Item 1.01. Entry into a Material
Definitive Agreement.
On March 20, 2008,
Synplicity, Inc., a California corporation (Synplicity) entered into an
Agreement and Plan of Merger (the Merger Agreement) with Synopsys, Inc.,
a Delaware corporation (Synopsys) and St. Andrews Acquisition Corp., a
California corporation and wholly owned subsidiary of Synopsys, pursuant to
which Synopsys has agreed to acquire Synplicity subject to the terms and
conditions set forth in the Merger Agreement (the Merger) for a gross amount
of approximately $227 million. The
Merger Agreement has been unanimously approved by the Boards of Directors of
both Synopsys and Synplicity.
Subject to the terms and conditions of the
Merger Agreement, at the effective time of the Merger, each issued and
outstanding share of
Synplicity
Common Stock will be converted into the right to
receive $8.00 (Price-Per Share). In
connection with the Merger, Synopsys will assume all issued and outstanding
options to purchase
Synplicity
Common Stock granted pursuant to the Synplicity 2000
Stock Option Plan, Synopsys will assume all issued and outstanding options to
purchase
Synplicity
Common Stock granted pursuant to the 1995 Synplicity
Stock Option Plan to the extent that such options have an exercise price equal
to the Price-Per Share, and Synopsys
will
assume all
issued and outstanding Synplicity Restricted Stock Units. Additionally, in connection with the Merger,
Synopsys has agreed to cash out other issued and outstanding non-assumed,
in-the-money options to purchase
Synplicity
Common Stock.
Consummation of the Merger is subject to
customary closing conditions including the
approval of the Merger by the
shareholders of Synplicity, the
receipt
of antitrust approvals or the expiration of applicable waiting periods in
certain jurisdictions, and the absence of certain governmental restraints.
The Merger Agreement contains certain
termination rights for both Synopsys and Synplicity and provides that in
certain specified circumstances,
Synplicity
must pay Synopsys a termination fee of
$7,936,884 (generally in the event the Board of
Directors of Synplicity changes its recommendation that the
shareholders of Synplicity vote in favor of the
Merger, or elects to pursue a superior acquisition proposal from a third
party).
The foregoing description
of the Merger Agreement is qualified in its entirety to the full text of the
Merger Agreement. The Merger Agreement is
attached as Exhibit 2.1 to this Current Report on Form 8-K and is
incorporated herein by reference. We
encourage you to read the Merger Agreement for a more complete understanding of
the transaction.
Concurrently with the execution of the
Merger,
Synplicitys
directors and certain of its executive officers have
entered into voting agreements with Synopsys and have agreed, in their capacity
as shareholders of
Synplicity,
to vote shares of Synplicity Common Stock held by
them (which in the aggregate represent approximately 41% of the outstanding
shares of
Synplicity
as of the date hereof)
in favor of the
Merger and against any proposal made in opposition to the Merger. The foregoing description of the Voting
Agreements is qualified in its entirety to the full text of the Voting
Agreements which are filed as Exhibits 2.2 and 2.3 to this Current Report on Form 8-K
and are incorporated
herein by reference
.
In connection with the
execution of the Merger Agreement, on March 20, 2008, each of Gary Meyers,
President and Chief Executive Officer of Synplicity, and Kenneth S. McElvain,
Chief Technical Officer and Vice President of Synplicity, entered into an offer
letter and nonsolicitation agreement with Synopsys, which agreements become
effective upon the closing of the Merger.
Pursuant to the terms of such agreements, each of Messrs. Meyers
and McElvain has agreed to become an employee of Synopsys effective at the
closing of the Merger and to abide by certain obligations not to compete with
the business of Synplicity and not to solicit employees and customers of
Synopsys for a period of two years after the closing of the Merger. Such agreements will be of no force or effect
if the Merger does not occur or the Merger Agreement is terminated. The
foregoing description of certain terms of the offer letters and noncompetition
and nonsolicitation agreements does not purport to be complete, and is
qualified in its entirety by reference to the full text of such agreements.
On March 20, 2008,
each of Synopsys and Synplicity issued a press release,
announcing that
they had entered into a definitive merger agreement. In addition, Synplicity distributed a set of
frequently asked questions concerning the transaction to its employees and an
email to its employees. Copies of each
press release, the frequently asked questions and the emails are attached to
this Current Report on Form 8-K as Exhibits 99.1, 99.2, 99.3 and 99.4,
respectively, and are incorporated herein by reference.
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