing standard of financial sophistication and are audit committee financial experts under the SEC rules
Proactive investor outreach program
Annual communication with stockholders
Annual advisory vote on Say-on-Pay
Majority voting standard
Right to call special meeting
Board of Directors Meetings and Attendance
Our Board of Directors held six meetings during fiscal 2020. Each director attended greater than 75% of all Board of Directors and applicable committee meetings that were held during his or her period of service as a director in fiscal 2020.
Board of Directors Attendance at Stockholders’ Meetings
Synopsys encourages director attendance at our annual stockholder meetings, but does not require attendance or have a formal policy requiring attendance. Attendance by phone is permitted. All then-current directors attended the 2020 Annual Meeting of Stockholders.
2021 Proxy Statement
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Corporate Governance
Director Evaluations
Our Board of Directors believes that, as an aspect of its commitment to sound corporate governance, it is important to regularly assess its functioning and to identify opportunities for improvement. In accordance with our Corporate Governance Guidelines and under the direction of our Governance Committee Chairperson, on an annual basis, each of our directors evaluates the overall Board of Directors and the functioning of the Board of Directors committees.
ANNUAL DIRECTOR EVALUATION PROCESS
 1 
Board of Directors Members Review Questionnaire
As part of that evaluation, each Board of Directors member reviews a comprehensive questionnaire soliciting input on topics such as corporate governance issues, Board of Directors and committee culture, structure and meeting process, director interactions with each other and with management, management responsiveness, quality and quantity of information provided to the Board of Directors, strategic planning and more.
 2 
Governance Committee Chair Compiles and Reviews Answers and Other Feedback
The responses to the questionnaires, in addition to other feedback provided by Board of Directors members through interviews and other communications, are then reviewed and compiled by our Governance Committee Chairperson in order to determine strengths and areas for improvement.
 3 
Governance Committee and the Board of Directors Discuss Results for Board of Directors and Committee Improvement
Those results are then discussed with the Governance Committee and the Board of Directors, and such results are used to improve Board of Directors and committee performance. Matters that require further assessment or additional follow-up are addressed at future Board of Directors or committee meetings, as applicable.
In addition, on an annual basis, our Board of Directors assesses the contributions of each individual member of our Board of Directors. A director’s qualifications are evaluated each time the director is considered for Board of Directors membership. For directors seeking re-election, the Governance Committee also evaluates the director’s overall service, including the director’s past attendance at Board of Directors and committee meetings, as well as participation in and contributions to the Board of Directors.
In addition to our annual director evaluation, in 2020, we conducted an independently-facilitated review of our overall Board of Directors and each of our committees. Our Board of Directors utilized the information gathered in this independently-facilitated review to improve the manner in which our Board of Directors and committees operate, including with respect to the efficacy of our Board of Directors and committee meetings, the quality of information distributed to our Board of Directors and committees, our Board of Directors’ engagement on strategy and other key business functions, the composition of our Board of Directors, and management succession planning.
Corporate Governance Guidelines
Our Board of Directors is committed to sound and effective corporate governance practices. Accordingly, our Board of Directors has adopted Corporate Governance Guidelines, which describe the governance principles and procedures by which the Board of Directors functions. Our Board of Directors regularly reviews and evaluates these guidelines. Among other matters, the Corporate Governance Guidelines cover board composition, board membership criteria, majority voting standard in uncontested elections, holdover policy, director responsibilities, board committees, evaluation of our co-Chief Executive Officers, board self-assessment and succession planning. The Corporate Governance Guidelines are available on our website at: https://www.synopsys.com/company/corporate-governance-ethics/governance-guidelines.html.
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Corporate Governance
Transactions with Related Persons
Our Code of Ethics and Business Conduct requires that every employee avoid situations where loyalties may be divided between our interests and the employee’s own interests. Employees and directors must avoid conflicts of interest that interfere with the performance of their duties or are not in our best interests.
Pursuant to its written charter, the Audit Committee reviews and approves all related party transactions as such term is used in ASC Topic 850 Related Party Disclosures, or as otherwise required to be disclosed in our financial statements or periodic filings with the Securities and Exchange Commission, other than (1) grants of equity awards made by our Board of Directors or any committee thereof or pursuant to an automatic grant plan, or (2) payment of compensation authorized by our Board of Directors or any committee thereof. Related party transactions include transactions between us, our executive officers and directors, beneficial owners of five percent or greater of our securities, and all other related persons specified under Item 404 of Regulation S-K promulgated by the Securities and Exchange Commission. We have adopted written policies and procedures regarding the identification of related parties and transactions, and the approval process for such transactions. The Audit Committee will consider each proposed transaction in light of the specific facts and circumstances presented, including but not limited to the risks, costs, and benefits to us and the availability from other sources of comparable products or services.
From the beginning of fiscal 2020 until the present, there have been no (and there are no currently proposed) transactions involving an amount in excess of $120,000 in which Synopsys was (or is to be) a participant and any executive officer, director, five percent beneficial owner of our common stock or member of the immediate family of any of the foregoing persons had (or will have) a direct or indirect material interest, except the compensation arrangements described in this Proxy Statement for our named executive officers and directors.
Political Contributions
In accordance with our Political Activities Policy, Synopsys does not contribute to political parties or candidates, nor do we attempt to influence the outcome of elections through political action committees. We may contribute periodically to local ballot initiatives in California that are consistent with our quality of life goals. We also engage with trade and industry associations in the United States and abroad, which may undertake advocacy on behalf of their members. Our Political Activities Policy is available on our website at: https:// www.synopsys.com/company/corporate-governance-ethics/government-affairs.html.
Director Compensation
Our non-employee directors are compensated for serving on our Board of Directors. We do not pay our employees who serve on our Board of Directors any additional compensation for Board of Directors membership.
Our Compensation Committee reviews our non-employee director compensation with the assistance of a compensation consultant, Radford (an Aon company), that it has determined to be objective and independent. The Compensation Committee reviews such compensation biennially, at a minimum, and recommends adjustments as appropriate.
Our Compensation Committee believes, based in part on market data provided by Radford (including a survey of market practices and trends among our peer group and the software and semiconductor industries generally) and reviewed with our Compensation Committee, that a combination of cash and equity-based awards is the most effective and appropriate way to compensate our non-employee directors. As part of its review process, both the cash and equity-based award elements are benchmarked by the Compensation Committee against our peer group and the aforementioned industries to ensure that the mix and levels are appropriate and competitive with comparable companies and align our directors’ interests with those of our stockholders.
Other than the compensation disclosed below, no director received compensation or other payment in connection with his or her candidacy or service on our Board of Directors.
Fiscal 2020 Compensation
As noted above, our non-employee director compensation consists of cash and equity awards. We also reimburse directors for out-of-pocket expenses for travel to Board of Directors meetings in accordance with our Corporate Travel Policy.
Cash
For fiscal 2020, we paid non-employee directors an annual retainer of $125,000 for serving on our Board. We also paid an additional retainer of $30,000 to our Lead Independent Director, $35,000 to the chair of the Audit Committee, $20,000 for each of the chair of the Compensation Committee and the chair of the Governance Committee, and $15,000 to the other members of the Audit Committee. The retainers were paid in advance in four equal payments prior to our regularly scheduled quarterly Board meetings.
2021 Proxy Statement
27

Corporate Governance
Equity
For fiscal 2020, non-employee directors were eligible to receive equity awards under the 2017 Non-Employee Directors Equity Incentive Plan (the 2017 Directors Plan). The plan provides for automatic grants of equity awards to non-employee members of our Board of Directors upon their initial appointment or election, and upon their re-election each year. The 2017 Directors Plan contains limits on the equity awards that may be awarded to non-employee directors in any fiscal year.
Initial Awards. For fiscal 2020, under the 2017 Directors Plan, new non-employee directors were eligible to receive (1) an initial stock option grant with a grant date fair value of $350,000, which vests in equal installments on the date immediately preceding each of the first three annual meetings following the date of grant, subject to continued Board of Directors service through each vesting date; and (2) if appointed to our Board of Directors less than eleven months since the most recent annual meeting of stockholders, an “interim award” in the form of restricted stock with a grant date fair market value equal to a pro-rated portion of the annual award of $175,000, which vests on the date immediately preceding the first annual meeting following the date of grant.
Annual Awards. For fiscal 2020, under the 2017 Directors Plan, each re-elected non-employee director was eligible to receive an annual award comprised of either a stock option grant, a restricted stock grant or a combination of both, as determined by our Board of Directors each year. The annual award in fiscal 2020, which was comprised solely of restricted stock, had a grant date fair market value equal to approximately $175,000. The annual restricted stock award vests on the date immediately preceding the first annual meeting following the date of grant, subject to continued Board of Directors service through such date. In the event of a change of control or similar transaction, the vesting of unvested grants will generally accelerate unless assumed by the successor company. Our Board of Directors received restricted stock for the annual award for fiscal 2020 and, as a result, we issued 1,281 shares of restricted stock to each non-employee director.
The following table sets forth a summary of the compensation paid to our non-employee directors for services in fiscal 2020.
NameFees Earned
or Paid in
Cash
($)
Stock
Awards
($)(1)
Option
Awards
($)(2)
Total
($)
Janice D. Chaffin$
145,000(3)
$174,959 $— $319,959 
Bruce R. Chizen125,000 174,959 — 299,959 
Mercedes Johnson
160,000(4)
174,959 — 334,959 
Chrysostomos L. “Max” Nikias
145,000(5)
174,959 — 319,959 
Jeannine P. Sargent
31,250(6)
102,065 
349,961(9)
483,276 
John Schwarz125,000 174,959 — 299,959 
Roy Vallee
170,000(7)
174,959 — 344,959 
Steven C. Walske
140,000(8)
174,959 — 314,959 
(1)These amounts represent the aggregate grant date fair values, computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation, of restricted stock awards issued pursuant to the 2017 Non-Employee Directors Equity Incentive Plan. For each non-employee director except for Ms. Sargent, the grant date fair value of these awards is calculated using the closing price of our common stock of $136.58 on the grant date multiplied by the 1,281 shares granted. For Ms. Sargent, the grant date fair value is calculated using the closing price of our common stock of $229.36 on the grant date multiplied by the 445 shares granted. These amounts do not represent the actual value that may be realized by the director upon vesting of such awards. For information on the assumptions used to calculate the value of the awards, refer to Note 10 to the consolidated financial statements contained in our 2020 Annual Report on Form 10-K. Such stock awards vest on the date immediately preceding the first annual meeting following the date of grant. At the end of fiscal 2020, each of our non-employee directors held 1,281 shares of unvested restricted stock awards, with the exception of Ms. Sargent, who held 445 shares.
(2)At the end of fiscal 2020, the only non-employee directors who held outstanding option awards were Ms. Chaffin (14,222 shares, which are fully vested), Ms. Johnson (15,000 shares, which are fully vested) and Ms. Sargent (5,998 shares, all of which remain subject to vesting).
(3)Includes $20,000 retainer paid to Ms. Chaffin for serving as the Governance Committee chairperson in fiscal 2020.
(4)Includes $35,000 retainer paid to Ms. Johnson for serving as the Audit Committee chairperson in fiscal 2020.
(5)Includes $20,000 retainer paid to Mr. Nikias for serving as the Compensation Committee chairperson in fiscal 2020.
(6)Ms. Sargent was appointed to the Board of Directors on September 2, 2020. This amount represents a pro-rated amount of the annual retainer paid to Ms. Sargent in fiscal 2020.
(7)Includes $15,000 retainer paid to Mr. Vallee for serving as an Audit Committee member and $30,000 retainer paid to Mr. Vallee for serving as the Lead Independent Director in fiscal 2020.
(8)Includes $15,000 retainer paid to Mr. Walske for serving as an Audit Committee member in fiscal 2020.
(9)Consists of the initial stock option grant to Ms. Sargent in connection with her appointment to the Board of Directors on September 2, 2020.

