2017 Financial and Operational Highlights

2017 was a year of significant achievement for the Company.

We focused on reinvigorating top-line growth while preserving our commitment to a strong margin structure and cash flow. We delivered the following results:

In addition to these milestones, we diversified our customer base and revenue streams, had a high rate of recurring revenue, continued to build deferred revenue and backlog, continued our share repurchase program, and completed multiple acquisitions. The Company also introduced distinctive new technologies. ANSYS 18 builds on our industry-leading technology with new rich features. Our technology preview of Discovery Live introduces a new paradigm in instantaneous simulation, to enable interactive design exploration and rapid product innovation.

In June 2017, Standard & Poor’s Dow Jones Indices added ANSYS to the S&P 500 Index, reflecting its growth and importance in the market place. The price of the Company’s common stock grew during 2017 by 58%.

Corporate Governance

Sound corporate governance and independent oversight of a company’s strategic execution are essential ingredients of a well-run company. The ANSYS Board remains committed to strong corporate governance and the protection of long-term stockholder value.

Please see “Corporate Governance at ANSYS” beginning on page 12 for a description of our corporate governance practices. These include, but are not limited to:

Executive Compensation Highlights

Our executive compensation policies and practices reinforce our pay for performance philosophy and align with sound governance principles and stockholder interests. Our executive compensation is largely driven by our performance. Below are graphical representations depicting our stock price performance over 1-year, 3-year, 5-year and 10-year periods relative to the NASDAQ composite, Russell

1000 and S&P 500 indices, and a peer group consisting of Autodesk, PTC, Cadence and Synopsys.

While 2017 was a transitional year for ANSYS, with Dr. Ajei S. Gopal being named CEO and new leadership joining the Company, we achieved record performance without disruption of business.

Our Board is divided into three classes, and is currently comprised of four Directors in Class I, three Directors in Class II and three Directors in Class III. Directors serve for three-year terms with one class of Directors being elected by our stockholders at each annual meeting; provided, however, that pursuant to the terms of Mr. Cashman’s Transition

Agreement, as disclosed in earlier filings, Mr. Cashman has agreed to tender his resignation at the end of the applicable transition period (April 30, 2019) or upon any termination of his employment prior to April 30, 2019. Patrick J. Zilvitis and Bradford C. Morley, each currently a Class I Director, are not standing for re-election, and we intend to reduce the size of the Board accordingly to eight with two Directors in Class I following the annual meeting.

At the annual meeting, two Class I Directors will be put forth for election to serve until the annual meeting of stockholders in 2021 and until such Directors’ successors are duly elected and qualified. Based on the recommendation of our Nominating and Corporate Governance Committee, our Board has nominated Guy E. Dubois for re-election and

Dr. Alec D. Gallimore for election as Class I Directors. Unless otherwise specified in the proxy, it is the intention of the persons named in the proxy to vote the shares represented by each properly executed proxy for the re-election of Mr. Dubois and the election of Dr. Gallimore as Class I Directors. Proxies cannot be voted for a greater number of persons than the number of nominees named. The nominees have agreed to stand for re-election or election and to serve, if elected, as Directors. However, if any person nominated by our Board fails to stand for election or is unable to accept election, the proxies will be voted for the election of such other person or persons as our Board may recommend.

We maintain a majority voting policy for the election of directors. This means that in order for a nominee to be elected in an uncontested election, the number of votes cast “For” such nominee’s election must exceed the number of votes cast “Against” that nominee’s election. Broker non-votes and abstentions will have no effect on the outcome of the election.

DIRECTOR INDEPENDENCE

The Board completed a thorough review of the independence of each ANSYS director. This review included investigation into the relationships that each non-employee director has with ANSYS and other factors that the Board deemed relevant in determining independence, such as beneficial ownership of our capital stock. The Board has determined that each of Mr. Dubois, Dr. Gallimore, Mr. Hovsepian, Mr. McDermott, Mr. Morley, Ms. Scherer, Mr. Thurk, and Mr. Zilvitis is not an affiliate or employee of the Company and is considered independent under Rule 5605 of the NASDAQ listing requirements and the Exchange Act.

Board Responsibilities

The Board has adopted Corporate Governance Guidelines to promote the effective functioning of the Board and its committees and provide the framework for corporate governance of the Company. The Company’s current Corporate Governance Guidelines are posted on our website at www.ansys.com in the “Investor Relations” section under the heading “Corporate Governance” and are updated on that website to the extent any amendments are adopted, as was the case with the revisions adopted in February 2018.

Oversight of Risk Management

The Board has responsibility to provide risk oversight as a part of each Director’s obligations to the Company and its stockholders. The Board aims to set a healthy “tone at the top” and guides the Company’s management to take appropriate measures to control material risk. The Board executes on these responsibilities directly and also through its standing committees: the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, each of which is comprised solely of members and chairs who qualify as independent directors. While the Board believes that the Company practices good risk management strategies and processes, it is the Board’s responsibility to oversee the pressure testing of these strategies and processes on a continuous basis in order to ensure that risk management stays effective despite evolving market conditions, business strategies, regulatory rules, and Company development.    

The Board, directly and through its Audit Committee, receives a risk management update from the Company’s management as part of its regular quarterly meetings and reviews all risk assessments conducted by the Company annually. In addition, the Audit Committee oversees the Company’s annual enterprise business risk assessment and bi-annual fraud risk assessment which are conducted by the Company’s internal auditor. The internal auditor reports directly to the Audit Committee. This annual assessment reviews the Company’s performance with regard to ongoing financial, operational, and strategic risks, both existing and new.

Details on the activities and responsibilities of the Board’s committees are discussed later in this proxy statement. In summary, the Board promotes the Company’s long-term stockholder value by providing oversight of risk management. The committees implement the Board’s oversight in particular focus areas, namely:

The Audit Committee provides primary oversight over financial reporting, regulatory compliance, internal controls and cyber-security.

The Compensation Committee provides primary oversight over employee compensation practices and policies, and non-executive director compensation practices and policies.

The Nominating and Corporate Governance Committee provides primary oversight of corporate governance practices, legal matters, succession planning, and conflicts of interest.

Stockholder Nominations

The Company’s bylaws allow stockholders to nominate individuals for election to the Board at the annual meeting of stockholders. Please see “Stockholder Proposals for 2019 Annual Meeting” on page 57 for a description of the requirements for stockholders to make a nomination.

In addition, in January 2018, the Company adopted new bylaws that for the first time allow stockholders to nominate individuals to the Company’s Board through proxy access for inclusion in its proxy statement. The Board believes that the adopted proxy access provision is a best practice for mature and successful public companies and provides an important avenue for stockholders to exercise their rights as investors in the Company’s success. The following is a summary of the requirements for a stockholder to access the proxy and should be read in conjunction with the detailed requirements found in the Company’s bylaws.

