<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1998
REGISTRATION NO. 333-39713
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SYNOPSYS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 700 EAST MIDDLEFIELD ROAD 56-1546236
(STATE OR OTHER JURISDICTION OF MOUNTAIN VIEW, CALIFORNIA 94043 (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) (650) 962-5000 IDENTIFICATION NUMBER)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
</TABLE>
AART J. DE GEUS
CHIEF EXECUTIVE OFFICER
SYNOPSYS, INC.
700 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 962-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
THOMAS C. DEFILIPPS, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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
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<S> <C> <C> <C> <C>
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PROPOSED PROPOSED
TITLE OF EACH CLASS AMOUNT MAXIMUM MAXIMUM
OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(2)
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Common Stock, $0.01 par
value....................... 637,284 shares $49.5625 $31,585,388.25 $8,780.74
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</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low sales prices as reported on the
Nasdaq National Market on November 24, 1998.
(2) A filing fee of $8,796.97 was paid to the Commission on November 25, 1998.
The $8,780.74 fee above is an amount amended to reflect the removal of 1,178
shares from the Registration Statement after November 25, 1998.
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION, DATED DECEMBER 23, 1998
PROSPECTUS
Synopsys, Inc.
700 East Middlefield Road
Mountain View, California 94043
Telephone Number: (650) 962-5000
637,284 SHARES
LOGO
COMMON STOCK
------------------------
These shares may be offered and sold from time to time by certain
stockholders of the Company identified in this prospectus. See "Selling
Stockholders." The selling stockholders acquired the shares on November 20, 1998
in connection with the acquisition by Synopsys, Inc. ("Synopsys") of Everest
Design Automation Inc. ("Everest") pursuant to that certain Agreement of Merger
and Plan of Reorganization by and among Synopsys, Tenzing Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Synopsys,
and Everest, dated as of October 26, 1998 (the "Merger Agreement").
The selling stockholders will receive all of the net proceeds from the sale
of the shares. These stockholders will pay all underwriting discounts and
selling commissions, if any, applicable to the sale of the shares. The Company
will not receive any proceeds from the sale of the shares.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 3 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
Synopsys's common stock is quoted on the Nasdaq National Market under the
symbol "SNPS." On December 22, 1998, the last reported sale price of the common
stock was $50.00 per share.
------------------------
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
------------------------
December 23, 1998
<PAGE> 3
TABLE OF CONTENTS
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PAGE
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<S> <C>
Forward Looking Information................................. 2
Synopsys, Inc............................................... 3
Risk Factors................................................ 3
Where to Find More Information about Synopsys............... 7
Information Incorporated by Reference....................... 7
Use of Proceeds............................................. 7
Selling Stockholders........................................ 8
Plan of Distribution........................................ 9
Legal Matters............................................... 10
Experts..................................................... 10
</TABLE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of Synopsys common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale of the shares.
In this prospectus, unless indicated otherwise, "Synopsys," the "Company,"
"we," "us," and "our" refer to Synopsys, Inc. and its subsidiaries.
FORWARD LOOKING INFORMATION
This prospectus, including the information incorporated by reference
herein, contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Exchange Act. Our actual results could differ materially from those
projected in the forward-looking statements as a result of the risk factors set
forth below. In particular, please review the sections captioned "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in our
annual report on Form 10-K for the fiscal year ended September 30, 1998, which
report is incorporated herein by reference and such section of any subsequently
filed Exchange Act reports. In connection with forward-looking statements which
appear in these disclosures, prospective purchasers of the shares offered hereby
should carefully consider the factors set forth in this prospectus under "Risk
Factors."
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SYNOPSYS, INC.
Synopsys develops, markets, and supports electronic design automation
("EDA") products for designers of integrated circuits ("ICs") and electronic
systems. Synopsys offers a range of design tools, verification tools and
systems, design reuse products and physical design tools that significantly
improve designers' productivity by offering improved time to market, reduced
development and manufacturing costs, and enhanced design quality of results when
compared to earlier generations of EDA products. Synopsys also provides
training, support and consulting services for its customers.
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations.
