<PAGE>
As filed with the Securities and Exchange Commission on January 30, 1998
Registration No. 333-44003
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SUMMIT DESIGN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 93-1137888
(State of incorporation) (I.R.S. Employer Identification No.)
9305 S.W. GEMINI DRIVE
BEAVERTON, OREGON 97008
(503) 643-9281
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
LARRY J. GERHARD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUMMIT DESIGN, INC.
9305 S.W. GEMINI DRIVE
BEAVERTON, OREGON 97008
(503) 643-9281
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
ALAN K. AUSTIN, ESQ.
STEVEN V. BERNARD, ESQ.
SUSAN L. STAPLETON, 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:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are to be 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 (the "Securities Act"), 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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
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Common Stock, par value
$0.01 per share.... 529,603 $9.92 $5,253,662 $1,550
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</TABLE>
(1) Estimated in accordance with Rule 457(c) under the Securities Act solely
for the purpose of computing the registration fee. The $9.92 is a
weighted average price of (1) the high-low average price of $9.95 on
January 5, 1998 for 447,856 shares and (2) the high-low average price of
$9.78 on January 27, 1998 for 81,747 shares as reported on the Nasdaq
National Market.
(2) Includes $235 for this Amendment No. 1 and $1,315 previously paid.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION
8(a), MAY DETERMINE.
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<PAGE>
PROSPECTUS
(Subject to completion, dated January 30, 1998)
529,603 SHARES
SUMMIT DESIGN, INC.
COMMON STOCK
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This Prospectus relates to the public offering, which is not being
underwritten, of up to 529,603 shares of Common Stock, par value $0.01 per
share (the "Shares"), of Summit Design, Inc. ("Summit" or the "Company"),
which may be offered from time to time by certain stockholders of the Company
or by pledgees, donees, transferees or other successors in interest that
receive such shares as a gift, partnership distribution or other non-sale
related transfer (the "Selling Stockholders"). The Company will receive no
part of the proceeds of such sales. All of the Shares were originally issued
by the Company in connection with the Company's acquisition by statutory
merger of TriQuest Design Automation, Inc. ("TriQuest"), by and through the
merger of a wholly-owned subsidiary of Summit ("Sub") with and into TriQuest
(the "Merger"). The Shares were issued pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 4(2) thereof. The Shares are being
registered by the Company pursuant to the Agreement and Plan of
Reorganization (the "Reorganization Agreement") by and among Summit, Sub and
TriQuest.
The Shares may be offered by the Selling Stockholders from time to time in
transactions on one or more exchanges, including the Nasdaq National Market,
or in the over-the-counter market or otherwise, at prices and at terms then
prevailing or at prices related to the then current market prices or in
negotiated transactions. See "Plan of Distribution." The price at which any
of the Shares may be sold, and the commissions, if any, paid in connection
with any such sale, are unknown and may vary from transaction to transaction.
The Company will pay all expenses incident to the offering and sale of the
Shares to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. To the extent
required, the specific shares of Common Stock to be sold, the public offering
price, the names of any agent, dealer or underwriter and any applicable
commission or discount with respect to any particular offer is set forth
herein or will be set forth in an accompanying Prospectus Supplement. See
"Selling Stockholders" and "Plan of Distribution."
The Company's Common Stock is listed on the Nasdaq National Market under
the symbol "SMMT." On January 29, 1998, the closing price of the Company's
Common Stock on the Nasdaq National Market was $13.75 per share.
---------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.
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The Securities and Exchange Commission (the "Commission") may take the view
that, under certain circumstances, the Selling Stockholders and any broker-
dealers or agents that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act. Commissions, discounts or concessions received
by any such broker-dealer or agent may be deemed to be underwriting commissions
under the Securities Act. See "Plan of Distribution."
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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.
---------------------------
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the securities laws
of any such State.
<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 and information statements and
other information with the Commission. Such reports, proxy and information
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, and at the following
Regional Offices of the Commission: New York Regional Office, Seven World
Trade Center, 13th Floor, New York, New York 10048 and Chicago Regional
Office, Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained by mail at
prescribed rates from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. The Common Stock of the Company is listed on the Nasdaq
National Market, and such reports, proxy and information statements and other
information concerning the Company may be inspected at the offices of Nasdaq
Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the shares of Common Stock
offered hereby, reference is hereby made to the Registration Statement. The
Registration Statement may be inspected at the public reference facilities
maintained by the Commission at the addresses set forth in the preceding
paragraph. Statements contained herein concerning any document filed as an
exhibit are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File
No. 0-20923) pursuant to the Exchange Act are hereby incorporated by
reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
(3) The Company's Current Reports on Form 8-K, as amended, filed on
March 14, 1997, July 28 1997, and September 24, 1997;
(4) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, filed with the Commission on
October 9, 1996; and
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of this offering shall
be deemed to be incorporated by reference into this Prospectus, to the extent
required, and to be a part of this Prospectus from the date of filing of such
reports and documents.