Stockholder Engagement

We take pride in our engagement with our stockholders. We welcome the insights and feedback our stockholders bring to our management team and take the stockholders’ point of view into account when developing our governance practices. The Board firmly believes the mutual trust we aim to build with our stockholders is one of the key components of good governance and is a key element of driving board responsibility and a strong governance culture.

ANSYS has a very active investor relations program, engaging with stockholders and interested investors on a global basis throughout the year via investor conferences, non-deal roadshows, conference calls and headquarters visits. We conducted a comprehensive investor perception study in the fall of 2017, eliciting feedback from owners, former owners and sell-side analysts. This feedback was shared with the Nominating and Corporate Governance Committee and will be used to strengthen and improve the investor relations program going forward. We also held a full-day Investor Day on September 14, 2017. The event was an opportunity for investors to meet and engage with senior management and to learn about our vision, strategy and go-to-market plans under the new leadership team. The video archive and presentations from the event are available on our IR website at www.investors.ansys.com.

Code of Business Conduct and Ethics

The Board collaborated with the Company’s management during 2017 to develop and update the Code of Business Conduct and Ethics (“Code”), which was published in February 2018. The Code applies to all employees, officers and directors of the Company and its subsidiaries. The updated Code emphasizes the key role that the Code plays in the activities of the Company and the importance that the Board places on integrity in innovation and business. The Code is the centerpiece of the Company’s annual ethics program, which includes activities related to ethical business practices throughout the year. The Code is posted on our website at www.ansys.com in the “Investor Relations” section under the heading “Corporate Governance.” We will also provide a copy of our Code to stockholders upon request.

ANSYS Citizenship and Sustainability

ANSYS is committed to the betterment of the world in which we live and work. Our technology enables companies in every industry to design, develop and test an endless range of products – from windmills to electric vehicles – prior to building a physical form, thus reducing the use of materials and other resources. Our products enable companies to find more efficient configurations for their products more rapidly. ANSYS has a number of ongoing sustainability initiatives. These initiatives include, among other things, a LEED certified corporate headquarters as well as recycling and energy conservation initiatives at our various locations throughout the world.

We value diversity, particularly in the software industry in which we operate. ANSYS attracts talent from various backgrounds and of different capabilities to develop solutions to support our customers and communities on a global basis and is committed to promoting diversity. We have established an ANSYS Women in Technology initiative to raise awareness for the need to recruit, develop, and retain women in our organization and to empower our employees to build their career, confidence and network at ANSYS.

ANSYS strives to maintain strong relationships with our employees. In 2017, we launched a global employee engagement survey which we will continue to conduct on an ongoing basis. We also encourage feedback via our compliance and ethics hotline. 

We are engaged with our local communities to help those in need. ANSYS invests where we have a presence by partnering with nonprofit organizations that help children improve their math, science and education skills or support initiatives to address critical social needs facing the community or region. In addition to providing support for these nonprofit organizations, ANSYS encourages our employees to participate actively in every community in which we operate around the world by volunteering their time and lending their expertise for STEM-related initiatives. We view our support as an investment to build long-term relationships in these communities in which our employees work and live around the globe.

Disclosure Regarding Human Trafficking and Anti-Slavery

ANSYS does not condone or support practices such as human trafficking, physical abuse of workers, or any form of child labor.

Related-Party Transactions

ANSYS has adopted a written policy providing that all material transactions between the Company and its officers, directors and other affiliates must be approved by a majority of the members of the Board, and by a majority of the disinterested members of the Board. In addition, the terms of such transactions must be no less favorable to the Company than could be obtained from unaffiliated third parties. The Nominating and Corporate Governance Committee has primary oversight over both the policy, including determining whether any updates should be made to the policy, as well as for review of any such related party transactions and recommending to the Board whether entering into any such transaction is advisable. Additionally, the Audit Committee has authority to review such transactions to the extent required as part of its review of the Company’s financial statements. The Company believes that its policy, together with the multi-faceted oversight approach, provides for a focused yet broad-based approach to reviewing and considering any potential related party transactions. The Company had no related party transactions for more than $120,000 during fiscal 2017.

Board Structure and Processes

Leadership Structure

The roles of Chairman of the Board, Lead Independent

Director of the Board, and CEO of the Company are separated. Effective as of January 1, 2017, Dr. Gopal became our CEO (whose office was previously held by Mr. Cashman) and Mr. Cashman became the Chairman of the Board. During any time that our Chairman is not independent, as is currently the case with Mr. Cashman, the Board is led by our Lead Independent Director, currently Mr. Hovsepian. Mr. Hovsepian has the principal responsibility for leading meetings of our independent directors, which ensures that our independent directors have a strong voice in the leadership of the Board. When our Chairman of the Board is not independent, our Lead Independent Director also is the primary point of consultation with the Nominating and Corporate Governance Committee regarding director nominations and process and management succession planning, which the Company believes helps to maintain a strong and independent direction to our highest-level governance activities.

We believe that this structure provides our Board with the greatest breadth of leadership and depth of experience, while also providing balance for the direction of the Company. It gives primary responsibility for the Company’s operational leadership to our CEO, while the Lead Independent Director facilitates our Board’s independent oversight of management, organizes communication between the management and the Board, and leads the Board’s consideration of governance matters. The Nominating and Corporate Governance Committee periodically reviews the Board’s leadership structure and, when appropriate, recommends changes in response to evolving needs.

Our Board delegates principal responsibility for its risk management and assessment functions to its Audit Committee. In addition to the Audit Committee, the Compensation Committee has the primary responsibility for reviewing the impact of our compensation programs on our risk management efforts. We have determined that the chair of the Audit Committee and the chair of the Compensation Committee should not serve on another committee with a significant area of risk management. In addition to all meetings of the independent directors being led by our Lead Independent Director, we believe there is a division of risk management roles that generates a strong culture of risk management within our Board.

Board Processes

Each standing committee of the Board conducts a thorough evaluation of its effectiveness each year. In addition, the

Nominating and Corporate Governance Committee conducts an annual evaluation of the Board. The purpose of the evaluations is to identify areas of strength and areas for improvement in the activities and effectiveness of each committee and the Board. The evaluations are generally in the form of a detailed assessment performed by the chair of each committee. The chair of the Nominating and Corporate Governance Committee conducts the assessment of the Board. The process begins with the chair initiating the assessment using a questionnaire that includes self and peer appraisals. The chair then engages with individual Board members, summarizes conclusions about performance, and then leads a candid discussion with the relevant committee and the Board. The Board then takes such further action as it deems appropriate.    

The Company supports and encourages the continuing education of Board members. The Company maintains membership in the National Association of Corporate Directors and reimburses the directors for their expenses in attending trainings and other events on topics including committee roles and responsibilities, and legal and ethical developments. The Company also provides educational sessions periodically to the Board on the Company’s business, industry developments, and other pertinent topics.