If any of the following risks actually occur, our business, financial
condition, or results of operations could be materially adversely affected. In
such case, the trading price of our common stock could decline and you may lose
all or part of your investment.
This prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in such forward-looking statements as a result of a variety of factors,
including those set forth in the following risk factors and elsewhere in, or
incorporated by reference into, this prospectus. In evaluating an investment in
the shares you should consider carefully the following risk factors in addition
to the other information presented in this prospectus or incorporated by
reference into this prospectus.
POTENTIAL EARNINGS FLUCTUATIONS
We attempt to plan our business to achieve quarter-to-quarter revenue and
earnings growth. Achieving predictable revenue and earnings growth is difficult.
Quarterly revenue and earnings are affected by many factors, including customer
product demand, product license terms, the size of our backlog, and the timing
of revenue recognition on products and services sold. The following factors
could affect our revenues and earnings per share in a particular quarter or over
several quarterly or annual periods:
- Our orders are seasonal. Historically, our first fiscal quarter ending
December 31 is our weakest, and may have a book-to-bill ratio below one.
- Our products are complex, and before buying them potential customers
spend a great deal of time reviewing and testing them. This is
particularly true if they are new customers or current customers
purchasing a new product or switching from a competitor's product. The
sales cycle does not necessarily match quarterly periods, and if by the
end of any quarter our sales force has not sold enough new licenses, our
orders and revenues could be substantially reduced.
- Like many companies in the software industry, we receive a
disproportionate volume of orders in the last week of a quarter, and
recognize a disproportionate amount of revenue in the last week of a
quarter. In addition, the proportion of our business attributable to our
largest customers is increasing. As a result, if any order, and
especially a large order, is delayed beyond the end of a fiscal period,
our orders and revenue for that period could be substantially reduced.
- The accounting rules we are required to follow only permit us to
recognize revenue when certain criteria are met. Orders for certain of
the Company's products and services, including certain time-based product
licenses, consulting services, and software support, yield revenue (or a
significant portion thereof) over multiple quarters (often extending
beyond the current fiscal year) or upon completion of performance rather
than at the time of sale. In addition, in negotiating a purchase order
with a customer, we may agree to terms that have the effect of requiring
deferral of revenue in whole or in part. As a result, it may be difficult
for us to convert orders, particularly those received late in a quarter,
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<PAGE> 5
or backlog, to revenue in any given quarter. It is therefore possible for
the Company to fall short in its revenue and/or earnings plan for a given
quarter even while orders and backlog remain on plan.
COMPETITION
The EDA industry is highly competitive. We compete against other EDA
vendors, and with customers' internally developed design tools and internal
design capabilities, for a share of the overall EDA budgets of our customers.
Our competitors include companies that offer a broad range of products and
services, such as Cadence Design Systems, Inc. ("Cadence"), Mentor Graphics,
Inc. ("Mentor") and Avant! Corporation ("Avant!"), as well as companies,
including numerous start-up companies, that offer products focused on a discrete
phase of the IC design process. In order to remain successful against such
competition, we must continue to enhance our current products and bring to
market new products that address the increasingly sophisticated needs of our
customers on a timely and cost-effective basis. We also will have to expand our
ability to offer consulting services. The failure to enhance existing products,
develop and/or acquire new products or to expand our ability to offer such
services would have a material adverse effect on our business, financial
condition and results of operations.
Technology advances and customer requirements are fueling a change in the
nature of competition among EDA vendors. Increasingly, EDA companies compete on
the basis of "design flows" involving a broad range of products (including both
logic and physical design tools) and services rather than on the basis of
individual "point" tools performing a discrete phase of the design process. No
single EDA company currently offers its customers industry-leading products in a
complete design flow. We offer a wide range of logic design tools but currently
offer a relatively limited range of physical design tools. In November 1998 we
acquired Everest, a private company developing physical design software. We will
need to develop or acquire additional physical design tools in order to offer a
complete design flow. We are also attempting to expand our capacity to offer
professional services, but for the foreseeable future will continue to have less
capacity than Cadence to provide such services. The market for physical design
tools is dominated by Cadence and Avant!, both of which are attempting to
complete their design flows. Cadence recently acquired Ambit Design Systems, a
private company offering synthesis and other logic design products, as well as
certain physical design verification products from Lucent Technologies, both of
which will increase the direct competition between Synopsys and Cadence. In
addition, Cadence's acquisition of logic design products may lead to reductions
in purchases of our logic design software by Cadence, which was one of Synopsys'
ten largest customers in fiscal 1998. Avant! also recently acquired a private
company offering logic synthesis software, which will increase the direct
competition between Synopsys and Avant!.
