EXECUTIVE RELEASE AND TRANSITION AGREEMENT

Exhibit 10.1

EXECUTIVE RELEASE AND TRANSITION AGREEMENT

     This Executive Transition and Release Agreement (this “Agreement”) is entered into between Moshe Gavrielov (“Executive”) and Cadence Design Systems, Inc. (“Cadence” or the “Company”).

      1. TRANSITION COMMENCEMENT DATE . As of November 30, 2007, (the “Transition Commencement Date”), Executive will no longer hold the position of Executive Vice President and General Manager, Verification Division, and will be relieved of all of Executive’s authority and responsibilities in that position. Executive will be paid all accrued salary for his services as Executive Vice President and General Manager, Verification Division, to the Transition Commencement Date by not later than the following regular payroll date. Following the Transition Commencement Date, Executive will no longer participate in Cadence’s medical, dental, and vision insurance plans (unless Executive elects to continue coverage pursuant to COBRA), and will not be eligible for a bonus for any services rendered after that date.

      2. TRANSITION PERIOD. The period from the Transition Commencement Date to the date when Executive’s employment with Cadence terminates (the “Termination Date”) is called the “Transition Period” in this Agreement. Executive’s Termination Date will be the earliest to occur of:

          a. the date on which Executive resigns from all employment with Cadence;

          b. the date on which Cadence terminates Executive’s employment due to a breach by Executive of Executive’s duties or obligations under this Agreement; and

          c. one year from the Transition Commencement Date.

      3. DUTIES AND OBLIGATIONS DURING THE TRANSITION PERIOD AND AFTERWARDS.

          a. During the Transition Period, Executive will assume the position of Consultant. In this position, Executive will render those services reasonably requested by Cadence’s Chief Executive Officer (“CEO”), the Executive Vice President, Development, or the Board of Directors on an as-needed basis. Executive’s time rendering those services is not expected to exceed thirty (30) hours per month. Executive and Cadence agree that neither party anticipates that Executive will resume full-time employment with Cadence in the future.

          b. As a Cadence executive, as well as other positions Executive may have held with Cadence, Executive has obtained extensive and valuable knowledge and information concerning Cadence’s business (including confidential information relating to Cadence and its operations, intellectual property assets, contracts, customers, personnel, plans, marketing plans, research and development plans and prospects). Executive acknowledges and agrees that it would be virtually impossible for Executive to work as an employee, consultant or advisor in the electronic design automation (“EDA”) industry (as defined below) without inevitably disclosing confidential and proprietary information belonging to Cadence. Accordingly, during the Transition Period, Executive will not, directly or indirectly, provide services, whether as an

employee, consultant, independent contractor, agent, sole proprietor, partner, joint venture, corporate officer or director, on behalf of any corporation, limited liability company, partnership, or other entity or person that (i) is engaged in the EDA industry, (ii) directly competes against Cadence or any of its existing or future affiliates in the EDA industry anywhere in the world, or (iii) produces, markets, distributes or sells any products, directly or indirectly through intermediaries, that are competitive with EDA industry products produced, marketed, sold or distributed by Cadence. As used in this paragraph, the term “EDA industry” means the research, design or development of electronic design automation software, electronic design verification, emulation hardware and related products, such products containing hardware, software and both hardware and/or software products, designs or solutions for, and all intellectual property embodied in the foregoing, or in commercial electronic design and/or maintenance services, such services including all intellectual property embodied in the foregoing. If Executive receives an offer of employment or consulting from any person or entity during the Transition Period, then Executive must first obtain written approval from Cadence’s CEO or his successor before accepting said offer, unless the potential employer that makes an offer to the Executive is a company that appears on Appendix A. Such written approval (i) shall be granted or withheld within ten (10) business days after the CEO received written notice of such offer from Executive and (ii) may be withheld only if Executive’s acceptance of such offer would not comply with this paragraph 3. During the Transition Period, Executive will be prohibited, to the full extent allowed by applicable law, and except with the written advance approval of Cadence’s CEO (or his successor(s)), from voluntarily or involuntarily, for any reason whatsoever, directly or indirectly, individually or on behalf of persons or entities not now parties to this Agreement: (i) encouraging, inducing, attempting to induce, soliciting or attempting to solicit for employment, contractor or consulting opportunities anyone who is employed at that time, or was employed during the previous one year, by Cadence or any Cadence affiliate; (ii) interfering or attempting to interfere with the relationship or prospective relationship of Cadence or any Cadence affiliate with any former, present or future client, customer, joint venture partner, or financial backer of Cadence or any Cadence affiliate engaged in the EDA industry; or (iii) soliciting, diverting or accepting business, in any line or area of business engaged in by Cadence or any Cadence affiliate in the EDA industry, from any former or present client, customer or joint venture partner of Cadence or any Cadence affiliate (other than on behalf of Cadence), except that Executive may solicit or accept business, in a line of business engaged in by Cadence or a Cadence affiliate in the EDA industry, from a former or present client, if and only if Executive had previously provided consulting services in such line of business, to such client, prior to ever being employed by Cadence, but in no event may Executive violate paragraph 3(b) hereof. The restrictions contained in subparagraph (i) of the immediately preceding sentence shall also be in effect for a period of one year following the Termination Date. This paragraph 3(b) does not alter any of the obligations the Executive may have under the Employee Proprietary Information Agreement, executed in January 2005.