Board Meetings

Our Board of Directors held seven meetings during 2017. Each of the directors attended at least 75% of the aggregate of the Board meetings and meetings of Board committees of which they were a member during the periods for which they served in 2017.

Committees

Our Board has the following standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The Board may from time to time establish ad hoc and special purpose committees that are transient.

Audit Committee

Each member of the Audit Committee is not an affiliate or employee of the Company and is independent as such term is defined in Rule 5605 and required by Rule 5605(c) of the

NASDAQ listing requirements. Our Board has determined that each of Mr. Morley and Ms. Scherer qualifies as an “audit committee financial expert.” Our Audit Committee held five meetings during 2017.

Our Audit Committee oversees our accounting and financial reporting process and the audit of our financial statements, and monitors legal and regulatory compliance. The committee is responsible for, among other things:

Our Audit Committee charter is available on our website at www.ansys.com in the “Investor Relations” section under the heading “Corporate Governance.”

Compensation Committee

Each member of the Compensation Committee is not an affiliate or employee of the Company and is independent as such term is defined in Rule 5605 and required by Rule 5605(d) of the NASDAQ listing requirements. The Compensation Committee held five meetings during 2017.

Our Compensation Committee oversees our compensation policies, plans and programs. The committee is responsible for, among other things:

Our Compensation Committee charter is available on our website at www.ansys.com in the “Investor Relations” section under the heading “Corporate Governance.”

Nominating and Corporate Governance Committee

Each member of the Nominating and Corporate Governance Committee is not an affiliate or employee of the Company and is independent as such term is defined in Rule 5605 and required by Rule 5605(e) of the NASDAQ listing requirements. Our Nominating and Corporate Governance Committee held two meetings during 2017.

Our Nominating and Corporate Governance Committee oversees and assists our Board in reviewing and recommending corporate governance policies and nominees for election to our Board and its committees. The committee is responsible for, among other things:

The Nominating and Corporate Governance Committee has retained for a fee a search firm to help identify suitable director candidates.

Our Nominating and Corporate Governance Committee charter is available on our website at www.ansys.com in the “Investor Relations” section under the heading “Corporate Governance.”

Compensation Committee Interlocks and Insider Participation

No member of our Compensation Committee was or is an officer or employee of the Company or any of its subsidiaries and all members are considered independent as such term is defined in Rule 5605 of the NASDAQ listing requirements. There are no Compensation Committee interlocks.

Our non-employee director compensation program is designed to attract, retain and reward qualified directors and align the financial interests of the non-employee directors with those of our stockholders. Pursuant to this program, each non-employee director will receive the following cash and equity compensation for Board service. We also reimburse our non-employee directors for expenses incurred in connection with attending Board and committee meetings, assisting with other Company business, such as meeting with potential officer and director candidates, as well as continuing director education.

Cash Compensation

During 2017, our non-employee directors were entitled to receive the following cash fees:

Equity Compensation

Each then-serving non-employee director is granted a Restricted Stock Unit (RSU) award having a value of $300,000 on the date of each annual meeting of stockholders. If an independent director’s commencement date is other than the date of an annual meeting of stockholders, such independent director may be granted, on such independent director’s commencement date, an annual award having an award value prorated based on the number of days between such director’s commencement date and the next annual meeting of stockholders. Dr. Alec Gallimore received a pro-rated initial award upon being elected to the board in December 2017 pursuant to the terms outlined above.

The annual RSU awards will vest upon the earlier of one year from the date of grant or the date of the Company’s next regular annual meeting of stockholders, subject to accelerated or prorated vesting under certain circumstances such as death or disability or change in control of the Company. Shares of our common stock will be issued at, or shortly following, the vesting of the RSUs.

Prior to 2016, certain directors were granted deferred stock units (“DSUs”) as part of our director compensation program. In 2016, our Compensation Committee approved of a plan to allow our non-employee directors to have the ability to diversify a portion of any DSUs that may be held by such Director, subject to the Director Stock Ownership Guidelines (described on page 26). Since November 1, 2016, non-employee Directors have been permitted to choose individually whether to retain all or part of his or her existing DSUs or to elect another investment alternative, such as an index or mutual fund or funds. This program is subject in all respects to our Director Stock Ownership Guidelines, meaning that Directors would only be permitted to diversify DSUs held in excess of the required minimum ownership guidelines. Two of our independent Directors elected to diversify a portion of his or her DSUs in 2017.

Our employee directors do not receive this additional compensation for service on the Board.

The Audit Committee of the Board has appointed Deloitte & Touche LLP (“Deloitte”), independent registered public accountants, to audit our financial statements for the fiscal year ending December 31, 2018. During our fiscal year ended December 31, 2017, Deloitte served as our independent registered public accounting firm.

Notwithstanding its selection and even if our stockholders ratify the selection, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of ANSYS and its stockholders. At the annual meeting, the stockholders are being asked to ratify the appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2018. Our Audit Committee is submitting the

selection of Deloitte to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of Deloitte will be present at the annual meeting, and will be available to respond to questions.

We maintain a majority voting policy for the ratification of our independent registered public accounting firm. This means that in order to ratify the selection of Deloitte as our independent registered public accounting firm, the number of votes cast “For” such ratification must exceed the number of votes cast “Against” ratification. Abstentions are considered votes cast and thus will have the same effect as a vote “Against” the proposal. Broker non-votes, if any, will have no effect on the outcome of the election. If the stockholders do not ratify the appointment of Deloitte, the Board or Audit Committee may reconsider the appointment.

As required by SEC rules, we are asking stockholders to approve, on an advisory and non-binding basis, the compensation of our named executive officers as disclosed in the “Compensation Discussion and Analysis” section beginning on page 32, the compensation tables, and the related narratives appearing in this proxy statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. We currently hold our Say-on-Pay vote every year.

The Say-on-Pay vote is advisory, and therefore is not binding on us, our Compensation Committee or our Board. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board and our Compensation Committee value the opinions of our stockholders.

We believe that our executive compensation program is effective in achieving the Company’s objective of attracting and retaining top-level talent.

Accordingly, we ask our stockholders to vote “FOR” the following resolution at the annual meeting:

“RESOLVED, that the stockholders approve, on a non-binding, advisory basis, the compensation paid to the named executive officers, as disclosed in the proxy statement for the 2018 annual meeting pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussion, and other related disclosure.”

We maintain a majority voting policy to approve the compensation of our named executive officers. This means that in order to approve the compensation of our named executive officers described in this proxy statement, the number of votes cast “For” such approval must exceed the number of votes cast “Against” approval. Abstentions are considered votes cast and thus will have the same effect as a vote “Against” the proposal. Broker non-votes, if any, will have no effect on the outcome of the election. Because this vote is advisory only, it will not be binding.