SUCCESS OF NON-SYNTHESIS PRODUCTS
Historically, much of the Company's growth has been attributable to the
strength of its logic synthesis products. Opportunities for growth in market
share in this area are limited, and synthesis revenues are expected to grow more
slowly than our target for overall revenue growth. Synthesis and related "design
creation" products account for approximately 45-50% of our revenue. As a result,
in order to meet our revenue plan, non-synthesis design creation products, high
level verification products and deep submicron products and our services
business will have to grow faster than our overall revenue growth target.
Our PrimeTime timing analysis, Formality formal verification, Module
Compiler datapath synthesis and VCS Verilog simulation products are expected to
be among the most important contributors to product revenue growth. These
products have achieved initial customer acceptance, but we will only derive
significant revenue from these products if they are accepted by a broad range of
customers. Product success is difficult to predict. The introduction of new
products and growth of a market for such products cannot be assured in a highly
competitive environment like EDA. In the past we, like all companies, have had
products that despite initial successes, have failed to meet our revenue
expectations. Expanding our capacity to offer consulting services and our
revenues derived therefrom will require us to recruit, hire and train a large
number of talented people, and to implement management controls on bidding and
executing on services engagements. The consulting business is significantly
different than the software business, however, and as indicated by recent
layoffs announced by Cadence in its service business, increasing consulting
orders and revenue while
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maintaining an adequate level of profit can be difficult. There can be no
assurance that the Company will be successful in expanding revenues from
existing or new products at the desired rate or expanding its services business,
and the failure to do so would have a material adverse effect on the Company's
business, financial condition and results of operations.
INTEGRATION OF ACQUIRED BUSINESSES
We have acquired or merged with a number of companies in recent years,
including EPIC Design Technology, Inc., Viewlogic Systems, Inc., Systems Science
Inc. and Everest, and as part of our efforts to expand our product and services
offerings we may acquire additional companies in the future. In addition to
direct costs, acquisitions pose a number of risks, including potential dilution
of earnings per share, problems of integrating the acquired products and
employees into our business, the failure to realize expected synergies or cost
savings, the drain on management time for acquisition-related activities,
possible adverse effects on customer buying patterns due to uncertainties
resulting from an acquisition, and assumption of unknown liabilities. While we
attempt to review proposed acquisitions carefully and negotiate terms that are
favorable to the Company, there is no assurance that any individual acquisition
will have the projected effect on the Company's performance.
DEPENDENCE ON SEMICONDUCTOR AND ELECTRONICS BUSINESSES
Our business has benefited from the rapid worldwide growth of the
semiconductor industry. Purchases of our products are largely dependent upon the
commencement of new design projects by semiconductor manufacturers and their
customers. The outlook for the semiconductor industry for the remainder of
calendar year 1998 and 1999 is uncertain, owing in part to adverse economic
conditions in Asia and to potential slowing of growth in the United States. A
number of the Company's customers have announced layoffs of their employees or
the suspension of investment plans, and although the Company has not seen a
significant drop-off in demand from these customers, their EDA budgets could be
reduced, alone or as part of overall expense control efforts. In addition, there
have been a number of mergers in the semiconductor and systems industries, which
may reduce the aggregate level of purchases of our products and services by the
merged companies. Slower growth in the semiconductor and systems industries, a
reduced number of design starts, tightening of customers' operating budgets or
continued consolidation among the Company's customers may have a material
adverse effect on our business, financial condition and results of operations.