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Corporate Governance
Fiscal 2021 Compensation
No changes were made to director compensation for fiscal 2021.
Stock Ownership Guidelines
In order to better align the interests of our directors and management with the interests of our stockholders and to promote accountability and mitigate excessive risk taking in long-term decision making, our Board of Directors first adopted stock ownership guidelines in fiscal 2003. Our Compensation Committee reviews those guidelines periodically in accordance with best practices and has amended such guidelines from time to time, with the most recent amendment occurring in December 2020. Under the current guidelines, non-employee directors are expected to achieve a stock ownership level with a value equal to the lesser of three times the amount of each non-employee director’s annual cash retainer (excluding compensation for committee service) or 15,000 shares, within three years of their initial election as a director, and maintain such ownership level, as measured each year on the date of the annual meeting of stockholders, so long as they serve in the position of director.
These guidelines as most recently amended also recommend that covered members of management hold the number of shares set forth below within four years of their appointment and maintain such ownership level so long as they serve in such positions; provided however, that if the value of any individual’s shares drops below the applicable Minimum Value set forth below, such individual will be required to hold the number of shares equal to the Minimum Value.
Covered PersonShare Number(#)Minimum Value($)
Co-Chief Executive Officer25,000 $4,400,000 
Chief Operating Officer12,5002,200,000
Chief Accounting Officer4,000700,000
All members of Corporate Staff not listed above6,5001,100,000
The guidelines do not require any covered person to exercise stock options or to purchase shares of our common stock on the open market solely to meet these guidelines. However, when stock options are exercised, when restricted stock or restricted stock units vest, or when shares are purchased under our Employee Stock Purchase Plan, the guidelines recommend that the covered person retain a number of shares of common stock equal to the lesser of 25% of the net value of shares of common stock acquired or vested (after deducting the exercise price, if any, and taxes at an assumed tax rate), or a number of shares necessary to reach such person’s applicable stock ownership guideline amount.
As of February 9, 2021, each non-employee director and named executive officer held the requisite number of shares and was accordingly compliant with our stock ownership guidelines. Please see the subsection titled “Stock Ownership Guidelines” in the “Compensation Discussion and Analysis” section beginning on page 60 below for more information regarding our stock ownership guidelines as they apply to our named executive officers.
2021 Proxy Statement
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We are asking our stockholders to approve our 2006 Employee Equity Incentive Plan, as amended (the 2006 Employee Plan), to increase the number of shares of common stock, par value $0.01 per share, available for issuance under the 2006 Employee Plan by 4,700,000 shares, representing approximately 3.08% of our shares of common stock outstanding as of January 31, 2021. We believe equity compensation is a critical tool for employee motivation and retention. We are proposing the share increase to enable us to continue offering effective equity compensation to our employees.
Our Board of Directors approved the 2006 Employee Plan, as amended, in January 2021, subject to stockholder approval. If approved by our stockholders, the amended 2006 Employee Plan will become effective as of the Annual Meeting date.
Approval of the 2006 Employee Plan, as amended, requires that the holders of a majority of the shares having voting power present in person or represented by proxy and voting on such matter at the Annual Meeting vote “For” this Proposal 2. Abstentions and broker non-votes will not be counted as either votes cast “For” or “Against” Proposal 2 and have no effect on the vote for this Proposal 2.
Purpose and Background
The primary goal of the amendment of our 2006 Employee Plan is to provide us with a sufficient reserve of common stock to offer appropriate incentives to our employees. Like other technology companies, we actively compete for highly qualified employees, especially technical employees. Our equity program is a key component of our strategy to attract and retain key individuals, and the share requirements of our equity program have grown with our company.
Each year, the Compensation Committee and our management review our overall compensation strategy and determine the allocations of cash and equity compensation in light of our pay for performance philosophy. We continue to believe that equity compensation is critical in motivating key employees and that it effectively aligns employee compensation with stockholder interests. The 2006 Employee Plan is the sole available plan for granting discretionary equity compensation to our employees. If the amended 2006 Employee Plan is not approved and we are unable to grant equity compensation in the future, we may need to consider other compensation alternatives, such as increasing cash compensation.
We are committed to effectively managing our share reserves for equity compensation while minimizing stockholder dilution. For this reason, we carefully manage both our gross burn rate and net burn rate. Gross burn rate reflects equity awards granted during the fiscal year divided by the number of shares outstanding. Net burn rate reflects equity awards granted during the fiscal year less equity awards cancelled and returned to the plan (net equity grants), divided by the number of shares outstanding.
We endeavor to achieve a gross burn rate that approximates the average rate for our peer group companies as well as for the software and services industry more generally, and to achieve burn rates within the limits published by independent shareholder advisory groups, such as Institutional Shareholder Services (ISS). While there are several methodologies to arrive at burn rates, using current ISS methodology, our gross burn rates for the last three years are within the guidelines published by ISS. Detailed information about equity awards issued in fiscal 2020 as well as other relevant information is set forth below.
We note that the cornerstone of our compensation philosophy is pay for performance, as discussed in the "Compensation Discussion and Analysis" section beginning on page 41. In that regard, approximately half of the value of the target regular annual equity grants to our named executive officers each year is in performance-based RSUs. The balance is in stock option grants, the values of which are directly linked to the appreciation of our stock price.

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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Important Features of the 2006 Employee Plan
We also note that our 2006 Employee Plan includes additional provisions that are designed to protect our stockholders’ interests and to reflect corporate governance best practices, including:
Stockholder approval required for additional shares. The 2006 Employee Plan does not contain an annual “evergreen” provision that provides for automatic increases of shares on an ongoing basis. The 2006 Employee Plan instead authorizes a fixed number of shares, and stockholder approval is required for any increase in the number of shares.
No discounted stock options or stock appreciation rights. The 2006 Employee Plan requires that stock options and stock appreciation rights must have an exercise price equal to or greater than the fair market value of our common stock on the date of grant.
Repricing not allowed. The 2006 Employee Plan expressly prohibits the repricing of equity awards—including the cancellation and re-grant of outstanding equity awards—without prior stockholder approval. The 2006 Employee Plan also expressly prohibits us from buying out stock options whose exercise price exceeds the fair market value of our common stock, often referred to as underwater options, for cash, without stockholder approval.
No liberal share recycling. In general, when awards terminate or are cancelled, the shares reserved for those awards are returned to the share reserve and become available for future awards. However, shares of common stock that are tendered to us in payment of the exercise price of an award or that are withheld to cover tax withholding obligations are not returned to our share reserve.
Seven-year term. All equity awards granted under the 2006 Employee Plan have a term of no more than seven years, thereby limiting the potential for unproductive overhang.
Fungible share reserve. The 2006 Employee Plan has a fungible share reserve, under which the share reserve is depleted at a higher multiple for restricted stock units, restricted stock, and other "full-value awards", in order to minimize stockholder dilution.
Limitations on Dividends and Dividend Equivalents. As determined by our Board of Directors, dividends and dividend equivalent rights may accrue with respect to awards other than stock options or stock appreciation rights granted under the 2006 Employee Plan, but no dividends or dividend equivalents may be paid out or settled unless and until, and then only to the extent that, the applicable underlying award vests. Further, neither stock options nor stock appreciation rights granted under the 2006 Employee Plan may provide for any dividends or dividend equivalents thereon.
No Liberal Corporate Transaction Provisions. No corporation transaction related vesting acceleration and other benefits may occur without an actual corporate transaction occurring.
Limit on Stock Awards. The 2006 Employee Plan limits the number of shares that may be granted to any one participant during any one fiscal year.
Includes Best Practice Performance-Based Stock Award Provisions. While the enactment of the 2017 Tax Cuts and Jobs Act eliminated the performance-based compensation exception under Section 162(m) of the Internal Revenue Code (the Code), the 2006 Employee Plan includes many best practice performance-based stock award provisions.
New Plan Benefits and Historical Grant Information
No awards have been granted or promised with respect to the additional 4,700,000 shares requested and the 2006 Employee Plan does not provide for set benefits or amounts of awards and we have not approved any awards that are conditioned on stockholder approval of the 2006 Employee Plan. Awards under our 2006 Employee Plan are made at the discretion of our Board of Directors or the Compensation Committee and are therefore not determinable at this time. The following tables set forth detailed information about our historical equity compensation practices.
2021 Proxy Statement
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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Awards Granted to Certain Individuals and Groups under the 2006 Employee Plan
The following table shows, for each of the named executive officers and the various groups indicated, the total number of shares of Synopsys common stock subject to stock awards that have been granted (even if not currently outstanding) under the 2006 Employee Plan since it became effective through January 31, 2021:
NameNumber of
Shares(#)
Aart J. de Geus3,035,299
Co-Chief Executive Officer and Chairman of the Board of Directors
Chi-Foon Chan2,387,966
Co-Chief Executive Officer and President
Sassine Ghazi343,499
Chief Operating Officer
Trac Pham545,941
Chief Financial Officer
Joseph W. Logan1,191,448
Sales and Corporate Marketing Officer
John F. Runkel, Jr.308,842
General Counsel and Corporate Secretary
All current executive officers as a group (6 persons)7,812,995
All current directors who are not executive officers as a group (8 persons)— 
Each nominee for election as a director— 
Each associate of any executive officers, current directors or director nominees— 
Each other person who received or is to receive 5% of awards— 
All employees, excluding executive officers, as a group
(15,036 persons as of October 31, 2020)
39,720,078 

Additional Equity Plan Information
The following table provides certain additional information regarding Synopsys' equity compensation plans, excluding the Employee Stock Purchase Plan:
 As of 1/31/2021
Total Stock Options Outstanding4,079,664 
Total Restricted Stock Unit Awards Outstanding4,675,800 
Total Common Stock Outstanding152,363,803 
Weighted-Average Exercise Price of Stock Options Outstanding$97.80
Weighted-Average Remaining Duration of Stock Options Outstanding4.14 years
Total Shares Available for Grant under the 2006 Employee Plan9,922,411 
Total Shares Available for Grant under the 2017 Directors Plan389,682 
Stock price as of January 31, 2021$255.45
For more information regarding Synopsys’ equity compensation plans, including the Employee Stock Purchase Plan, please see “Equity Compensation Plan Information.”
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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Information for Burn Rate Calculations
The following table provides detailed information regarding activity under all of our equity plans (except our Employee Stock Purchase Plan) in fiscal 2020.
 Fiscal 2020
Stock Options Granted by Synopsys(1)
699,648 
Restricted Stock Units Granted by Synopsys(2)
2,040,909 
Restricted Stock Awards Granted by Synopsys(3)
9,412 
Stock Options Cancelled105,558 
Restricted Stock Units Cancelled(4)
288,518 
Restricted Stock Awards Cancelled— 
Weighted-Average Common Stock Outstanding151,135,441 
Common Stock Outstanding at Fiscal Year End152,618,215 
(1)Granted under the 2006 Employee Plan; includes 5,998 stock options granted under the 2017 Directors Plan to Ms. Sargent in connection with her appointment to our Board of Directors in September 2020.
(2)Granted under the 2006 Employee Plan, and represents the actual number of restricted stock units granted, prior to the application of the fungible share reserve ratio.
(3)Granted under the 2017 Directors Plan, which does not contain a fungible share reserve ratio. Represents the actual number of restricted stock awards granted.
(4)Represents the actual number of restricted stock units cancelled, prior to the reverse application of the fungible share reserve ratio.
Description of the 2006 Employee Plan, as Amended
The material terms and provisions of the 2006 Employee Plan, as amended, are summarized below. This summary, however, does not purport to be a complete description of the 2006 Employee Plan. The following summary of the 2006 Employee Plan is qualified in its entirety by reference to the complete text of the 2006 Employee Plan, a copy of which is included as Appendix A to this Proxy Statement. Any stockholder that wishes to obtain a paper copy of the plan document may do so by written request to: Corporate Secretary, Synopsys, Inc., 690 East Middlefield Road, Mountain View, California 94043.
As further described in this Proposal 2, the 2006 Employee Plan has been amended to, among other things:
increase the number of shares in the share reserve and incentive stock option limits by 4,700,000 shares;
eliminate references to the performance-based compensation exemption under Section 162(m) of the Code since the exemption is no longer available under the tax rules, while retaining material 162(m) requirements to ensure good governance;
clarify that the plan administrator may adopt additional objective and non-discretionary adjustments with respect to performance-based awards at the time such awards are approved;
explicitly prohibit the transfer of awards to third-party institutions for value in the case of restricted stock awards;
provide the plan administrator with broad discretion to determine the value of shares withheld to pay taxes; and
clarify that stock awards granted under the 2006 Plan are subject to any vesting or transferability policies adopted by the plan administrator.
General
The 2006 Employee Plan was originally adopted by our Board of Directors in March 2006 and approved by stockholders in April 2006 as a successor plan to prior stock option plans for our employees. The 2006 Employee Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights, and other forms of equity compensation (collectively, equity awards). The 2006 Employee Plan also provides the ability to grant performance equity awards and performance cash awards (together, performance awards), which enable our Compensation Committee to use performance criteria in establishing specific targets to be attained as a condition to the vesting of awards.
Incentive stock options granted under the 2006 Employee Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code. Non-statutory stock options granted under the 2006 Employee Plan are not intended to qualify as incentive stock options under the Code. See “U.S. Federal Income Tax Information” below for a discussion of the tax treatment of equity awards.
2021 Proxy Statement
33

PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Purpose
The 2006 Employee Plan is intended to create an incentive for our eligible employees and consultants to exert maximum efforts toward our success and provides such individuals with the opportunity to benefit from increases in the value of our common stock, thereby aligning their interests with the interests of our stockholders.
Administration
The 2006 Employee Plan provides that our Board of Directors has the authority to construe and interpret the 2006 Employee Plan and to determine the persons to whom and the dates on which equity awards will be granted, the number of shares of common stock to be subject to each equity award, the time or times during the term of each equity award within which all or a portion of the award may be exercised, the exercise, purchase, or strike price of each equity award, the type of consideration permitted to exercise or purchase each equity award, and other terms of the equity awards.
Our Board of Directors has the authority to delegate some or all of the administration of the 2006 Employee Plan to a committee or committees composed of members of our Board. In the discretion of our Board of Directors, a committee may consist solely of two or more “outside directors” (as defined in the plan) to the extent that the Board of Directors determines it to be desirable to qualify awards that were granted under the plan prior to April 8, 2019 as “performance-based compensation” within the meaning of Section 162(m) of the Code, and/or solely of two or more “non-employee directors” (as defined in the plan). The 2006 Employee Plan also permits delegation of administration of the plan to one or more executive officers with respect to grants to employees of Synopsys and its subsidiaries. Our Board of Directors has delegated to the Compensation Committee administration of the 2006 Employee Plan. Our Board of Directors has also delegated to each of our co-Chief Executive Officers, as both officers and members of our Board of Directors, administration of the 2006 Employee Plan with respect to equity awards to employees other than executive officers, subject to specified limitations and restrictions.
Eligibility
General. As of January 31, 2021, Synopsys had 15,037 eligible employees and 1,665 eligible consultants under the 2006 Employee Plan. Synopsys does not currently expect to grant awards to consultants under the 2006 Employee Plan, but it is permitted to do so under the plan’s terms. Our non-employee directors are not eligible to receive any awards under the 2006 Employee Plan. The requirements for eligibility are further described below, and the basis for participation is being selected by the plan administrator.
Incentive Stock Options. Incentive stock options may be granted under the 2006 Employee Plan only to employees (including executive officers) of Synopsys and its affiliates. The aggregate maximum number of shares of common stock that may be issued pursuant to the exercise of incentive stock options will be 102,997,248 shares of common stock. Stockholder approval of this Proposal 2 will constitute approval of this maximum limit for incentive stock options.
No incentive stock option may be granted under the 2006 Employee Plan to any person who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of the total combined voting power of Synopsys or its affiliates, unless the exercise price of such stock option is at least 110% of the fair market value of the stock subject to the stock option on the date of grant and the term of the stock option does not exceed five years from the date of grant. In addition, the aggregate fair market value, determined on the date of grant, of the shares of common stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under the 2006 Employee Plan and any other equity plans of Synopsys and its affiliates) may not exceed $100,000 (any excess of such amount shall be treated as non-statutory stock options).
Non-Statutory Stock Options, Restricted Stock, Restricted Stock Units and Other Awards. Non-statutory stock options, restricted stock, restricted stock units and all other types of equity awards and performance awards authorized under the 2006 Employee Plan may be granted to employees (including executive officers) and consultants of Synopsys and its affiliates.
Individual Limit. No person may be granted stock options or stock appreciation rights under the 2006 Employee Plan covering more than 1,000,000 shares of common stock during any calendar year. The 2006 Employee Plan also includes annual limits on grants of performance awards to individuals, as described below.
Stock Subject to the 2006 Employee Plan
As of January 31, 2021, 9,922,411 shares of common stock were available for future grants under the 2006 Employee Plan. If this Proposal 2 is approved by our stockholders, an additional 4,700,000 shares will be available for future grants under the 2006 Employee Plan. Assuming the stockholders approve this Proposal 2, 102,997,248 shares of our common stock will have been reserved for issuance under the 2006 Employee Plan.
The number of shares of common stock available for issuance under the 2006 Employee Plan is currently reduced by one share for each share of common stock issued pursuant to a stock option or a stock appreciation right and by 1.70 shares for each share of common stock issued on or after March 29, 2016 pursuant to restricted stock awards, restricted stock unit awards or other awards (excluding options and stock appreciation rights).

