<PAGE>
As filed with the Securities and Exchange Commission on December 10, 1996
REGISTRATION NO.333-17343
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
COOPER & CHYAN TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0409778
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
______________________
1601 SOUTH DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(408) 366-6966
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
____________________
ROBERT D. SELVI
CHIEF FINANCIAL OFFICER
COOPER & CHYAN TECHNOLOGY, INC.
1601 SOUTH DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(408) 366-6966
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
____________________
Copies to:
---------
GORDON K. DAVIDSON, ESQ.
RICHARD L. DICKSON, ESQ.
TRAM T. PHI, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME FOR A PERIOD OF 45 DAYS AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT OR UNTIL THE EARLIER SALE OF ALL SHARES REGISTERED HEREUNDER.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]____________
_____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(1) PRICE(1) REGISTRATION FEE(2)
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 1,545,208 shares $31.50 $48,674,052.00 $1,323.63
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based on
the average of the high and low prices of the Common Stock on the Nasdaq
National Market on December 6, 1996.
(2) Represents the incremental registration fee for an additional 138,666 shares
of Common Stock at $31.50 per share. The Company paid the registration fee
for the remaining 1,406,542 shares with its filing on December 5, 1996.
____________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
1,545,208 SHARES
COOPER & CHYAN TECHNOLOGY, INC.
COMMON STOCK
($0.01 PAR VALUE)
___________________
All of the shares of Common Stock offered hereby are being sold by the Selling
Stockholders named herein under "Selling Stockholders." Such shares are being
offered on a continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, during a period, which is anticipated to be 45 days in length
following the date on which the Registration Statement of which this Prospectus
forms a part becomes effective. No underwriting discounts, commissions or
expenses are payable or applicable in connection with the sale of such shares.
The Common Stock of Cooper & Chyan Technology, Inc. (the "Company" or "CCT") is
quoted on the Nasdaq National Market ("NNM") under the symbol "CCTI." The shares
of Common Stock offered hereby will be sold from time to time at then prevailing
market prices, at prices related to prevailing market prices or at negotiated
prices. On December 6, 1996, the closing price of the Common Stock on the NNM
was $31.625.
The shares of Common Stock offered hereby were issued by the Company to the
Selling Stockholders pursuant to Stock Purchase Agreements dated May 11, 1995,
May 23, 1995 and May 6, 1996. The shares of Common Stock offered hereby
represent approximately 11.8% of the Company's currently outstanding Common
Stock.
___________________
SEE "RISK FACTORS" COMMENCING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
COMMON STOCK OFFERED HEREBY.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO THE UNDERWRITING PROCEEDS TO PROCEEDS TO
PUBLIC (1) DISCOUNT COMPANY SELLING STOCKHOLDERS(1)
-------------- --------------- ------------ -----------------------
<S> <C> <C> <C> <C>
PER SHARE........... see text above none none see text above
TOTAL............... see text above none none see text above
-------------- --------------- ------------- -----------------------
</TABLE>
- ---------------------
(1) THE SHARES OF COMMON STOCK OFFERED HEREBY WILL BE SOLD FROM TIME TO TIME AT
THE THEN PREVAILING MARKET PRICES, AT PRICES RELATING TO PREVAILING MARKET
PRICES OR AT NEGOTIATED PRICES. THE COMPANY WILL PAY EXPENSES OF
REGISTRATION ESTIMATED AT $45,000.
- -------------------------------------------------------------------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission located at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can also be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a Web site (located at http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding the Company. The Common Stock is quoted for trading on the NNM, and
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement and
the exhibits filed therewith or incorporated therein by reference. Statements
contained in this Prospectus as to the contents of any contract or any other
document referred to are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or incorporated therein by reference, each
such statement being qualified in all respects by such reference. A copy of the
Registration Statement may be inspected, without charge, at the offices of the
Commission in Washington, D.C. and copies of all or any part of the Registration
Statement may be obtained from the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, upon
the payment of the fees prescribed by the Commission.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company or any Selling Stockholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that the information herein is correct
as of any time subsequent to the date hereof or that there has been no change in
the affairs of the Company since such date.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) The Company's annual report on Form 10-K filed with the Commission for the
fiscal year ended December 31, 1995.
(b) The Company's quarterly reports on Form 10-Q filed with the Commission for
the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996.
(c) The Company's current report on Form 8-K filed with the Commission on
September 12, 1996 and Form 8-K/A filed with the Commission on November 12,
1996.
(d) The Company's current report on Form 8-K filed with the Commission on
November 12, 1996.
(e) All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act following the fiscal year ended December 31,
1995 and prior to the termination of the offering contemplated hereby.
(f) The description of the Common Stock contained in the Company's registration
statement on Form 8-A filed with the Commission under the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any and all of the information
that has been incorporated by reference in this Prospectus (not including
exhibits to the information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Cooper & Chyan
Technology, Inc., 1601 South De Anza Boulevard, Cupertino, California 95014,
Attention: Investor Relations; telephone number (408) 366-6966.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
3
<PAGE>
THE COMPANY
GENERAL
The principal executive offices of the Company are located at 1601 South De
Anza Boulevard, Cupertino, California 95014, and its telephone number is (408)
366-6966. In this Prospectus, the term "CCT" or the "Company" refers to Cooper &
Chyan Technology, Inc., a Delaware corporation, unless the context otherwise
requires.
ACQUISITION BY CADENCE DESIGN SYSTEMS, INC.
On October 28, 1996, the Company entered into an Agreement and Plan of
Merger and Reorganization with Cadence Design Systems, Inc., a Delaware
corporation ("Cadence"), pursuant to which, upon fulfillment or waiver of
certain conditions, the Company will become a wholly owned subsidiary of Cadence
(the "Merger") in a stock-for-stock merger that is expected to be tax free and
accounted for as a pooling of interests. Upon consummation of the proposed
Merger, each outstanding share of Common Stock will be converted into the right
to receive eighty-five hundredths (0.85) of a share of common stock of Cadence.
The Merger, which is subject to certain conditions, including the approval by
the holders of a majority of the outstanding shares of the Company's Common
Stock and the expiration or termination of the Merger under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), is
currently expected to be completed as early as February 1997.
RISK FACTORS
In evaluating the Company's business, prospective investors should
carefully consider the following factors in addition to the other information
presented in this Prospectus.
Reliance on SPECCTRA and IC Craftsman Product Lines. Until 1995, the
---------------------------------------------------
Company derived substantially all of its revenue from its SPECCTRA line of
products and from the service activities performed by UniCAD, Inc., the
Company's recently acquired wholly owned subsidiary ("UniCAD"). Since the
introduction of the SPECCTRA product line, CCT has released new versions of its
--------
SPECCTRA product line approximately once each year. The IC Craftsman product
- -------
line, introduced in early 1995, accounted for approximately 15% of the Company's
total revenue in 1995 and 29% of the Company's total revenue in the first nine
months of 1996. The SPECCTRA and IC Craftsman product lines are based on a
-------- ------------
single set of core software technologies.
CCT's future operating results are significantly dependent upon continued
enhancement and market acceptance of its SPECCTRA and IC Craftsman product
-------- ------------
lines. There can be no assurance that the SPECCTRA product line will continue to
--------
be adequately enhanced to achieve continued market acceptance or that CCT will
continue to be successful in marketing the IC Craftsman product line or any
------------
other new or enhanced products. In particular, CCT believes that its future
operating results are significantly dependent upon market acceptance in Japan of
CCT's IC Craftsman products. CCT believes that a number of factors will be
------------
necessary for its IC Craftsman and SPECCTRA product lines to continue to achieve
------------ --------
market acceptance. These factors include performance, price, interoperability
with existing systems and the customer's assessment of CCT's technical,
managerial, service and support expertise and capabilities. Failure to succeed
with respect to any of these factors could result in CCT's failing to continue
to achieve market acceptance of its products, which would have a material
adverse effect on CCT's business, financial condition and results of operations.
A decline in demand for any of CCT's products as a result of competition,
technological change or other factors would have a material adverse effect on
CCT's business, financial condition and results of operations. In addition,
factors adversely affecting the electronic design automation ("EDA") market
generally could have a material adverse effect on CCT's business, financial
condition and results of operations.
Competition. The EDA software industry is highly competitive and is
-----------
characterized by continued advances in technology. CCT must continue to enhance
its current products and develop and introduce new products which address the
rapidly changing requirements of the marketplace. CCT faces intense competition
in both the printed circuit board ("PCB") and integrated circuit ("IC") markets.
Certain of CCT's competitors, including Mentor Graphics Corporation ("Mentor
Graphics"), also have OEM arrangements with CCT and bundle the SPECCTRA product
--------
line with their own products. There can be no assurance that CCT's participation
in the IC market will not be viewed unfavorably by CCT's OEMs and have an
adverse effect on SPECCTRA OEM sales. CCT also competes with the internal design
--------
groups of its existing and potential customers, who may be reluctant to purchase
products offered by independent vendors.
CCT expects that it will face increasing pricing pressures from its current
competitors and new market entrants. There can be no assurance that CCT's
competitors will not engage in pricing practices
4
<PAGE>
that are detrimental to CCT. In addition, CCT believes that the amount of design
work done by the users of CCT's products on Windows-based personal computers is
increasing relative to UNIX-based workstations. This trend has led to a decrease
in the average selling prices of CCT's products. If this trend continues, it may
continue to negatively impact CCT's average selling prices. There can be no
assurance that such decreases in average selling price will be offset by an
increase in the volume of sales.
Many of CCT's current and potential competitors have longer operating
histories, significantly greater financial, technical, product development and
marketing resources, greater name recognition and larger customer bases than
CCT. There can be no assurance that CCT's competition will not be able to
develop products comparable or superior to those developed by CCT, adapt more
quickly to new technologies, evolving industry trends or customer requirements
than CCT, or devote greater resources to the development, promotion and sale of
their products than CCT. In addition, current competitors of CCT have
established and may establish cooperative relationships among themselves or with
third parties to increase the ability of their products to address the needs of
CCT's existing and prospective customers. Such alliances among competitors could
present increased competition to CCT. Moreover, the EDA industry has become
increasingly concentrated in recent years as the result of numerous mergers and
acquisitions. CCT expects that competition may increase as a result of this
increased concentration. There can be no assurance that CCT will be able to
compete successfully against current and future competitors or that competitive
pressures faced by CCT will not have a material adverse effect on its business,
financial condition and results of operations.
In addition, the introduction or announcement by CCT or one or more of its
competitors of products embodying new technologies or features could render
CCT's existing products obsolete or unmarketable. There can be no assurance that
the introduction or announcement of new product offerings by CCT or one or more
of its competitors will not cause customers to defer purchases of existing
Company products. Such deferral of purchases could have a material adverse
effect on CCT's business, financial condition and results of operations.
Dependence on Key Personnel. CCT's future depends in large part on the
---------------------------
continued service of its key technical personnel, in particular its founders,
and its ability to continue to attract and retain such personnel, many of whom
are highly skilled. The competition for such personnel in the software industry
in general, and the EDA industry in particular, is intense, and there can be no
assurance that CCT will retain its key technical personnel or continue to
attract such personnel in the future. There are only a limited number of
qualified EDA engineers, and competition for such individuals is especially
intense. CCT has at times experienced and continues to experience difficulty in
recruiting qualified technical personnel. Although such difficulties have not
had a material impact on CCT's business to date, there can be no assurance that
such difficulties will not do so in the future. Generally, CCT's employees are
not bound by employment or noncompetition agreements or covered by key man life
insurance policies. In addition, competitors may attempt to recruit CCT's key
employees. The loss of any key technical, management or marketing personnel or
the failure to recruit such personnel successfully in the future could have a
material adverse effect on CCT's business, financial condition and results of
operations.
