MAGMA DESIGN AUTOMATION EMPLOYMENT AND SEVERENCE AGREEMENT

A.

The Employee is and has been employed by the Company.

B.

The Company and the Employee desire to enter into this Agreement to provide additional financial security and benefits to the Employee and to encourage the Employee to continue his employment with the Company.

C.

Certain capitalized terms used in the Agreement are defined in Section 7 below.

1.

Position . The Company shall employ the Employee in the position of                                      , as such position has been defined in terms of responsibilities and compensation as of the effective date of this Agreement; provided, however, that the Board of Directors (the “Board”) shall have the right, at any time prior to the occurrence of a Change of Control, to revise such responsibilities and compensation as the Board in its discretion may deem necessary or appropriate. The Employee shall comply with and be bound by the Company’s operating policies, procedures and practices from time to time in effect during his employment. During the term of the Employee’s employment with the Company, the Employee shall continue to devote his full time, skill and attention to his duties and responsibilities, and shall perform them faithfully, diligently and competently, and the Employee shall use his best efforts to further the business of the Company and its affiliated entities.

2.

Base Compensation . The Company shall pay the Employee as compensation for his services a base salary at an annualized rate in an amount to be determined from time to time by the Board or the Compensation Committee of the Board. Such salary shall be paid periodically in accordance with normal Company payroll practices. The annualized compensation specified in this Section 2, as such compensation may be increased or decreased by the Board or the Compensation Committee, is referred to in this Agreement as “Base Compensation.”

3.

Annual Incentive . Beginning with the Company’s current fiscal year and for each fiscal year thereafter during the term of this Agreement, the Employee shall be eligible to receive additional cash compensation under the Company’s annual incentive plan (the “Annual Incentive”) based upon specific financial and/or other targets approved by the compensation committee of the Board (the “Target Incentive”). The Annual Incentive payable hereunder shall be payable in accordance with the Company’s normal practices and policies pursuant to the terms of the annual incentive plan.

4.

Employee Benefits . The Employee shall be eligible to participate in the employee benefit plans and executive compensation programs maintained by the Company applicable to other key executives of the Company, including (without limitation) retirement plans, savings or profit-sharing plans, stock option, incentive or other bonus plans, life, disability, health, accident and other insurance programs, paid vacations, and similar plans or programs, subject in each case to the generally applicable terms and conditions of the applicable plan or program in question and to the sole determination of the Board or any committee administering such plan or program.

5.

Employment Relationship . The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans and policies at the time of termination.

6.

Severance Benefits.

(a.)

Termination Following a Change of Control . If the Employee’s employment with the Company terminates at any time within twelve (12) months after a Change of Control, then the Employee shall be entitled to receive severance benefits as follows:

(i.)

Involuntary Termination . If the Employee’s employment terminates as a result of Involuntary Termination other than for Cause, the Employee shall be entitled to receive a severance payment equal to the sum of one year of the Employee’s Base Compensation for the Company’s fiscal year then in effect or if greater, the sum of the Employee’s Base Compensation for the Company’s fiscal year immediately preceding the Termination Date, plus (y) the amount of the Employee’s Target Incentive for the fiscal year then in effect (or, if no Target Incentive is in effect for such year, the highest Target Incentive in the three (3) preceding fiscal years). Any severance payments to which the Employee is entitled pursuant to this Section 6(a) (i) shall be paid to the Employee (or to the Employee’s estate or beneficiary in the event of Employee’s death) in a lump sum not later than fifteen (15) days following the Employee’s Involuntary Termination.

(ii.)

Voluntary Resignation ; Termination for Cause. If the Employee voluntarily resigns from the Company without Good Reason, or if the Company terminates the Employee’s employment for Cause, then the Employee shall not be entitled to receive severance or other benefits except for those (if any) to which he may be entitled under the Company’s then existing severance and benefits plans and policies at the time of such resignation or termination.

(iii.)

Disability; Death . If the Company terminates the Employee’s employment as a result of the Employee’s Disability, or if the Employee’s employment terminates due to the death of the Employee, then the Employee shall not be entitled to receive severance or other benefits except for those (if any) to which he may be entitled under the Company’s then existing severance and benefits plans and policies at the time of such Disability or death.

(b.)

Equity Awards . In the event the Employee is entitled to severance benefits pursuant to Section 6(a)(i), then in addition to such severance benefits, the unvested portion of any stock option(s) or other equity awards held by the Employee under the Company’s stock option plans and other equity compensation plans or instruments shall vest and become exercisable in full, and the Employee shall have the right to exercise such additional vested portion of such stock option(s) or other equity awards at the time the Employee becomes entitled to the benefits under Section 6(a)(i).

(c.)

Medical Benefits . In the event the Employee is entitled to severance benefits pursuant to Section 6(a)(i), then in addition to such severance benefits the Company shall pay the Employee a lump sum payment in an amount equivalent to the reasonably estimated cost the Employee may incur to extend for a period of twelve (12) months medical coverage substantially similar to that enjoyed by the Employee immediately prior to Involuntary Termination. The Employee may use this payment, as well as any other payment made under this Section 6, for such continuation coverage or for any other purpose. Such payment will be made on the date that is six (6) months after the Employee’s Termination of Employment.

(d.)

Release . Notwithstanding any other provision of this Section 6, no amounts shall be