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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
If a stock option or stock appreciation right award expires or otherwise terminates without being fully exercised, if shares subject to a restricted stock award or restricted stock unit award are forfeited to or repurchased by us, or if an equity award is settled in cash, the shares not issued under those awards, or the shares forfeited to or repurchased by us, become available for subsequent issuance under the 2006 Employee Plan. Such returning shares increase the number of shares available for issuance under the 2006 Employee Plan by one share if they were issued pursuant to a stock option or stock appreciation right and, by 1.70 shares if they were issued pursuant to restricted stock awards, restricted stock unit awards or other awards (excluding options and stock appreciation rights).
If shares subject to an award granted under the 2006 Employee Plan are not delivered to a participant because:
an equity award is exercised through a reduction in the number of shares subject to the equity award (a “net exercise”),
the appreciation distribution upon exercise of a stock appreciation right is paid in shares of common stock, or
shares are withheld in satisfaction of applicable withholding taxes,
then those shares do not become available for subsequent issuance under the 2006 Employee Plan. If the exercise price of an award is satisfied by a participant tendering previously held shares, the tendered shares do not become available for subsequent issuance under the 2006 Employee Plan.
Terms of Stock Options
We may grant stock options under the 2006 Employee Plan pursuant to stock option agreements adopted by our Board of Directors or a duly authorized committee. The following is a description of the permissible terms of stock options under the 2006 Employee Plan. Individual stock option agreements may be more restrictive as to any or all of the permissible terms described below.
Exercise Price. The exercise price of incentive stock options and non-statutory stock options may not be less than 100% of the fair market value of the stock subject to the stock option on the date of grant and, in some cases (see “Eligibility” above), may not be less than 110% of such fair market value.
Consideration. The stock option exercise price may, at the discretion of our Board of Directors, be paid in cash or by check, pursuant to a broker-assisted cashless exercise, by delivery of other shares of Synopsys common stock, pursuant to a net exercise arrangement, or in any other form of legal consideration reasonably acceptable to our Board of Directors.
Vesting. Stock options granted under the 2006 Employee Plan vest, or become exercisable, as determined by our Board of Directors. Vesting typically occurs during the optionholder’s continued service with Synopsys or an affiliate, whether such service is in the capacity of an employee, director or consultant (collectively, service) and regardless of any change in the capacity of the optionholder, or upon achievement of quantitative or qualitative goals determined by the plan administrator. Shares covered by different stock options may be subject to different vesting terms.
Term. Under the current 2006 Employee Plan, the maximum term of a stock option is seven years, except that in certain cases (see “Eligibility” above) the maximum term is five years.
Termination of Service. Stock options generally terminate three months after termination of a participant’s service unless:
the stock option agreement by its terms specifically provides otherwise,
termination is due to the participant’s disability, in which case the stock option may be exercised (to the extent the stock option was exercisable at the time of the termination of service) at any time within 12 months of termination,
the participant dies while in service, or the participant dies within a specified period after termination of service, in which case the stock option may be exercised (to the extent the stock option was exercisable at the time of the participant’s death) within 12 months of the participant’s death by the person or persons to whom the rights to such stock option have passed, or
the participant is terminated for cause (as defined under the 2006 Employee Plan), in which case the stock option will terminate and cease to be exercisable (whether vested or unvested) at the time of such termination.
The stock option term may be extended in the event that exercise of the stock option following termination of service is prohibited by applicable securities laws. In no event, however, may a stock option be exercised beyond the expiration of its term.
Restrictions on Transfer. A participant generally may not transfer a stock option other than by will, by the laws of descent and distribution, or pursuant to a domestic relations order. During the lifetime of the participant, only the participant may exercise a stock option (except in instances pursuant to a domestic relations order). A participant may also designate a beneficiary (excluding any third-party financial institution) who may exercise a stock option following the participant’s death.


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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Terms of Restricted Stock
We may grant restricted stock awards under the 2006 Employee Plan pursuant to restricted stock award agreements adopted by our Board of Directors or a duly authorized committee. Restricted stock awards are shares of our common stock that may be subject to restrictions, such as vesting requirements.
Consideration. Our Board of Directors may grant restricted stock awards in consideration for past or future services rendered to Synopsys or an affiliate, or any other form of legal consideration acceptable to our Board of Directors.
Vesting. Shares of stock acquired under a restricted stock award may, but need not, be subject to a repurchase option in favor of Synopsys or forfeiture to Synopsys in accordance with a vesting schedule as determined by our Board of Directors.
Termination of Service. Upon termination of a participant’s service, Synopsys may repurchase or otherwise reacquire any forfeited shares of stock that have not vested as of such termination under the terms of the applicable restricted stock award.
Restrictions on Transfer. Rights to acquire shares of shares of Synopsys common stock will be transferable by the participant only upon such terms and conditions as are set forth in the restricted stock award agreement, so long as the underlying shares remain subject to the terms of the agreement and provided that in no event may any restricted stock award be transferred for consideration to a third-party financial institution.
Terms of Restricted Stock Units
We may grant restricted stock unit awards under the 2006 Employee Plan pursuant to restricted stock unit award agreements adopted by our Board of Directors or a duly authorized committee. Restricted stock units represent the value of a fixed number of shares of Synopsys common stock on the date of grant.
Consideration. Our Board of Directors may grant restricted stock units in consideration for past or future services rendered to Synopsys or an affiliate, or any other form of legal consideration acceptable to our Board of Directors.
Vesting. Restricted stock units vest at the rate or on the terms specified in the restricted stock unit award agreement as determined by our Board of Directors.
Settlement. Restricted stock units may be settled by the delivery of shares of Synopsys common stock, cash, or any combination as determined by our Board of Directors. At the time of grant, our Board of Directors may impose additional restrictions or conditions that delay the delivery of stock or cash subject to the restricted stock unit award after vesting.
Termination of Service. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited upon the participant’s termination of service.
Terms of Stock Appreciation Rights
We may grant stock appreciation rights under the 2006 Employee Plan pursuant to stock appreciation rights agreements adopted by our Board of Directors or a duly authorized committee. A stock appreciation right is a right to receive the excess value over the strike price of a fixed number of shares. Individual stock appreciation right agreements may be more restrictive as to any or all of the permissible terms described below. Each stock appreciation right is denominated in shares of common stock equivalents but may be settled in cash.
Term. The maximum term of stock appreciation rights is seven years.
Strike Price. The strike price of stock appreciation rights may not be less than 100% of the fair market value of the common stock equivalents subject to the stock appreciation rights on the date of grant.
Exercise. Upon exercise of a stock appreciation right, Synopsys will pay the participant an amount equal to the excess of the aggregate fair market value on the date of exercise of a number of common stock equivalents with respect to which the participant is exercising the stock appreciation right, over the strike price determined by our Board of Directors on the date of grant. The appreciation distribution upon exercise of a stock appreciation right may be paid in cash, shares of our common stock, or any other form of consideration determined by our Board of Directors.
Vesting. Stock appreciation rights vest and become exercisable at the rate specified in the stock appreciation right agreement as determined by our Board of Directors.
Termination of Service. Stock appreciation rights generally terminate three months after termination of a participant’s service unless:
the stock appreciation rights agreement by its terms specifically provides otherwise,
termination is due to the participant’s disability, in which case the stock appreciation right may be exercised (to the extent vested at the time of the termination of service) at any time within 12 months of termination,