Dependence on OEMs and Distributors. A significant portion of CCT's
-----------------------------------
domestic and international license and service revenue comes from OEMs, which
incorporate CCT's products into their CAD systems, and distributors. During
1993, 1994, 1995 and the first nine months of 1996, revenue from distributors
and OEMs accounted for approximately 78%, 50%, 36% and 18%, respectively, of
CCT's total revenue. CCT is particularly dependent upon one of its OEMs, Mentor
Graphics. During 1993, 1994, 1995 and the first nine months of 1996, sales of
licenses to Mentor Graphics accounted for approximately 26%, 20%, 11%, and 10%,
respectively, of CCT's total revenue.
CCT is dependent upon the continued viability and financial stability of
its distributors and OEMs. Since CCT's products are used by highly skilled
professional engineers, an effective distributor or OEM representative must
possess sufficient technical, marketing and sales resources and must devote
5
<PAGE>
these resources to a lengthy sales cycle, customer training and product service
and support. In addition, CCT's distributors and OEMs generally offer products
of several different companies, including in some cases products that are
competitive with CCT's products. Although CCT is not aware of any financial
difficulties being experienced by any of its significant OEMs or distributors,
there can be no assurance that Mentor Graphics or any of CCT's distributors or
other OEMs will be able to continue to market, service and support CCT's
products effectively, that economic conditions or industry demand will not
adversely affect these distributors and OEMs, that Mentor Graphics or any
distributor or other OEM that licenses CCT's products will choose to continue to
license such products or that any of these distributors and OEMs will not devote
greater resources to marketing and supporting products of other companies. The
current OEM agreement with Mentor Graphics will expire on March 31, 1998. There
can be no assurance that CCT will reach a subsequent agreement with Mentor
Graphics. Should CCT fail to reach a subsequent agreement with Mentor Graphics,
there can be no assurance that CCT would be successful in either securing
alternative channels of distribution for its products or expanding its own
direct sales to replace Mentor Graphics. The loss of, or a significant reduction
in revenue from, Mentor Graphics or any of CCT's distributors or other OEMs
would have a material adverse effect on CCT's business, financial condition and
results of operations, at least to the extent such loss is not offset by a
corresponding increase in CCT's direct sales.
Over the past two years CCT has significantly increased its sales and
marketing personnel. The increase in sales and marketing personnel was begun in
anticipation of the introduction of the IC Craftsman product line and was
------------
continued in order to expand worldwide distribution, principally in Europe and
Japan. While CCT anticipates an increase in revenues as the IC Craftsman product
------------
line gains commercial acceptance and international sales increase, there can be
no assurance that CCT will continue to achieve revenue levels that justify the
increased expenses. CCT has relatively little experience in direct sales in the
IC market. There can be no assurance that expansion of CCT's direct sales
efforts will succeed or that such expansion will result in increased sales.
Although the success of this direct channel has reduced CCT's dependence on the
OEM channel, there can be no assurance that the expansion of this channel will
not have an adverse effect on existing distributor and OEM relationships.
Management of Growth. Recently, CCT has significantly increased its
--------------------
research and development and sales and marketing personnel. The rapid growth and
expansion CCT has experienced, including the acquisition of UniCAD, has placed
and continues to place a significant strain upon its management, and operational
and financial resources. CCT has grown from 115 permanent full time employees at
December 31, 1994 to 166 permanent full time employees at September 30, 1996,
and currently plans to continue to expand its staff. The increase in the number
of CCT's employees and CCT's market diversification and product development
activities have resulted in increased responsibilities for CCT's management.
CCT's ability to operate successfully will require such personnel to work
together effectively. Failure to do so could have a material adverse effect upon
CCT's business, financial condition and results of operations.
To accommodate this recent growth, CCT is currently enhancing a variety of
new and upgraded operational and financial systems, procedures and controls,
including the improvement of its general ledger accounting and other internal
management systems, its customer database and its transaction processing
systems. There can be no assurance that CCT will be able to continue to enhance
these systems, procedures and controls successfully. The failure of CCT to
respond to and manage its growth and changing business conditions, or to adapt
its operational, management and financial control systems to accommodate its
growth, could have a material adverse effect on CCT's business, financial
condition and results of operations.
Future Operating Results Uncertain; Quarterly Fluctuations. Although CCT
----------------------------------------------------------
has recently experienced significant revenue growth, such growth should not be
considered to be indicative of future revenue growth, if any, or of future
operating results. CCT's recent revenue growth is a result of
6
<PAGE>
increased unit volume and new product introductions. There can be no assurance
that CCT's revenue will grow or be sustained in future periods or that CCT will
remain profitable in any future period.
CCT believes that its quarterly and annual operating results have in the
past and may in the future vary significantly depending on factors such as
variations in product development or operating expenditures, increased
competition, the purchasing patterns of its customers, the timing of customer
design and development projects, the timing of customer evaluation and
acceptance, the timing of expenditures by CCT in anticipation of product
releases or increased revenue, the timing of product enhancements and product
introductions by CCT and its competitors, market acceptance of new and enhanced
versions of CCT's products, the size, timing and structure of significant
licenses, changes in pricing policies of CCT and its competitors, variations in
the mix of products CCT licenses, delays in processing orders, the mix of direct
and indirect sales, changes in Company strategy, personnel changes and general
economic factors. Any unfavorable changes in these or other factors could have a
material adverse effect on CCT's business, financial condition and results of
operations.
The sales cycle for CCT's products is relatively lengthy. In particular,
orders for licenses of CCT's IC Craftsman products in a given quarter are
------------
typically made by relatively fewer customers and in larger amounts as compared
to orders for licenses of CCT's SPECCTRA products. Accordingly, because IC
-------- --
Craftsman revenues have increased as a percentage of CCT's total revenues, such
- ---------
licenses ordered by a single customer can account for a significant portion of a
quarter's revenues. Because CCT's expenses are relatively fixed in the short
term, the loss or delay of such orders by a single customer or multiple
customers could have a material adverse effect on CCT's business, financial
condition and results of operations.
In addition, CCT's revenues and results of operations are affected by
seasonal trends that may include higher revenues in CCT's second and fourth
fiscal quarters and lower revenues in its first and third fiscal quarters as a
result of many customers' purchasing and budgetary practices, and lower revenues
in the summer months (particularly in Europe) when many businesses make fewer
purchases. CCT's expense levels are based, in part, on its expectations as to
future revenue. If revenue levels are below expectations due to delays
associated with customers' acceptance and evaluation procedures or for any other
reason, operating results are likely to be materially adversely affected. Net
income, if any, may be disproportionately affected by a reduction in revenue
because only a small portion of CCT's expenses varies with its revenue.
Risk Associated with Technological Change and New Product Development. The
---------------------------------------------------------------------
EDA industry is characterized by extremely rapid technological change, frequent
new product introductions and enhancements, evolving industry standards and
rapidly changing customer requirements. Customers in the EDA industry require
software products that allow them to minimize their time-to-market,
differentiate their products, maximize their engineering productivity and reduce
design time and costs. CCT's future success will depend upon its ability to
continually enhance its current products and develop and introduce new products
that keep pace with technological advancements and address the increasingly
sophisticated needs of its customers. There can be no assurance that CCT will be
successful in developing and marketing product enhancements or new products that
respond to technological change, evolving industry standards and changing
customer requirements, that CCT will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of these
products or product enhancements or that its new products and product
enhancements will adequately meet the requirements of the marketplace and
achieve any significant degree of market acceptance. Failure of CCT, for
technological or other reasons, to develop and introduce new products and
product enhancements in a timely and cost-effective manner would have a material
adverse effect on CCT's business, financial condition and results of operations.
Any failure by CCT to anticipate or to respond adequately to changing market
conditions, or any significant delays in product development or
7
<PAGE>
introduction, could cause customers to delay or decide against purchases of
CCT's products and would have a material adverse effect on CCT's business,
financial condition and results of operations.
Software products as complex as those offered by CCT may contain defects or
failures when introduced or when new versions are released. CCT has in the past
discovered software defects in certain of its products and may experience delays
or lost revenue correcting such defects in the future. Although CCT has
corrected known material defects and has not experienced material adverse
effects resulting from any such defects to date, there can be no assurance that,
despite testing by CCT, errors will not be found in new products or releases
after commencement of commercial shipments. Any such occurrence could result in
loss of market share or failure to achieve market acceptance and could have a
material adverse effect upon CCT's business, financial condition and results of
operations.
Dependence on Proprietary Technology. CCT's success is heavily dependent
------------------------------------
upon its proprietary software technology. CCT does not currently have any
patents and relies principally on trade secret, copyright and trademark laws,
nondisclosure and other contractual agreements and technical measures to protect
its technology, including its ShapeBased technology. CCT generally enters into
confidentiality and/or license agreements with its employees, distributors and
customers, and limits access to and distribution of its software, documentation
and other proprietary information. CCT's software is shipped with a software
security lock which limits software access to authorized users. In addition, CCT
does not license or release its source code, except in connection with source
code escrow arrangements. However, effective copyright and trade secret
protection may be unavailable or limited in certain foreign countries. There
also can be no assurance that the additional steps taken by CCT will prevent
misappropriation of its technology. Any failure by or inability of CCT to
protect its proprietary technology could have a material adverse effect on CCT's
business, financial condition and results of operations. Furthermore, such
protections do not preclude competitors from developing products with
functionality or features similar to CCT's products, and there can be no
assurance that third parties will not independently develop competing
technologies that are substantially equivalent or superior to CCT's
technologies. However, CCT believes that, due to the rapid pace of innovation
within the EDA industry, factors such as the technological and creative skills
of its personnel, new product developments, frequent product enhancements, name
recognition and reliable product maintenance are more important to establishing
and maintaining a technology leadership position than are the various legal
protections of its technology.
CCT does not believe its products infringe the proprietary rights of any
third parties. However, there can be no assurance that infringement claims will
not be asserted against CCT or its customers. Furthermore, CCT may initiate
claims or litigation against third parties for infringement of CCT's proprietary
rights or to establish the validity of CCT's proprietary rights. Litigation,
either as plaintiff or defendant, would cause CCT to incur substantial costs and
divert management resources from productive tasks, whether or not such
litigation is resolved in CCT's favor, which could have a material adverse
effect on CCT's business, financial condition and results of operations. Parties
making claims against CCT could secure substantial damages, as well as
injunctive or other equitable relief, which could effectively block CCT's
ability to license its products in the United States or abroad. Such a judgment
could have a material adverse effect on CCT's business, financial condition and
results of operations. If it appears necessary or desirable, CCT may seek
licenses to intellectual property that it is allegedly infringing. CCT is not
currently seeking any such license. There can be no assurance, however, that
licenses could be obtained on commercially reasonable terms, if at all, or that
the terms of any offered license would be acceptable to CCT. The failure to
obtain the necessary licenses or other rights could have a material adverse
effect on CCT's business, financial condition and results of operations. As the
number of software products in the industry increases and the functionality of
these products further overlaps, CCT believes that software developers may
become increasingly subject to infringement claims. Any such claims, with or
without merit, can be time consuming and expensive to defend and could adversely
affect CCT's business, financial condition and results of operations.