INTERNATIONAL EXPOSURE
In fiscal 1998, international revenue accounted for 39% of our revenue,
after accounting for 41% and 42% of our revenue in fiscal 1997 and 1996,
respectively. We expect that international revenue will continue to account for
a significant portion of our revenue in the future. As a result, the Company's
performance may be negatively affected by changes in foreign currency exchange
rates and changes in regional or worldwide economic or political conditions. In
particular:
- Revenue from sales in Japan during fiscal 1998 was adversely affected by
the weakness of the yen against the dollar, overall weakness in the
Japanese economy and the deferral of investments in semiconductor
facilities and technology by Japanese companies. Continued weakness of
the Japanese economy during fiscal 1999 is likely to adversely affect
revenue from Japan during the year. The yen has recently strengthened,
but the exchange rate for fiscal 1999 remains subject to unpredictable
fluctuations. Renewed weakness of the yen could adversely affect revenue
from Japan during fiscal 1999.
- Significant declines in the value of the Korean won during fiscal 1998,
and the subsequent economic crisis had a significant adverse affect on
our business in Korea during the year, and is likely to continue to
affect our orders and revenue from Korea in fiscal 1999. Declines in the
currencies of other countries in the Asia Pacific region, particularly
Taiwan, have also negatively affected the Company's sales in the region.
Continued instability in Asian currency markets and weaknesses in Asian
economies would continue to have an adverse effect on our orders and
revenues from the Asia Pacific region.
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RISKS OF JOINT DEVELOPMENT
In February 1996, we entered into a six-year joint development and license
agreement with IBM, pursuant to which the two companies agreed to develop
certain new products. Joint development of products is subject to risks and
uncertainties over and above those affecting internal development. During fiscal
year 1997, the first joint product resulting from the alliance, PrimeTime, was
introduced, and the parties agreed to terminate efforts to develop a product in
one of the product areas covered by the agreement. A second joint product is
expected to be introduced in January 1999, and development of the fourth product
to be developed under the agreement has been suspended. Synopsys and IBM are
currently discussing the future of the alliance. There can be no assurance that
joint development will continue, or that the products developed by the alliance
will be successful.
NEED TO RECRUIT AND RETAIN KEY PERSONNEL
Our success is dependent on technical and other contributions of key
employees. We participate in a dynamic industry, with significant start-up
activity, and our headquarters is in Silicon Valley, where skilled technical,
sales and management employees are in high demand. There is a limited number of
qualified EDA engineers, and the competition for such individuals is intense.
Experience at Synopsys is highly valued in the EDA industry, and our employees
are recruited aggressively by our competitors and by start-up companies. Our
salaries are competitive in the market, but under certain circumstances,
start-up companies can offer more attractive stock option packages. As a result,
we have experienced, and may continue to experience, significant employee
turnover. In addition, there can be no assurance that we can continue to recruit
and retain key personnel. Failure to successfully recruit and retain such
personnel could have a material adverse effect on our business, financial
condition and results of operations.
POISON PILL PROVISIONS
The Company has adopted a number of provisions that could have
anti-takeover effects. The Board of Directors has adopted a Preferred Shares
Rights Plan, commonly referred to as a "poison pill." In addition, the Board of
Directors has the authority, without further action by its stockholders, to fix
the rights and preferences of, and issue shares of, authorized but undesignated
shares of Preferred Stock. This provision and other provisions of the Company's
Restated Certificate of Incorporation and Bylaws and the Delaware General
Corporation Law may have the effect of deterring hostile takeovers or delaying
or preventing changes in control or management of the Company, including
transactions in which the stockholders of the Company might otherwise receive a
premium for their shares over then current market prices.
YEAR 2000
Synopsys presently believes that we will not experience significant
operational problems arising from the Year 2000 problem (i.e., the inability of
certain computer programs to correctly process date information on or after
January 1, 2000). However, if unforeseen Year 2000 issues arise with respect to
Synopsys products, one or more important customers experiences Year 2000-related
problems that interferes with their purchases of Synopsys products, or we are
not able to identify and fix Year 2000 problems relating to the computer systems
and software we rely on to run our business, we may experience a disruption in
our business, which could have a material adverse impact on our business,
financial condition and results of operations.