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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
the participant dies while in service, or within a specified period after termination of service, in which case the stock appreciation right may be exercised (to the extent vested at the time of the participant’s death) within 12 months of the participant’s death by the person or persons to whom the rights to such stock appreciation right have passed, or
the participant is terminated for cause (as defined under the 2006 Employee Plan), in which case the stock appreciation right will terminate and cease to be exercisable (whether vested or unvested) at the time of such termination.
The term of a stock appreciation right may be extended in the event that exercise following termination of service is prohibited by applicable securities laws. In no event may a stock appreciation right be exercised beyond the expiration of its term.
Terms of Other Stock Awards
Our Board of Directors may grant other equity awards based in whole or in part by reference to the value of our common stock. Subject to the provisions of the 2006 Employee Plan, our Board of Directors has the authority to determine the persons to whom and the dates on which such other equity awards will be granted, the number of shares of common stock (or cash equivalents) to be subject to each award, and other terms and conditions of such awards. Such awards may be granted either alone or in addition to other equity awards granted under the 2006 Employee Plan. These awards may not have a term in excess of seven years from the date of grant.
Terms of Performance Awards
General. Our Board of Directors and Compensation Committee may grant performance equity awards and performance cash awards that vest based on the attainment of performance goals during a designated performance period.
Performance Goals. Our Board of Directors and Compensation Committee have the authority to structure one or more such awards so that stock or cash will be issued or paid pursuant to the award only upon the achievement of certain pre-established performance goals. The 2006 Employee Plan includes a list of performance goals that may be used (alone or in combination with each other) for performance-based awards, which may consist of any measures of performance selected by our Board of Directors.
Performance goals may be set on a company-wide basis, with respect to one or more business units, divisions, affiliates, or business segments, and in either absolute terms or relative to internally generated business plans, the performance of one or more comparable companies or the performance of one or more relevant indices. Adjustments may be made in the method of calculating the attainment of performance goals as follows: (i) to exclude restructuring and/or other nonrecurring charges (including but not limited to the effect of tax or legal settlements); (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude stock-based compensation expense determined under generally accepted accounting principles; (vi) to exclude any other unusual or infrequently occurring item (including but not limited to various income tax impacts prompted by tax reform legislation adopted in late 2017 (commonly referred to as the Tax Cuts and Jobs Act of 2017), including the income tax related to transition tax, the tax rate change, and tax restructuring; and the tax impact of repatriation); (vii) to respond to, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development; (viii) to respond to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions; (ix) to exclude the dilutive effects of acquisitions or joint ventures; (x) to assume that any business divested by Synopsys achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (xi) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends; (xii) to reflect a corporate transaction, such as a merger, consolidation, separation (including a spinoff or other distribution of stock or property by a corporation), or reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code); (xiii) to reflect any partial or complete corporate liquidation; (xiv) to exclude the effect of in-process research and development expenses; (xv) to exclude the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes; and (xvi) pursuant to such other objective and non-discretionary adjustments adopted by the Compensation Committee at the time the award is approved.
Annual Limitation. The maximum benefit to be granted to a participant in any calendar year attributable to performance equity awards may not exceed 1,000,000 shares of common stock. The maximum benefit to be granted to a participant in any calendar year attributable to performance cash awards granted pursuant to the amended 2006 Employee Plan may not exceed $4,000,000.
Changes to Capital Structure
In the event any change is made to the outstanding shares of our common stock without receipt of consideration (whether through a stock split, reverse stock split or other changes in the capital structure), appropriate adjustments will be made to the class of securities issuable under the 2006 Employee Plan, the maximum number of securities issuable under the 2006 Employee Plan, the incentive stock option limitation, the maximum award that one person may be granted in a calendar year under the 2006 Employee Plan, and the number, class and price per share under outstanding equity awards under the 2006 Employee Plan.
2021 Proxy Statement
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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Corporate Transactions; Changes in Control
Unless otherwise provided in a written agreement between Synopsys or an affiliate and a participant, or unless otherwise expressly provided by our Board of Directors or Compensation Committee at the time of grant of an equity award, in the event of significant corporate transactions, outstanding equity awards under the 2006 Employee Plan may be assumed, continued or substituted by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue or substitute such equity awards, then:
with respect to any such equity awards that are held by individuals then performing services for Synopsys or its affiliates, the vesting and exercisability provisions of such equity awards will be accelerated in full and such awards will be terminated if not exercised prior to the effective date of the corporate transaction and any reacquisition or repurchase rights will lapse (contingent upon the effectiveness of the corporate transaction),
all other outstanding equity awards will be terminated if not exercised prior to the effective date of the corporate transaction, except that certain equity awards, such as restricted stock awards, may have their reacquisition or repurchase rights assigned to the surviving or acquiring entity (or its parent company) in the corporate transaction, though if such reacquisition or repurchase rights are not assigned, then such equity awards will become fully vested, and
no vested restricted stock unit award will terminate without being settled by delivery of shares of common stock, their cash equivalent or in any other form of consideration, as determined by the Board of Directors, prior to the effectiveness of the corporate transaction.
A significant corporate transaction will be deemed to occur in the event of:
a sale of all or substantially all of the consolidated assets of Synopsys and its subsidiaries,
a sale of at least 90% of the outstanding securities of Synopsys,
a merger, consolidation or similar transaction in which Synopsys is not the surviving corporation, or
a merger, consolidation or similar transaction in which Synopsys is the surviving corporation, but shares of Synopsys outstanding common stock are converted into other property by virtue of the corporate transaction.
The 2006 Employee Plan provides, at the discretion of our Board of Directors, that the holder of an outstanding equity award that would otherwise terminate if not exercised prior to the corporate transaction may surrender such equity award in exchange for a payment equal to the excess of the value of the property that the holder would have received upon exercise of the equity award immediately prior to the corporate transaction, over the exercise price otherwise payable in connection with the equity award, which excess amount may be fully vested at the time of the corporate transaction or may be required to vest after the time of the corporate transaction substantially in accordance with the schedule in effect immediately prior to the corporate transaction.
An equity award may be subject to additional acceleration of vesting and exercisability upon or after a change in control as may be provided in the award agreement for such equity award, or as may be provided in any other written agreement between Synopsys or any affiliate and the participant. An equity award may vest as to all or any portion of the shares subject to the equity award (a) immediately upon the occurrence of a change in control, whether or not such equity award is assumed, continued, or substituted by a surviving or acquiring entity in the change in control, or (b) in the event a participant’s service is terminated, actually or constructively, within a designated period prior to, at, or following the occurrence of a change in control. In the absence of a determination by the plan administrator, no such acceleration will occur.
The acceleration of an equity award in the event of an acquisition or similar corporate event may be viewed as an anti-takeover provision, which may have the effect of discouraging a proposal to acquire or otherwise obtain control of Synopsys.
Dividends and Dividend Equivalents
As determined by our Board of Directors, dividends and dividend equivalent rights may accrue with respect to awards granted under the 2006 Employee Plan other than stock options or stock appreciation rights, but no dividends or dividend equivalents will be paid out or settled unless and until, and then only to the extent that, the applicable underlying award vests. Neither stock options nor stock appreciation rights granted under the 2006 Employee Plan may provide for any dividends or dividend equivalents thereon.
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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Duration, Termination and Amendment
Our Board of Directors may suspend or terminate the 2006 Employee Plan without stockholder approval or ratification at any time. The 2006 Employee Plan will expire on April 1, 2026, unless terminated sooner by our Board of Directors. Our Board of Directors may amend or modify the 2006 Employee Plan at any time, subject to any required stockholder approval. To the extent required by applicable law or regulation, stockholder approval will be required for any amendment that:
materially increases the number of shares available for issuance under the 2006 Employee Plan,
materially expands the class of individuals eligible to receive awards under the 2006 Employee Plan,
materially increases the benefits accruing to the participants under the 2006 Employee Plan or materially reduces the price at which shares of common stock may be issued or purchased under the 2006 Employee Plan,
materially extends the term of the 2006 Employee Plan, or
expands the types of awards available for issuance under the 2006 Employee Plan.
Our Board of Directors also may submit to stockholders any other amendment to the 2006 Employee Plan.
Clawback Policy
Awards granted under the 2006 Employee Plan are also subject to our Compensation Recovery Policy, which allows us to recover or “clawback” cash and equity compensation paid to covered employees under certain circumstances. Pursuant to the policy, we may require a covered employee to return all or a portion of any compensation paid or received after January 1, 2009, if (1) the compensation was based on the achievement of financial results, and the results were the subject of a substantial restatement of our financial statements as filed with the Securities and Exchange Commission, and (2) less compensation would have been earned by the employee based on the restated financial results. Our Board of Directors has the sole authority to enforce this policy, and it is limited by applicable law. Each of our executive officers is subject to our Compensation Recovery Policy.
Other Policies
Each award granted under the 2006 Employee Plan may be subject to the terms and conditions of any other policy (and any amendments thereto) adopted by Synopsys from time to time, which may include any policy related to the vesting or transfer of awards, provided that in no event will such policy permit that an award be transferred for consideration to a third-party financial institution. Whether any such policy will apply to a particular award may depend, among other things, on when the award was granted, whom the award was granted to, and the type of award.
U.S. Federal Income Tax Information
The following is a summary of the principal United States federal income taxation consequences to participants and Synopsys with respect to participation in the 2006 Employee Plan. This summary is not intended to be exhaustive, and does not discuss the income tax laws of any city, state or foreign jurisdiction in which a participant may reside.
Incentive Stock Options. Incentive stock options granted under the 2006 Employee Plan are intended to qualify for the favorable federal income tax treatment accorded “incentive stock options” under the Code. There generally are no federal ordinary income tax consequences to the participant or Synopsys by reason of the grant or exercise of an incentive stock option. However, the exercise of an incentive stock option may increase the participant’s alternative minimum tax liability, if any.
The excess, if any, of the fair market value of the incentive stock option shares on the date of exercise over the exercise price is an adjustment to income for purposes of the alternative minimum tax. Alternative minimum taxable income is determined by adjusting regular taxable income for certain items, increasing that income by certain tax preference items and reducing this amount by the applicable exemption amount.
If a participant holds stock acquired through exercise of an incentive stock option for more than two years from the date on which the stock option was granted and more than one year after the date the stock option was exercised for those shares, any gain or loss on a disposition of those shares (a qualifying disposition) will be a long-term capital gain or loss.
Generally, if the participant disposes of the stock before the expiration of either of those holding periods (a disqualifying disposition), then at the time of disposition the participant will realize taxable ordinary income equal to the lesser of (a) the excess of the stock’s fair market value on the date of exercise over the exercise price, or (b) the participant’s actual gain, if any, on the purchase and sale. The participant’s additional gain or any loss upon the disqualifying disposition will be a capital gain or loss, which will be long-term or short-term depending on whether the stock was held for more than one year after exercise.
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PROPOSAL 2 — Approval of Our 2006 Employee Equity Incentive Plan, as Amended
Non-Statutory Stock Options. No taxable income is generally recognized by a participant upon the grant or vesting of a non-statutory stock option under the 2006 Employee Plan. Upon exercise of a non-statutory stock option, the participant will recognize ordinary income equal to the excess, if any, of the fair market value of the purchased shares on the exercise date over the exercise price paid for those shares.
Upon disposition of the common stock, the participant will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such common stock plus any amount recognized as ordinary income upon acquisition of the stock. Such gain or loss will be long-term or short-term depending on whether the common stock was held for more than one year.
Stock appreciation rights are generally taxed in a manner similar to non-statutory stock options.
Restricted Stock Awards. Upon the grant of a restricted stock award which is unvested and subject to reacquisition by Synopsys in the event of the participant’s termination of service prior to vesting in those shares, the participant will not recognize any taxable income at the time of issuance, but will have to report as ordinary income, as and when our reacquisition right lapses, an amount equal to the fair market value of the shares on the dates the reacquisition right lapses. The participant may, however, elect under Section 83(b) of the Code to include as ordinary income in the year of issuance an amount equal to the fair market value of the shares on the date of issuance. If the Section 83(b) election is made, the participant will not recognize any additional income as and when the reacquisition right lapses.
Upon disposition of the common stock acquired upon the receipt of a restricted stock award, the participant will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such common stock plus any amount previously recognized as ordinary income in respect of such common stock. Such gain or loss will be long-term or short-term depending on whether the common stock was held for more than one year.
Restricted Stock Unit Awards. No taxable income is generally recognized upon receipt of a restricted stock unit award under the 2006 Employee Plan. In general, the participant will recognize ordinary income in the year in which the shares to be issued in respect of that unit are issued in an amount equal to the fair market value of the shares on the issuance date. Amounts taxed as ordinary income from non- statutory stock options, restricted stock awards and restricted stock unit awards are subject to income tax withholding and applicable employment taxes.
Tax Consequences to Synopsys. To the extent the participant recognizes ordinary income in the circumstances described above, we will generally be entitled to a corresponding income tax deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code. However, we will not be entitled to any income tax deduction upon a qualifying disposition of an incentive stock option.
While the Compensation Committee considers the deductibility of compensation as one factor in determining executive compensation, the Compensation Committee retains the discretion to award compensation that is not deductible as it believes that it is in the best interests of our stockholders to maintain flexibility in our approach to executive compensation in order to structure a program that we consider to be the most effective in attracting, motivating and retaining key executives.

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As required pursuant to Section 14A of the Securities Exchange Act, we are requesting our stockholders to provide advisory approval of the compensation of our named executive officers (NEOs) as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the narrative discussion on pages 41 to 75 of this Proxy Statement. This non-binding advisory vote is commonly referred to as a “say-on-pay” vote and is held annually. It is expected that the next say-on-pay vote will occur at the 2022 Annual Meeting of Stockholders.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis discusses the compensation of our NEOs for fiscal 2020.
Fiscal 2020 NEOs
Aart J. de Geus
Co-Chief Executive Officer and Chairman of the Board of Directors
Chi-Foon Chan
Co-Chief Executive Officer, President and Member of the Board of Directors
Sassine Ghazi
Chief Operating Officer(1)
Trac Pham
Chief Financial Officer
Joseph W. Logan
Sales and Corporate Marketing Officer
John F. Runkel, Jr.
General Counsel and Corporate Secretary
(1) On August 17, 2020, Sassine Ghazi was promoted from General Manager of the Design Group to Chief Operating Officer.
Executive Summary
Fiscal 2020 Business Performance Overview
Fiscal 2020 was another outstanding year for Synopsys. Despite unprecedented macro challenges, including a global pandemic, we significantly exceeded our beginning-of-year financial plan and built considerable financial, technology and customer momentum heading into fiscal 2021.
FINANCIAL HIGHLIGHTS
Generated $3.685 billion in revenue.
  
Non-cancellable backlog grew to $4.9 billion.
Expanded operating margin significantly and delivered strong double-digit non-GAAP earnings per share (EPS) growth for the fourth consecutive year.
Strong business across Semiconductor and System Design segment, led by EDA software and semiconductor IP.
Software Integrity contributed $358 million in revenue, approximately 10% of total, with solid profitability.
Delivered record operating cash flow of $991 million.

Returned $242 million to stockholders through stock repurchases. We have repurchased approximately $2.0 billion of our stock over the past six years, representing a return of greater than 60% of free cash flow to stockholders over this period.
2021 Proxy Statement
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
BUSINESS HIGHLIGHTS
Synopsys saw increasing momentum from the innovative products it has delivered over the past several years, in addition to launching several new solutions that position us well for the next wave of semiconductor and systems innovations. We also made operational adjustments to build on the successes we’ve had and to enable us to further scale the business.
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New EDA products gaining traction
Fusion Compiler: State-of-the-art digital design solution is achieving widespread wins and deployments.
Custom Compiler: Innovative custom design solution is driving growing customer adoption.
Hardware verification: Our customer base for ZeBu emulation and HAPS prototyping continues to grow well, as our solutions are enabling today’s extremely complex designs.
New innovations: Launched several new solutions for next-generation design, including DSO.ai (uses AI to learn and automatically adjust and optimize portions of the design process), 3DIC (enables the design and analysis of multiple die together on a chip), and the Silicon Lifecycle Management platform (industry's first solution that provides visibility into performance, reliability and security issues for the entire chip lifespan).
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Semiconductor IP delivering very strong growth
Approximately 20% revenue growth year-over-year, driven by strong market demand in key verticals such as AI, automotive and high-performance computing, served by the broadest portfolio of proven IP available.
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Organization Updates
We promoted Sassine Ghazi to Chief Operating Officer (COO) in order to leverage his prior positive impact on our innovative Fusion Platform strategy and implementation, and to drive even more effective partnering across our Semiconductor and System Design segment.
We expanded our leadership bench with a new general manager of the Software Integrity group, who has made adjustments and enhancements to our go-to-market and product platform strategy and implementation.
Fiscal 2020 Executive Compensation Overview
The cornerstone of our compensation philosophy is pay for performance. We closely align the compensation paid to our NEOs with achievement of both near- and long-term financial goals. Approximately 92% of the target compensation awarded in fiscal 2020 to Dr. de Geus and Dr. Chan, our co-CEOs, was performance-based, and approximately 87% of the target compensation awarded in fiscal 2020 to our other NEOs, as a group, was performance-based.
We performed well against our fiscal 2020 goals, as further described below:
Incentive AwardsPerformance HighlightsCommentary
Fiscal 2020 EIP Award
101.8% achievement of Corporate Financial Goals, yielding a 107.4% Corporate Financial Payout Factor
102.8% of achievement of fiscal 2022 revenue backlog goal, which resulted in a Revenue Predictability Payout Factor of 113.8% and funding of 122.2%
The weighted average achievement for the Corporate Financial Goals exceeded 100%, resulting in the CFG Multiplier (1.10X) increasing overall funding to 134.4%
Minimum average achievement of 90% of our goals before any payment can be earned
Actual payouts were 136.5% on average, as further described below
Fiscal 2020 Annual PRSUs
109.4% achievement of non-GAAP net income performance goal, resulting in 100% of our NEOs’ fiscal 2020 Annual PRSUs becoming eligible to vest based on continued service
25% of the PRSUs vested on December 10, 2020, and the remaining 75% are scheduled to vest over a three-year period in equal annual installments
Fiscal 2019 Special PRSUs
Achievement of non-GAAP operating margin target of 28% for fiscal 2020, resulting in the first tranche of our NEOs’ Fiscal 2019 Special PRSU Grants vesting
33% of the target PRSUs vested on December 10, 2020, and the remaining target PRSUs will vest based on non-GAAP operating margin targets for 2021 and 2022
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Compensation Practices and Governance Policies
What We DoWhat We Don’t Do
  Pay for Performance. Performance-based pay represents a significant portion of our NEOs’ Target TDC.
  Balanced Mix of Performance Goals. The performance goals for our incentive awards focus on both near-term and long-term goals.
  Double Trigger Change of Control Benefits. Our NEO change of control agreements are “double trigger.”
  Maximum Payout Caps. Our EIP and 2006 Employee Plan maintain maximum payout caps to avoid excessive payments and risk taking.
  Clawback Policy. We maintain a clawback policy for the recovery of performance-based cash and equity compensation in the event of a substantial financial restatement.
  Robust Stock Ownership Guidelines. All of our NEOs are in compliance with our Stock Ownership Guidelines.
  Independent Compensation Committee. Our Compensation Committee is composed solely of independent directors.
  Independent Compensation Consultant. Our Compensation Committee directly retains an independent compensation consultant.
  Annual advisory Say-on-Pay Vote. We hold an annual advisory say-on-pay vote and ~94% of votes cast approved our fiscal 2019 NEO compensation.
  Equity Burn Rate Management. We continue to closely manage our equity burn rate, limiting gross share usage to 1.8% in fiscal 2020.
No Excessive Risks. Annual risk assessment of executive compensation program to ensure no excessive risk raking.
No Excessive Change of Control Payments. Cash change of control payments do not exceed two times annual target cash compensation.
No Excise Tax Gross Ups. We do not provide for “golden parachute” excise tax gross ups.
No Excessive Perks. We do not provide any excessive perquisites to our NEOs.
No Hedging or Pledging. All employees, including our NEOs, and our directors are prohibited from engaging in hedging or pledging our stock as collateral for a loan.
No Repricing or Cash-out of Underwater Options. Our 2006 Employee Plan forbids the repricing and cash-out of underwater options without stockholder approval.
No Dividends on Unvested Equity Awards. Our 2006 Employee Plan prohibits paying out dividends and dividend equivalents on unvested awards.
No Executive Pension Plans or SERPs. We only maintain a standard 401(k) plan and deferred compensation plan for our NEOs.
Our Compensation Philosophy
We have designed our executive compensation program to attract, motivate and retain a team of highly qualified executives who will drive technological and business success. In order to motivate and reward our NEOs for work that improves our long-term business performance and increases stockholder value, we have set out the following objectives:
Pay for PerformanceCompetitivenessOutperformance
Align NEO compensation to the success of our business objectives
Provide competitive compensation that attracts and retains top-performing NEOs
Motivate NEOs to achieve results that exceed our strategic plan targets
 