8
<PAGE>
International Operations. During 1993, 1994, 1995 and the first nine months
------------------------
of 1996, CCT derived 31%, 51%, 49% and 41%, respectively, of its total revenue
from the licensing and support of its software products outside the United
States. CCT expects that international license and service revenue will continue
to account for a significant portion of its revenues in the future and that
CCT's continued growth and profitability will require expansion of its sales in
foreign markets.
CCT's international revenue involves a number of risks, including the
impact of possible recessionary environments in economies outside the United
States, longer receivables collection periods and greater difficulty in accounts
receivable collection, unexpected changes in regulatory requirements, reduced
protection for intellectual property rights in some countries, tariffs and other
trade barriers, foreign currency exchange rate fluctuations, difficulties in
staffing and managing foreign operations, the burdens of complying with a
variety of foreign laws, potentially adverse tax consequences and political and
economic instability. There can be no assurance that the foregoing factors will
not have a material adverse effect on CCT's future international license and
service revenue, and, consequently, on CCT's business, financial condition and
results of operations.
CCT has expanded its sales and support organizations in Europe and Asia,
which has resulted in an increase in sales and marketing expenses. CCT intends
to further expand these organizations, resulting in additional increases in
sales and marketing expenses. However, CCT expects the growth rate of such
expenses to be lower than in the past. There can be no assurance that CCT will
be able to sustain or increase revenue derived from international licensing and
service. Any failure to expand sales in foreign markets would have a material
adverse effect on CCT's business, financial condition and results of operations.
Risks Associated with CCT's Acquisition of UniCAD. The anticipated benefits
-------------------------------------------------
of the recently completed acquisition of UniCAD will not be achieved unless
UniCAD and CCT are successfully combined in an efficient and timely manner. It
is possible that the process of combining the two organizations, integrating
their product offerings and coordinating their research and development,
production, administrative and sales and marketing efforts, will cause an
interruption of, or a loss of momentum in, the activities of either or both of
the companies' businesses, which could have a material adverse effect on CCT's
business, financial condition and results of operations, at least in the near
term. The difficulties of integration may be increased by the necessity of
coordinating geographically separated organizations and integrating personnel
with disparate business backgrounds. Furthermore, the process of combining the
companies could have a material adverse effect on employee morale and on the
ability of CCT to retain the key management, technical and sales and marketing
personnel who are critical to CCT's future operations. In addition, the
consummation of the acquisition could cause customers or potential customers to
delay or cancel orders for products as a result of uncertainty over the
integration and support of CCT's products. There can be no assurances that CCT's
current management will be capable of managing the combined operations, or
UniCAD's existing strategic relationships with its customers, effectively. In
addition, it is possible that the business and management changes brought by the
acquisition may cause key employees to leave UniCAD or cause CCT to terminate
key employees of UniCAD. Any failure by UniCAD or CCT to retain and attract key
employees could have a material adverse effect on CCT's business, financial
condition and results of operations.
Risks Associated with the Merger with Cadence. The anticipated benefits of
---------------------------------------------
the recently announced Merger with Cadence will not be achieved unless Cadence
and CCT are successfully combined in an efficient and timely manner. The
Merger is subject to a number of conditions. Among the conditions that must be
fulfilled in order to consummate the Merger are the affirmative vote of a
majority of the outstanding voting stock of CCT and the expiration or
termination of the waiting period under the HSR Act. The consummation of the
Merger is also conditioned upon the receipt of a letter from Cadence's
independent public accountants concerning the qualification of the Merger for
accounting treatment as a pooling of interests in accordance with generally
accepted accounting principles. In order to qualify the Merger for pooling of
interests accounting treatment, Cadence needs to cure the taint on certain
treasury shares by issuing them in one or more transactions. There can be no
assurance that such conditions will be satisfied or waived and, accordingly,
there can be no assurance that the Merger will be consummated. In addition,
the review of the Merger pursuant to the HSR Act may substantially delay the
consummation of the Merger. There can be no assurance that a challenge to the
Merger on antitrust grounds will not be made, or if such a challenge is made,
that CCT and Cadence will prevail or would not be required to terminate the
Merger agreement, divest certain assets, license certain proprietary
technology or accept certain conditions in order to consummate the Merger. The
announcement of the Merger could have a material adverse effect on employee
morale and on the ability of CCT to retain the key personnel who are critical
to CCT's future operations and could cause customers or
9
<PAGE>
potential customers to delay or cancel orders for products as a result of
uncertainty over the integration and support of CCT's products, either of which
could have a material adverse effect on CCT's business, financial condition and
results of operations.
Sales by Selling Stockholders; Volatility of Stock Price. The shares of
-------------------------------------------------------
Common Stock offered hereby represent approximately 11.8% of the outstanding
Common Stock as of the date of this Prospectus. The public sale of such shares,
or the perception that such shares may be sold, may have the effects of
depressing the market price of the Common Stock and causing substantial
fluctuations in the price of the Common Stock. The price of the Common Stock has
been subject to significant price fluctuations. In addition, as a result of the
announcement of the Merger, the price of the Common Stock is now subject to
significant price fluctuations associated with fluctuations in the price of
Cadence's Common Stock. There can be no assurance that the price of the Common
Stock will stabilize at any time or at a price equal to or above the offering
price of the shares offered hereby. In addition, the trading volume for the
Common Stock has generally been relatively small. A large increase in share
trading volume in a short period of time could cause a significant reduction in
share trading prices.
10
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Common Stock as of December 2,
1996 by the Selling Stockholders named below. Synopsys, Inc. ("Synopsys"),
Mentor Graphics Corporation ("Mentor Graphics") and Marubeni Hytech Corp.
("Marubeni") acquired the shares of Common Stock offered hereby pursuant to
Stock Purchase Agreements with the Company dated May 6, 1996, May 11, 1995 and
May 23, 1995, respectively. In connection with such Stock Purchase Agreements,
Synopsys and the Company also entered into an Investor Rights Agreement pursuant
to which the shares offered by Synopsys hereby are being registered, and various
joint development and marketing arrangements, and Mentor Graphics and Marubeni
entered into a Rights Agreement pursuant to which the shares offered by Mentor
Graphics and Marubeni hereby are being registered. Mentor Graphics is an OEM
and Marubeni is a distributor of the Company's products. See "Risk Factors--
Dependence on OEMs and Distributors." James R. Fiebiger, a director of the
Company, is also a director of Mentor Graphics. Except as described herein, no
Selling Stockholder has had any position, office or other material
relationship with the Company within the past three years. The following table
assumes that the Selling Stockholder sell all of the shares held by the
Selling Stockholders in this offering. The Company is unable to determine the
exact number of shares that will actually be sold.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to Offering Owned After Offering
------------------------ ----------------------
Shares Being
Name Number Percent Offered Number Percent
- ----------------- ----------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Synopsys, Inc. 1,206,542 9.2% 1,206,542 -- --
Mentor Graphics Corporation 200,000 1.5% 200,000 -- --
Marubeni Hytech Corp. 138,666 1.1% 138,666 -- --
All Selling Stockholders 1,545,208 11.8% 1,545,208 -- --
</TABLE>
PLAN OF DISTRIBUTION
The Registration Statement of which this Prospectus forms a part has been
filed pursuant to the Investor Rights Agreement and the Rights Agreement
referred to above (the "Agreements"). To the Company's knowledge, the Selling
Stockholders have not entered into any agreement, arrangement or understanding
with any particular broker or market maker, if any, with respect to the shares
offered hereby, nor does the Company know the identity of the brokers or market
makers that will participate in the offering.
The shares of Common Stock covered hereby may be offered and sold from time
to time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made over the NNM or otherwise,
at then prevailing market prices, at prices related to prevailing market prices
or at negotiated prices. The shares may be sold in one or more of the following:
(a) a block trade in which the broker-dealer engaged by the Selling Stockholder
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by the
broker-dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. To the Company's
knowledge, the Selling Stockholders have not, as of the date hereof, entered
into any arrangement with a broker-dealer for the sale of shares through a block
trade, special offering, or secondary distribution of a purchase by a broker-
dealer. In effecting sales, broker-dealers engaged by the Selling Stockholders
may arrange for other broker-dealers to participate. Broker-dealers will receive
commissions or discounts from the Selling Stockholders in amounts to be
negotiated.
In offering the shares, the Selling Stockholders and any broker-dealers who
execute sales for the Selling Stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Stockholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions.
11
<PAGE>
All costs, expenses and fees in connection with the registration of the
shares will be borne by the Company. Commissions and discounts, if any,
attributable to the sales of the shares will be borne by the Selling
Stockholders. The Selling Stockholders may agree to indemnify any broker-dealer
or agent that participates in transactions involving sales of the shares against
certain liabilities, including liabilities arising under the Securities Act.
Under the Agreements, the Company and the Selling Stockholders have agreed to
indemnify each other and certain other persons against certain liabilities in
connection with the offering of the shares, including liabilities arising under
the Securities Act.
The Selling Stockholders have advised the Company that, during such time as
they may be engaged in a distribution of the shares of Common Stock included
herein, they will comply with Rules 10b-6 and 10b-7 under the Exchange Act and,
in connection therewith, the Selling Stockholders have agreed not to engage in
any stabilization activity in connection with any securities of the Company, to
furnish copies of this Prospectus to each broker-dealer through which the shares
of Common Stock included herein may be offered, and not to bid for or purchase
any securities of the Company or attempt to induce any person to purchase any
securities of the Company except as permitted under the Exchange Act. The
Selling Stockholders have also agreed to inform the Company and broker-dealers
through whom sales may be made hereunder when the distribution of the shares is
completed.
Rule 10b-6 under the Exchange Act prohibits participants in a distribution
from bidding for or purchasing for an account in which the participant has a
beneficial interest, any of the securities that are the subject of the
distribution. Rule 10b-7 under the Exchange Act governs bids and purchases made
to stabilize the price of a security in connection with a distribution of the
security.
This offering will terminate on the earlier of (a) 45 days from the date of
the effectiveness of the Registration Statement of which this Prospectus forms a
part; or (b) the date on which all shares offered hereby have been sold by the
Selling Stockholders. There can be no assurance that the Selling Stockholders
will sell any or all of the shares of Common Stock offered hereby. To the extent
that the Selling Stockholders do not sell all of the shares of Common Stock
offered hereby prior to 45 days from the date of effectiveness of the
Registration Statement, the Selling Stockholders may exercise registration
rights with respect to such unsold shares in the future.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Fenwick & West LLP, Two Palo Alto Square,
Palo Alto, California 94306.
EXPERTS
The audited consolidated financial statements of Cooper & Chyan
Technology, Inc. at December 31, 1995 and 1994 and for each of the three years
ended December 31, 1995 incorporated by reference in this Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon, and are incorporated by reference in reliance
upon such experts given upon the authority of such firm as experts in
accounting and auditing.
The supplemental consolidated financial statements of Cooper & Chyan
Technology, Inc. at December 31, 1995 and 1994 and for each of the three
years ended December 31, 1995 included in this Registration Statements have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report, appearing elsewhere herein, which as to the years 1995 and 1994 are
based in part on the reports of Deloitte & Touche, independent auditors. The
financial statements referred to above are included in reliance upon the
reports of such firms given upon the authority of such firms as experts in
accounting and auditing.