          c. Nothing in paragraph 3(b) shall preclude Executive from providing services as an employee or consultant to an entity engaged in the EDA industry that has multiple subsidiaries, divisions or other business units, if Executive provides his services exclusively to a subsidiary, division or other business unit that is not engaged in the EDA industry, and as long as Executive receives written approval from Cadence’s CEO to accept such position.

          d. Executive will fully cooperate with Cadence in all matters relating to his employment, including the winding up of work performed in Executive’s prior position and the orderly transition of such work to other Cadence employees, and any legal matters that may require his involvement, at the request of the Company’s General Counsel.

          e. Executive will not make any statement, written or oral, that disparages Cadence or any of its affiliates, or any of Cadence’s or its affiliates’ products, services, policies, business practices, employees, executives, officers, or directors. Similarly, Cadence agrees to instruct its executive officers and members of the Company’s Board of Directors not to make any statement, written or oral, that disparages Executive. The restrictions described in this paragraph shall not apply to any truthful statements made in response to a subpoena or other compulsory legal process.

          f. Notwithstanding paragraph 9 hereof, the parties agree that damages would be an inadequate remedy for Cadence in the event of a breach or threatened breach by Executive of paragraph 3(b), or for Cadence or Executive in the event of a breach or threatened breach of paragraph 3(e). In the event of any such breach or threatened breach, the non-breaching party may, either with or without pursuing any potential damage remedies, obtain from a court of competent jurisdiction, and enforce, an injunction prohibiting the other party from violating this Agreement and requiring the other party to comply with the terms of this Agreement.

      4. TRANSITION COMPENSATION AND BENEFITS. In consideration and compensation for Executive’s services during the Transition Period, Cadence will provide the following to Executive:

          a. a monthly salary of $4,000 less applicable tax withholdings and deductions, payable in accordance with Cadence’s regular payroll schedule, commencing on the first pay date that is more than six months following the Transition Commencement Date;

          b. immediate vesting as of the Transition Commencement Date of that portion of the stock options and restricted stock granted to Executive prior to the Termination Date, or assumed by the Company by virtue of its acquisition of Verisity, that would ordinarily have vested during the Transition Period, provided that Executive has executed all necessary stock option and restricted stock agreements, and with the understanding that (i) upon the Transition Commencement Date all unvested options and unvested restricted stock that do not vest in accordance with this paragraph 4(b) shall immediately expire and be forfeited and (ii) upon Executive’s Termination Date, all vested options may be exercised in accordance with the applicable stock option agreement; and

          c. if Executive elects to continue coverage under Cadence’s medical, dental, and vision insurance plans pursuant to COBRA following the Transition Commencement Date, Cadence will pay Executive’s COBRA premiums during the Transition Period.

Except as so provided, Executive will receive no other compensation or benefits from Cadence in consideration of Executive’s services during the Transition Period.

      5. FIRST TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not voluntarily resign from employment with Cadence and Cadence does not

terminate Executive’s employment with Cadence due to a breach by Executive of Executive’s duties under this Agreement, and in consideration for Executive’s acceptance of this Agreement and Executive’s further execution and delivery of a Release of Claims in the form of Attachment 1 hereto, Cadence will provide to Executive within ten business days of the date that is six months following the Transition Commencement Date and after Executive has returned to the Company all hard and soft copies of records, documents, materials and files relating to confidential, proprietary or sensitive company information in his possession or control by the Transition Commencement Date, as well as all other Company-owned property, the following termination payment, to which Executive would not otherwise be entitled:

	•		a lump-sum payment of one year’s base salary, or $400,000.00, less applicable tax deductions and withholdings;
	•		a bonus, prorated for the time worked during the Second Half of 2007 as an executive of the Company, reflecting an Individual Performance Modifier of “1,” and the Cadence Group Modifier that Executive would have received had he continued to work as an executive for the Company on the date the bonus would normally have been paid in February 2008, if and only if a bonus is paid to executives.

      6. SECOND TERMINATION PAYMENT AND BENEFITS. Provided that Executive does not resign from employment with Cadence and Cadence does not terminate Executive’s employment with Cadence due to a breach by Executive of Executive’s duties under this Agreement, upon the Termination Date, and in consideration for Executive’s acceptance of this Agreement and Executive’s further execution of a Release of Claims in the form of Attachment 2 to this Agreement, Cadence will provide to Executive within ten business days after the expiration of the revocation period of the Release of Claims (as defined in that document) the following termination payment, to which Executive would not otherwise be entitled:

•

a lump-sum payment of one year’s target bonus, or $400,000.00, less applicable tax deductions and withholdings provided.

      7. GENERAL RELEASE OF CLAIMS.

          a. Executive hereby irrevocably, fully and finally releases Cadence, its parent, subsidiaries, affiliates, directors, officers, agents and employees (“Releasees”) from all causes of action, claims, suits, demands or other obligations or liabilities, whether known or unknown, suspected or unsuspected, that Executive ever had or now has as of the time that Executive signs this Agreement which relate to his hiring, his employment with the Company, the termination of his employ