Stockholder AlignmentBalanceInternal Pay Equity
Align the interests of NEOs and stockholders through the managed use of long-term incentives
Set performance goals that reward an appropriate balance of near- and long-term results
Promote teamwork among NEOs by considering internal pay equity in setting compensation levels

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Fiscal 2020 NEO Compensation Details
Our three core elements of NEO direct compensation are base salary, an annual cash incentive opportunity and annual equity awards. The graphic below reflects the approximate general distribution of these three core elements of NEO target total direct compensation (Target TDC) awarded during fiscal 2020 as determined by our Compensation Committee.
CO-CEOsOTHER NEOs
p44_piechartxco-ceosx1ai2.jpg
p44_piechartxotherneosx1ai2.jpg
*Excludes Mr. Ghazi’s equity awards that were granted in connection with his promotion.
Core Fiscal 2020 Compensation Element
Purpose
Characteristics
BASE SALARY
Base salaries compensate our NEOs for expected levels of day-to-day performance.
Base salaries should be determined by each NEO’s role and responsibilities, our financial performance projections, pay at comparable companies, our budget for the coming year, historical base salary levels, and the resulting total target compensation that can be earned given the individual’s base salary and related target incentive opportunity.
Co-CEOs
image_1041.jpg
Other NEOs
p44_piechartotherneobasesa.jpg
CASH INCENTIVE
Align NEO performance with near-term financial objectives and future revenue goals, which reward contributions that have a multi-year impact.
Cash incentive payments can be earned by our NEOs only if we achieve a significant level of our financial performance goals, which advance our long-term strategic plans and, ultimately, stockholder value, over time.
Co-CEOs
image_1061.jpg
Other NEOs
p44_piechartotherneocashin.jpg
STOCK OPTIONS
Align interests of NEOs and stockholders through incentivizing long-term stock price growth and encouraging retention.
Stock options vest over four years and encourage long-term performance as they are only valuable if our stock price increases over time.
Co-CEOs
image_1081.jpg
Other NEOs
p44_piechartotherneostocko.jpg
ANNUAL PRSUs
Align interests of NEOs and stockholders through incentivizing continued operating performance success and encouraging retention.
Annual PRSUs vest only upon the achievement of pre-established performance criteria and thereafter, are subject to time-based vesting in three equal annual installments, resulting in a total vesting period of four years.
Co-CEOs
image_1101.jpg
Other NEOs
image_1111.jpg

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Base Salary
Base salaries compensate our NEOs for expected levels of day-to-day performance and are based on each NEO’s role and responsibilities, our financial performance projections, pay at comparable companies, our budget for the coming year, historical salary levels, and the resulting total target compensation that can be earned given the individual’s base salary and related target incentive opportunity. We did not increase the base salary for our co-CEOs and Mr. Logan in fiscal 2020. The Compensation Committee approved a modest increase in base salary for Mr. Ghazi, Mr. Pham and Mr. Runkel based on their performance and to reflect movement in the market for their roles. The base salaries of each our NEOs for fiscal 2020 as compared to fiscal 2019 and the primary reasons for any change are summarized below.
NEO
2020
Salary
($)
2019
Salary
($)
Salary
Increase
($)
Primary Reasons for the Change
Aart J. de Geus$540,000 $540,000 $— N/A
Chi-Foon Chan540,000540,000N/A
Sassine Ghazi430,000400,00030,000Move from co-manager to sole General Manager of the Design Group and associated increase in responsibilities; internal pay equity; market competitiveness; prior performance
Trac Pham475,000455,00020,000Market competitiveness; prior performance
Joseph W. Logan450,000450,000N/A
John F. Runkel, Jr.425,000400,00025,000Market competitiveness; prior performance
Cash Incentive
We use annual cash incentive compensation to align NEO performance with near-term financial objectives and future revenue goals, which reward contributions that have a multi-year impact. These cash incentive payments can be earned by our NEOs only if we achieve a significant level of our financial performance goals, which advance our long-term strategic plans and, ultimately, stockholder value, over time. Our Compensation Committee grants cash incentive compensation opportunities under our Executive Incentive Plan (EIP).
Executive Incentive Plan. At the beginning of the fiscal year, the Compensation Committee approves a threshold level of performance or threshold funding goal that must be achieved, before there is any funding under the EIP. The Compensation Committee also approves the cash incentive targets, performance goals and a payout matrix that determines how much of the target may be paid at each level of achievement of our performance goals. After the end of the fiscal year, the Compensation Committee applies a pre-determined formula provided by the EIP to calculate the amount of potential cash incentive funding, but it retains discretion to adjust those payments produced by the formula. In no event can an actual cash incentive payment to any NEO exceed 200% of the NEO’s cash incentive target.
Cash Incentive Target. A cash incentive target is the amount of cash incentive compensation that a NEO could earn if we achieve our performance goals. Targets are expressed as a percentage of the NEO’s salary. In reviewing targets, our Compensation Committee takes into consideration each NEO’s role and responsibilities, our financial performance projections, the budget for the coming year, pay at comparable companies, historical compensation levels and the resulting total target compensation that can be earned given the individual’s base salary and related target incentive opportunity. The cash incentive targets for each of our NEOs for fiscal 2020 as compared to fiscal 2019 and the primary reasons for any change are summarized below.
NEO
Fiscal
2020 Cash
Incentive
Target (% of
Salary)
Fiscal
2019 Cash
Incentive
Target (% of
Salary)
Primary Reasons for the Change
Aart J. de Geus240%240%N/A
Chi-Foon Chan240240N/A
Sassine Ghazi130120Move from co-manager to sole General Manager of the Design Group and associated increase in responsibilities; internal pay equity; market competitiveness; prior performance
Trac Pham10090Market competitiveness; prior performance
Joseph W. Logan150150N/A
John F. Runkel, Jr.7570Market competitiveness; prior performance
Threshold Funding Goal. On an annual basis, our Compensation Committee sets a threshold funding goal for the EIP as well as performance goals based on revenue, operating margin, and revenue backlog. If we fail to achieve our funding goal, no cash incentive payments will be earned under the EIP.
Performance Goals. Assuming the funding goal is achieved, we must still achieve at least a 90% average performance level for our Corporate Financial Goals, before any cash incentive payment may be earned. We believe the exclusive use of corporate performance metrics, rather than a mix of corporate and individual metrics, fosters teamwork among our NEOs and reflects the importance of company-wide performance to stockholder value.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Our Corporate Financial Goals and the rationale for these goals are summarized in the table below.
Corporate Financial GoalsRationale
Current fiscal year revenueIncentivizes revenue growth and rewards efforts to retain customers and expand our business
Current fiscal year non-GAAP operating marginImportant connection to our overall profitability in the current fiscal year
Future fiscal years revenue backlogIncentivizes future revenue growth and revenue predictability
In addition, the Compensation Committee sets a further revenue backlog goal called a Revenue Predictability Goal that, if fully achieved, can increase the funding in the EIP through a multiplier. We use revenue backlog capturing two subsequent fiscal years of revenue backlog to encourage our NEOs to address future revenue and revenue predictability, thereby rewarding contributions that have a multi-year impact.
Our Compensation Committee believes the consistent application of this blend of performance measures permits our NEOs to focus on sustained performance rather than short-term accomplishments and has contributed to our consistent revenue growth and profitability achievement.
The Compensation Committee generally sets the numeric goals for each EIP performance metric based on the operating plan approved by our Board of Directors.
FISCAL 2020 FUNDING GOAL, CORPORATE FINANCIAL GOALS, REVENUE PREDICTABILITY GOAL AND GOAL ACHIEVEMENT
Our fiscal 2020 funding goal's initial threshold was 70% of our fiscal 2020 non-GAAP operating margin goal(1), as we did not believe that our NEOs should have the right to earn a bonus unless this minimum level of profitability was obtained. We achieved our non-GAAP operating margin target of 28%.
Corporate Financial GoalsPerformance
Weight
Fiscal 2020
Achieved(%)
Fiscal 2020 Revenue
33.33%
image_1121.jpg
101%
Fiscal 2020 non-GAAP operating margin(1)
33.33%
image_1131.jpg
100%
Fiscal 2021 revenue backlog(2)
33.34%
image_1141.jpg
104.4%
Average Achievement101.8%

Revenue Predictability Goal
Fiscal 2020 Target(3)
Fiscal 2020
Achieved(%)
Fiscal 2022 revenue backlog(2)
102.8%
(1)Non-GAAP operating margin is GAAP operating margin adjusted to exclude (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) restructuring charges, (v) the effects of certain settlements, final judgments and loss contingencies related to legal proceedings, and (vi) the income tax effect of non-GAAP pre-tax adjustments.
(2)Revenue backlog for a particular year is the portion of committed orders not yet recognized as revenue but that we expect to be recognized in that particular year, measured as of the end of the current fiscal year.
(3)We consider our second-year revenue backlog target to be confidential, and the disclosure of this target would cause us competitive harm. In general, the Compensation Committee sets revenue backlog targets from year to year that it believes to be challenging but attainable with considerable effort by our NEOs and employees, and in the absence of significant deterioration in macroeconomic or broader industry conditions.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
We achieved strong financial results in fiscal 2020, with an average achievement of our three Corporate Financial Goals of 101.8%. We also performed well against our Revenue Predictability Goal, achieving 102.8% of our target, which resulted in the application of a multiplier to potential NEO cash incentive funding, as described below.
Corporate Financial Goals Payout Matrix. Each year, our Compensation Committee approves a payout matrix that determines, within boundaries established by the EIP, what percentage of cash incentive targets can be earned at each level of achievement of our Corporate Financial Goals. The EIP requires a minimum average performance achievement of 90% for our Corporate Financial Goals before our NEOs can earn any cash incentive payment.
The EIP is structured in this way to provide a limited payment opportunity when performance goals are narrowly missed. We believe this limits our exposure to excessive risk-taking that can arise with “all or nothing” performance conditions. We believe this minimum 90% average achievement level holds our NEOs to a higher level of performance when compared to standard industry practice. Our EIP also has a higher performance threshold than our broad-based employee incentive compensation plans to reinforce accountability at the leadership level.
OVERVIEW OF FISCAL 2020 CORPORATE FINANCIAL GOAL PAYOUT MATRIX
Percentage of Average Achievement of
Corporate Financial Goals(%)
Corporate Financial
Payout Factor(1)(%)
≥125%150 %
105120.2 
100100 
9067.5 
<90— 
(1)We round our average achievement to the nearest quarter percent and use linear interpolation to calculate the exact payout factor for achievement levels that fall in between levels specified in the matrix. Since we achieved our Corporate Financial Goals at an average of 101.8%, the Corporate Financial Payout Factor is 107.4% for fiscal 2020.
Revenue Predictability Goal Payout Matrix. Each year, our Compensation Committee also approves a matrix that determines the Revenue Predictability Payout Factor that will be applied at each level of achievement of the Revenue Predictability Goal. For fiscal 2020, achievement of 100% or less of the Revenue Predictability Goal would result in no increase to the payout determined by the other metrics established for the cash incentive award. Achievement above that level, however, could result in a Revenue Predictability Payout Factor of up to 150%, based on actual performance.
The Revenue Predictability Factor acts as a “multiplier” for the Corporate Financial Payout Factor and, regardless of the level of achievement of the Revenue Predictability Goal, no payment would be made under the EIP for fiscal 2020 if the minimum 90% average achievement level was not met under the Corporate Financial Goals.
OVERVIEW OF FISCAL 2020 REVENUE PREDICTABILITY GOAL PAYOUT MATRIX
Percentage of Average Achievement of Revenue
Predictability Goal(%)
Revenue Predictability
Payout Factor(1)(%)
≥125%150 %
110150 
105125 
100100 
≤90100 
(1)We round our average achievement to the nearest quarter percent and use linear interpolation to calculate the exact payout factor for achievement levels that fall between 100% to 110%. Since we achieved 102.8% of our Revenue Predictability Goal, the Revenue Predictability Payout Factor is 113.8% for fiscal 2020 with a straight-line interpolation being applied.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
EIP Payment Formula. After the end of our fiscal year, our Compensation Committee certifies whether the funding goal and performance goals were met and uses the following formula from the EIP to calculate potential cash incentive payments:
 
Potential Cash
Incentive
Payment
 = 
Cash
Incentive
Target
X
Corporate
Financial Payout
Factor
X
Revenue
Predictability
Payout Factor
(if applicable)
X
Corporate
Financial Goals
Multiplier
(if applicable)
 