12
<PAGE>
INDEX TO CCT SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Ernst & Young LLP with respect to Cooper & Chyan Technology, Inc................ F-2
Report of Deloitte & Touche, LLP with respect to UniCAD, Inc.............................. F-3
Supplemental Consolidated Balance Sheet as of December 31, 1994 and 1995 and
September 30, 1996 (unaudited)........................................................ F-4
Supplemental Consolidated Statements of Income for the years ended December 31,
1993, 1994 and 1995 and for the nine months ended September 30, 1995
(unaudited) and 1996 (unaudited)...................................................... F-5
Supplemental Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1993, 1994 and 1995 and for the nine months ended September 30,
1996 (unaudited)...................................................................... F-6
Supplemental Consolidated Statements of Cash Flows for the years ended December
31, 1993, 1994 and 1995 and for the nine months ended September 30, 1995
(unaudited) and 1996 (unaudited)...................................................... F-7
Notes to Supplemental Consolidated Financial Statements................................... F-8
</TABLE>
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Cooper & Chyan Technology, Inc.
We have audited the accompanying supplemental consolidated balance sheets
of Cooper & Chyan Technology, Inc. (formed as a result of the consolidation of
Cooper & Chyan Technology, Inc. and UniCAD, Inc.) as of December 31, 1994 and
1995, and the related supplemental consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1995. The supplemental consolidated financial statements
give retroactive effect to the merger of Cooper & Chyan Technology, Inc. and
UniCAD, Inc. on August 28, 1996, which has been accounted for using the pooling
of interests method as described in the notes to the supplemental consolidated
financial statements. These supplemental financial statements are the
responsibility of the management of Cooper & Chyan Technology, Inc. Our
responsibility is to express an opinion on these supplemental financial
statements based on our audits. We did not audit the financial statements of
UniCAD, Inc., which statements reflect total assets constituting 21% for 1994
and 7% for 1995 of the related supplemental consolidated financial statement
totals, and which reflect net income constituting 44% for 1994 and 27% for 1995
of the related consolidated financial statement totals. Those statements were
audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to data included for UniCAD, Inc., is based
solely on the report of other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the
supplemental financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Cooper & Chyan
Technology, Inc. at December 31, 1994 and 1995, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1995, after giving retroactive effect to the merger of
UniCAD, Inc. as described in the notes to the supplemental consolidated
financial statements, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Palo Alto, California
January 26, 1996
(Except for note 2 as to which the date is August 28, 1996)
<PAGE>
AUDITOR'S REPORT
To the Board of Directors
UniCAD, Inc.
We have audited the consolidated balance sheets of UniCAD, Inc. and
subsidiary as of September 30, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity, and cash flows for the years then
ended (not separately presented herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the companies as of September
1995 and 1994, and the results of their operations and their cash flows for the
years then ended in conformity with United States generally accepted accounting
principles.
Deloitte & Touche
Chartered Accountants
Ottawa, Canada
September 20, 1996
<PAGE>
COOPER & CHYAN TECHNOLOGY, INC.
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- SEPTEMBER 30
1994 1995 1996
----------------------- ----------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents..... $2,117,092 $ 3,586,998 $ 4,690,200
Short term investments........ 350,788 23,402,236 26,737,015
Accounts receivable
(Net of allowance of $329,945
at December 31, 1995)........ 3,318,991 5,599,419 6,525,685
Income taxes receivable....... 99,130 -- --
Deferred income taxes......... -- 373,525 373,525
Prepaid expenses and other
current assets............... 289,974 1,133,917 1,932,325
---------- ----------- -----------
Total current assets............. 6,175,975 34,096,095 40,258,750
Property, plant and equipment net 2,018,157 3,008,270 3,346,863
Other assets..................... 163,197 385,174 250,788
---------- ----------- -----------
$8,357,329 $37,489,539 $43,856,401
========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings under bank credit
facility..................... $ 500,000 $ -- $ --
Trade accounts payable........ 277,610 882,074 573,132
Accrued salary and employee
benefits..................... 784,672 1,178,947 2,251,297
Accrued liabilities........... 629,436 2,180,027 2,014,441
Income taxes payable.......... -- 242,566 294,937
Deferred revenue.............. 2,801,519 3,033,293 2,632,724
Deferred income taxes......... 59,937 -- --
---------- ----------- -----------
Total current liabilities........ 5,053,174 7,516,907 7,766,531
Deferred income taxes............ 42,886 238,851 238,851
Other long term liabilities...... 313,819 319,459 92,534
Stockholders' equity
Convertible preferred stock,
$0.01 par value, 5,000,000
shares authorized, no shares
outstanding at December 31,
1995; no par value,
4,000,000 shares authorized,
1,480,000 shares outstanding
at December 31, 1994......... 185,000 -- --
Common stock, $0.01 par
value, 30,000,000 shares
authorized, 12,321,737
shares outstanding at
December 31, 1995; no par
value, 24,000,000 shares
authorized, 7,321,349 shares
outstanding at December 31,
1994......................... 107,838 123,228 129,584
Additional paid in capital........... 3,778 25,732,747 28,828,228
Notes receivable from stockholders... -- (39,010) --
Deferred compensation................ -- (404,626) (333,222)
Retained earnings.................... 2,650,834 4,001,983 7,133,895
---------- ----------- -----------
Total stockholders' equity....... 2,947,450 29,414,322 35,758,485
---------- ----------- -----------
$8,357,329 $37,489,539 $43,856,401
========== =========== ===========
</TABLE>
See accompanying notes.
<PAGE>
COOPER & CHYAN TECHNOLOGY, INC. SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, Nine Months Ended
----------------------------------------------- -------------------------
1993 1994 1995 1995 1996
------------ ----------- ------------ ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue
License.......................... $ 6,263,681 $ 9,525,076 $15,660,859 $10,735,585 $18,138,210
Service.......................... 1,030,764 6,020,059 7,780,879 5,284,006 7,542,007
----------- ----------- ----------- ----------- -----------
Total revenue........................ 7,294,445 15,545,135 23,441,738 16,019,591 25,680,217
----------- ----------- ----------- ----------- -----------
Costs and expenses
Cost of license revenue.......... 259,541 850,677 1,157,101 885,160 1,226,884
Cost of service/other revenue.... 92,848 774,805 845,946 465,001 662,056
Research and development......... 3,297,544 5,576,019 5,892,932 4,262,731 5,557,199
Sales and marketing.............. 1,490,117 4,898,583 10,200,510 6,987,522 10,066,474
General and administrative....... 488,067 1,907,826 3,525,581 2,167,110 4,006,103
Write offs related to investee
company......................... -- 434,490 -- -- --
----------- ----------- ----------- ----------- -----------
Total costs and expenses............. 5,628,117 14,442,400 21,622,070 14,767,524 21,518,716
----------- ----------- ----------- ----------- -----------
Income from operations............... 1,666,328 1,102,735 1,819,668 1,252,067 4,161,501
Interest income...................... 15,761 14,373 230,594 82,688 771,637
Interest expense..................... (5,058) (5,134) (17,925) (36,159) (22,935)
Equity in losses of investee company. (32,046) (87,100) -- -- --
Other income(loss)................... -- (22,336) (37,663) (1,600) 38,896
----------- ----------- ----------- ----------- -----------
Income before provision for income
taxes............................... 1,644,985 1,002,538 1,994,674 1,296,996 4,949,639
Provision for income taxes........... 603,217 359,333 665,787 463,393 1,686,597
----------- ----------- ----------- ----------- -----------
Net income........................... $ 1,041,768 $ 643,205 $ 1,328,887 $ 833,603 $ 3,263,042
=========== =========== =========== =========== ===========
Net income per share................. $ 0.10 $ 0.06 $ 0.11 $ 0.07 $ 0.23
=========== =========== =========== =========== ===========
Shares used in computing per share
amounts............................. 10,134,829 10,989,405 12,271,502 11,917,611 14,418,872
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
COOPER & CHYAN TECHNOLOGY, INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CONVERTIBLE NOTES
PREFERRED STOCK COMMON STOCK ADDITIONAL RECEIVABLE
--------------- ------------ PAID-IN FROM
SHARES AMOUNT SHARES AMOUNT CAPITAL STOCKHOLDERS
----------- -------- --------- ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1992............................ 1,480,000 $185,000 6,135,600 $23,771 $ -- $ --
Exercise of common stock options......................... 276,200 23,457
Cash dividends ($0.045 per preferred share)..............
Net income...............................................
--------- ------- --------- ------ -------- ------------
Balances at December 31, 1993............................ 1,480,000 185,000 6,411,800 47,228 -- --
Issuance of common stock (UniCAD inception).............. 372,157 3,722
UniCAD adjustment........................................ 3,778
Exercise of common stock options......................... 537,392 56,888
Cash dividends ($0.045 per preferred share)..............
Adjustment for unrealized gains/(losses) on
available for sale securities...........................
Currency translation adjustment..........................
Net income...............................................
--------- ------- --------- ------ -------- ------------
Balances at December 31, 1994............................ 1,480,000 185,000 7,321,349 107,838 3,778 --
Deferred compensation related to grant of stock options.. 580,100
Amortization of deferred compensation....................
Cancellation of deferred compensation.................... (109,277)
Issuance of Series A convertible preferred stock......... 416,666 2,499,981 (138,841)
Reincorporation in the State of Delaware................. (2,666,014) (2,804,855)
Conversion of preferred stock to common stock............ (1,896,666) (18,967) 1,896,666 18,967
Process of initial public offering, net of issuance
costs................................................... 2,273,000 22,730 22,411,004
Exercise of common stock options, net of notes receivable
from stockholders....................................... 830,722 112,534 42,287 (39,010)
Adjustment for unrealized gains (losses) on available for
sale securities.........................................
Currency translation adjustment..........................
Net income...............................................
--------- ------- --------- ------ -------- ------------
Balances at December 31, 1995............................ -- -- 12,321,737 123,228 25,732,747 (39,010)
UniCAD activity for the three months ended
December 31, 1995 (unaudited)........................... 139 1 2
Exercise of common stock options (unaudited)............ 433,561 4,278 389,656
Repayment of notes receivable from shareholders
(unaudited)............................................. 39,010
Shares issued under the ESPP Plan (unaudited)............ 47,447 474 443,455
Shares issued to Synopsys for cash (net of offering costs
of $60,263) (unaudited)................................. 160,292 1,603 2,262,368
Adjustment for unrealized gains (losses) on available for
sale securities (unaudited).............................
Amortization of deferred compensation (unaudited)........
Currency translation adjustment (unaudited)..............
Net income (unaudited)...................................