Any statement contained in a document incorporated by reference into
this Prospectus shall be deemed to be modified or superseded for 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
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all
of the foregoing documents incorporated by reference into this Prospectus
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be directed to Summit Design, Inc., 9305 S.W. Gemini Drive, Beaverton,
Oregon 97008, Attention: Investor Relations. The Company's telephone number
at that location is (503) 643-9281.
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<PAGE>
THE COMPANY
Summit is a leading provider of graphical design entry and verification
software tools and design to test software tools. The Company's products
assist integrated circuit ("IC" or "chip") system, design and test engineers
in meeting the market demands for rapid time to market, increased product
functionality and lower product cost. The Company's graphical Systems Level
Design Automation ("SLDA") products enable IC system and design engineers to
create and verify IC designs using familiar graphical paradigms such as block
diagrams, state machines, flow charts or truth tables rather than the less
intuitive textual hardware description language ("HDL") code required by
synthesis and simulation tools. The Company's SLDA products automatically
generate optimized HDL descriptions from graphical designs, eliminating time
consuming and error prone manual entry of HDL code. The Company was
incorporated in the State of Delaware on December 29, 1993. The Company's
principal executive offices are located at 9305 S.W. Gemini Drive, Beaverton,
Oregon 97008, and its telephone number at that location is (503) 643-9281.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference
contain forward-looking statements that are based on current expectations,
estimates and projections about the Company's industry, management's beliefs,
and assumptions made by management. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," and "estimates," and variations of
such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions
that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements. Such risks and uncertainties include, in addition to those set
forth herein under "Risk Factors," those noted in the documents incorporated
herein by reference. The Company undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new information,
future events or otherwise.
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<PAGE>
RISK FACTORS
THE SHARES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A HIGH
DEGREE OF RISK. THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN BEFORE PURCHASING THE COMMON STOCK OFFERED HEREBY:
POTENTIAL OPERATING LOSSES; FLUCTUATIONS IN QUARTERLY RESULTS
While the Company has generated net income in prior quarters, there can
be no assurance that the Company will be profitable in the future. In
addition, the Company has experienced significant quarterly fluctuations in
operating results and cash flows and it is likely that these fluctuations
will continue in future periods. These fluctuations have been, and may in
the future be, caused by a number of factors, including the rate of
acceptance of new products, corporate acquisitions and consolidations,
product, customer and channel mix, the size and timing of orders, lengthy
sales cycles, the timing of new product announcements and introductions by
the Company and its competitors, seasonal factors, rescheduling or
cancellation of customer orders, the Company's ability to continue to develop
and introduce new products and product enhancements on a timely basis, the
level of competition, purchasing and payment patterns, pricing policies of
the Company and its competitors, product quality issues, currency
fluctuations and general economic conditions.
The Company has generally recognized a substantial portion of its
revenue in the last month of each quarter, with this revenue concentrated in
the latter part of the month. Any significant deferral of purchases of the
Company's products could have a material adverse effect on the Company's
business, financial condition and results of operations in any particular
quarter, and to the extent that significant sales occur earlier than
expected, operating results for subsequent quarters may be adversely
affected. The Company's revenue is difficult to forecast for several
reasons. The market for certain of the Company's software products is
evolving. The Company's sales cycle is typically six to nine months and
varies substantially from customer to customer. The Company operates with
little product backlog because its products are typically shipped shortly
after orders are received. In addition, a significant portion of the
Company's sales are made through indirect channels and can be harder to
predict. The Company establishes its expenditure levels for product
development, sales and marketing and other operating activities based
primarily on its expectations as to future revenue. As a result, if revenue
in any quarter falls below expectations, expenditure levels could be
disproportionately high as a percentage of revenue, and the Company's
operating results for that quarter would be adversely affected. Based upon
the factors described above, the Company believes that its quarterly revenue,
expenses and operating results are likely to vary significantly in the
future, that period-to-period comparisons of its results of operations are
not necessarily meaningful and that, as a result, such comparisons should not
be relied upon as indications of the Company's future performance. Moreover,
although the Company's revenue has increased in recent periods, there can be
no assurance that the Company's revenue will grow in future periods or that
the Company will remain profitable on a quarterly or annual basis. Due to
the foregoing or other factors, it is likely that the Company's results of
operations may be below investors' and market analysts' expectations in some
future quarters, which could have a severe adverse effect on the market price
of the Company's Common Stock.
PRODUCT CONCENTRATION; UNCERTAINTY OF MARKET ACCEPTANCE OF SLDA
Prior to July 1997, the Company's revenue was predominantly derived from
two product lines, Visual HDL, which includes Visual HDL for VHDL and Visual
HDL for Verilog, and Design to Test products, Test Development Series
("TDS"). Effective July 1, 1997, as a result of a sale of assets to Credence
Systems Corporation, TDS products ceased to be a source of revenue. With the
acquisition of TriQuest in February 1997 and Simulation Technologies Corp.
