____________________________________ Bill Piexoto, Cadence Design Systems Staff Technical Instructor 408/944-7570 billp@cadence.com ----- Begin Included Message ----- >From: Benefits Manager Date: June 1, 1993 Re: Benefit Coverage for "Domestic Partners" Cadence has always provided employees (who work more than 30 hours per week) with the opportunity to enroll their spouse and children into the Cadence benefit programs. I am pleased to announce that Cadence will give employees the opportunity to enroll their domestic partner, of the same or opposite sex, and children of domestic partners, into the Cadence medical, dental and/or vision plans with coverage effective 7-1-93. This enhancement fits within the philosophy of Making Cadence a Great Place to Work and contributes to achieving the 4-in-4 goal of Employee Satisfaction. For a minimal cost to Cadence, we can maintain a competitive benefits program that meets the diverse needs of Cadence employees equitably and helps to attract potential candidates from our communities. As part of the enrollment process employees who elect domestic partner coverage will be required to complete an "Affidavit of Domestic Partnership", a legally enforceable document that may be used in a court of law. This affidavit defines and attests to the validity of the domestic partner relationship, characterized by exclusivity and shared financial responsibility. Both partners must be unmarried, unrelated per state law, and at least 18 years of age. Cadence requires the completion of an affidavit to certify that the person an employee wants to enroll meets the definition of domestic partner. We do not intend to ask for any further documentation; however, we reserve the right to request documentation of eligibility for any dependents enrolled in the Cadence programs. There are tax laws that govern the treatment of benefits provided to employees by employers. For the most part, employers can provide employees and their legal dependents benefits on a tax-free basis. Because domestic partners are not currently recognized as legal dependents by the IRS, the benefits to domestic partners cannot be provided tax-free. Cadence is required to report the value of benefits for domestic partners as taxable income on an employees' W-2 (less any after-tax contributions the employee makes for that coverage) in a similar manner that premiums for life insurance coverage in excess of $50,000 are reported. To simplify this reporting process, the enrollment process for domestic partners coverage will be handled outside of the Compositions program. Cadence has typically required employees to make a contribution for dependent coverage of ~10%-20% of the cost of providing medical, dental, and vision benefits. The Compositions program was designed with that same contribution level in mind. Employees with domestic partners coverage will be required to make an after-tax contribution for elected coverages consistent with this philosophy. Employees who enroll domestic partners will not receive any additional flex credits in the Compositions program; however, the company will subsidize coverage for domestic partners at the same level coverage is subsidized for the legal dependents of an employee in the Compositions Benefits Program. An enrollment packet is available that contains everything you need to know to enroll your domestic partner and their children. The "Affidavit of Domestic Partner" and a table showing the employee contribution amounts with the reportable income figures for each benefit can be previewed on-line. If you have access to a Macintosh (Word format), look in TOPS under zone "San Jose 4-2", "TOPS Server", under "Forms". For UNIX-based systems (FrameMaker format) use the following path to access the information: "cds658:/usr2/Frame3.0/fmtemplates/Cadence Templates/HR". In San Jose, you can pick up a complete enrollment packet (including on-line information, enrollment forms, etc.) in the benefit forms area in Building 3 (near Cafe CJ's), or Building 5 (near Human Resources), or Plumeria. In Chelmsford, enrollment packets are located in the benefits area. To have a packet sent to you via interoffice mail, contact XXXXX. We are available to answer any questions you have regarding this program. If you decide to take advantage of this opportunity, YOU MUST RETURN YOUR ENROLLMENT FORMS TO THE BENEFIT DEPARTMENT BY WEDNESDAY, 6-15-93. Coverage will be effective 7-1-93 and deductions will begin with the 7-15-93 paycheck. Going forward, domestic partners coverage will be part of open enrollment each year. Confidentiality will be respected at all times throughout this process. * ASI and IMS employees are not eligible for Domestic Partners coverage at this time.