During 2017, Dr. Gopal restructured the senior leadership team and the functions performed by each team member.

As such, there were changes made to our executive officers. The following table identifies certain information about our executive officers as of December 31, 2017.

Ajei S. Gopal has been our president and chief executive officer since January 2017. From August 2016 through December 2016, Dr. Gopal was our president and chief operating officer. He has been a member of the Company’s Board of Directors since February 2011, serving as an independent member of the Board until he became a Company employee as of August 2016. From April 2013 until he joined the Company, Dr. Gopal was an operating partner at Silver Lake, including a secondment to serve as interim President and COO at Symantec Corporation. From 2011 until 2013, he was senior vice president at Hewlett Packard. Prior to that, Dr. Gopal was executive vice president at CA Technologies, which he joined in 2006. From 2004 to 2006, he was with Symantec Corporation, where he served as executive vice president and chief technology officer. Earlier, Dr. Gopal served as chief executive officer and a member of the board of directors of ReefEdge Networks, a company he co-founded in 2000. Before that, he worked at IBM from 1991 to 2000, initially at IBM Research, and later in IBM’s Software Group. He began his career as a member of the technical staff at Bell Communications Research. Dr. Gopal’s

background in both technology and senior management of large software and technology companies, along with his experience in global operations and business development, provide significant insight and advisory capacity to the

Company’s Board of Directors.

Maria T. Shields has been our chief financial officer and vice president of finance and administration since September

1998. She was promoted to senior vice president in April 2018. Previously, she served as our corporate controller since September 1994 and as a vice president since May 1998. Prior to joining the Company, Ms. Shields held various positions as a CPA with Deloitte & Touche LLP, including that of audit manager. Ms. Shields serves as a Director of the First National Bank of Pittsburgh Community Board.

Richard Mahoney joined ANSYS as our vice president of worldwide sales and customer excellence in December 2016. He was promoted to senior vice president in April 2018. From 2014 to 2016, he was senior vice president, design enablement and international sales, at Global Foundries. Prior to that, he had a long successful career at Cadence Design Systems, starting in 1989 as a software developer and architect, then advancing to senior vice president of worldwide field operations with responsibility for worldwide sales, field application engineering, customer support and sales operations. He brings a wealth of experience in sales leadership, business management, operations and technical roles. While at Cadence, he led a global engineering team and was responsible for multiple billions of dollars in international sales.

Mark Hindsbo joined ANSYS as the vice president of marketing in June 2015. As of April 2017, Mark became our vice president and general manager, design and platform business unit. As of December 2017, he became our vice president and general manager, design business unit. He brings a broad set of business and technical experiences across sales, marketing, business strategy, software development, and physics. Prior to joining ANSYS, from 2013 he was the vice president of customer success at Parallels. He spent over 10 years at Microsoft in roles ranging from general manager in the server and tools business group, to vice president of the developer business in the US. Prior to this he was at The Boston Consulting Group, co-founded an interactive marketing agency, and did scientific computing at Novo Nordisk. He has conducted nuclear research at CERN (European Organization for Nuclear Research).

Shane Emswiler joined ANSYS as a result of the Ansoft acquisition in 2008. He has been in the simulation industry for 15 years bringing significant experience to his current role. Since April of 2017, he has been vice president and general manager of the electronics, fluids and mechanical business units. Previously, he was vice president and general manager of the electronics business unit which he held since 2010 when he transitioned from Chief Financial Officer of Ansoft. Prior to joining Ansoft he was a Senior Manager with Ernst & Young LLP.

Janet Lee joined ANSYS as vice president, general counsel & secretary in June 2017. From 2010 to 2017 she was the vice president, Legal and Intellectual Property at HERE Technologies. Prior to that, she had a successful career at Nokia, starting in 2007 as a director for legal and intellectual property supporting the Nokia Research Center, then advancing to vice president for legal and intellectual property matters for services. She worked until 2007 as assistant general counsel at America Online, Inc. Ms. Lee was an attorney at Cooley Godward LLP from 1996 to 1999. From 1995 to 1996 she was general counsel to the Renaissance Capital Group. She was an attorney for Clifford Chance from 1993 to 1995, and for Paul, Weiss, Rifkind, Wharton and Garrison from 1991 to 1993.

Matthew C. Zack joined ANSYS as the vice president of business development and corporate marketing in April 2017. He is a seasoned industry veteran with decades of experience, most recently as a senior corporate development executive at SAP from 2014. In that role, he identified potential M&A targets, executed transactions and delivered significant value for stockholders. Previously, he served as the executive vice president and chief financial officer of Ariba while leading corporate development and human resources. He was part of the management team that transformed Ariba to the cloud, fueling its growth and a nearly 400 percent increase in share price. Before joining Ariba, he headed corporate development at FreeMarkets and served in various consulting roles at Accenture.

Compensation Discussion & Analysis

Our Named Executive Officers

This compensation discussion and analysis section describes the compensation of our named executive officers. Our named executive officers for fiscal 2017 are Ajei S. Gopal, Maria T. Shields, Richard Mahoney, Mark Hindsbo, Shane Emswiler, and Fernando Esquivel.

Overview of Compensation Program & Philosophy

Paying for performance is the guiding principle of ANSYS’ total rewards strategy. ANSYS’ philosophy is to target actual total compensation delivered at the 50th percentile of the market. For sustained superior performance, ANSYS’ philosophy is to deliver premium actual total compensation that is comparable to the upper quartile of the peer group.

Our Compensation Committee ensures that the total compensation paid to our named executive officers is reasonable, competitive and principally performance-based. Generally, the types of compensation and benefits provided to our named executive officers are similar to those provided to our other officers and employees.

Management Transitions

This was an important transition year for the company. Dr. Gopal was appointed as our Chief Executive Officer on January 1, 2017 and new senior leaders were added to Dr. Gopal’s team.

As described in more detail below, during the course of 2017, the new leadership team helped drive the creation of substantial value for our customers and our stockholders. The Compensation Committee believes that the named executive officers were reasonably and fairly compensated for this exceptional performance.

Fiscal 2017 Business Highlights

The successful execution of the leadership transition is reflected through ANSYS’ 2017 key accomplishments.

Strong Company Performance

2017 was a year of significant achievement for the Company.

We focused on reinvigorating top-line growth while preserving our commitment to a strong margin structure and cash flow. We have succeeded in this commitment by delivering the following results.

Details on the Company’s revenue growth during 2017 can be found in the Company’s annual report for the fiscal year ended December 31, 2017, filed on form 10-K.

S&P 500

In June 2017, Standard & Poor’s, Dow Jones Indices added ANSYS to the S&P 500 Index, reflecting its growth and importance in the market place with a market capitalization greater than $10 billion.