("SimTech") in September 1997, the Company also derives revenue from
verification products which include hardware-software co-verification, code
coverage, and HDL debugging products as well as analysis, verification and
register-transfer level ("RTL") optimization tools.
The Company believes that SLDA products will continue to account for
substantially all of its revenue in the future. As a result, factors
adversely affecting sales of these products, including increased competition,
inability to successfully introduce enhanced or improved versions of these
products, product quality issues and technological change, could have a
material adverse effect on the Company's business, financial condition and
results of operations.
The Company's future success depends primarily upon the market
acceptance of its existing and future SLDA products. The Company
commercially shipped its first SLDA product, Visual HDL for VHDL, in the
first quarter of 1994. For the three
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<PAGE>
months and the nine months ended September 30, 1997 and for the years ended
December 31, 1996, 1995 and 1994, respectively, revenue from SLDA products
and related maintenance contracts represented 100%, 83.6%, 60.9%, 43.6% and
34.8%, respectively, of the Company's total revenue. The Company's SLDA
products incorporate certain unique design methodologies and thus represent a
departure from industry standards for design creation and verification. The
Company believes that broad market acceptance of its SLDA products will
depend on several factors, including the ability to significantly enhance
design productivity, ease of use, interoperability with existing electronic
design automation ("EDA") tools, price and the customer's assessment of the
Company's financial resources and its technical, managerial, service and
support expertise. The Company also depends on its distributors to assist
the Company in gaining market acceptance of its products. There can be no
assurance that sufficient priority will be given by the Company's
distributors to marketing the Company's products or whether such distributors
will continue to offer the Company's products. There can be no assurance
that the Company's SLDA products will achieve broad market acceptance. A
decline in the demand for, or the failure to achieve broad market acceptance
of, the Company's SLDA products will have a material adverse effect on the
Company's business, financial condition and results of operations.
Although demand for SLDA products has increased in recent years, the
market for SLDA products is still emerging and there can be no assurance that
it will continue to grow or that, even if the market does grow, businesses
will continue to purchase the Company's SLDA products. If the market for
SLDA products fails to grow or grows more slowly than the Company currently
anticipates, the Company's business, financial condition and results of
operations would be materially adversely affected.
Traditionally, EDA customers have been risk averse in accepting new
design methodologies. Because many of Summit's tools embody new design
methodologies, this risk aversion on the part of potential customers presents
an ongoing marketing and sales challenge to the Company and makes the
introduction and acceptance of new products unpredictable. The Company's
Visual Testbench product, introduced in the fourth quarter of 1995, provides
a new methodology and requires a change in the traditional design flow for
creating IC test programs. The Company anticipates a lengthy period of test
marketing for the Visual Testbench product. Accordingly, the Company cannot
predict the extent, if any, to which it will realize revenue from Visual
Testbench in excess of the revenue expected to be received pursuant to an OEM
agreement entered into in July 1997.
COMPETITION
The EDA industry is highly competitive and the Company expects
competition to increase as other EDA companies introduce SLDA products. In
the SLDA market, the Company principally competes with Mentor Graphics and a
number of smaller firms. Indirectly, the Company also competes with other
firms that offer alternatives to SLDA and could potentially offer more
directly competitive products in the future. Certain of these companies have
significantly greater financial, technical and marketing resources and larger
installed customer bases than the Company. Some of the Company's current and
future competitors offer a more complete range of EDA products and may
distribute products that directly compete with the Company's SLDA products by
bundling such products with their core product line. In addition, the
Company's products perform a variety of functions, certain of which are, and
in the future may be, offered as separate products or discrete point
solutions by the Company's existing and future competitors. For example,
certain companies currently offer design entry products without simulators.
There can be no assurance that such competition will not cause the Company to
offer point solutions instead of, or in addition to, the Company's current
software products. Such point solutions would be priced lower than the
Company's current product offerings and could cause the Company's average
selling prices to decrease, which could have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company competes on the basis of certain factors including product
capabilities, product performance, price, support of industry standards, ease
of use, first to market and customer technical support and service. The
Company believes that it competes favorably overall with respect to these
factors. However, in particular cases, the Company's competitors may offer
SLDA products with functionality which is sought by the Company's prospective
customers and which differs from that offered by the Company. In addition,
certain competitors may achieve a marketing advantage by establishing formal
alliances with other EDA vendors. Further, the EDA industry in general has
experienced significant consolidation in recent years, and the acquisition of
one of the Company's competitors by a larger, more established EDA vendor
could create a more significant competitor. There can be no assurance that
the Company will be able to compete successfully against current and future
competitors or that competitive pressures faced by the Company will not have
a material adverse effect on its business, financial condition and results of
operations. There can be no assurance that the Company's current and future
competitors will not be able to develop products comparable or superior to
those developed by the Company or to adapt more quickly than the Company
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<PAGE>
to new technologies, evolving industry trends or customer requirements.