CHANGES IN FINANCIAL ACCOUNTING STANDARDS
We prepare our financial statements in conformity with generally accepted
accounting principles ("GAAP"). GAAP are subject to interpretation by the
American Institute of Certified Public Accountants ("AICPA"), the Securities and
Exchange Commission ("SEC") and various bodies formed to interpret and create
appropriate accounting policies. A change in these policies can have a
significant effect on our reported results, and may even affect our reporting of
transactions completed before a change is announced. Accounting policies
affecting many other aspects of our business, including rules relating to
software revenue recognition, purchase and pooling-of-interests accounting for
business combinations, employee stock purchase plans and
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stock option grants have recently been revised or are under review by one or
more groups. Changes to these rules, or the questioning of current practices,
may have a significant adverse affect on our reported financial results or in
the way we conduct our business.
In addition, the preparation of financial statements in conformity with
GAAP requires us to make estimates and assumptions that affect the recorded
amounts of assets and liabilities, disclosure of those assets and liabilities at
the date of the financial statements and the recorded amounts of expenses during
the reporting period. A change in the facts and circumstances surrounding these
estimates could result in a change to the estimates and impact future operating
results.
WHERE TO FIND MORE INFORMATION ABOUT SYNOPSYS
We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at http://www.synopsys.com or at the SEC's web site at
http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents that we have previously filed with the SEC or
documents that we will file with the SEC in the future. The information
incorporated by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below, and
any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act of 1934 (the "Exchange Act"), until the selling stockholders
sell all the shares. This prospectus is part of a Registration Statement we
filed with the SEC (Registration No. 333-39713). The documents we incorporate by
reference are:
1. Synopsys's Annual Report on Form 10-K for the fiscal year ended
September 30, 1998;
2. The description of Synopsys's common stock contained in its Registration
Statement on Form 8-A as filed on January 24, 1992.
We also incorporate by reference all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities registered have been sold or which deregisters all securities then
remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Registration Statement or Prospectus shall be
deemed to be modified or superseded for purposes of the Registration Statement
or this Prospectus to the extent that a statement contained herein, in a
Prospectus Supplement or in any other document subsequently filed with the
Commission which 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 the Registration Statement or this Prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Synopsys, Inc., 700 East Middlefield
Road, Mountain Veiw, California 94043; telephone number (650) 962-5000.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares by
the selling stockholders.
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SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock by each selling stockholder. All
information contained in the table below is based on beneficial ownership as of
November 20, 1998. Unless otherwise noted, none of the selling stockholders has
held any position or office or had a material relationship with the Company or
any of its affiliates within the past three years other than as a result of the
ownership of the Company's common stock.
<TABLE>
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BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING(2) NUMBER OF AFTER OFFERING(2)
-------------------- SHARES ---------------------
SELLING STOCKHOLDERS(1) NUMBER PERCENT OFFERED NUMBER PERCENT
----------------------- -------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Anthelion Capital, LLC...................... 64,865 * 58,379 6,486 *
Bernard Aronson............................. 2,179 * 1,962 217 *
Andy Bechtolsheim........................... 250,878 * 225,791 25,087 *
Frederick W. W. Bolander.................... 727 * 655 72 *
Brobeck, Phleger & Harrison, LLP............ 364 * 328 36 *
Chemicals and Materials Enterprise
Associates L.P. II........................ 54,467 * 49,021 5,446 *
Robert T. Coneybeer......................... 745 * 671 74 *
Vinod K. Dham............................... 2,206 * 1,986 220 *
Goel Family Partnership..................... 36,312 * 32,681 3,631 *
Hemraj Hingarh.............................. 1,816 * 1,635 181 *
Kurt Keutzer(3)............................. 10,349 * 4,903 544 *
Warren T. Lazarow(4)........................ 1,852 * 197 184 *
Mezzamie Group.............................. 727 * 655 72 *
NEA Presidents Fund, L.P.................... 3,268 * 2,942 326 *
NEA Ventures 1998, Limited Partnership...... 364 * 328 36 *
New Enterprise Associates VII, Limited
Partnership............................... 163,400 * 147,060 16,340 *
Raj-Dak Investments......................... 71,809 * 64,629 7,180 *
Valerie and Michael Russell................. 146 * 132 14 *
Saiyed Atiq Raza and Noreen Tirmizi Raza,
Trustees N & A Raza Revocable Trust UA
3/22/97................................... 7,263 * 6,537 726 *
J. Phillip Samper........................... 727 * 655 72 *
Sang S. Wang and Janet S. Wang, Trustees of
the Wang Living Trust U/T/D 10/4/96....... 2,451 * 2,206 245 *
John Sanguinetti............................ 727 * 655 72 *
Chester Silvestri........................... 29,710 * 26,739 2,971 *
Rajvir Singh................................ 7,263 * 6,537 726 *
</TABLE>
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* Less than 1%.
