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Charter of the Compensation Committee of the Board of Directors of Synopsys, Inc.

Purpose
The purpose of the Compensation Committee established pursuant to this charter is to make all cash and equity compensation decisions relating to the Chief Executive Officer, all other persons determined by the Board to be "officers" as defined under Section 16 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and members of the Board of Directors of Synopsys, Inc. (the "Company").

The Compensation Committee shall have the authority to undertake the specific duties and responsibilities listed below and will have the authority to undertake such other specific duties as the Board of Directors from time to time delegates to it.

Membership
The Compensation Committee shall consist of a minimum of two (2) members of the Board, all of whomshall qualify as "non-employee directors" within the meaning of Rule 16b-3 of the Exchange Act , "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended and "independent directors" within the meaning of Rule 4200(a)(15) of the rules of the National Association of Securities Dealers, Inc. The members of the Compensation Committee are appointed by and serve at the discretion of the Board of Directors.

Responsibilities
The responsibilities of the Compensation Committee shall be to:

  1. Establish the compensation policy for the Chief Executive Officer, all persons determined by the Board to be "officers" under Section 16 of the Exchange Act and members of the Board of Directors of the Company.
  2. Make all decisions regarding all forms of cash and equity compensation (including all "plan" compensation, as such term is defined in Item 402(a)(7) of Regulation S-K promulgated by the Securities and Exchange Commission, and all non-plan compensation) to be provided to the Chief Executive Officer and other officers of the Company, including determination of salary, bonus and stock options, stock appreciation rights or other equity compensation.
  3. Review and make recommendations to the Board of Directors regarding general compensation goals and guidelines for the Company's employees and the criteria by which bonuses to the Company's employees are determined, including all sales and other commissionable employees and executives.
  4. Administer, within the authority delegated by the Board of Directors, the Company's Employee Stock Purchase Plan, International Employee Stock Purchase Plan, 1992 Stock Option Plan, 1998 Non-Statutory Stock Option Plan, 1994 Non-Employee Directors Stock Option Plan and such other stock plans as may be approved by the Board of Directors from time to time (collectively, the "Plans"). In its administration of the Plans, the Compensation Committee may, pursuant to authority delegated by the Board of Directors (i) grant stock options, stock appreciation rights or other equity compensation to individuals eligible for such grantsand (ii) amend such stock options, stock appreciation rights and other equity compensation The Compensation Committee shall also make recommendations to the Board of Directors with respect to amendments to the Plans and changes in the number of shares reserved for issuance thereunder.
  5. Review and make recommendations to the Board of Directors regarding other plans that are adopted or proposed for adoption by the directors of the Company for the provision of compensation to employees and consultants to the Company.
  6. Prepare a report (to be included in the Company's proxy statement) which describes: (a) the criteria on which compensation paid to the Chief Executive Officer for the last completed fiscal year is based; (b) the relationship of such compensation to the Company's performance; (c) the Compensation Committee's executive compensation policies applicable to executive officers; and (d) any other matters required to be included therein pursuant to the rules of the Exchange Act as they may be amended from time to time.
  7. Authorize the repurchase of shares from terminated employees pursuant to the terms of the Plans or otherwise and applicable law.

Meetings
It is anticipated that the Compensation Committee will meet at least four times each fiscal year. However, the Compensation Committee may establish its own schedule, which it will provide to the Board of Directors in advance.

At a minimum of one of such meetings annually, the Compensation Committee will consider stock plans, performance goals and incentive awards, and the overall coverage and composition of the compensation package.

Minutes
The Compensation Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board of Directors.

Reports
The Compensation Committee will provide written reports to the Board of Directors of the Company regarding recommendations of the Compensation Committee submitted to the Board of Directors for action, and copies of the written minutes of its meetings.



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Last Modified: Oct 04, 2004