Increased competition could result in price reductions, reduced margins and
loss of market share, all of which could have a material adverse effect on
the Company's business, financial condition and results of operations.
DEPENDENCE ON ELECTRONICS INDUSTRY MARKET
Because the electronics industry is characterized by rapid technological
change, short product life cycles, fluctuations in manufacturing capacity and
pricing and margin pressures, certain segments, including the computer,
semiconductor, semiconductor test equipment and telecommunications
industries, have experienced sudden and unexpected economic downturns.
During these periods, capital spending is commonly curtailed and the number
of design projects often decreases. Because the Company's sales are
dependent upon capital spending trends and new design projects, negative
factors affecting the electronics industry could have a material adverse
effect on the Company's business, financial condition and results of
operations. A number of electronics companies, including customers of the
Company, have recently experienced a slowdown in their businesses. The
Company's future operating results may reflect substantial fluctuations from
period to period as a consequence of such industry patterns, general economic
conditions affecting the timing of orders from customers and other factors.
DEPENDENCE ON THIRD PARTIES FOR PRODUCT INTEROPERABILITY
Because the Company's products must interoperate with EDA products of
other companies, particularly simulation and synthesis products, the Company
must have timely access to third party software to perform development and
testing of its products. Although the Company has established relationships
with a variety of EDA vendors to gain early access to new product
information, these relationships may be terminated by either party with
limited notice. In addition, such relationships are with companies that are
current or potential future competitors of the Company, including Synopsys,
Mentor Graphics and Cadence. If any of these relationships were terminated
and the Company was unable to obtain, in a timely manner, information
regarding modifications of third party products necessary for modifying its
software products to interoperate with these third party products, the
Company could experience a significant increase in development costs. The
development process would also take longer, and product introductions would
be delayed. The Company's business, financial condition and results of
operations, consequently, could be materially adversely affected.
NEW PRODUCTS AND TECHNOLOGICAL CHANGE; EVOLVING INDUSTRY STANDARDS
The EDA industry is characterized by extremely rapid technological
change, frequent new product introductions and evolving industry standards.
The introduction of products embodying new technologies and the emergence of
new industry standards can render existing products obsolete and
unmarketable. In addition, customers in the EDA industry require software
products that allow them to reduce time to market, differentiate their
products, improve their engineering productivity and reduce their design
errors. The Company's future success will depend upon its ability to enhance
its current products and develop and introduce new products that keep pace
with technological developments and emerging industry standards and address
the increasingly sophisticated needs of its customers. There can be no
assurance that the Company will be successful in developing and marketing
product enhancements or new products that respond to technological change or
emerging industry standards, that the Company will not experience
difficulties that could delay or prevent the successful development,
introduction and marketing of these products, or that its new products will
adequately meet the requirements of the marketplace and achieve market
acceptance. If the Company is unable, for technological or other reasons, to
develop and introduce products in a timely manner in response to changing
market conditions, industry standards or other customer requirements,
particularly if such product releases have been pre-announced, the Company's
business, financial condition and results of operations will be materially
adversely affected.
Software products as complex as those offered by the Company may contain
errors that may be detected at any point in the products' life cycles. The
Company has in the past discovered software errors in certain of its products
and has experienced delays in shipment of products during the period required
to correct these errors. There can be no assurance that, despite testing by
the Company and by current and potential customers, errors will not be found,
resulting in loss of, or delay in, market acceptance and sales, diversion of
development resources, injury to the Company's reputation or increased
service and warranty costs, any of which could have a material adverse effect
on the Company's business, financial condition and results of operations.
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<PAGE>
DEPENDENCE ON DISTRIBUTORS
The Company relies on distributors for licensing and support of its
products outside of North America. Approximately 34%, 48%, 46%, 42% and 38%
of the Company's revenue for the nine months ended September 30, 1997 and
1996 and for the years ended December 31, 1996, 1995 and 1994, respectively,
were attributable to sales made through distributors. The Company has also
entered into a joint venture with Anam S&T Co., Ltd. ("Anam") pursuant to
which the joint venture corporation (Summit Design Korea, Inc. ("Summit
Asia")) acquired exclusive rights to sell, distribute and support all of the
Company's products in the Asia-Pacific region, excluding Japan. Summit Asia
has acted in such capacity since April 1, 1996. Prior to that date, Anam was
an independent distributor of the Company's products. The Company is
currently considering restructuring the ownership and responsibilities of
Summit Asia. There can be no assurance that any restructuring would result in
Summit Asia becoming profitable or that revenue attributable to sales in the
Asia Pacific region, excluding Japan, would increase. During the first
quarter of 1997, the Company entered into a distribution agreement with ATE
Services Company, Ltd. ("ATE") pursuant to which ATE was granted exclusive
rights to sell, distribute and support Summit's Visual Testbench products
within Japan until October 1998, subject to the Company's ability to
terminate the relationship if ATE fails to meet quarterly sales objectives.