(1) The selling stockholders acquired the shares in connection with the
acquisition by Synopsys of Everest Design Automation Inc. (the "Everest
Acquisition"). All of the shares offered hereby are being offered by the
selling stockholders. Pursuant to the terms of the Registration Rights
Agreement, dated as of October 26, 1998, which was made in connection with
the Everest Acquisition (the "Registration Rights Agreement"), the Company
undertook to use its best efforts to effect the registration of the shares
issued to the selling stockholders. The Registration Rights Agreement also
includes certain indemnification arrangements with the selling stockholders.
The number of shares beneficially owned by the selling stockholders includes
an aggregate of 72,232 shares of common stock that have been deposited in
escrow pursuant to the terms of the merger agreement governing the Everest
Acquisition to secure the respective indemnification obligations of the
selling stockholders thereunder (the "Escrowed Shares"). The
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Escrowed Shares will be released from escrow on October 25, 1999 to the
extent that no claims have been made against the Escrowed Shares.
(2) Applicable percentage ownership is based on 68,193,820 shares of common
stock outstanding as of August 8, 1998, adjusted to reflect the issuance of
a total of 1,392,399 shares in connection with the Everest Acquisition.
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities, subject to community property laws, where applicable. Shares of
common stock subject to options that are presently exercisable or
exercisable within 60 days of November 20, 1998 are deemed to be
beneficially owned by the person holding such options for the purpose of
computing the percentage of ownership of such person but are not treated as
outstanding for the purpose of computing the percentage of any other person.
To the extent that any shares are issued upon exercise of options, warrants
or other rights to acquire the Company's capital stock that are presently
outstanding or granted in the future or reserved for future issuance under
the Company's stock plans, there will be further dilution to new public
investors.
(3) Mr. Keutzer is the beneficial owner of a total of 10,349 shares of common
stock, 4,902 of which are issuable upon the exercise of options granted to
Mr. Keutzer pursuant to Everest's 1997 Stock Option/ Stock Issuance Plan.
(4) Mr. Lazarow is the beneficial owner of a total of 1,852 shares of common
stock, 1,667 shares of which were issued to Mr. Lazarow pursuant to
Everest's 1997 Stock Option/Stock Issuance Plan and 184 shares of which were
deposited in the escrow account. Of such 184 shares, 163 shares are escrowed
in connection with shares of common stock issued to Mr. Lazarow pursuant to
Everest's 1997 Stock Option/Stock Issuance Plan.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling stockholders. Such sales may be made on the Nasdaq National
Market, in the over-the-counter market or otherwise, at prices and under terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The shares may be sold by means of one or more of the
following: (a) a block trade in which the broker-dealer so engaged 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 a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
prospectus; (c) an over-the-counter distribution in accordance with the rules of
the Nasdaq National Market; (d) ordinary brokerage transactions in which the
broker solicits purchasers; and (e) privately negotiated transactions. In
effecting sales, broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers engaged by the selling stockholders may arrange for
other broker-dealers to participate in resales.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with the selling stockholders. The selling stockholders may also sell the
shares short and redeliver the shares to close out such short positions. The
selling stockholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares
registered hereunder, which the broker-dealer may resell or otherwise transfer
pursuant to this prospectus. The selling stockholders may also loan or pledge
shares registered hereunder to a broker-dealer, and the broker-dealer may sell
the shares so loaned or upon a default the broker-dealer may effect sales of the
pledged shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders in amounts
to be negotiated in connection with the sale. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.