Factor
How It Works
Objective
Levels for Fiscal 2020
Corporate Financial
Payout Factor
We calculate the average achievement of our three Corporate Financial Goals and match it with the corresponding Corporate Financial Payout Factor in our Payout Matrix (see above).
Each of the three Corporate Financial Goals is equally weighted to emphasize not only current fiscal year financial goals but also future revenue.
107.4% – due to average goal achievement of 101.8%.
Revenue Predictability Payout
Factor (if applicable)
If we achieve more than 100% of our Revenue Predictability Goal, the EIP multiplies potential cash incentive funding by a Revenue Predictability Payout Factor based on the level of overachievement. Under-performance does not decrease potential payments.
For fiscal 2020, the Revenue Predictability Payout Factor ranged from 100% to 150%.
Our Compensation Committee believes this factor encourages our NEOs to achieve a sustained and predictable future revenue stream.
113.8% – due to achieving 102.8% of our Revenue Predictability Goal.
CFG Multiplier (if applicable)
If the average achievement of our Corporate Financial Goals exceeds 100.0%, a multiplier is applied to potential cash incentive funding.
For fiscal 2020, the potential CFG Multiplier was 1.10.
Our Compensation Committee believes the CFG Multiplier encourages our NEOs to maximize their efforts to achieve outstanding results for our stockholders.
Applicable – due to average goal achievement of 101.8%, which exceeded 100.0%.
Cap:     The maximum individual award for each NEO is capped at 200% of the NEO's target.
The EIP Payment Formula above will not be applicable, and our NEOs will not earn any cash incentive payments under the EIP, if the funding goal is not achieved for the fiscal year.
Actual Fiscal 2020 Cash Incentive Payments. Actual cash incentive payments are only earned after our Compensation Committee has reviewed the potential cash incentive funding calculations under the objective EIP payment formula and considered other relevant information not incorporated into the formula, such as company and individual performance. The Compensation Committee is empowered to adjust potential cash incentive funding, regardless of whether any multiplier has been earned. In no event can an actual cash incentive payment to a NEO exceed 200% of the NEO’s cash incentive target.
Our Compensation Committee convened in late 2020 to discuss the fiscal 2020 performance of each of our NEOs, review potential cash incentive funding, consider other compensation actions taken in fiscal 2020, and determine the actual incentive payments. Based on our achievement of EIP performance goals, the calculation of cash incentive funding using the EIP Payment Formula yielded potential awards of 134.4% of our NEOs’ targets, which is based on:
 
134.4%
Potential
Cash Incentive
Payment
 = 
Cash
Incentive
Target
X
107.4%
Corporate
Financial Payout
Factor
X
113.8%
Revenue
Predictability
Payout Factor
X
1.10
CFG Multiplier
 
After considering a number of factors, including internal cost considerations, the Compensation Committee approved fiscal 2020 actual cash incentive payments under the EIP at 133.2% of target for all NEOs other than Mr. Ghazi, which was below the potential payout. The Compensation Committee approved a fiscal 2020 actual cash incentive payment of 160.1% for Mr. Ghazi to reflect his additional contributions in the fourth quarter of fiscal 2020 and the fact that his cash incentive target was not increased to reflect his new position in fiscal 2020.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
The table below shows the amount of the fiscal 2020 EIP awards that were earned, the target cash incentive payments, the cash incentive payments that would have been made based on the formulaic results described above (at 134.4% of target), and the actual cash incentive payments that were made as a result of the Compensation Committee’s decisions discussed above.
NEOTarget Cash
Incentive Payment($)
Calculated Potential
Cash Incentive Amount
Based on Performance
Achievement($)
Actual Cash
Incentive Payment($)
Difference between
Potential and Actual
Cash Incentive
Payment (%)
Primary Reasons for
the Change
Aart J. de Geus$1,296,000 $1,741,417 $1,625,000 -6.7 %Despite outstanding individual and company performance, payment amount was reduced to ensure internal pay equity as amount of reduction was used to compensate other NEOs
Chi-Foon Chan1,296,0001,741,4171,625,000-6.7 Despite outstanding individual and company performance, payment amount was reduced to ensure internal pay equity as amount of reduction was used to compensate other NEOs
Sassine Ghazi559,000751,121895,000+19.2Market competitiveness; move from co-manager to sole General Manager of the Design Group and associated increase in responsibilities, and subsequent promotion to COO, and individual performance in each role
Trac Pham475,000638,251715,000+12.0Market competitiveness; individual performance and contributions to company’s success
Joseph W. Logan675,000906,9881,015,000+11.9Market competitiveness; individual performance and contributions to company’s success
John F. Runkel, Jr.318,750428,300430,000+0.4Individual performance and contributions to company’s success

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Equity Awards
We believe that equity awards align the interests of our NEOs with the long-term interests of our stockholders by rewarding long-term value creation measured by our stock price and by providing retention incentives through multi-year vesting periods.
FISCAL 2020 EQUITY AWARDS – ANNUAL EQUITY AWARDS
Our Compensation Committee granted the following annual equity awards in the first fiscal quarter of fiscal 2020 to our NEOs under our 2006 Employee Plan:
ANNUAL EQUITY AWARDS
 