--------- --------- --------- ------ -------- ------------
Balances at September 30, 1996........................... -- $ -- 12,963,176 $129,584 $28,828,228 $ --
========= ========= ========== ======== =========== ============
</TABLE>
<TABLE>
<CAPTION>
TOTAL
DEFERRED RETAINED STOCKHOLDERS'
COMPENSATION EARNINGS EQUITY
------------ ------------ -------------
<S> <C> <C> <C>
Balances at December 31, 1992.................................................... $ -- $1,087,858 $ 1,296,629
Exercise of common stock options................................................. 23,457
Cash dividends ($0.045 per preferred share)...................................... (66,600) (66,600)
Net income....................................................................... 1,041,768 1,041,768
------------ ---------- ------------
Balances at December 31, 1993.................................................... -- 2,063,026 2,295,254
Issuance of common stock (UniCAD inception)...................................... 3,722
UniCAD adjustment................................................................ 3,778
Exercise of common stock options................................................. 56,888
Cash dividends ($0.045 per preferred share)...................................... (66,600) (66,600)
Adjustment for unrealized gains/(losses) on
available for sale securities................................................... (3,895) (3,895)
Currency translation adjustment.................................................. 15,098 15,098
Net income....................................................................... 643,205 643,205
------------ ---------- ------------
Balances at December 31, 1994.................................................... -- 2,650,834 2,947,450
Deferred compensation related to grant of stock options.......................... (580,100) --
Amortization of deferred compensation............................................ 66,197 66,197
Cancellation of deferred compensation............................................ 109,277 --
Issuance of Series A convertible preferred stock................................. 2,499,981
Reincorporation in the State of Delaware......................................... --
Conversion of preferred stock to common stock.................................... --
Process of initial public offering, net of issuance costs........................ 22,433,734
Exercise of common stock options, net of notes receivable from
stockholders.................................................................... 115,811
Adjustment for unrealized gains (losses) on available for sale
securities...................................................................... 19,179 19,179
Currency translation adjustment.................................................. 3,083 3,083
Net income....................................................................... 1,328,887 1,328,887
------------ ---------- ------------
Balances at December 31, 1995.................................................... (404,626) 4,001,983 29,414,322
UniCAD activity for the three months ended
December 31, 1995 (unaudited)................................................... (14,039) (14,036)
Exercise of common stock options (unaudited).................................... 393,934
Repayment of notes receivable from shareholders (unaudited)...................... 39,010
Shares issued under the ESPP Plan (unaudited).................................... 443,929
Shares issued to Synopsys for cash (net of offering costs of
$60,263) (unaudited)............................................................ 2,263,971
Adjustment for unrealized gains (losses) on available for sale
securities (unaudited).......................................................... (15,853) (15,853)
Amortization of deferred compensation (unaudited)................................ 71,404 71,404
Currency translation adjustment (unaudited)...................................... (101,238) (101,238)
Net income (unaudited)........................................................... 3,263,042 3,263,042
------------ ---------- ------------
Balances at September 30, 1996................................................... $ (333,222) $7,133,895 $35,758,485
============ ========== ===========
</TABLE>
See accompanying notes.
<PAGE>
COOPER & CHYAN TECHNOLOGY, INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, NINE MONTHS ENDED
------------------------ SEPTEMBER 30,
-----------------
1993 1994 1995 1995 1996
---------- ----------- ------------ ----------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net income................................ $1,041,768 $ 643,205 $ 1,328,887 $ 833,603 $ 3,263,042
Adjustments to reconcile net
income to net
Cash provided by (used in)
operating activities:
Depreciation and amortization......... 95,760 667,703 978,315 597,570 933,123
Equity in losses of investee company.. 32,046 87,100 -- -- --
Write off of investment in
investee company.................. -- 80,854 -- -- --
Deferred income taxes................. (40,151) (251,772) (237,497) 8,784 --
Amortization of deferred stock
compensation...................... -- -- -- 42,395 71,404
Other................................. -- 12,089 3,470 -- --
Changes in assets and liabilities:
Accounts receivable................... (711,739) (1,297,456) (2,280,428) (1,874,380) (926,266)
Income taxes receivable............... -- (99,130) 99,130 (166,915) --
Prepaid expenses and
other current assets.............. (137,890) (23,999) (843,943) (760,260) (798,408)
Other assets.......................... (91,500) (41,145) (221,977) (81,056) 134,386
Trade accounts payable................ 44,160 233,450 604,464 519,206 (308,942)
Accrued salary and
employee benefits................. 168,240 357,459 394,275 (40,664) 1,072,350
Other accrued liabilities............. (25,732) 629,436 1,550,591 562,700 (165,586)
Income taxes payable.................. 380,733 (400,068) 242,566 170,000 52,371
Deferred revenue...................... 1,146,166 1,336,291 231,774 7,964 (400,569)
Other long term liabilities........... -- 313,819 5,640 (83,189) (226,925)
---------- ---------- ------------ ----------- ------------
Total adjustments......................... 860,093 1,604,631 526,380 (1,097,845) (563,062)
---------- ---------- ------------ ----------- ------------
Net cash provided by (used in) operating
activities............................ 1,901,861 2,247,836 1,855,267 (264,242) 2,699,980
---------- ---------- ------------ ----------- ------------
Cash flows from investing activities
Purchase of property and equipment........ (630,675) (1,456,013) (1,902,232) (1,366,687) (1,271,716)
Purchase of available-for-sale
securities............................ -- (784,046) (23,478,433) (76,197) (29,778,494)
Proceeds from sale of available-for-sale
securities............................ -- 417,274 442,695 430,880 26,427,862
Purchase of common stock
in equity investee.................... (100,000) -- -- -- --
Acquisition of subsidiary, net of cash
acquired.............................. -- (133,063) -- -- --
---------- ---------- ------------ ----------- ------------
Net cash provided by (used in) investing
activities............................ (730,675) (1,955,848) (24,937,970) (1,012,004) (4,622,348)
---------- ---------- ------------ ----------- ------------
Cash flows from financing activities
Proceeds (payments) on notes payable
to shareholders....................... (146,406) -- -- 39,010
Proceeds (repayment) of
bank credit facility.................. -- 500,000 (500,000) (500,000) --
Proceeds from issuance of
convertible preferred stock........... -- -- 2,499,981 2,499,981 --
Proceeds from issuance of common stock.... 23,457 64,388 22,549,545 67,523 3,101,837
Dividends paid............................ (66,600) (66,600) -- -- --
---------- ---------- ------------ ----------- ------------
Net cash provided by
(used in) financing activities........ (189,549) 497,788 24,549,526 2,067,504 3,140,847
---------- ---------- ------------ ----------- ------------
Net increase in cash and cash equivalents. 981,637 789,776 1,466,823 791,258 1,218,479
Effect of exchange rates
on foreign currency cash balances..... -- 15,098 3,083 2,181 (101,238)
UniCAD activity for the three months
ended December 31, 1995............... -- -- -- -- (14,039)
Cash and cash equivalents
at beginning of period................ 330,581 1,312,218 2,117,092 2,117,092 3,586,998
---------- ---------- ------------ ----------- ------------
Cash and cash equivalents
at end of period...................... $1,312,218 $ 2,117,092 $ 3,586,998 $ 2,910,531 $ 4,690,200
========== =========== ============ =========== ============
Supplemental disclosure
of cash flow information
Cash paid during the period for
income taxes...................... $ 244,435 $ 1,261,534 $ 531,068 $ 439,709 $ 1,490,444
========== =========== ============ =========== ============
</TABLE>
See accompanying notes.
<PAGE>
COOPER & CHYAN TECHNOLOGY, INC.
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Basis of Presentation
- --------------------------------------
Cooper & Chyan Technology, Inc. (the "Company") was incorporated in January
1989. The Company develops, markets and supports software tools that help
designers route the interconnections among the electronic devices on high
performance printed circuit boards ("PCBs") and integrated circuits ("ICs").
As more fully described in Note 2, on August 28, 1996, the Company entered
into a business combination with UniCAD. The business combination has been
accounted for as a pooling of interests and the historical consolidated
financial statements of the Company for all years prior to the business
combination have been restated in the accompanying Supplemental Consolidated
Financial Statements to include the financial positions, results of operations
and cash flows of UniCAD. The supplemental financial statements will become the
historical financial statements of CCT upon issuance of financial statements for
the subsequent period that includes the date of the acquisition of UniCAD.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries after the elimination of significant
intercompany transactions and balances.
Interim Financial Data
- ----------------------
In the opinion of management, the interim financial statements have been
prepared on the same basis as the annual financial statements and include all
adjustments (consisting only of normal recurring adjustments) necessary to state
fairly, the financial information set forth therein, in accordance with
generally accepted accounting principles. The results of operations for the nine
months ended September 30, 1996 are not necessarily indicative of results to be
expected for the full fiscal year.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents consist of cash on deposit with banks and money
market and debt instruments with original maturities of 90 days or less.
Concentration of Credit Risk and Major Customers
- ------------------------------------------------
The Company's major market is the electronic design automation ("EDA")
industry which is very volatile. Any significant downturn in the EDA industry
could have a material affect on the Company's operating results.
The Company's revenue consists principally of revenue based on two distinct
product lines, the SPECCTRA product line for the PCB market, and the
--------
IC Craftsman product line for the IC market. In 1995, SPECCTRA product revenues
- ------------ --------
accounted for 60% of total revenue, and IC product revenue accounted for 15% of
total revenue.
One customer accounted for approximately 26%, 20% and 11% of revenues for
the years ended December 31, 1993, 1994 and 1995, respectively. Two other
customers accounted for approximately 17% and 13% of revenues for the year ended
December 31, 1993. The loss of, or a significant reduction in revenue from, any
of the Company's distributors or OEMs would have a material adverse effect on
the Company's business, financial condition and results of operations, at least
to the extent such loss is not offset by a corresponding increase in the
Company's direct sales.
In 1995, 48% of the Company's revenue was earned overseas. Overseas
operations entail a number of risks associated with exchange rate fluctuations,
longer receivables collection periods, the general economic situation of foreign
countries, reduced protection of intellectual property rights, tariffs and other
trade barriers.
Financial instruments that potentially subject the Company to a
concentration of credit risk primarily consist of cash and cash equivalents,
short-term investments and trade receivables. The Company's cash and cash
equivalents are on deposit with major financial institutions.
The Company invests its excess cash balances in a variety of short term
municipal bond funds and money market funds. The Company has not experienced any
material losses from any of these instruments.
<PAGE>
The Company performs ongoing credit evaluations of its customers' financial
condition and generally requires no collateral. In the year ended December 31,
1995, the Company provided total bad debt provisions of $329,945.
Equity Investments
- ------------------
The Company accounts for investments using the equity method when the
Company owns a 20% to 50% equity interest. Under this method, the Company's
original investment is adjusted by its share of earnings or losses, net of any
dividends received.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Stock-based Compensation
- -----------------------
The Company accounts for stock option grants in accordance with the
provisions of the Accounting Principle Board's Opinion No. 25, "Accounting for
Stock Issued to Employees."
Property and Equipment
- ----------------------
Property and equipment are stated at cost and depreciated over estimated
useful lives of three to seven years.
Leasehold improvements are amortized using the straight-line method over
the shorter of the estimated useful lives of the assets or the remaining term of
the lease.
Net Income Per Share
- -------------------
Net income per share is computed using the weighted average number of
common and dilutive common equivalent shares outstanding during the period.
Pursuant to the Securities and Exchange Commission Staff Accounting Bulletins
and staff policy, such computations include all common and common equivalent
shares issued within 12 months of the Company's initial public offering in
October 1995 as if they were outstanding for all periods presented using the
treasury stock method. Common equivalent shares consist of the incremental
common shares issuable upon the conversion of the convertible preferred stock
(using the if-converted method) and shares issuable upon the exercise of stock
options (using the treasury stock method).
Software Development Costs
- --------------------------
Under Statement of Financial Accounting Standards No. 86 ("SFAS 86"),
software development costs are capitalized beginning when a product's
technological feasibility has been established and ending when a product is
available for general release to customers. Generally, the establishment of
technological feasibility of the Company's products and general release have
coincided. As a result, the Company has not capitalized any software development
costs because any costs meeting the requirements of SFAS 86 have not been
significant.