The agreement may also be terminated by either party for breach. In
addition, in the first quarter of 1996, the Company entered into a
three-year, exclusive distribution agreement for its SLDA products in Japan
with Seiko Instruments, Inc. ("Seiko"). In the event Seiko fails to meet
specified quotas for two or more quarterly periods, exclusivity can be
terminated by Summit, subject to Seiko's right to pay a specified fee to
maintain exclusivity. The agreement is renewable for successive five-year
terms by mutual agreement of the Company and Seiko and is terminable by
either party for breach. In March 1997, the Company entered into a
three-year distribution agreement with Kanematsu USA Inc. ("Kanematsu") which
granted Kanematsu exclusive distribution rights to see, distribute and
support certain verification products in Japan. For the year ended December
31, 1996 and nine months ended September 30,1997, all sales of the Company's
products in the Asia-Pacific region were through Seiko, Summit Asia, ATE and
Kanematsu.
There can be no assurance the relationships with Seiko, Summit Asia, ATE
and Kanematsu will be effective in maintaining or increasing sales relative
to the levels experienced prior to such relationships. The Company also has
independent distributors in Europe and is dependent on the continued
viability and financial stability of its distributors. Since the Company's
products are used by skilled design engineers, distributors must possess
sufficient technical, marketing and sales resources and must devote these
resources to a lengthy sales cycle, customer training and product service and
support. Only a limited number of distributors possess these resources. In
addition, Seiko, Summit Asia, ATE and Kanematsu, as well as the Company's
other distributors, may offer products of several different companies,
including competitors of the Company. There can be no assurance that the
Company's current distributors will continue to market or service and support
the Company's products effectively, that any distributor will continue to
sell the Company's products or that the distributors will not devote greater
resources to products of other companies. The loss of, or a significant
reduction in, revenue from the Company's distributors could have a material
adverse effect on the Company's business, financial condition and results of
operations.
INTERNATIONAL SALES AND OPERATIONS
Approximately 24%, 37%, 50%, 52% and 39% of the Company's revenue for
the three months and nine months ended September 30, 1997 and the years ended
December 31, 1996, 1995 and 1994, respectively, were attributable to sales
made outside the United States. The decline in the percent of revenue from
sales made outside the United States for the three and nine months ended
September 30, 1997 is related primarily to domestic sales to one customer.
The Company expects that international revenue will continue to represent a
significant portion of its total revenue. The Company's international
revenue is currently denominated in U.S. dollars. As a result, increases in
the value of the U.S. dollar relative to foreign currencies could make the
Company's products more expensive and, therefore, potentially less
competitive in those markets. The Company pays the expenses of its
international operations in local currencies and does not engage in hedging
transactions with respect to such obligations. International sales and
operations are subject to numerous risks, including tariff regulations and
other trade barriers, requirements for licenses, particularly with respect to
the export of certain technologies, collectability of accounts receivable,
changes in regulatory requirements, difficulties in staffing and managing
foreign operations and extended payment terms. There can be no assurance
that such factors will not have a material adverse effect on the Company's
future international sales and operations and, consequently, on the Company's
business, financial condition and results of operations. In addition,
financial markets and economies in the Asia Pacific region have been
experiencing adverse conditions which could adversely affect demand for the
Company's products in such region.
In order to successfully expand international sales, the Company may
need to establish additional foreign operations, hire additional personnel
and recruit additional international distributors. This will require
significant management attention and financial resources and could adversely
affect the Company's operating margins. In addition, to the extent that the
Company is unable to effect these additions in a timely manner, the Company's
growth, if any, in international sales will be limited. There can be no
assurance that the Company will be able to maintain or increase international
sales of the Company's products, and failure to do so could have a material
adverse effect on the Company's business, financial condition and results of
operations.
-7-
<PAGE>
MANAGEMENT OF GROWTH AND ACQUISITIONS
Summit's ability to achieve significant growth will require it to
implement and continually expand its operational and financial systems,
recruit additional employees and train and manage current and future
employees. Summit expects that any such growth will place a significant
strain on its operational resources and systems. Failure to effectively
manage any such growth would have a material adverse effect on Summit's
business, financial condition and results of operations.
On February 28, 1997, Summit completed its acquisition of TriQuest and
on September 9, 1997, Summit completed its acquisition of SimTech. As a
result of these acquisitions, Summit's operating expenses are expected to
increase. There can be no assurance that the integration of TriQuest's and
SimTech's business can be successfully completed in a timely fashion, or at
all, or that the revenues from TriQuest and SimTech will be sufficient to
support the costs associated with the acquired businesses, without adversely
affecting Summit's operating margins. Any failure to successfully complete
the integration in a timely fashion or to generate sufficient revenues from
the acquired business could have a material adverse effect on Summit's
business and results of operations. In addition, Summit regularly evaluates
acquisition opportunities. Future acquisitions by Summit could result in
potentially dilutive issuances of equity securities, the incurring of debt
and contingent liabilities and amortization expenses related to goodwill and
other intangible assets, which could materially adversely affect Summit's
results of operations. Product and technology acquisitions entail numerous
risks, including difficulties in the assimilation of acquired operations,
technologies and products, diversion of management's attention to other
business concern, risks of entering markets in which Summit has no or limited
prior experience and potential loss of key employees of acquired companies.