Launching New Technology

During the first quarter of 2017, we introduced ANSYS 18. Building on our industry-leading technology, ANSYS 18 is a feature-rich release that customers can use to accurately simulate and gain insights into products that are as diverse as the latest smartphone to highly efficient aircraft engines. The Company also provided a preview of ANSYS Discovery Live. ANSYS Discovery Live provides instantaneous simulation, tightly coupled with direct geometry modeling, to enable interactive design exploration and rapid product innovation. It is an interactive experience in which our customers can manipulate geometry, materials and physics, and instantaneously see 3-D results.

What We Do

What We Don’t Do

Our Executive Compensation Practices

Our executive compensation policies and practices reinforce our pay for performance philosophy and align with sound governance principles and stockholder interests. Listed below are highlights of our 2017 compensation policies and practices.

Objectives of Compensation Program

The main objectives of our executive compensation program are to create a competitive total rewards package based on the attainment of short-term performance objectives and long-term strategic goals and to retain and attract qualified executive officers who will lead us to long-term success and enhance stockholder value. Each element of our compensation program supports these objectives.

Role of Compensation Consultant

The Compensation Committee has the authority to retain the services and obtain the advice of external advisors, including compensation consultants, legal counsel and other advisors to assist in the evaluation of executive officer compensation. The Compensation Committee has engaged Compensia, Inc. (“Compensia”), to review our executive

compensation policies and practices by conducting an executive compensation market analysis and review of our equity practices to help ensure alignment with market practices. Compensia reviewed and advised on all principal aspects of our executive compensation program, including:

Compensia provides no other services to the Company.

Role of Compensation Committee and Executive Officers in Compensation Decisions

Our Compensation Committee is comprised solely of independent Directors who meet the independence requirements of the NASDAQ and qualify as “outside directors” under Section 162(m) of the Internal Revenue Code.

Our Compensation Committee is authorized to approve the compensation of our CEO, Dr. Gopal, including establishing the performance goals and objectives for our CEO, evaluating our CEO’s performance in light of the goals and objectives that were set, and determining the CEO’s compensation based on that evaluation. Dr. Gopal serves on our Board but recuses himself from any deliberations about his compensation. For 2017, Dr. Gopal prepared an analysis for our Compensation Committee recommending each element of compensation to be paid to all other named executive officers. Our Compensation Committee considered this analysis along with an analysis from Compensia, in approving the compensation of our other named executive officers. To the extent not established by our Board, our

Compensation Committee is also authorized to establish compensation and benefits for our Chairman and for new and existing independent Directors. Our CEO, our Vice President of Human Resources, and Compensia provide advice, analysis and recommendations to our Compensation Committee.

As part of its ongoing oversight of our compensation programs, our Compensation Committee pays particular attention to the review of risks related to our compensation programs for our named executive officers. We have determined that it is not reasonably likely that our compensation policies would have a material adverse effect on the Company.

Our Compensation Committee and our Board considered the following elements of our compensation plans and policies when evaluating whether our plans and policies encourage our executives and employees to take unreasonable risks:

Peer Group Considerations

The list of peer companies developed by Compensia for consideration by our Compensation Committee in setting cash and equity compensation for our named executive officers for 2017 were the following:

For 2018, we have expanded our peer review group due to the evolution of the business focus of some of the peer

group companies (Fair Isaac, FactSet Research Systems and SS&C Technologies). Others were removed from the list upon acquisition by another company (Mentor Graphics, Qlik Technologies and Rackspace Hosting). Below are the 2018 peer companies:

In relation to these peer companies as of the date of the 2017 Compensia analysis, our Company was at the 40th percentile in revenue, was at the 23rd percentile in number of employees, was at the 86th percentile in operating income and was at the 69th percentile in market capitalization.

Components of Compensation Program and Fiscal 2017 Compensation

Our executive compensation program consists of the following principal components:

We also provide our employees, including our named executive officers and other executive officers, with comprehensive employee benefit programs such as, in the United States, medical, dental and vision insurance, a 401(k) plan, life and disability insurance, flexible spending accounts, an employee stock purchase plan and other plans and programs made available to eligible employees.

We emphasize performance-based compensation rather than base salary. Each element of compensation is chosen in order to attract and retain the necessary executive talent and to reward corporate performance by creating a balance between shorter-term corporate performance and providing incentives for the attainment of long-term strategic goals and enhancing stockholder value. The allocation of each element of compensation is determined by our Compensation Committee for each executive based on the following factors:

While we believe in structuring executive compensation plans that give our executives incentive to deliver certain objective elements of corporate financial performance over specified time periods, we do not believe in a purely mechanical approach. Instead, part of our executive compensation philosophy includes an element of reward for nonquantitative achievements demonstrated by our executives in the actions and decisions they have made throughout the year. When establishing our executive compensation plans for a given year, it is not possible to foresee all of the challenges and demands that will be made of our executives, both as a management team and in their areas of individual responsibility. We believe that, by rewarding decision-making and leadership, in addition to the achievement of quantifiable results, we are building a management team capable of creating stockholder value over the longer-term, while remaining disciplined in delivering shorter-term financial results.

The allocation of an executive officer’s compensation among each of the compensation components is based on our competitive benchmarking, our recruiting and retention goals, our view of internal fairness and consistency and other considerations that our Compensation Committee deems relevant, such as extraordinary performance. While our Compensation Committee does not have a formula for determining the appropriate allocation between cash and non-cash compensation or short-term and long-term performance-based compensation, historically our Compensation Committee has allocated a greater percentage of an employee’s total compensation to performance-based equity as he or she becomes more senior in the organization.

The charts below show the pay mix of our CEO and other named executive officers for fiscal 2017:

Base Salaries

We pay base salaries to attract talented executives and to provide a fixed base level of cash compensation. Base salaries for the named executive officers are individually determined by the Compensation Committee after consideration of:

There have generally been three bases for adjustment to base salary: annual increases, promotions or change in role, and market adjustments. The Compensation Committee considers base salary increases for our executive officers, including the named executive officers, annually, based on the factors described above. The Committee’s review of these factors is subjective and no fixed value or weight is assigned to any specific factor when making salary decisions.

2017 Base Salaries

The table below sets forth the annual base salaries for our named executive officers for 2017:

As described above, Dr. Gopal became CEO on January 1, 2017. The Compensation Committee adjusted Dr. Gopal’s base salary to reflect his new role. All other base salary increases were customary annual adjustments based on market data of our peer group provided by Compensia, the recommendations of Dr. Gopal (other than with respect to his own base salary), and their individual performance. Mr. Mahoney joined the Company in December 2016 and therefore, was not eligible for an annual adjustment.