9
<PAGE> 11
The Company has advised the selling stockholders that the anti-manipulation
rules under the Exchange Act may apply to sales of shares in the market and to
the activities of the selling stockholders and their affiliates. In addition,
the Company will make copies of this prospectus available to the selling
stockholders and has informed them of the need for delivery of copies of this
prospectus to purchasers at or prior to the time of any sale of the shares
offered hereby.
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. The
Company will not receive any proceeds from the sale of the shares.
The Company may suspend the use of this prospectus for up to an aggregate
of 20 trading days, if, in the reasonable judgment of the Company, a development
has occurred or condition exists as a result of which the Registration Statement
or the prospectus does not contain material non-public information which in the
reasonable judgment of the Company is required to be included in the
Registration Statement or the Prospectus for sales of the shares to be made
hereunder. The Company is obligated in the event of such suspension to amend the
Registration Statement or the prospectus to take all actions necessary to ensure
that the use of the prospectus may be resumed as soon as practicable In
addition, the Selling Stockholders are not permitted to use this prospectus for
effecting resales during the following periods: (i) the period beginning March
15, 1999 and ending on the second day after Synopsys's public announcement of
its results of operations for the second quarter of Synopsys's fiscal 1999
reporting year; (ii) the period beginning June 15, 1999 and ending on the second
day after Synopsys's public announcement of its results of operations for the
third quarter of Synopsys's fiscal 1999 reporting year; and (iii) the period
beginning September 15, 1999 and ending on the second day after Synopsys's
public announcement of its results of operations for the fourth quarter of
Synopsys's 1999 reporting year or November 20, 1999, whichever comes first.
The Company has agreed with the selling stockholders to keep the
registration statement of which this prospectus constitutes a part effective
until November 20, 1999. Trading of any unsold shares after November 20, 1999
will be subject to compliance with all applicable securities laws, including
Rule 144.
There can be no assurance that the selling stockholders will sell any or
all of the shares of common stock offered by them hereunder.
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been passed
upon for the Company by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements and schedule of the Company as of
September 30, 1998 and 1997, and for each of the years in the three-year period
ended September 30, 1998, have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public auditors, incorporated by reference herein; and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of EPIC Design Technology, Inc. for
the year ended September 30, 1996 (none of which are presented herein) have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference from Synopsys, Inc.'s Annual
Report of Form 10-K for the year ended September 30, 1998, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, payable by the
Company in connection with the sale of common stock being registered. All
amounts are estimates except the SEC registration fee and Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
AMOUNT TO BE PAID
-----------------
<S> <C>
SEC registration fee........................................ $ 8,694
Nasdaq National Market listing fee.......................... 17,500
Printing expenses........................................... 10,000
Legal fees and expenses..................................... 10,000
Accounting fees and expenses................................ 7,500
Miscellaneous expenses...................................... 6,306
-------
Total............................................. $60,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a corporation
to include in its charter documents and in agreements between the corporation
and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law.
Article X of the Company's Restated Certificate of Incorporation provides
for the indemnification of directors to the fullest extent permitted under
Delaware law.
Article VII of the Company's Bylaws provides for the indemnification of
officers, directors and third parties acting on behalf of the corporation to the
fullest extent permitted under the General Corporation Law of Delaware.
The Registrant has entered into indemnification agreements with its
directors and executive officers, in addition to indemnification provided for in
the Registrant's Bylaws, and intends to enter into indemnification agreements
with any new directors and executive officers in the future.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed 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.
The Registration Rights Agreement dated October 26, 1998, by the Registrant
made in connection with the acquisition of Everest provides that the Company
will indemnify the selling stockholders against certain liabilities, including
liabilities under the Securities Act.
At present, there is no pending litigation or proceeding involving a
director, officer, employee, or other agent of the Registrant in which
indemnification is being sought, nor is the Registrant aware of any threatened
litigation that may result in a claim for indemnification by any director,
officer, employee, or other agent of the Registrant.