image_1231.jpg
Annual performance-based restricted stock units (Annual PRSUs), which are eligible to vest only upon the achievement of pre-established performance criteria. Once earned, the award is further subject to time-based vesting in three equal annual installments thereafter, resulting in a total vesting period of four years, which helps to hold NEOs accountable for their decision making given that the Annual PRSUs are directly subject to increases and decreases in our stock price, further aligning NEO and stockholder interests.
Stock options with time-based vesting, which vest over four years with 25% of the shares vesting on the one-year anniversary of the grant date, and the remaining shares vesting quarterly thereafter. Stock options encourage long-term performance as they are only valuable if our stock price increases over time, as the awards vest. Accordingly, the Compensation Committee considers stock options, as well as PRSUs, to be performance-based compensation.
The Compensation Committee believes this approximately 50/50 ratio is appropriate for our annual equity awards because it encourages our NEOs to focus both on near-term results, by requiring the achievement of a near-term performance condition for the PRSUs to vest, and on long-term value creation, since stock options and PRSUs once earned, reward sustained increases in our stock price, though only to the extent the employee vests in the award by remaining in service for an additional three years.
NEO
Stock Options(#)(1)
PRSU Shares(#)(2)
Grant Date Fair
Value of
Equity Awards($)
Aart J. de Geus74,64116,927$4,600,066 
Chi-Foon Chan74,64116,9274,600,066 
Sassine Ghazi43,8119,9362,700,118 
Trac Pham43,8119,9362,700,118 
Joseph W. Logan40,5669,2002,500,117 
John F. Runkel, Jr.25,1515,7041,550,075 
(1)Stock options vest as to 25% of the shares subject to the option grant on the first anniversary of the grant date and as to 3/48ths of the shares subject to the option grant quarterly thereafter.
(2)As discussed further under “Annual PRSUs Terms” below, these Annual PRSUs were subject to a non-GAAP net income performance goal of $790.0 million for fiscal 2020.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Target Value. The size of the annual equity awards granted to each NEO in the first fiscal quarter is based on an estimated target dollar value. The Compensation Committee considers each NEO’s role and responsibilities, historical compensation levels, the impact of award size on our burn rate, pay at comparable companies and internal pay equity in determining awards. The Compensation Committee does not have a specific formula that weights these factors. Our equity budget for the coming year is also a critical factor, as the Compensation Committee is mindful of potential stockholder dilution and internal pay equity between our NEOs and employees in general when approving grants.
The target dollar value was converted into a number of shares based on estimated conditions on the grant date, as described in “Equity Element Allocation” below. The grant date fair value, which is disclosed in the table above and in the subsection titled Summary Compensation Table within the Executive Compensation Tables section below reflects the accounting value on the grant date. The table sets forth the initial target value of each NEO’s equity grants compared to the last year and the primary reasons for the change.
Initial Target Dollar Value for Annual Equity Grants of all NEOs
NEOFiscal 2020 Approved
Target Dollar Value
($)
Fiscal 2019 Approved
Target Dollar Value
($)
Difference from Fiscal 2019(%)Primary Reasons for the Change
Aart J. de Geus$4,600,000 $4,450,000 +3.4%Market competitiveness;
prior performance
Chi-Foon Chan4,600,000 4,450,000 +3.4Market competitiveness;
prior performance
Sassine Ghazi(1)
2,700,000 1,450,000 +86.2Move from co-manager to sole General Manager of the Design Group and associated increase in responsibilities; internal pay equity; market competitiveness; prior performance
Trac Pham2,700,000 2,350,000 +14.9Market competitiveness; prior
performance; internal pay equity
Joseph W. Logan2,500,000 2,000,000 +25.0Market competitiveness; prior
performance; internal pay equity
John F. Runkel, Jr.1,550,000 900,000 +72.2Market competitiveness; prior
performance; internal pay equity
(1)Does not include Mr. Ghazi’s promotional grants, which are discussed in detail below.
Equity Element Allocation. After choosing the estimated target dollar value for each NEO’s annual equity awards, the Compensation Committee sought to allocate the dollar value equally between stock options and PRSUs.
To determine the target number of Annual PRSU shares which were granted to the NEOs in December 2019, the Compensation Committee used our closing stock price on the grant date to calculate an award worth half of the estimated target equity value. For stock options, the Compensation Committee used a Black-Scholes option-pricing model to estimate the fair value of a stock option share on the expected grant date. Because the grants were based on estimates of conditions on the grant date, the actual grant date fair value of the PRSUs and stock options reflected in the Summary Compensation Table below is different, as it is based on our value on the effective grant date.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Annual PRSU Terms. As in past years, the Compensation Committee selected a non-GAAP net income goal for our fiscal 2020 Annual PRSUs because it is an important measure of our success that is distinct from other metrics used in our EIP, such as the revenue backlog goals focused on our future revenue streams. Non-GAAP net income is GAAP net income adjusted to exclude (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) restructuring charges, (v) the effects of certain settlements, final judgments and loss contingencies related to legal proceedings, and (vi) the income tax effect of non-GAAP pre-tax adjustments.
Our fiscal 2020 goal was increased above our fiscal 2019 goal to a non-GAAP net income of $790 million, which we believe was established at a level that would be appropriately difficult to attain.
Our Annual PRSUs generally vest over four years. If the performance goal is achieved, only 25% of the Annual PRSU shares that are eligible to vest based on such performance will vest at the end of the performance year. The remaining Annual PRSU shares that are eligible to vest generally vest annually over the following three years, provided the NEO continues to remain employed by Synopsys, which encourages retention as well as long-term focus and accountability.
Each Annual PRSU grant is made at the maximum number of shares that can be earned if we fully achieve our goal and will be reduced for actual performance below it. There is no increase in shares for overachievement. The actual number of shares that are eligible to vest depends on the level of achievement of our goal, and achievement below 95% results in the cancellation of the entire award.
Adjustments. With respect to all PRSU awards (including the Fiscal 2019 Special PRSU Grants described below), the Compensation Committee generally may adjust the performance goal targets as permitted by the 2006 Employee Plan on or before the last day of the applicable performance period in order to give effect to acquisitions completed during the performance period or if it determines business conditions so warrant. No such adjustments were made in fiscal 2020 with respect to PRSU awards.
PERCENTAGE ACHIEVEMENT OF PRSU NON-GAAP NET INCOME PERFORMANCE GOAL
p51_barhartxprsunon-gaapx0a.jpg
If we achieve between 95% and 100% of our performance goal, then between 50% and 100% of the Annual PRSU award is eligible to vest. The exact number of shares eligible to vest is calculated according to the following matrix approved by the Compensation Committee.
Percentage Achievement of
Performance Goal(%)
Percentage of Annual PRSUs Eligible to Vest(%)
≥100%100 %
9998 
9894 
9786 
9670 
9550 
<95— 
The Compensation Committee rewards performance levels between 95% and 100% to provide our NEOs with a partial award for substantially achieving our non-GAAP net income goal. The Compensation Committee believes this design limits excessive risk-taking that can be encouraged by a single “all or nothing” performance condition.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Fiscal 2020 PRSU Non-GAAP Net Income Achievement. We achieved 109.4% of our fiscal 2020 non-GAAP net income performance goal of $790 million, and accordingly, 25% of our NEOs’ fiscal 2020 Annual PRSUs vested on December 10, 2020. The remaining 75% of the shares are scheduled to vest in three equal annual installments beginning on December 8, 2021, as long as the NEO provides continuous services to us.
NEOTarget PRSU
Shares at Grant(#)
Resulting PRSU Shares
Earned and Eligible for Vesting(#)
Aart J. de Geus16,92716,927
Chi-Foon Chan16,92716,927
Sassine Ghazi9,9369,936
Trac Pham9,9369,936
Joseph W. Logan9,2009,200
John F. Runkel, Jr.5,7045,704
PAYOUT OF FISCAL 2019 SPECIAL PRSU GRANTS
In October 2019, the Compensation Committee approved special, long-term PRSU grants to our NEOs (Fiscal 2019 Special PRSU Grants) that were designed to (1) provide the NEOs with an additional incentive to achieve our substantial operating margin goals over the next three years, (2) recognize focused effort to achieve market expansion and increased profit from fiscal 2020 through fiscal 2022, and (3) align actions across our executive team to help ensure enterprise-wide success. These awards may be earned, if at all, based on Synopsys non-GAAP operating margin (as defined above under “Cash Incentive”) achievement during each of fiscal 2020, 2021 and 2022.
At the time of the grant of the Fiscal 2019 Special PRSU Grants, the Compensation Committee established a non-GAAP operating margin goal for each of fiscal 2020, 2021 and 2022. Following the end of each such fiscal year, a portion of the Fiscal 2019 Special PRSU Grants may be earned, generally subject to a specified non-GAAP operating margin target for each fiscal year, as determined by the Compensation Committee, and the NEO’s continuous employment with Synopsys through the date of such determination (the Certification Date), as follows:
if the fiscal 2020 non-GAAP operating margin goal* is achieved, 1/3 of the Fiscal 2019 Special PRSU Grants (the 2020 PRSUs) will vest;
if the fiscal 2021 non-GAAP operating margin goal* is achieved, 1/3 of the Fiscal 2019 Special PRSU Grants (the 2021 PRSUs), plus the 2020 PRSUs (to the extent not previously earned), will vest; and
if the fiscal 2022 non-GAAP operating margin goal* is achieved, 1/3 of the Fiscal 2019 Special PRSU Grants, plus the 2020 PRSUs and 2021 PRSUs (to the extent not previously earned), will vest.
*The non-GAAP operating margin goal increases in difficulty, reinforcing the stretch nature of the overall goals as well as the importance of sustainable profit performance each year to achieve all three goals.
The Fiscal 2019 Special PRSU Grant vesting schedule is illustrated in the table below:
SPECIAL PRSU GRANT VESTING
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PRSUs that are not earned and vested as of the final Certification Date will be forfeited.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Fiscal 2020 PRSU Non-GAAP Operating Margin Goal Achievement. We achieved our fiscal 2020 non-GAAP operating margin goal of 28.0%, and accordingly, 1/3 of our NEOs’ Fiscal 2019 Special PRSU Grants vested on December 10, 2020. Each NEO’s target number of PRSU shares and the number of shares that vested are set forth in the table below:
NEOTarget
PRSU Shares(#)
PRSUs that Vested
on 12/10/20(#)
PRSUs Remaining
to be Earned(#)
Aart J. de Geus24,732 8,24416,488
Chi-Foon Chan24,732 8,24416,488
Sassine Ghazi6,948 2,3164,632
Trac Pham13,061 4,3548,707
Joseph W. Logan11,116 3,7057,411
John F. Runkel, Jr.4,447 1,4832,964
FISCAL 2020 EQUITY AWARDS – OTHER AWARDS
In September 2020, the Compensation Committee granted promotional equity awards to Mr. Ghazi, which consisted of a stock option grant, a service based restricted stock unit award, and a PRSU award, with an aggregate target value of approximately $2,315,500, to acknowledge and recognize the importance of his promotion to Chief Operating Officer and the expansion of his scope of responsibilities. The Compensation Committee considers Mr. Ghazi’s stock option grant and PRSU award, which comprise more than 2/3 of the aggregate target value of his promotional grants, to be performance-based compensation.
MR. SASSINE GHAZI’S PROMOTION GRANTS
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Time-vested Awards. Mr. Ghazi’s stock option, which has an initial target value of $750,000, vests over four years, with 25% of the shares vesting on the one-year anniversary of the grant date, and the remaining shares vesting quarterly thereafter. Mr. Ghazi’s RSU award, which has an initial target value of $750,000, vests annually over four years. Each award vests, subject to his continued service with us, and the value of each such award is tied to our stock performance.
PRSU Award. Mr. Ghazi’s promotional PRSU award, which has an initial target value of $815,500, was granted to him to incentivize him to drive Synopsys towards increased profitability and achieve the company’s financial ambitions, thus ensuring tight alignment with stockholder expectations and value creation for Synopsys.
In determining the design of Mr. Ghazi’s promotional PRSU award, the Compensation Committee considered the financial performance goals associated with the Fiscal 2019 Special PRSU Grant and the impact of a newly appointed COO on the achievement of such goals. Consideration was also given to Mr. Ghazi’s directive to drive significant growth across his scope of responsibilities and achieve rigorous non-GAAP operating margin targets for the business. Consequently, the Compensation Committee determined that Mr. Ghazi’s promotional PRSU award would vest based on the same operating margin goals that apply to the remaining two tranches of his Fiscal 2019 Special PRSU Grant, subject to his continuous employment with Synopsys through the date the Compensation Committee determines that each such operating margin goal is achieved:
50% of Mr. Ghazi’s PRSU award will vest following the end of fiscal 2021 (the 2021 promotional PRSUs), if the fiscal 2021 non-GAAP operating margin goal for his Fiscal 2019 Special PRSU Grant is achieved, and
The remaining 50% of Mr. Ghazi’s PRSU award, plus the 2021 promotional PRSUs (to the extent not previously earned), will vest if the fiscal 2022 non-GAAP operating margin goal for his Fiscal 2019 Special PRSU Grant is achieved.
The table below sets forth the number of shares subject to each of Mr. Ghazi’s awards and the aggregate grant date fair value of such awards.
NEO
Promotional
Stock Option(#)
Promotional
RSUs(#)
Promotional
PRSUs(#)
Grant Date Fair
Value of
Equity Awards($)
Sassine Ghazi13,785 3,528 3,836 $2,315,883 
No other NEOs received new-hire, promotional or special recognition equity awards in fiscal 2020.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Other Benefits
General Health, Welfare and Other Benefit PlansPerquisites and Other Benefits
Our NEOs are eligible to participate in a variety of employee benefit plans on the same terms as our other employees, including medical, dental and vision care plans, life and disability insurance, our tax-qualified 401(k) plan, and our Employee Stock Purchase Plan. We believe these benefits are consistent with benefits provided by our peer group and help us to attract and retain high quality executives.
No executive perquisites or other special executive benefits were given to our NEOs in fiscal 2020, except for Mr. Ghazi who received certain commuting benefits. In general, Synopsys and our Compensation Committee do not provide perquisites to our NEOs.
Deferred Compensation Plans
We offer a deferred compensation program that allows our NEOs and other highly compensated individuals to save a portion of their compensation on a tax-deferred basis to remain competitive with a number of our peer companies and because the tax benefit it offers comes at a relatively low cost to us. The program is currently administered through two deferred compensation plans (one of which is a legacy plan and closed to new participants). Under these plans, our NEOs and other highly compensated employees may elect to defer up to 50% of their salaries and up to 100% of their cash incentive compensation.
Severance and Change of Control Benefits
Executive Change of Control Severance Benefit Plan. We maintain an Executive Change of Control Severance Benefit Plan (Change of Control Plan) that was approved by our Board of Directors in March 2006 and most recently amended in December 2016, primarily to reflect changes in applicable law and administrative practices. Each of our current executive officers is covered under the Change of Control Plan, except Drs. de Geus and Chan, whose benefits are described below. The Change of Control Plan provides for limited cash and equity benefits in the event an executive’s employment is terminated in connection with a change of control of Synopsys. The Compensation Committee believes these incentives will help us retain our executives, and therefore maintain the stability of our business, during the potentially volatile period accompanying a change of control. The Compensation Committee believes the benefits are also comparable to benefits offered by our peer group, which helps us attract talented executives and maintain a consistent management team.
The Change of Control Plan only provides benefits if there is a “double trigger” to preserve morale and productivity, and to encourage executive retention in the event of a change of control. In addition to requiring a change of control for Synopsys, benefits are only provided if either (1) the eligible executive is involuntarily terminated without cause during the 30 days before or 12 months after the change of control; or (2) there is a constructive termination of the executive within 12 months after the change of control.
Such benefits are conditioned on the departing executive signing a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits to mitigate any potential employer liability and avoid future disputes or litigation.
Our potential payment obligations under the Change of Control Plan are described in the subsection titled “Potential Payments upon Termination of Employment or Change of Control” in the “Executive Compensation Tables” section below.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Executive Severance Benefit and Transition Plan. In February 2021, the Compensation Committee approved the Executive Severance Benefit and Transition Plan (Severance Plan) to offer severance benefits to designated key employees outside of a change of control, subject to certain conditions, including the provision of part-time employment at the sole discretion and request of the Compensation Committee, compliance with certain non-compete, non-solicitation and non-disparagement provisions, and the execution of a general release of claims against Synopsys. Each of our current executive officers is covered under the Severance Plan, except Drs. de Geus and Chan. The Severance Plan provides for (1) a cash severance payment equal to 12 months of base salary and COBRA premiums, (2) six months of vesting acceleration for equity awards that remain subject only to time-based vesting conditions, and (3) the opportunity to earn a pro-rated cash incentive payment under the EIP in the event an executive officer experiences a qualifying termination of employment. The Compensation Committee believes these incentives will help us retain our executives, because they are competitive to benefits offered by our peer group, and are subject to conditions, which benefit Synopsys.
Severance benefits are only payable outside of a change of control for (a) an involuntary termination without cause or (b) a voluntary resignation for good reason.
All such benefits are conditioned on the departing executive signing a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits to mitigate any potential employer liability and avoid future disputes or litigation. Each executive officer must also comply with certain restrictive covenants, including non-compete, non-solicitation and non-disparagement requirements. Further, an executive officer may be required to serve as a part-time employee for up to 9 months (at a greater than 50% rate with proportionately reduced base salary) at the sole discretion and request of the Company to ensure a smooth transition. Any cash incentive payment under the EIP will be pro-rated based on the number of months the executive served as a full-time employee during the applicable performance period and will be earned based on actual results achieved or if lower, target.
Severance and Change of Control Arrangements for Dr. Aart de Geus and Dr. Chi-Foon Chan. Drs. de Geus and Chan are not covered by the Change of Control Plan described above but are eligible for severance and change of control benefits through their respective employment agreements, which were entered into in October 1997 and most recently amended in December 2016, primarily to reflect changes in applicable law and administrative practices. As with our other NEOs, we believe that the change of control benefits we offer are reasonable, consistent with benefits offered by our peer group, and help retain the focused services of Drs. de Geus and Chan which are only provided for an involuntary termination, because the benefits help us remain competitive for their services, are comparable to the benefits provided by our peer group to similarly situated executives, and are reasonable in amount.
The severance and change of control provisions are the same in each agreement. Such change of control benefits also require a “double trigger”: they are only provided for (1) an involuntary termination of employment without cause within 24 months following a change of control or (2) a voluntary resignation of employment for good reason within 24 months following a change of control. Severance benefits are only payable for (a) an involuntary termination without cause or (b) a voluntary resignation for good reason.
Such benefits are conditioned on the departing executive signing a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits.
Our potential payment obligations under the employment agreements of Drs. de Geus and Chan are described in the subsection titled “Potential Payments upon Termination of Employment or Change of Control” in the “Executive Compensation Tables” section below.
Equity Plans. If we are acquired or involved in a similar corporate transaction, and the surviving company does not assume, replace or otherwise continue our outstanding equity awards, our equity incentive plans generally provide that all employee awards will fully vest. We provide this double trigger benefit to all employees who hold equity awards under our plans to promote the stability and focused service of our workforce during a potentially uncertain time. Our Compensation Committee believes this benefit encourages our employees to work diligently towards the completion of a transaction that would potentially maximize stockholder value, even when our employees’ own equity awards would not survive the transaction.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Fiscal 2021 NEO Target Compensation Decisions
Our overall compensation philosophy for fiscal 2021 strongly emphasizes pay for performance. After considering a number of factors, including our fiscal 2020 performance, preliminary fiscal 2021 outlook, and the positive results of our 2020 say-on-pay vote, the Compensation Committee decided to use the same metrics as fiscal 2020 in setting performance goals under our EIP and for our PRSUs, and set the levels of achievement based on our fiscal 2021 corporate financial plan.
At its meetings in late 2020, the Compensation Committee decided to adjust the compensation of our NEOs for fiscal 2021 to reflect Synopsys' sustained strong performance and to improve the competitiveness and holding power of the target direct compensation of our NEOs relative to our peer group, which has evolved in recent years to reflect our growth. Other than our COO, such compensation adjustments were limited to increasing the target value of our NEOs’ annual equity awards, thereby increasing the proportion of their long-term performance-based and/or at-risk compensation and further incenting their performance over the long-term. In the case of Mr. Ghazi, he received an increase in both his target equity and cash compensation based on the foregoing considerations as well as his promotion to COO.
NEOIncrease in
Fiscal 2021
Cash Target
Compensation
from Fiscal 2020(%)
Increase in
Fiscal 2021
Equity Target
Compensation
from Fiscal 2020(%)
Increase in
Fiscal 2021
Total Target
from Fiscal 2020(%)
Primary Reasons for the Change
Aart J. de Geus—%+52.2%+37.3%Market competitiveness; holding power; prior performance.
Chi-Foon Chan+52.2+37.3Market competitiveness; holding power; prior performance
Sassine Ghazi+26.4+85.2+69.4Promotion to COO with significantly increased responsibilities; market competitiveness; holding power in light of new role; internal pay equity
Trac Pham+29.6+21.9Market competitiveness; holding power; prior performance; internal pay equity
Joseph W. Logan+40.0+27.6Market competitiveness; holding power; prior performance; internal pay equity
John F. Runkel, Jr.+41.9+28.3Market competitiveness; holding power; prior performance; internal pay equity
Our Compensation Committee also determined to grant 50% of each NEO’s target annual equity award value in the form of PRSUs, 25% in the form of stock options, and 25% in the form of time-based RSUs. The Compensation Committee made this change to better align with market practice and to help manage dilution to existing stockholders as RSUs result in Synopsys granting fewer shares of common stock than through stock options of equivalent grant date fair value. RSUs also provide an important tool for us to retain and incentivize our highly sought after NEOs since the value of the awards will be delivered to our NEOs over a four-year period, subject to continued service with us, and become more valuable as our stock price increases, which benefits all stockholders.
For fiscal 2021, we have maintained our pay for performance philosophy, with approximately 94% of Target TDC for our co-CEOs being tied to performance, and 90% of Target TDC for our other NEOs, on average, as a group, being tied to performance.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Our Compensation Decision-making Process
Role of Compensation Committee
Our Compensation Committee is responsible for determining NEO compensation. The Compensation Committee is comprised of three independent directors and meets regularly throughout the year to review and discuss, among other items, our compensation philosophy, changes in compensation governance and compliance rules and best practices, and the composition of our peer group for pay comparisons. In late calendar year 2020, the Compensation Committee reviewed and approved:
The level of achievement of financial performance goals for the prior fiscal year;
Annual incentive compensation earned, if any, based on the prior fiscal year achievement;
Annual financial performance goals for the current fiscal year; and
The level and mix of NEO target compensation for the current fiscal year.
Role of Compensation Committee Consultant
Our Compensation Committee directly retained the services of Aon Rewards Solutions (Radford) as an independent compensation consultant for fiscal 2020. The Compensation Committee conducts an annual assessment of its consultant’s performance and re-appoints its consultant each year. Radford has served as the Compensation Committee’s consultant since September 2006. The Compensation Committee may replace Radford or hire additional consultants at any time. The Compensation Committee retains sole authority to appoint and compensate Radford and to oversee its work for the Compensation Committee. Synopsys pays the fees for the services provided by Radford to the Compensation Committee. In fiscal 2020, the services provided by Radford included:
Assisting in the selection of our peer group companies for fiscal 2021 (and with the determination of our fiscal 2020 peer group in fiscal 2019);
Providing and analyzing compensation market data;
Helping the Compensation Committee interpret compensation market data;
Assisting in the review of recent governance trends for potential policy updates;
Advising on the reasonableness of our NEO compensation levels and programs;
Assisting in the review of non-employee director compensation, including providing compensation market data;
Assisting in the review of the NEO compensation disclosure in this Proxy Statement;
Conducting a detailed review of our cash and equity compensation plans to provide an independent view of the risks associated with our compensation programs, including those for our NEOs; and
Attending each Compensation Committee meeting, including meeting with the Compensation Committee in private sessions, without management present.
In addition to the approximately $125,000 in fees we paid Radford for services provided to our Compensation Committee, we also paid $133,269 in fees to Radford during fiscal 2020 for access by our Human Resources department to Radford’s general employee compensation benchmarking data, access to immigration prevailing wage reports, and benefits-related work in Ireland. The decision to engage Radford for these services was made by management and approved by the Compensation Committee.
After considering the factors set forth in Rule 10C-1(b)(4) under the Exchange Act and Nasdaq Listing Rule 5605(d)(3)(D), including a review of the access fees described above and Radford’s representations to the Compensation Committee regarding each factor, the Compensation Committee determined that Radford was independent.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Peer Group Comparisons
Our Compensation Committee reviews compensation data from a specific group of companies that are similar to us in scale and organizational complexity in considering the compensation of our NEOs. At the time of the selection in April 2019, the Compensation Committee selected peer group companies for fiscal 2020 with an emphasis on companies that (1) were business or labor market competitors in the software (excluding gaming and e-commerce) or fabless semiconductor industries; (2) generated annual revenues between approximately 0.5 and 2.5 times Synopsys’ revenue (approximately $1.7 billion to $8.3 billion); and (3) had a market capitalization between approximately 0.5 and 3.0 times Synopsys’ market capitalization (approximately $7.5 billion to $46.5 billion).
Fiscal 2020 Peer Group
Advanced Micro Devices, Inc.NortonLifeLock Inc.
Akamai Technologies, Inc.Nuance Communications, Inc.
ANSYS, Inc.Open Text Corporation
Autodesk, Inc.PTC Inc.
Cadence Design Systems, Inc.Red Hat, Inc.
Citrix Systems, Inc.ServiceNow, Inc.
Intuit Inc.Teradata Corporation
Keysight Technologies Inc.Trimble Navigation Ltd.
Marvell Technology Group Ltd.Workday Inc.
Microchip Technology Inc.Xilinx, Inc.
Teradata Corporation was added to the fiscal 2020 peer group because they are similar in size to us, is a company with which we compete for talent, and operates in a similar industry. CA Technologies was acquired by Broadcom Inc. in November 2018 and was therefore removed from the peer group for fiscal 2020.
The Compensation Committee uses peer group comparisons to measure the competitiveness of our compensation practices. Pay at comparable companies is just one of the factors in the Compensation Committee’s pay decisions, which also take into account individual performance, an NEO’s level of experience and responsibilities, internal pay equity, our compensation budget, historical compensation levels, and other factors that are deemed to be important based on the Compensation Committee’s business judgment.
For fiscal 2020, with respect to NEOs other than our co-CEOs, the Compensation Committee had access to market data that captured a range of pay. The Compensation Committee examined the range of pay to provide for meaningful differentials in pay levels that represented differences in the criticality and performance of each role across companies, and also reflected the full range of competitive pay at our peer companies without focusing on extreme outliers.
Role of Management
Our Compensation Committee discusses NEO performance assessments and compensation targets with Dr. de Geus and our Human Resources and Facilities Officer. To assess co-CEO performance, the Compensation Committee oversees a comprehensive assessment process that includes feedback from our Board of Directors and members of senior management and is facilitated by our Human Resources and Facilities Officer. We also have an executive compensation team that provides background on company budgetary constraints and internal pay comparisons to help the Compensation Committee understand Radford’s recommendations in those contexts. No NEO is present for Compensation Committee decisions related to their individual compensation.
Tally Sheets
Prior to approving target compensation levels for the upcoming fiscal year, our Compensation Committee reviews tally sheets for each NEO to review how each core element of compensation relates to other elements and to total pay. The tally sheets summarize Target TDC, as well as potential payments upon change of control or, if applicable, involuntary termination. The tally sheets also summarize historical compensation for our NEOs, allowing the Compensation Committee to review NEO total pay that could be earned over time.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Annual Say-on-Pay Vote
Our stockholders have the opportunity to cast an annual advisory vote on our NEO compensation (say-on-pay vote). Last year’s proxy statement detailed our fiscal 2019 NEO compensation, as well as certain elements of our fiscal 2020 NEO compensation.
Approximately 94% of voted shares (cast for or against) approved our NEO compensation as disclosed in last year’s proxy statement. Although the vote is non-binding, the Compensation Committee considers the results of the say-on-pay vote when making compensation decisions, allowing our stockholders to provide input on our compensation philosophy, policies and practices. The Compensation Committee believes that our historical voting results demonstrate strong support for its decision to maintain a similar compensation philosophy and structure each year. Accordingly, we did not make any changes to our compensation policies and practices that were specifically driven by the outcome of the say-on-pay vote.
Stock Ownership Guidelines
We have maintained stock ownership guidelines since fiscal 2003, which require individuals employed in certain specified positions to own certain levels of stock to align their interests with those of our stockholders, and to promote accountability and mitigate excessive risk taking in long-term decision making. Our Compensation Committee reviews those guidelines periodically in accordance with best practices. Under our guidelines, covered individuals are encouraged to achieve the recommended stock ownership level within four years. Such individuals may accumulate shares of our common stock through stock option exercises, purchases under our Employee Stock Purchase Plan, through open market purchases made in compliance with applicable securities laws, or through any other equity plans that we may adopt from time to time. In fiscal 2020, the stock ownership recommendations for our current NEOs were:
NEOShare Number(#)
Aart J. de Geus50,000
Chi-Foon Chan50,000
Sassine Ghazi10,000
Trac Pham10,000
Joseph W. Logan10,000
John F. Runkel, Jr.10,000
In December 2020, to better align the stock ownership levels of our NEOs with market practices and given their current ownership levels relative to our peers, our Compensation Committee and our Board of Directors approved revised stock ownership guidelines requiring each of our NEOs to hold the number of shares set forth below; provided however, that if the value of any NEO’s shares drops below the applicable Minimum Value set forth below, such NEO will be required to hold the number of shares equal to the Minimum Value.
NEOShare Number(#)Minimum Value($)
Aart J. de Geus25,000$4,400,000 
Chi-Foon Chan25,0004,400,000
Sassine Ghazi12,5002,200,000
Trac Pham6,5001,100,000
Joseph W. Logan6,5001,100,000
John F. Runkel, Jr.6,5001,100,000
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Other Important Compensation Practices
Name of PolicyConsiderationsMaterial Features
Anti-Hedging Policy
Hedging insulates executives from stock price movement and reduces alignment with stockholders.
All employees, including our NEOs, and our directors are prohibited from engaging in the following types of hedging transactions involving our common stock: (1) selling short any Synopsys stock or other Synopsys security; and (2) buying or selling puts or calls or other derivatives on Synopsys securities, or otherwise entering into any hedging arrangements involving Synopsys securities.
Anti-Pledging Policy
Pledging raises potential risks to stockholder value, particularly if the pledge is significant.
Our insider trading policy prohibits our employees, including our NEOs, and our directors from holding our common stock in a margin account or pledging it as collateral for a loan.
Equity Grant Timing Policy
Equity award grants should not be timed to take advantage of the release of material nonpublic information.
Executives are generally granted equity awards at the beginning of each fiscal year at a Compensation Committee meeting that is typically scheduled more than a year in advance, and on a date when the option exercise price reflects a fully informed market price.
New-hire, promotional, or special recognition equity grants for executives are made shortly after the occurrence of the applicable event but not during closed windows.
Burn Rate Policy
Dilution to our existing stockholders should be closely managed.
The Compensation Committee approves an annual gross equity budget to achieve a gross burn rate that approximates the average burn rate for peer group companies and the software and services industry more generally.
Our gross share usage was limited to 1.8% for fiscal 2020.
Clawback Policy
We should be able to recoup cash and equity awards in the event of a substantial restatement of our financial statements.
We can “clawback” cash and equity compensation paid to covered employees in the event of a substantial restatement of our financial statements that are filed with the SEC if less compensation would have been earned by the employee based on the restated financial results.
Conclusion
We remain strongly committed to our pay for performance philosophy. As a result of the compensation program described above, the majority of each NEO’s compensation depends upon the achievement of our business goals. Our Compensation Committee gives careful consideration to each core element of direct compensation for each NEO. The Compensation Committee believes our NEO compensation program is effective in advancing our goals, reasonable in light of the programs of our peers, and responsible in encouraging our NEOs to strive for crucial innovation, business growth and outstanding stockholder returns, without promoting unnecessary or excessive risks.
Compensation Risk Assessment
Our Compensation Committee aims to establish company-wide compensation policies and practices that reward contributions to long-term stockholder value and do not promote unnecessary or excessive risk-taking. In furtherance of this objective, in late calendar year 2020, our Compensation Committee conducted an assessment of our company-wide compensation arrangements. The assessment process included, among other things, a review of:
Our compensation philosophy;
Compensation at peer group companies;
Our core compensation element mix; and
The terms and payments under our cash and equity incentive plans.