Summit's management has had limited experience in assimilating acquired
organizations and products into Summit's operations. No assurance can be
given as to the ability of Summit to integrate successfully any operations,
personnel or products that have been acquired or that might be acquired in
the future, and the failure of Summit to do so could have a material adverse
effect on Summit's results of operations.
OPERATIONS IN ISRAEL
The Company's research and development operations related to its SLDA
products are located in Israel and may be affected by economic, political and
military conditions in that country. Accordingly, the Company's business,
financial condition and results of operations could be materially adversely
affected if hostilities involving Israel should occur. This risk is
heightened due to the restrictions on the Company's ability to manufacture or
transfer outside of Israel any technology developed under research and
development grants from the government of Israel as described in "--Israeli
Research, Development and Marketing Grants." In addition, while all of the
Company's sales are denominated in U.S. dollars, a portion of the Company's
annual costs and expenses in Israel are paid in Israeli currency. These
costs and expenses were approximately $4.3, $4.3 and $2.9 million in 1996,
1995 and 1994, respectively. Payment in Israeli currency subjects the Company
to foreign currency fluctuations and to economic pressures resulting from
Israel's generally high rate of inflation, which has been approximately 11%,
8% and 15% during 1996, 1995, and 1994, respectively. The Company's primary
expense which is paid in Israeli currency is employee salaries for research
and development activities. As a result, an increase in the value of Israeli
currency in comparison to the U.S. dollar could increase the cost of research
and development expenses and general and administrative expenses. There can
be no assurance that currency fluctuations, changes in the rate of inflation
in Israel or any of the other aforementioned factors will not have a material
adverse effect on the Company's business, financial condition or results of
operations. In addition, coordination with and management of the Israeli
operations requires the Company to address differences in culture,
regulations and time zones. Failure to successfully address these
differences could be disruptive to the Company's operations.
The Company's Israeli production facility has been granted the status of
an "Approved Enterprise" under the Israeli Investment Law for the
Encouragement of Capital Investments, 1959 (the "Investment Law") . Taxable
income of a company derived from an "Approved Enterprise" is eligible for
certain tax benefits, including significant income tax rate reductions for up
to seven years following the first year in which the "Approved Enterprise"
has Israeli taxable income (after using any available net operating losses).
The period of benefits cannot extend beyond 12 years from the year of
commencement of operations or 14 years from the year in which approval was
granted, whichever is earlier. The tax benefits derived from a certificate
of approval for an "Approved Enterprise" relate only to taxable income
attributable to such "Approved Enterprise" and are conditioned upon
fulfillment of the conditions stipulated by the Investment Law, the
regulations promulgated thereunder and the criteria set forth in the
certificate of approval. In the event of a failure by the Company to comply
with these conditions, the tax benefits could be canceled, in whole or in
part, and the Company would be required to refund the amount of the canceled
benefits, adjusted for inflation and interest. There can be no assurance that
the Company's Israeli production facility will continue to
-8-
<PAGE>
operate or qualify as an "Approved Enterprise" or that the benefits under the
"Approved Enterprise" regulations will continue, or be applicable, in the
future. The loss of, or any material decrease in, these income tax benefits
could have a material adverse effect on the Company's business, financial
condition and results of operations.
ISRAELI RESEARCH, DEVELOPMENT AND MARKETING GRANTS
Summit's Israeli subsidiary has obtained research and development grants
from the Office of the Chief Scientist (the "Chief Scientist") in the Israeli
Ministry of Industry and Trade of approximately $232,000 and $608,000 in 1993
and 1995, respectively. As of September 30, 1997, the Company was obligated
to pay back approximately $232,000 and $470,000 for the 1993 and 1995 grants,
respectively. Such obligations are collateralized by all tangible and
intangible assets of the Israeli subsidiary. The terms of the grants
prohibit the manufacture of products developed under these grants outside of
Israel and the transfer of the technology developed pursuant to these grants
to any person, without the prior written consent of the Chief Scientist. The
Company's Visual HDL for VHDL products have been developed under grants from
the Chief Scientist and thus are subject to these restrictions. If the
Company is unable to obtain the consent of the government of Israel, the
Company would be unable to take advantage of potential economic benefits such
as lower taxes, lower labor and other manufacturing costs and advanced
research and development facilities that may be available if such technology
and manufacturing operations could be transferred to locations outside of
Israel. In addition, the Company would be unable to minimize risks
particular to operations in Israel, such as hostilities involving Israel.