Revenue Recognition
- -------------------
Revenues primarily include revenue from software product shipments and
revenue from maintenance contracts. The Company recognizes revenue from software
licenses after shipment of the products and fulfillment of acceptance terms, if
any, and when no significant contractual obligations remain outstanding and
collection of the resulting receivable is deemed probable. When the Company
receives payment prior to shipment and fulfillment of significant vendor
obligations, such payments are recorded as deferred revenue. Revenue from
maintenance contracts is recognized ratably over the related contractual period,
generally 12 months. Revenue from customer training, support and other services
is recognized as the service is performed.
Foreign Currency Translation
- ----------------------------
The Company translates assets and liabilities of its foreign subsidiaries
into U.S. dollars at the rates of exchange in effect at the end of the period.
Income and expense items are translated on a quarterly basis at the average
rates of exchange prevailing during the quarter. Gains and losses from this
translation are credited or charged to
<PAGE>
stockholders' equity. Foreign currency transaction gains and losses, which have
been immaterial, are included in the results of operations.
2. BUSINESS COMBINATIONS
On August 28, 1996, the Company completed its acquisition of UniCAD, a
leading PCB CAD software developer and distributor. The Company exchanged an
aggregate of 460,735 shares of CCT common stock and options for all of the
outstanding capital stock and assumption of all of the outstanding stock options
of UniCAD, a privately held company. The business combination was treated as a
pooling of interests for accounting purposes, and accordingly, the historical
financial statements of the Company have been restated as if the transaction
occurred at the beginning of the earliest period presented. In connection with
the business combination, the Company incurred direct transaction costs of
approximately $400,000 which consist of fees for investment banking, legal and
accounting services and other related expenses incurred in conjunction with the
business combination.
The Supplemental Consolidated Financial Statements have been prepared to
give retroactive effect to the business combination with UniCAD on August 28,
1996. Generally accepted accounting principles prohibit giving effect to a
consummated business combination accounted for by the pooling-of-interests
method in financial statements that do not include the date of consummation. The
accompanying supplemental consolidated financial statements do not extend
through the date of consummation, however, they will become the historical
consolidated financial statements of the company after financial statements
covering the date of consummation of the business combination are issued.
The table below sets forth the combined net revenues and net income for the
periods indicated.
<TABLE>
<CAPTION>
COMBINED
SUBSEQUENT
CCT UNICAD TO MERGER COMBINED
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Year ended December 31, 1993
Net revenues............... $ 7,294,445 $ - $ - $ 7,294,445
Net income................. 1,041,768 - - 1,041,768
Year ended December 31, 1994
Net revenues............... $10,832,256 $4,712,879 $ - $15,545,135
Net income................. 359,603 283,602 - 643,205
Year ended December 31, 1995
Net revenues............... $17,718,073 $5,723,665 $ - $23,441,738
Net income................. 975,433 353,454 - 1,328,887
Nine months ended
September 30, 1995 (unaudited)
Net revenues............... $11,721,009 $4,298,582 $ - $16,019,591
Net income................. 333,534 500,069 - 833,603
Nine months ended
September 30, 1996 (unaudited)
Net revenues............... $16,297,210 $3,852,367 $5,530,640 $25,680,217
Net income (loss)(1)....... 1,762,885 (196,321) 1,696,478 3,263,042
- -----------
</TABLE>
(1) After the deduction of transaction costs of $400,000.
3. SHORT-TERM INVESTMENTS
Management determines the appropriate classification of equity securities
at the time of purchase and reevaluates such designations as of each balance
sheet date.
The Company has classified its marketable equity and mutual fund securities
as available-for-sale. Available-for-sale securities are carried at fair value
with
<PAGE>
unrealized holding gains and losses being reported in stockholders' equity.
Realized gains and losses on available-for-sale securities are included in
interest income.
The following is a summary of available-for-sale securities:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
December 31, 1994
Equity securities.................... $ 149,072 $ 889 $5,154 $ 144,807
Mutual funds......................... 205,611 370 - 205,981
----------- ------- ------ -----------
$ 354,683 $ 1,259 $5,154 $ 350,788
=========== ======= ====== ===========
December 31, 1995
Money Market......................... $ 1,412,238 $ - $ - $ 1,412,238
Municipal Funds...................... 22,047,716 19,179 - 22,066,895
----------- ------- ------ -----------
$23,459,954 $19,179 $ - $23,479,133
=========== ======= ====== ===========
</TABLE>
Of the $23,479,133, $76,897 has been included in cash and cash equivalents
in the accompanying balance sheet.
4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995
---------- -----------
<S> <C> <C>
Property and equipment consists of
the following:
Office and computer equipment........ $2,180,301 $ 3,552,048
Furniture and fixtures............... 259,065 374,133
Purchase software.................... 307,992 495,563
Leasehold improvements............... 150,666 378,511
---------- -----------
2,898,024 4,800,255
Accumulated depreciation and
amortization........................ (879,867) (1,791,985)
---------- -----------
$2,018,157 $ 3,008,270
========== ===========
</TABLE>
5. INVESTMENT IN EQUITY INVESTEE
The Company held an investment of 32% in CAD Connection International, Inc.
("CCI"), a company based in Munich, Germany. The Company accounted for the
investment using the equity method and because of net losses and write offs, the
investment balance at December 31, 1994 was zero. During 1994, the Company wrote
off $435,000 pertaining to its investment, related accounts receivable and the
settlement of a related legal dispute.
During the years ended December 31, 1993, 1994 and 1995, the Company made
sales of $138,031, $164,592 and zero, respectively, to CCI.
Summarized financial information of CCI for 1993 and the interim period of
1994 up to the write off of the CCI investment is as follows (in thousands):
<TABLE>
<CAPTION>
1993 1994
------ ------
<S> <C> <C>
(UNAUDITED)
Current assets............................... $1,052 $1,043
Noncurrent assets............................ 84 84
Current liabilities.......................... 923 1,196
Noncurrent liabilities....................... - -
Net sales.................................... 2,302 1,095
Gross profit................................. 864 376
Net loss..................................... (103) (272)
</TABLE>
<PAGE>
6. BANK CREDIT FACILITY
The Company had a $500,000 revolving line of credit agreement which expired
in May 1995. Borrowings under this agreement bore interest at the bank's prime
rate plus 1%. The loan was secured by a first position interest in all of the
Company's business assets.
7. ACCRUED LIABILITIES
Accrued liabilities consists of:
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1994 1995
-------- ----------
<S> <C> <C>
Accrued Value Added Tax........... $ - $ 411,231
Other............................. 629,436 1,768,796
-------- ----------
$629,436 $2,180,027
======== ==========
</TABLE>
8. INCOME TAXES
The components of the provisions for income taxes consist of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1993 1994 1995
-------- --------- ---------
<S> <C> <C> <C>
Current:
Federal................... $496,840 $ 581,467 $ 913,241
State..................... 142,285 112,708 65,373
Foreign................... - - 16,870
-------- --------- ---------
639,125 694,175 995,484
Deferred:
Federal................... (21,105) (269,391) (262,058)
State..................... (14,803) (65,451) (67,639)
Foreign................... - - -
-------- --------- ---------
(35,908) (334,842) (329,697)
-------- --------- ---------
$603,217 $ 359,333 $ 665,787
======== ========= =========
</TABLE>
The provisions for income taxes differ from the amount computed by applying
the statutory federal income tax rate to income before income taxes. The source
and tax effects of the differences are as follows:
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1993 1994 1995
--------- ----------- ----------
<S> <C> <C> <C>
Income before provision for income
taxes............................................ $1,644,985 $1,002,538 $1,994,674
========== ========== ==========
Income tax at statutory federal rate
(34%, 34%, and 35%).............................. $ 559,295 $ 340,863 $ 698,136
State income tax, net of federal
benefit.......................................... 84,138 31,190 (1,473)
Research and development tax credits.............. (62,687) (108,500) (101,786)
Foreign losses not benefited...................... - - 24,783
Other............................................. 22,471 95,780 46,127
---------- ---------- ----------
$ 603,217 $ 359,333 $ 665,787
========== ========== ==========
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities computed in accordance with
FAS 109 are as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------
1993 1994 1995
--------- --------- ----------
<S> <C> <C> <C>
Deferred tax assets:
Nondeductible reserves and
accruals................................ $580,794 $ 215,647 $ -
Less, valuation allowance................ (206,699) (77,449) -
Other-net................................ 16,615 72,093 -
Foreign investment tax credits........... 209,760 80,836 -
--------- --------- ---------
Net deferred tax assets................. 600,470 291,127 -
--------- --------- ---------
Deferred tax liabilities:
Cash to accrual......................... (102,399) (145,375) (266,536)
Depreciation............................ (173,663) (110,448) (70,673)
Other-net............................... (14,429) (55,057) (17,386)
--------- --------- ---------
Total deferred tax liabilities............... (290,491) (310,880) (354,595)
--------- --------- ---------
Net deferred tax assets (liabilities)........ $ 309,979 $ (19,753) $(354,595)
========= ========= =========
</TABLE>
The company's Canadian subsidiary has provincial tax loss carryforwards
available of approximately $62,000 expiring in 2001 and 2002. In addition, the
subsidiary has investment tax credits of approximately $209,760 which expire in
2004 and 2005. A valuation allowance has been provided to reduce the deferred
tax assets to an amount management believes is more likely than not to be
realized. During 1995, the valuation allowance was increased by $129,250
primarily as a result of additional investment tax credits being generated by
the Canadian subsidiary.
9. PREFERRED STOCK
In May 1995, the Company sold 250,000 shares of Series A preferred stock to
Mentor Graphics Corporation for $1,500,000 and 166,666 shares of Series A
preferred stock for $999,981 to Marubeni Hytech Corporation, a Japanese
corporation.
In October 1995, the Company completed the initial public offering of its
common stock. In connection with this offering, all outstanding shares of Series
A convertible preferred stock were automatically converted into common stock. At
December 31, 1995, the Company is authorized to issue 5,000,000 shares of
undesignated preferred stock.
10. EQUITY PLANS
In 1989, the Company adopted the 1989 Stock Option Plan (the "1989 Plan")
which provides for the issuance of up to 2,000,000 shares of the Company's
common stock. Options may be granted under the 1989 Plan to employees, officers
and directors of the Company. In 1993, the Company adopted the 1993 Equity
Incentive Plan (the "1993 Plan") which provides for the issuance of up to
2,200,000 shares of the Company's common stock. The 1993 Plan authorizes the
award of options, stock bonuses and opportunities to purchase restricted stock.
The 1989 Plan was terminated upon the adoption of the 1993 Plan. Incentive stock
options may be granted at a price not less than the fair market value of the
stock (110% of the fair market value for options granted to stockholders owning
10% or more of the voting stock) at the date of the grant. Restricted stock may
be granted at not less than 85% of the fair market value of the common stock at
the date of grant. Options expire ten years from the date of grant (five years
for options issued to owners of 10% or more of the voting stock) and vest over a
five-year period.
In August 1995, the Company's board of directors authorized an increase in
the number of shares available for grant under the 1993 Plan by 2,000,000
shares. In addition, the Company's board of directors adopted the 1995 Directors
Stock Option Plan which authorized the issuance of 150,000 shares. This Plan
provides for each outside director to be granted an option to purchase 20,000 of
common stock on the date on which such person first becomes an outside Director
following the effective date of the Director Option Plan and, annually
thereafter, an option to purchase 5,000 shares of common stock. The exercise
price of such options will be the fair market value at the date of grant. The
initial options vest over 4 years. Through December 31, 1995, 40,000 shares have
been granted under this plan.