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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
As part of that review, our Compensation Committee asked Radford, its independent compensation consultant, to perform a detailed review of our cash and equity compensation plans in comparison to market practices to determine if there were any areas of risk and recommend appropriate remediation policies (if necessary).
The Compensation Committee considered the following, among other factors, when determining the level of risk:
Our revenue model and our cash incentive plan that is available to both executives and non-executive employees encourage our employees to focus on creating a stable, predictable stream of revenue over multiple years, rather than focusing on current year revenue at the expense of succeeding years.
The allocation of compensation among our core compensation elements effectively balances short-term performance and long-term performance.
Our cash and equity incentive awards focus on both near-term and long-term goals and, in the case of equity incentive awards, provide for compensation over a four-year period, to encourage our employees to remain focused on our performance beyond the immediate fiscal year.
The performance goals for our cash and equity incentive awards use a variety of performance metrics, which diversifies the risk associated with any one metric or aspect of performance.
Our cash and equity incentive awards contain a range of performance levels and payouts to discourage employees from taking risky actions to meet a single target with an all-or-nothing result of compensation or no compensation.
Our Executive Incentive Plan caps cash incentive payments at a maximum award size. In addition, the Compensation Committee retains discretion to adjust our employees’ incentive payments under the plan.
Our cash incentive payments and equity awards are subject to a clawback policy to recover compensation in the event of a substantial financial restatement.
Our executives are encouraged to hold a meaningful number of shares of our common stock under our stock ownership policy.
Based upon this assessment, our Compensation Committee believes that our company-wide compensation policies and practices are reasonable and encourage appropriate behaviors without creating risks that are reasonably likely to have a material adverse effect on us.
Compensation Committee Report*
The Compensation and Organizational Development Committee (the Compensation Committee) has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on the Compensation Committee’s review of, and the discussions with management with respect to, the Compensation Discussion and Analysis, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in our Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
The foregoing report is provided by the following directors, who constitute the Compensation Committee:
COMPENSATION AND ORGANIZATIONAL DEVELOPMENT COMMITTEE
Chrysostomos L. “Max” Nikias, Chair
Janice D. Chaffin
Bruce R. Chizen
*This report shall not constitute “soliciting material,” shall not be deemed “filed” with the Securities and Exchange Commission, and is not to be incorporated by reference into any of our other filings under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, except to the extent we specifically incorporate this report by reference therein.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Compensation Committee Interlocks and Insider Participation
During fiscal 2020, Bruce R. Chizen, Chrysostomos L. “Max” Nikias and Janice D. Chaffin served on the Compensation Committee. None of the members of the Compensation Committee is nor was, during fiscal 2020, an officer or employee of Synopsys, none of the members of the Compensation Committee was formerly an officer of Synopsys, and none had or have any relationships with Synopsys that are required to be disclosed under Item 404 of Regulation S-K. None of our executive officers serves or, during fiscal 2020, served as a member of a board of directors or compensation committee of any entity that has or, during fiscal 2020, had one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
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PROPOSAL 3 — Advisory Vote to Approve Executive Compensation
Executive Compensation Tables
Summary Compensation Table
The following table shows compensation awarded to, paid to, or earned by each of our NEOs for each of the last three or fewer fiscal years during which such individuals were determined to be NEOs. Our NEOs for fiscal 2020 consisted of: Dr. de Geus and Dr. Chan, our co-Chief Executive Officers; Mr. Ghazi, our Chief Operating Officer; Mr. Pham, our Chief Financial Officer; Mr. Logan, our Sales and Corporate Marketing Officer; and Mr. Runkel, our General Counsel and Corporate Secretary.
Name and Principal PositionYearSalary
($)
Bonus
($)
Stock
Awards
($)(1)(2)
Option
Awards
($)(1)
Non-Equity
Incentive Plan
Compensation
($)(3)
All Other
Compensation
($)(4)
Total
($)(5)
Aart J. de Geus
Co-Chief Executive Officer
and Chairman of the Board
of Directors
2020 $540,000 $— $2,300,041 $2,300,025 $1,625,000 $3,500 $6,768,566 
2019 540,000 — 5,562,554 2,224,994 1,296,000 4,077 9,627,625 
2018 535,100 — 2,249,988 2,249,998 2,394,000 3,750 7,432,836 
Chi-Foon Chan
Co-Chief Executive Officer
and President
2020 540,000 — 2,300,041 2,300,025 1,625,000 4,600 6,769,666 
2019 540,000 — 5,562,554 2,224,994 1,296,000 4,759 9,628,307 
2018 535,100 — 2,249,988 2,249,998 2,394,000 4,038 7,433,124 
Sassine Ghazi(6)
Chief Operating Officer
2020 430,000 — 2,915,985 2,100,016 895,000 68,317 6,409,318 
Trac Pham
Chief Financial Officer
2020 475,000 — 1,350,104 1,350,014 715,000 4,250 3,894,368 
2019 455,000 — 2,937,540 1,174,986 409,500 5,154 4,982,180 
2018 433,200 — 1,074,987 1,074,995 726,800 5,038 3,315,020 
Joseph W. Logan
Sales and Corporate
Marketing Officer
2020 450,000 — 1,250,096 1,250,021 1,015,000 4,500 3,969,617 
2019 450,000 — 2,500,031 999,999 675,000 3,000 4,628,030 
2018 448,500 — 1,000,044 999,994 1,320,000 4,000 3,772,538 
John F. Runkel, Jr.
General Counsel and
Corporate Secretary
2020 425,000 — 775,060 775,015