Although the Company is eligible to apply for additional grants from the
Chief Scientist, it has no present plans to do so. The Company also received
a Marketing Fund Grant from the Israeli Ministry of Industry and Trade for an
aggregate of $423,000. The grant must be repaid at the rate of 3% of the
increase in exports over the 1993 export level of all Israeli products, until
repaid. As of September 30, 1997, approximately $364,000 was outstanding
under the grant.
DEPENDENCE ON KEY PERSONNEL
The Company's future success depends in large part on the continued
service of its key technical and management personnel and its ability to
continue to attract and retain highly-skilled technical, sales and marketing
and management personnel. The Company has entered into employment agreements
with certain of its executive officers, however, such agreements do not
guarantee the services of these employees and do not contain noncompetition
provisions. Competition for personnel in the software industry in general,
and the EDA industry in particular, is intense, and the Company has at times
in the past experienced difficulty in recruiting qualified personnel. There
can be no assurance that the Company will retain its key personnel or that it
will be successful in attracting and retaining other qualified technical,
sales and marketing and management personnel in the future. The loss of any
key employees or the inability to attract and retain additional qualified
personnel may have a material adverse effect on the Company's business,
financial condition and results of operations. The Company does not carry
"key person" life insurance on any of its key personnel. The Company recently
hired a new Vice President of Worldwide Marketing & Sales and several new
sales persons. The Company's future success will depend in part on the
ability of these new persons to rapidly and effectively transition into their
new positions. Additions of new personnel and departures of existing
personnel, particularly in key positions, can be disruptive and can result in
departures of additional personnel, which could have a material adverse
effect on the Company's business, financial condition and results of
operations.
LIMITATIONS ON PROTECTION OF INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
The Company's success depends in part upon its proprietary technology.
The Company relies on a combination of copyright, trademark and trade secret
laws, confidentiality procedures, licensing arrangements and technical means
to establish and protect its proprietary rights. As part of its
confidentiality procedures, the Company generally enters into non-disclosure
agreements with its employees, distributors and corporate partners, and
limits access to, and distribution of, its software, documentation and other
proprietary information. In addition, the Company's products are protected by
hardware locks and software encryption techniques designed to deter
unauthorized use and copying. Despite these precautions, it may be possible
for a third party to copy or otherwise obtain and use the Company's products
or technology without authorization, or to develop similar technology
independently.
The Company provides its SLDA products to end-users primarily under
"shrink-wrap" license agreements included within the packaged software. In
addition, the Company delivers certain of its verification products
electronically under an electronic version of a "shrink-wrap" license
agreement. These "shrink-wrap" license agreements are not negotiated with or
signed by the licensee, and thus may not be enforceable in certain
jurisdictions. In addition, the laws of some foreign countries
-9-
<PAGE>
do not protect the Company's proprietary rights as fully as do the laws of
the United States. There can be no assurance that the Company's means of
protecting its proprietary rights in the United States or abroad will be
adequate or that competitors will not independently develop similar
technology.
The Company could be increasingly subject to infringement claims as the
number of products and competitors in the Company's industry segment grows,
the functionality of products in its industry segment overlaps and an
increasing number of software patents are granted by the United States Patent
and Trademark Office. There can be no assurance that a third party will not
claim such infringement by the Company with respect to current or future
products. Any such claims, with or without merit, could be time-consuming,
result in costly litigation, cause product delays or require the Company to
enter into royalty or licensing agreements. Such royalty or licensing
agreements, if required, may not be available on terms acceptable to the
Company or at all. Failure to protect its proprietary rights or claims of
infringement could have a material adverse effect on the Company's business,
financial condition and results of operations.
POSSIBLE VOLATILITY OF STOCK PRICE
The stock markets have experienced price and volume fluctuations that
have particularly affected technology companies, resulting in changes in the
market prices of the stocks of many companies which may not have been
directly related to the operating performance of those companies. Such broad
market fluctuations may adversely affect the market price of the Common
Stock. In addition, factors such as announcements of technological
innovations or new products by the Company or its competitors, market
conditions in the computer software or hardware industries and quarterly
fluctuations in the Company's operating results may have a significant
adverse effect on the market price of the Company's Common Stock.
-10-
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale from time
to time of the Shares. All proceeds from the sale of the Shares will be for
the account of the Selling Stockholders, as described below. See "Selling
Stockholders" and "Plan of Distribution" described below.
SELLING STOCKHOLDERS
The following table sets forth as of the date of this Prospectus, the
name of each of the Selling Stockholders, the number of shares of Common
Stock that each such Selling Stockholder beneficially owned as of such date,
the number of shares of Common Stock owned by each Selling Stockholder that
may be offered for sale from time to time by this Prospectus, and the number
of shares of Common Stock to be held by each such Selling Stockholder
assuming the sale of all the Common Stock offered hereby. Except as
indicated, 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. The Company may amend or supplement this Prospectus
from time to time to update the disclosure set forth herein.