Incentive and nonqualified stock option activity under the above-mentioned
Plans is as follows:
<PAGE>
<TABLE>
<CAPTION>
SHARES
AVAILABLE SHARES UNDER OUTSTANDING OPTIONS
FOR ----------------------------------
GRANT SHARES PRICE
----------- --------- -----
<S> <C> <C> <C>
Balance at December 31, 1993....................... 435,080 1,581,400 $0.01 - $ 0.26
Additional shares authorized for
grant......................................... 1,376,682 - $ - - $ -
Options granted................................ (1,056,962) 1,056,962 $0.01 - $ 1.25
Options exercised.............................. - (537,392) $0.01 - $ 0.26
Options cancelled.............................. 14,808 (14,808) $ - - $ 0.24
---------- ---------- --------------
Balance at December 31, 1994 769,608 2,086,162 $0.01 - $ 1.25
Additional shares authorized for
grant.......................................... 2,243,284 - $ - - $ -
Options granted................................. (1,266,459) 1,266,459 $0.01 - $14.00
Options exercised............................... - (822,838) $0.01 - $ 1.25
Options cancelled............................... 261,521 (261,521) $0.01 - $ 4.50
---------- ---------- --------------
Balance at December 31, 1995...................... 2,007,954 2,268,262 $0.01 - $14.00
========== ========== ==============
</TABLE>
At December 31, 1995, options to acquire 333,016 shares were exercisable
(December 31, 1994-756,680).
In August 1995, the Company's board of directors adopted the 1995 Employee
Stock Purchase Plan (the "Purchase Plan") which authorizes the issuance of
150,000 shares of common stock. Shares may be purchased under the Purchase Plan
at 85% of the lesser of the fair market value of the common stock on the date of
grant or the purchase date.
The Company has recorded deferred compensation expense of $580,100 for the
difference between the grant price and the deemed fair market value of certain
of the Company's common stock options granted in 1995. This amount is being
amortized over the vesting period of the individual options, generally five
years. Compensation expense recognized in 1995 totaled $66,917 and $109,277 of
deferred compensation was canceled due to employee terminations. At December 31,
1995 deferred compensation totaled $404,626.
11. COMMITMENTS
FACILITY LEASES
The Company leases office facilities under noncancelable operating leases.
In addition to monthly rent, the Company is responsible for the payment of
certain operating costs. Rent expense was approximately $235,000, $439,615 and
$704,253 for the years ended December 31, 1993, 1994 and 1995, respectively.
Future minimum lease payments are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31
<S> <C>
1996................ $ 860,350
1997................ 840,927
1998................ 744,177
1999................ 670,002
2000................ 326,366
----------
$3,441,822
==========
</TABLE>
12. EXPORT SALES
The Company markets its products in the United States and in foreign countries
through its sales personnel and distributors. The Company's export sales are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------
1993 1994 1995
---------- ---------- -----------
<S> <C> <C> <C>
Europe...... $ 786,236 $2,075,822 $ 3,952,658
Asia........ 1,443,717 2,101,585 3,600,552
Canada...... - 3,628,349 3,700,686
Other....... - 108,967 52,267
---------- ---------- -----------
$2,229,953 $7,914,723 $11,306,163
========== ========== ===========
</TABLE>
<PAGE>
13. EMPLOYEE BENEFIT PLAN
The Company has a deferred contribution plan which covers substantially all
employees over the age of 21 completing at least one year of service. Company
contributions to the Plan are determined annually at the discretion of the board
of directors and vest over six years of service. Employee contributions are
fully vested at all times. Employer contributions for 1993, 1994 and 1995 were
$184,176, $285,000 and zero respectively.
14. PURCHASE RIGHTS
The Company has included purchase right provisions in certain of its OEM
agreements. Generally, pursuant to these provisions, the Company must notify
such OEMs whenever the Company intends to accept certain third-party offers to
acquire an interest in the Company, whereupon the OEM has the opportunity to
enter a competing bid meeting specified conditions.
15. EVENTS SUBSEQUENT TO THE DATE OF THE AUDITORS REPORT
On October 28, 1996, the Company entered into a definitive agreement to be
acquired by Cadence, a leading supplier of business solutions for the design of
electronic components and systems. Under the terms of the agreement, each share
of CCT common stock will be exchanged for 0.85 shares of Cadence common stock.
In accordance with the same conversion ratio, each option to purchase shares of
CCT common stock will be assumed by Cadence and will be converted into an option
to purchase that number of shares of Cadence common stock. Based on the number
of outstanding shares of CCT common stock and CCT options on October 28, 1996,
it is anticipated that Cadence will issue approximately 11.0 million shares of
Cadence common stock and assume employee stock options to purchase approximately
1.9 million shares of Cadence common stock.
The transaction is intended to be a tax-free reorganization and is
anticipated to be accounted for as a pooling of interests. Consummation of the
merger is subject to review by the United States Department of Justice under the
Hart-Scot-Rodino Antitrust Improvements Act of 1976, as amended, approval by the
stockholders of the Company, and normal closing conditions. Upon completion of
the merger, the Company will become a wholly-owned subsidiary of Cadence.
Appendix A
<PAGE>
================================================================================
COOPER & CHYAN TECHNOLOGY, INC.
1,545,208 Shares of
Common Stock
____________________
PROSPECTUS
____________________
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with this
offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $15,389.05
Accounting fees and expenses 3,000.00
Legal fees and expenses 25,000.00
Miscellaneous 1,610.95
----------
Total $45,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation includes a provision that eliminates
the personal liability of its directors to the Registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director to the fullest
extent permitted by law. In addition, as permitted by Section 145 of the
Delaware General Corporation Law, the Bylaws of the Registrant provide that: (i)
the Registrant is required to indemnify and hold harmless its directors and
officers to the fullest extent permitted by law in any action, suit or
proceeding (a "proceeding"); provided that the Registrant shall indemnify any
such person seeking indemnity in connection with a proceeding initiated by such
person only if such proceeding was authorized by its Board of Directors, (ii)
the Registrant is required to pay all expenses incurred by a director or officer
in defending a proceeding in advance of its final disposition; provided that if
the Delaware General Corporation Law so requires, such advance payments shall
only be made if such director or officer delivers an undertaking to the
Registrant to repay all amounts so advanced if it should ultimately be
determined that such director or officer is not entitled to be indemnified;
provided further, that the Registrant shall not be required to advance any
expenses to a person against whom the Registrant directly brings a claim, in a
proceeding, alleging that such person has breached his or her duty of loyalty to
the Registrant, committed an act or omission not in good faith or that involves
intentional misconduct or a knowing violation of law, or derived an improper
personal benefit from a transaction; (iii) the rights conferred in the Bylaws
are not exclusive and the Registrant is free at its discretion to indemnify or
advance expenses to persons whom the Registrant is not obligated to indemnify or
advance expenses to under the Bylaws; (iv) the Board of Directors is authorized
to cause the Registrant to enter into indemnification agreements with any
director, officer, employee or agent of the Registrant; and (v) the Registrant
may not retroactively amend, repeal or modify the Bylaw provisions relating to
indemnity.
The Registrant's policy is to enter into indemnity agreements with each of
its directors and officers. The indemnity agreements provide that the Registrant
must maintain in effect directors' and officers' liability insurance, unless
such insurance is not available on reasonable terms. The indemnity agreements
also provide that directors and officers shall be indemnified against any and
all expenses and liabilities of any type whatsoever, including judgments, fines,
ERISA excise taxes or penalties, and amounts paid in settlement actually and
reasonably incurred by them in any proceeding other than derivative actions by
or in the right of the Registrant. The indemnity agreements provide that in the
case of any derivative actions, directors and officers shall be indemnified
against any expenses and amounts paid in settlement actually and reasonably
incurred by them; except that no indemnification is available if a director or
officer is finally adjudged to be liable to the Registrant by a court of
competent jurisdiction
II-1
<PAGE>
due to willful misconduct of a culpable nature in the performance of his or her
duty to the Registrant, unless the Court of Chancery or the court in which the
derivative action was brought determines that despite the adjudication of
liability the circumstances of the case indicate that such person is entitled to
indemnity in the amount the court deems proper. The indemnity agreements require
a director or officer to reimburse the Registrant for expenses advanced only to
the extent it is ultimately determined that the director or officer is not
entitled to be indemnified for such expenses under his or her indemnity
agreement, the Registrant's Certificate of Incorporation or Bylaws, the General
Corporation Law of Delaware, or otherwise. The indemnity agreements provide that
it is not exclusive of any rights a director or officer may have under any
provision of law, the Registrant's Certificate of Incorporation or Bylaws, the
vote of the Registrant's stockholders or disinterested directors, other
agreements or otherwise.
The Registrant will not be obligated pursuant to the indemnity agreements
to indemnify or advance expenses to a director or officer with respect to
proceedings or claims: (i) initiated by the director or officer and not by way
of defense, except with respect to proceedings authorized by the Board of
Directors or brought to establish or enforce a right to indemnification under
the agreement, Bylaws or charter documents of the Registrant, or any law or
statute; (ii) initiated by the director or officer to enforce or interpret the
agreement, if a court of competent jurisdiction determines that each of the
material assertions of the director or officer was frivolous or not made in good
faith; or (iii) brought by the Registrant against the director or officer for
willful misconduct, unless a court of competent jurisdiction determines that
each of such claims was frivolous or not made in good faith. The Registrant also
will not be obligated pursuant to the agreements to indemnify or advance
expenses to a director of officer: (i) for any amounts paid in settlement of a
proceeding unless the Registrant consents in advance to such settlement; (ii) on
account of any suit in which judgment is rendered against the director or
officer for an accounting of profits made from the purchase or sale by the
director or officer of securities of the Registrant pursuant to the provisions
of Section 16(b) of the Securities and Exchange Act of 1934 or similar
provisions of any federal, state or local statutory law or in any situation
which is contrary to any undertaking given by the Registrant to the Securities
and Exchange Commission; (iii) on account of conduct by the director or officer
from which is finally adjudged to have been knowingly fraudulent or deliberately
dishonest, or to constitute willful misconduct or a knowing violation of the
law; (iv) on account of conduct by the director or officer from which he or she
derived an improper personal benefit; (v) on account of conduct that constituted
a breach of the director's or officer's duty of loyalty to the Registrant or its
stockholders; or (vi) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
The indemnification provision in the Bylaws, and the indemnity agreements
entered into between the Registrant and its directors and officers, may be
sufficiently broad to permit indemnification of the Registrant's directors and
officers for liabilities arising under the Securities Act.