11
<PAGE> 13
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
4.1 Registration Rights Agreement dated October 26, 1998,
granted by the Registrant to the selling stockholders*
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation*
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors
(relating to financial statements of Synopsys, Inc.)
23.2 Consent of Deloitte & Touche LLP, Independent Accountants
(relating to financial statements of EPIC Design Technology,
Inc.)
23.3 Consent of Counsel (included in Exhibit 5.1)*
24.1 Power of Attorney (See page 15)*
</TABLE>
- ------------------------
* Previously filed on November 25, 1998 with the Company's Registration
Statement on Form S-3.
ITEM 17. UNDERTAKINGS
The 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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) 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;
(c) 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 paragraphs (a) and (b) above do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of 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 such post-effective amendment 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.
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 the purpose 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, (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the
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.
5. To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Exchange Act; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth
in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
12
<PAGE> 14
6. 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 foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the SEC
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 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.
13
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mountain View, State of California, on the 23rd day
of December 1998.
SYNOPSYS, INC.
By: /s/ AART J. DE GEUS*
------------------------------------
Aart J. de Geus
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ AART J. DE GEUS* Chief Executive Officer December 23, 1998
- -------------------------------------------------------- (Principal Executive
Aart J. de Geus Officer) and Chairman of
the Board of Directors
/s/ CHI-FOON CHAN* President, Chief Operating December 23, 1998
- -------------------------------------------------------- Officer and Director
Chi-Foon Chan
/s/ WILLIAM W. LATTIN* Executive Vice President December 23, 1998
- -------------------------------------------------------- and Director
William W. Lattin
/s/ DEBORAH COLEMAN* Director December 23, 1998
- --------------------------------------------------------
Deborah Coleman
/s/ HARVEY C. JONES, JR.* Director December 23, 1998
- --------------------------------------------------------
Harvey C. Jones, Jr.
/s/ RICHARD NEWTON* Director December 23, 1998
- --------------------------------------------------------
A. Richard Newton
/s/ STEVEN C. WALSKE* Director December 23, 1998
- --------------------------------------------------------
Steven C. Walske
/s/ DAVID SUGISHITA Chief Financial Officer December 23, 1998
- -------------------------------------------------------- (Principal Financial
David Sugishita Officer and Accounting
Officer)
*By: /s/ DAVID SUGISHITA
---------------------------------------------------
David Sugishita
Attorney-in-Fact
</TABLE>
14
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Registration Rights Agreement dated October 26, 1998,
granted by the Registrant to the selling stockholders*
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation*
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors
(relating to financial statements of Synopsys, Inc.)
23.2 Consent of Deloitte & Touche LLP, Independent Accountants
(relating to financial statements of EPIC Design Technology,
Inc.)
23.3 Consent of Counsel (included in Exhibit 5.1)*
24.1 Power of Attorney (See page 15)*
</TABLE>
- ------------------------
* Previously filed on November 25, 1998 with the Company's Registration
Statement on Form S-3.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Synopsys, Inc.:
We consent to incorporation by reference in the registration statement
dated on or about December 23, 1998, on Amendment No. 1 to Form S-3 of Synopsys,
Inc. of our report dated October 26, 1998, relating to the consolidated balance
sheets of Synopsys, Inc. and subsidiaries as of September 30, 1998, and 1997,
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the years in the three-year period ended September 30,
1998, and the related consolidated financial statement schedule, which report is
incorporated by reference in the September 30, 1998, annual report on Form 10-K
of Synopsys, Inc., and to the reference to our firm under the heading "experts"
in the prospectus.
/S/ KPMG PEAT MARWICK LLP
Mountain View, California
December 18, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-68011 of Synopsys, Inc. on Form S-3 of our report
dated October 11, 1996 (relating to the consolidated financial statements of
EPIC Design Technology, Inc. not presented separately therein), appearing in and
incorporated by reference in the Annual Report on Form 10-K of Synopsys, Inc.
for the year ended September 30, 1998 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ DELOITTE & TOUCHE LLP
San Jose, California
December 18, 1998