Performance Based Cash Bonuses

A key compensation objective is to have a significant portion of each named executive officer’s compensation tied to Company performance. In support of this objective, we generally provide annual performance-based cash bonuses for our named executive officers, based on the achievement against corporate performance objectives established at the beginning of the calendar year. This performance-based cash bonus is designed to reward executives based on the achievement of Company financial goals as well as individual performance goals tied to the executive’s functional role. Executives are assigned a target bonus opportunity each year. Actual bonus awards are calculated based on the Company’s financial performance during the year and achievement of individual performance results.

At the beginning of 2017, the Board approved the 2017 operating plan, which included performance objectives for the Company that the Compensation Committee and Dr.

Gopal used to design our named executive officers’ cash bonus opportunity for 2017. The Compensation Committee set both individual and company metrics. The Compensation Committee believed that bookings and operating income were the appropriate company metrics that aligned with the Company’s growth strategy. The weighting of each metric is set forth in the tables below.

Achievement that is less than 95% results in 0% payout.

Bookings is the measurement of total software sales and maintenance (excluding services and multi-year contract effects) in planned currency and excluding acquisitions that weren’t contemplated in the Company’s 2017 sales plan.

Operating Income is the operating income reported in the Company’s financial filings, adjusted to reflect such operating income in planned currency and to remove the impact of any acquisitions not contemplated in the Company’s 2017 financial plan, unless the inclusion of bookings related to any acquisitions is approved by the Compensation Committee.

Mr. Mahoney joined the Company in December 2016. Pursuant to the terms of his offer letter, he was to receive his cash bonus in semi-annual payments. Effective in 2018, Mr. Mahoney will receive annual payments consistent with the Company’s other executive officers.

2017 Target Cash Bonus

As in prior years, the target annual cash bonus opportunities

for our named executive officers were generally expressed as a percentage of their respective base salaries. The table below shows the target bonus amount for each named executive officer as a percentage of base salary and as a corresponding cash amount:

2017 Cash Bonus Payments

Based on the achievement against the 2017 plan metrics, the Compensation Committee awarded cash bonuses in the amounts described in the table below:

Long-term Equity Compensation

Our executive compensation program includes stock-based awards, the value of which depends on our stock performance and other performance measures, to achieve strong long-term performance. The stock-based awards consist of performance-based Restricted Stock Units (PSUs) and time based Restricted Stock Units (RSUs).

PSUs align our executive officers’ pay to ANSYS’ financial performance based on specific financial performance metrics (i.e., revenue growth and operating margin) as well as a metric based on the return on the Company’s common stock (Total Stockholder Return or “TSR”). RSUs offer predictable value to our executive officers while promoting alignment of their interests with the long-term interests of our stockholders in a manner consistent with our peer company compensation practices. The combination of PSUs and RSUs motivate and retain our valued executive officers.

In the future, we may introduce other forms of equity compensation to our executive officers that are aligned with the interests of our stockholders.

The Compensation Committee, in consultation with our CEO (other than with respect to his compensation), determines the size, mix, material terms and metrics (in the case of PSUs) of equity awards granted to each of our executive officers taking into consideration factors such as the scope of their role, responsibility, competitive market data provided by Compensia, individual performance and retention risk.

For 2017, the Compensation Committee decided to have an equal distribution of PSU and RSU awards. Therefore, each named executive officer had 50% of their long-term equity compensation in the form of RSUs and the remaining 50% of their long-term equity compensation as PSUs.

Performance Metrics for PSU Awards

For 2017, the Compensation Committee selected the following metrics for PSUs:

Once the Compensation Committee selected the metrics, each named executive officer received two separate performance based awards as described in the chart below:

Please see the Grants of Plan-Based Awards Table on page 46 for additional information on these equity awards.

The TSR Metric

In 2017, the Compensation Committee decided to measure ANSYS’ TSR against the NASDAQ Composite Index (“Index”) rather than the NASDAQ Composite Total Returns Index which was used for the 2016 PSU awards.

Under the relative TSR metric, the Company’s performance is measured versus the Index over three separate one-year performance periods.

Specifically, one hundred percent (100%) of the applicable portion of the award for each sub-period is eligible to be earned or “banked” if the TSR equals the Index over the same period. The applicable portion of the target award will be reduced by three percentage points for each percent by which the Index exceeds the TSR; provided, however, that the applicable portion of the target is reduced to zero percent if the Index exceeds the TSR by twenty-five percent (25%) or more. In addition, zero percent of the applicable portion of the target award will be

earned for any sub-period in which there is both a negative TSR and the Index exceeds the TSR. The applicable portion of the target award will be increased by two percentage points for each percent by which the TSR exceeds the Index, up to a maximum of one-hundred and fifty percent (150%) of the target award. If, however, there is negative TSR that still exceeds the Index, a maximum of one hundred percent (100%) of the target may be earned for such period.

For purposes of illustration, the performance assessment is as follows:

Beginning in 2018 there will no longer be banking of shares underlying PSU awards with the TSR metric, and performance will be measured on a 3-year cumulative period.

As described above, 2017 was a transitional year for ANSYS. The Company underwent significant leadership changes and established long-term growth strategies. Prior year PSU plans were developed using aggressive goals which were not achieved and were forfeited. Recognizing that this put the Company at risk for disenfranchising critical talent, the new leadership team designed a one-time financial PSU award. Upon the achievement of target for a sub-performance period for these PSUs, 50% of the award will vest and 50% will be “banked” until the end of the three-year performance period.

The Compensation Committee has decided that any new PSUs using the revenue metric will not employ the 50% release mechanism, and all shares will be banked, if earned. No shares for such new PSU grants will vest until the end of the cumulative three-year period.

2017 LTI Performance Results

The TSR Metric

As described above, the PSU award that is tied to TSR measures ANSYS’ TSR compared to the NASDAQ Composite Index. For the 2017 sub-performance period, ANSYS’ TSR

was 57.16%, compared to the NASDAQ Composite Index of 27.54%, resulting in 150% of the target amount of the first tranche of the 2017 TSR Performance Share award to be banked. These shares will vest three years from the grant date, contingent upon the executive officer’s continued employment through the vesting date.

The Financial Metric

The Company achieved revenues of $1,090M, significantly above the target of $1,040M established at the beginning of calendar year 2017. The adjusted, non-GAAP operating income results were $508.6M, yielding an operating margin modifier of 46.7%. This superior performance resulted in a maximum payout capped at 200% of target. For the 2017 sub-performance period, 50% of the target amount of the first tranche vested upon certification of the results. The remaining 50% are banked and will vest three years from the grant date, contingent upon the executive officer’s continued employment through the vesting date.

Payouts for both awards are detailed below.

Stock Options

The company did not issue stock options during 2017.

Dr. Gopal 2017 Compensation

With respect to Dr. Gopal’s 2017 compensation, the Compensation Committee considered Dr. Gopal’s background and significant previous leadership expertise and expected level of contributions when determining his level of pay and benefits. After evaluating such factors and looking at our executive compensation peer group, our Compensation Committee believes that Dr. Gopal’s 2017 adjusted base salary, equity awards and other benefits were set at levels determined to be appropriate for his transition as CEO.