As authorized by the Registrant's Bylaws, the Registrant, with approval by
the Registrant's Board of Directors, has obtained directors and officers
liability insurance.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
<S> <C>
NUMBER EXHIBIT TITLE
- ------- ------------------------------------------------------------------------------------------
2.01 -- Form of Agreement and Plan of Merger between the Registrant and Cooper & Chyan Technology,
Inc., a California corporation.(1)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
2.02 -- Agreement and Plan of Reorganization dated as of July 22, 1996 by and between Registrant,
CCT Acquisition Corp. and UniCAD.(2)**
2.03 -- Agreement of Merger dated as of August 28, 1996 by and among Registrant, CCT Acquisition
Corp. and UniCAD.(3)
2.04 -- Agreement and Plan of Merger and Reorganization dated as of October 28, 1996 by and among
Registrant, Cadence Design Systems, Inc., and Wyoming Acquisition Sub, Inc.(4)
4.01 -- Registrant's Certificate of Incorporation.(1)
4.02 -- Registrant's Certificate of Designation.(1)
4.03 -- Registrant's Bylaws.(1)
4.04 -- Registrant's Certificate of Elimination of Series A Preferred Stock.(5)
4.05 -- Form of Specimen Certificate for Registrant's Common Stock.(1)
4.06 -- Rights Agreement dated May 11, 1995 among Registrant, Mentor Graphics Corporation and
Marubeni Hytech Corp.(1)
4.07 -- Stock Purchase Agreement dated as of May 11, 1995 between the Registrant and Mentor
Graphics Corporation.(1)
4.08 -- Stock Purchase Agreement dated as of May 23, 1995 between the Registrant and Marubeni
Hytech Corp.(1)
4.09 -- Stock Purchase Agreement dated as of May 6, 1996 among Synopsys, Inc., the Registrant,
John. F Cooper, David Chyan, John R. Harding, William Portelli and Robert D. Selvi.(6)
4.10 -- Investor Rights Agreement dated as of May 6, 1996 among Synopsys, Inc., the Registrant,
John. F Cooper, David Chyan, John R. Harding, William Portelli and Robert D. Selvi.(6)
5.01 -- Opinion of Fenwick & West LLP regarding the legality of the securities being issued.(8)
23.01 -- Consent of Ernst & Young LLP, Independent Auditors.(8)
23.02 -- Consent of Deloitte & Touche, Independent Auditors.(8)
23.03 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
24.01 -- Power of Attorney (7).
99.01 -- Form of Voting Agreement dated as of October 28, 1996 by and between Cadence Design
Systems, Inc. and each of John F. Cooper, David Chyan, John R. Harding, Robert D. Selvi,
and William J. Portelli.(4)
99.02 -- Option Agreement dated as of November 2, 1996 by and between Cadence Design Systems, Inc.
and John F. Cooper.(4)
99.03 -- Option Agreement dated as of November 2, 1996 by and between Cadence Design Systems, Inc.
and David Chyan.(4)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Incorporated by reference to Registrant's Form S-1 Registration Statement
as declared effective October 30, 1995 (File No. 33-96640).
(2) Incorporated by reference to Registrant's Form 8-K/A filed on November 12,
1996.
(3) Incorporated by reference to Registrant's Form 8-K filed on September 12,
1996.
(4) Incorporated by reference to Registrant's Form 8-K filed on November 12,
1996.
II-3
<PAGE>
(5) Incorporated by reference to Registrant's annual report on Form 10-K for
the fiscal year ended December 31, 1995.
(6) Incorporated by reference to Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1996.
(7) Previously filed.
(8) Filed herewith.
** Confidential treatment has been requested for certain portions of this
document. Such portions have been omitted from the referenced filing of
this document and have been filed separately with the Securities and
Exchange Commission.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the
"Securities Act"); (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
--------
however, that sections (i) and (ii) do not apply if the information required to
- -------
be included in a post-effective amendment is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
----
fide offering thereof.
- ----
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
II-4
<PAGE>
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all for the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cupertino, State of California, on the ninth day
of December, 1996.
COOPER & CHYAN TECHNOLOGY, INC.
By: /s/ Robert D. Selvi
-------------------
Robert D. Selvi
Chief Financial Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------- -----------------
PRINCIPAL EXECUTIVE OFFICER:
<S> <C> <C>
/s/ John R. Harding* President, Chief Executive December 9, 1996
- ------------------------------- Officer and Director
John R. Harding
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER:
/s/ Robert D. Selvi Vice President, Chief December 9, 1996
- ------------------------------- Financial Officer and
Robert D. Selvi Secretary
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ADDITIONAL DIRECTORS:
/s/ David Chyan* Executive Vice President, December 9, 1996
- --------------- Product Development
David Chyan and Director
/s/ John F. Cooper* Chairman of the Board and December 9, 1996
- ------------------ Chief Technical Officer
John F. Cooper
/s/ Mary I. Cooper* Director and Secretary December 9, 1996
- ------------------
Mary I. Cooper
- ----------------- Director December __, 1996
James R. Fiebiger
- ----------------- Director December __, 1996
Yoshikazu Hori
</TABLE>
* By: /s/ Robert D. Selvi
---------------------------------
Robert D. Selvi, Attorney-in-fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
<S> <C> <C>
NUMBER EXHIBIT TITLE
- ------- ------------------------------------------------------------------------------------------
2.01 -- Form of Agreement and Plan of Merger between the Registrant and Cooper & Chyan Technology,
Inc., a California corporation.(1)
2.02 -- Agreement and Plan of Reorganization dated as of July 22, 1996 by and between Registrant,
CCT Acquisition Corp. and UniCAD.(2)**
2.03 -- Agreement of Merger dated as of August 28, 1996 by and among Registrant, CCT Acquisition
Corp. and UniCAD.(3)
2.04 -- Agreement and Plan of Merger and Reorganization dated as of October 28, 1996 by and among
Registrant, Cadence Design Systems, Inc., and Wyoming Acquisition Sub, Inc.(4)
4.01 -- Registrant's Certificate of Incorporation.(1)
4.02 -- Registrant's Certificate of Designation.(1)
4.03 -- Registrant's Bylaws.(1)
4.04 -- Registrant's Certificate of Elimination of Series A Preferred Stock.(5)
4.05 -- Form of Specimen Certificate for Registrant's Common Stock.(1)
4.06 -- Rights Agreement dated May 11, 1995 among Registrant, Mentor Graphics Corporation and
Marubeni Hytech Corp.(1)
4.07 -- Stock Purchase Agreement dated as of May 11, 1995 between the Registrant and Mentor
Graphics Corporation.(1)
4.08 -- Stock Purchase Agreement dated as of May 23, 1995 between the Registrant and Marubeni
Hytech Corp.(1)
4.09 -- Stock Purchase Agreement dated as of May 6, 1996 among Synopsys, Inc., the Registrant,
John. F Cooper, David Chyan, John R. Harding, William Portelli and Robert D. Selvi.(6)
4.10 -- Investor Rights Agreement dated as of May 6, 1996 among Synopsys, Inc., the Registrant,
John. F Cooper, David Chyan, John R. Harding, William Portelli and Robert D. Selvi.(6)
5.01 -- Opinion of Fenwick & West LLP regarding the legality of the securities being issued.(8)
23.01 -- Consent of Ernst & Young LLP, Independent Auditors.(8)
23.02 -- Consent of Deloitte & Touche, Independent Auditors.(8)
23.03 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
24.01 -- Power of Attorney (7).
99.01 -- Form of Voting Agreement dated as of October 28, 1996 by and between Cadence Design
Systems, Inc. and each of John F. Cooper, David Chyan, John R. Harding, Robert D. Selvi,
and William J. Portelli.(4)
99.02 -- Option Agreement dated as of November 2, 1996 by and between Cadence Design Systems, Inc.
and John F. Cooper.(4)
99.03 -- Option Agreement dated as of November 2, 1996 by and between Cadence Design Systems, Inc.
and David Chyan.(4)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) Incorporated by reference to Registrant's Form S-1 Registration Statement
as declared effective October 30, 1995 (File No. 33-96640).
(2) Incorporated by reference to Registrant's Form 8-K/A filed on November 12,
1996.
(3) Incorporated by reference to Registrant's Form 8-K filed on September 12,
1996.
(4) Incorporated by reference to Registrant's Form 8-K filed on November 12,
1996.
(5) Incorporated by reference to Registrant's annual report on Form 10-K for
the fiscal year ended December 31, 1995.
(6) Incorporated by reference to Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1996.
(7) Previously filed.
(8) Filed herewith.
** Confidential treatment has been requested for certain portions of this
document. Such portions have been omitted from the referenced filing of
this document and have been filed separately with the Securities and
Exchange Commission.
<PAGE>
[LETTERHEAD OF FENWICK & WEST LLP APPEARS HERE]
EXHIBIT 5.01
------------
December 10, 1996
Cooper & Chyan Technology, Inc.
1601 South DeAnza Boulevard
Cupertino, California 95014
Gentlemen/Ladies:
At your request, we have examined the Amendment No. to the Registration
Statement on Form S-3 (the "Registration Statement") to be filed by you with
the Securities and Exchange Commission on or about December 9, 1996 in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 1,545,208 shares of your Common Stock (the "Stock"), all of
which are presently issued and outstanding and will be sold by Synopsys, Inc.,
Mentor Graphics Corporation and Marubeni Hytech Corp. (the "Selling
Stockholders").
In rendering this opinion, we have examined the following:
(1) your registration statement on Form S-1 (File Number 33-96640) filed
with and declared effective by the Securities and Exchange Commission
on October 30, 1995, together with the Exhibits filed as a part
thereof;
(2) the Registration Statement, together with the Exhibits filed as a part
thereof;
(3) the Prospectus prepared in connection with the Registration Statement;
and
(4) the minutes of meetings and actions by written consent of the
stockholders and Board of Directors that are contained in your minute
books and the minute books of your predecessor, Cooper & Chyan
Technology, Inc., a California corporation ("CCT California"), that
are in our possession.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the lack of any undisclosed terminations, modifications, waivers or
amendments to any documents reviewed by us and the due execution and delivery of
all documents where due execution and delivery are prerequisites to the
effectiveness thereof.
<PAGE>
Cooper & Chyan Technology, Inc.
December 4, 1996
Page 2
As to matters of fact relevant to this opinion, we have relied solely upon
our examination of the documents referred to above and have assumed the current
accuracy and completeness of the information and records included in the
documents referred to above. We have made no independent investigations or other
attempts to verify the accuracy of any of such information or to determine the
existence or non-existence of any other factual matters; however, we are not
-------
aware of any facts that would lead us to believe that the opinion expressed
herein is not accurate.
Based upon the foregoing, it is our opinion that the 1,545,208 shares of
the Stock that may be sold by the Selling Stockholders, when issued and sold in
accordance in the manner referred to in the Prospectus associated with the
Registration Statement, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and is intended solely for the your
use as an exhibit to the Registration Statement for the purpose of the above
sale of the Stock and is not to be relied upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By: /s/ Gordon K. Davidson
--------------------------
General Partner
<PAGE>
EXHIBIT 23.01
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts" to the
use of our report dated January 26, 1996 (except for note 2 which is dated
August 28, 1996), with respect to the supplemental consolidated financial
statements of Cooper & Chyan Technology, Inc. in Amendment No.1 to the
Registration Statement (Form S-3) and related prospectus of Cooper & Chyan
Technology, Inc. for the registration of 1,545,208 shares of its common stock.
We also consent to the incorporation by reference therein of our report dated
January 26, 1996 with respect to the consolidated financial statements and
schedule of Cooper & Chyan Technology, Inc. included in its Annual Report on
Form 10-K for the year ended December 31, 1995.
ERNST & YOUNG LLP
Palo Alto, California
December 9, 1996
<PAGE>
Exhibit 23.02
-------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement (Form S-3) of our report dated September 20, 1996, on
our audit of the consolidated financial statements of UniCAD, Inc. for the
years ended September 30, 1995 and 1994 included in Cooper & Chyan Technology,
Inc.'s Form 8-K/A to amend its Current Report on Form 8-K filed on September
12, 1996. We also consent to the reference to us under the heading "Experts"
in such Amendment No. 1 to the Registration Statement.
/s/ DELOITTE & TOUCHE
Deloitte & Touche
Ottawa, Canada
December 10, 1996