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of the median compensated of all our employees who were employed as of October 2, 2017 (other than our CEO). The purpose of this new disclosure is to provide a measure of the equitability of pay within our Company. We believe our compensation philosophy and process yield an equitable result for all of our employees. During fiscal 2017, the principal executive officer of ANSYS was our President and

CEO, Ajei Gopal. For 2017, the annual total compensation for Dr. Gopal was $10,299,056 as described in the Summary Compensation Table on page 45. The annual total compensation for our median compensated employee, an employee located in South Korea, was $133,074. Because our median compensated employee was located in South Korea, we converted that employee’s compensation from South Korean Won to U.S. Dollars at a year-to-date average exchange rate of 1130.5677 as of December 31, 2017. Our resulting CEO pay ratio for 2017 was approximately 77:1.

In accordance with Item 402(u) of Regulation S-K, we identified the median employee by (i) aggregating for each applicable employee (A) annual base salary for permanent employees as of October 2, 2017 (or for hourly employees, the hourly compensation rate multiplied by the target annual work schedule), (B) the target bonus for 2017, (C) the accounting value of any equity awards granted during 2017, and (ii) ranking this compensation measure for our employees from lowest to highest. This calculation was performed for all employees, excluding Dr. Gopal, whether employed on a full-time, part-time, temporary, or seasonal basis. For non-permanent employees that joined the Company during 2017, annual salary rates were adjusted to account only for the portion of the year that they were employed by the Company. The Company did not use statistical sampling nor did it rely on the data privacy or the de minimis exemption.

The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation, allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

Other Compensation Policies and Information

Employee Benefits and Perquisites

Employee benefits are provided to all eligible employees, including our named executive officers, which the

Compensation Committee believes are reasonable and consistent with its overall compensation objective to better enable us to attract and retain employees. These benefits include, in the United States, medical, dental, vision insurance, a 401(k) retirement plan, life and disability insurance, flexible spending accounts, an employee stock purchase plan, and other programs.

Stock Ownership Guidelines

The Board believes that our directors and executive officers should hold a meaningful financial stake in the Company in order to further align their interests with those of our stockholders. As a result, our Board has adopted stock ownership guidelines for members of our Executive Leadership Team and our Senior Leadership Team as indicated below. The guidelines were increased with effect from January 1, 2018.

Compensation Risk Assessment

The Compensation Committee, with the assistance of Compensia, assesses and considers potential risks when reviewing and approving our compensation policies and practices for the executive officers and our employees. We have designed our compensation programs, including our incentive compensation plans, with features to address potential risks while rewarding employees for achieving financial and strategic objectives through prudent business judgement and appropriate risk taking. Based upon its assessment, the Compensation Committee believes that any risks arising from our compensation programs do not create disproportionate incentives for our employees to take risks that could have a material adverse impact on us in the future.

Equity Grant Policy

Under the ANSYS, Inc. Equity Grant Policy, all equity granted under the Company’s equity incentive plans, and the terms and conditions governing such grants, must be authorized and approved by our Compensation Committee. Our Compensation Committee must authorize and approve any changes to the terms and conditions of any grant and any exceptions to our Equity Grant Policy.

Our Compensation Committee may authorize block grants of options or RSUs for employees who are not our executive officers or directors and may delegate the allocation of awards under these blocks to our CEO, CFO, General Counsel and/or Vice President of Human Resources.

Our Compensation Committee has delegated to our CEO and Vice President of Human Resources authority to make awards under the following three types of equity blocks: (i) new hire RSU grants of up to $500,000 per new hire, so long

as the aggregate number of grants in a calendar year does not exceed the applicable total number of shares approved by the Compensation Committee for such block grant; (ii) grants of RSUs to current employees for the achievement of extraordinary objectives or for special retention purposes of up to $150,000 per employee (known as “recognition and retention grants”), so long as the aggregate number of shares subject to grants in a calendar year does not exceed the applicable total number of shares approved by the Compensation Committee for such block grant; and (iii) stock option and RSU grants to new employees acquired in connection with designated business combinations, not to exceed an aggregate grant date fair value of ten percent (10%) of the purchase price, of each delegated business combination or such higher amount as may be approved by the Compensation Committee.

Under our Equity Grant Policy, grants to existing directors, officers, employees, consultants and key persons generally occur during open trading windows when all material information, including our earnings, has been publicly disclosed. Accordingly, the grant date for grants will generally be as follows: (i) the later of (a) forty-five (45) days after the end of each calendar quarter or the next business day thereafter, (b) two business days after the start of our next open trading window after the end of a calendar quarter or the next business day thereafter; (ii) for non-employee directors, on the date of the Company’s annual stockholder meeting, unless otherwise determined by our Compensation Committee; (iii) for delegated new hire grants and business combination grants, on the last business day of the month in which the hire date occurs and shall not precede the employee’s hire date; or (iv) for delegated recognition and retention grants for existing employees, on the last business day of the month in which such grant was approved.

No grant date shall precede the date the grant was authorized by our Compensation Committee. The grant or exercise price for all grants will be the fair market value of the stock on the grant date. The fair market value for any PSU awards or RSU awards will be the average closing price of the stock over the 20 trading days immediately preceding and including the grant date.

Clawback of Compensation

On May 12, 2010, our Board of Directors established a Recoupment of Compensation policy. Under the policy, if our Board determines in its sole discretion that the Company’s financial results are restated, whether in part or in their entirety, due to misconduct by one or more executive officers, the Board shall have the discretion to use commercially reasonable best efforts to remedy the misconduct and

prevent its recurrence. The Board may determine, to the fullest extent permitted by law, to (i) recoup any bonus or other performance-based compensation that has been paid, (ii) cancel any equity-based awards made, and/or (iii) recoup any gains made under equity-based awards made, from any executive officer engaged in such misconduct. The Board may also take any of the actions described in the preceding sentence in the event that one of the Company’s executive officers violates the terms of a non-competition agreement with the Company. The Recoupment of Compensation policy is part of our Corporate Governance Guidelines and is available on our website at www.ansys.com in the “Investor Relations” section under the heading “Corporate Governance.”

Anti-Hedging Policy

Under our Policy on Insider Trading and Insider Trading Procedures, no insider, which includes all of our Directors and named executive officers, among others, may at any time sell any securities of the Company that are not owned by such insider at the time of sale (a “short sale”). In addition, no insider may buy or sell puts, calls or other derivative securities of the Company, or pledge securities of the Company, at any time.

Perquisites

Some of our executives receive de minimis benefits that are not available to all of our employees. We do not provide aircraft or premium travel allowances to our executives, and we have no deferred compensation, pension arrangements, post-retirement health coverage or similar benefits for our executives.

All of our named executive officers are eligible to participate in the same Company retirement plans that are available to all of our eligible employees. Our corporate health and other insurance plans are the same for all eligible employees, and our executives’ pay the same premiums as our other employees who are enrolled in our plans.

Post-Employment Compensation

Retirement Benefits

We do not provide pension arrangements or post-retirement health coverage for our executives or employees, except as provided in certain employment agreements, as required under local law, or our Executive Severance Plan, details of which are included below under “Employment, Severance and Change-of-Control Agreements.” Our U.S.-based employees are eligible to participate in our 401(k) plan or that of one of our subsidiaries. In any plan year, we will contribute to each ANSYS, Inc. participant a matching contribution as follows: a dollar-for-dollar match for the first

3% an employee contributes to his or her 401(k) account, and a 25% match on the next 5% an employee contributes, for a maximum matching payment by us of 4.25%. All other executives are eligible to participate in the retirement plans offered generally to employees in the location where they are employed.

Nonqualified Deferred Compensation

We do not provide any nonqualified defined contribution or other deferred compensation plans to our executive officers.

Other Post-Employment Payments

We do not provide post-employment health coverage or other benefits, except in connection with certain employment agreements, details of which are included below under “Employment, Severance and Change of Control Agreements.”

Employment, Severance and Change of Control Agreements

All of our U.S.-based employees, including our executive officers, are employees-at-will and as such do not have employment contracts with us, except in the case of our CEO and some employees of our foreign or acquired subsidiaries, which is consistent with our compensation philosophy. We have entered into severance agreements with these individuals because of the unique situations of each of these executives.

Gopal Agreement

We entered into an employment agreement with Dr. Gopal on August 29, 2016, pursuant to which Dr. Gopal’s employment was for an initial term of one year, to automatically continue for additional one-year periods unless either party elects not to renew on 60 days prior written notice or the employment is earlier terminated by either party. Under the terms of the employment agreement, Dr. Gopal received an annual base salary of $550,000, which was increased to $750,000 by the Board in December 2016 in connection with his transition to become our CEO in January 2017, and a targeted annual bonus opportunity of 100% of his base salary in accordance with bonus goals set by the Board.

In the event that Dr. Gopal’s employment with us is terminated by us without “cause” or as a result of his resignation with “good reason,” Dr. Gopal will be entitled to (i) receive an amount equal to two times the sum of his then effective base salary plus his target bonus, payable over 24 months in equal installments, (ii) in certain circumstances a monthly payment by us of an amount equal to the employer health insurance contribution amount that would have been paid in respect of Dr. Gopal for at most 24 months following such termination, (iii) the vesting of a portion of the time-based vesting restricted stock units included in

the Initial RSUs (as defined below) as if Dr. Gopal had been employed for an additional two years, and (iv) the period of time during which Dr. Gopal may exercise his vested stock options shall be extended to the longer of (x) three months after his date of termination or (y) seven days after the commencement of our first open trading window that occurs after the date of termination, but in no event later than the 10-year expiration date of such options.

If a termination under such circumstances occurs during the period beginning 60 days prior to the effective date of a definitive agreement that will result in a change in control and ending 18 months after the consummation (closing) of a change in control, then, in lieu of the benefits described in the foregoing sentence, Dr. Gopal will be entitled to (a) the amounts described in clause (i) above, which will be paid in a lump sum in certain circumstances rather than over 24 months, (b) the acceleration and vesting of all outstanding stock options or other stock-based awards held by Dr. Gopal, subject to any performance or metric-based requirements set forth therein which shall be separately determined as set forth in the applicable award agreement and (c) in certain circumstances, a monthly payment by us of an amount equal to the employer health insurance contribution amount that would have been paid in respect of Dr. Gopal for at most 24 months following such termination.

Dr. Gopal has agreed to be subject to certain non-competition, non-solicitation and non-hire provisions during the term of his employment and for 24 months following the termination of his employment, subject to certain carve-outs for passive involvement in private equity firms with competitive investments, serving as a board member (or equivalent) of businesses with a de minimis competitive activity or serving as an executive of a business with a de minimis competitive activity provided that he has no involvement with the competitive activity.

Executive Severance Plan

On February 17, 2010, the Company adopted the ANSYS, Inc. Executive Severance Plan, which was amended as of July 29, 2014, (“Executive Severance Plan”), for executives and other employees selected for participation by our Compensation Committee. Pursuant to the Executive Severance Plan, covered executives whose employment with the Company is terminated for any reason other than for cause, death or disability will receive a lump-sum severance payment equal to the sum of six months’ base salary and target bonus and an amount equal to the earned, but unpaid, portion of the covered executive’s target bonus, as well as twelve months’ health and welfare benefits and outplacement services up to $15,000 in the aggregate. In the event the employment of a covered executive is terminated for any reason other than

for cause, death or disability, or by the covered executive with good reason, in either case within eighteen months after a change of control of the Company and without cause, the covered executive will (a) receive a lump-sum severance payment equal to the sum of twelve months’ base salary and target bonus and an amount equal to the earned, but unpaid, portion of the covered executive’s target bonus, (b) receive twelve months’ health and welfare benefits and outplacement services up to $15,000 in the aggregate and (c) have all outstanding stock options and other outstanding stock-based awards accelerate and become fully exercisable and non-forfeitable as of the date of such termination of employment. Dr. Gopal does not participate in the Executive Severance Plan.

All of our executive equity award agreements are subject to “double-trigger” vesting, meaning that if within eighteen months of a change of control, their respective employment is terminated without cause or is terminated by such executive after any adverse modification of his or her duties, principal employment location or compensation, then all stock options and other equity incentives awarded to that employee would become fully vested. Assuming a change of control occurred on December 31, 2017, their employment terminated on December 31, 2017, and the price per share paid in the change of control is the closing market price as of December 29, 2017, Dr. Gopal would have received $24,821,841, Ms. Shields would have received $10,071,099, Mr. Mahoney would have received $5,062,331, Mr. Hindsbo would have received $4,602,004, and Mr. Emswiler would have received $4,210,300 in connection with the vesting of their stock options, PSUs and RSUs.

Had a change of control occurred during 2017 and had their employment been terminated on December 31, 2017, our executive officers would have been eligible to receive the severance payments set forth in the table entitled “Potential Payments Under Employment, Severance and Change-of-Control Agreements” on page 50 of this Proxy Statement.

Our Compensation Committee has implemented these change of control arrangements to protect the interests of our senior executives when a potential change of control could affect our executives’ job security, authority or compensation, and believes that these arrangements help us recruit and retain executive-level talent. These change of control arrangements also promote the interests of our stockholders by mitigating the senior executives’ concerns about such potential matters and thereby assuring that management provides guidance to the Board and stockholders that is not related to such concerns.