<TABLE>
<CAPTION>
Shares Shares Which May Shares Beneficially Owned
Beneficially be Sold Pursuant to After Offering(3)
-------------------------
Selling Stockholder Owned(1) this Prospectus(2) Number Percent
- ------------------------------------------------ ------------ ------------------- ------ -------
<S> <C> <C> <C> <C>
Brian D. Alleyne................................ 1,530 1,377 153 *
Barry Financial, LLC............................ 29,102 26,192 2,910 *
Carl Otto Bruning III........................... 4,244 3,820 424 *
Benjamin Leonard and Theresa M. Butler.......... 1,530 1,377 153 *
Stephen Butler(4)............................... 59,193 20,196 38,997 *
Sujata Chadha................................... 900 810 90 *
Herbert V. Criscito............................. 29,102 26,192 2,910 *
Ashwina and Hema A. Doshi....................... 1,474 1,327 147 *
Rajiv Dutta(5).................................. 16,626 5,345 11,281 *
Nancy D. Ege.................................... 1,800 1,620 180 *
Tracy Fang(6)................................... 630 405 225 *
Dennis Favero................................... 6,001 5,401 600 *
Dennis V. and Christine Favero.................. 6,601 5,941 660 *
Steve Fenstermaker(7)........................... 630 405 225 *
The Fluegel Trust............................... 58,882 52,994 5,888 *
Agnes M. and Smith M. George.................... 3,600 3,240 360 *
David S. George................................. 28,004 23,165 4,839 *
Douglas Glader.................................. 1,800 1,620 180 *
Martin J. and Gabrielle F. Goff................. 2,910 2,619 291 *
James J. Harrison............................... 7,275 6,548 727 *
Frederick and Sheila Hoar....................... 900 810 90 *
Christopher James............................... 12,002 10,802 1,200 *
David & Annette Jorgenson Revocable Trust....... 14,402 12,962 1,440 *
Shrikanth Kattemalalavadi....................... 1,800 1,620 180 *
Nand S. Kumar(8)................................ 46,890 41,632 5,258 *
Sanjay Lall..................................... 14,551 13,096 1,455 *
Jeffrey L. and Kathryn R. Langner............... 900 810 90 *
Larry LeDoux.................................... 3,000 2,700 300 *
Pravin K. Madhani............................... 3,812 3,562 250 *
The Marren Trust................................ 9,001 8,101 900 *
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Shares Shares Which May Shares Beneficially Owned
Beneficially be Sold Pursuant to After Offering(3)
-------------------------
Selling Stockholder Owned(1) this Prospectus(2) Number Percent
- ------------------------------------------------ ------------ ------------------- ------ -------
<S> <C> <C> <C> <C>
Maura A. Murphy.................................. 291 262 29 *
Patricia A. Murphy............................... 436 393 43 *
Petermeier Living Trust.......................... 1,800 1,620 180 *
The Pickard Family Trust......................... 16,277 14,650 1,627 *
John Rizzi....................................... 2,355 2,120 235 *
Joseph D. and Elizabeth M. Rizzi Family Trust.... 49,596 44,637 4,959 *
Jayanta Roy (9).................................. 62,270 45,557 16,713 *
Suzanne Rizzi.................................... 2,355 2,120 235 *
Namrata Sajwan................................... 1,800 1,620 180 *
Ramprasad Shastry................................ 12,025 10,823 1,202 *
Andrew T. Sheehan................................ 14,582 13,124 1,458 *
Robyn Sherman.................................... 120 108 12 *
Sururaj Singh.................................... 1,260 1,134 126 *
Tarunraj Singh................................... 540 486 54 *
Roger V. Smith................................... 11,776 10,599 1,177 *
Vasu Subbiah..................................... 540 486 54 *
Sunrise Capital Fund I, LLC...................... 18,003 16,203 1,800 *
Murli Mohan Thirumale............................ 1,260 1,134 126 *
Thomas A. Thampy................................. 7,501 6,751 750 *
Tite Tolerance, Inc.............................. 7,275 6,548 727 *
Jan Ho Van Schuyver.............................. 900 810 90 *
Lawrence A. Vivolo............................... 2,350 2,115 235 *
Daryl Vorne...................................... 1,800 1,620 180 *
Richard A. and Dianna S. Vorne................... 1,800 1,620 180 *
Mervyn P. Winston................................ 2,355 2,120 235 *
Michael J. Yates................................. 120 108 12 *
------- ------- ------- --------
Total 590,479 475,457 115,022 --
</TABLE>
- ---------------------------------------
* Indicates less than one percent.
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is
not necessarily indicative of beneficial ownership for any other purpose.
Under such rule, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also
any shares which the individual has the right to acquire within 60 days
of the date of this Prospectus through the exercise of any stock option
or other right. Unless otherwise indicated in the footnotes, each person
has sole voting and investment power (or shares such powers with his or
her spouse) with respect to the shares shown as beneficially owned.
(2) Does not include 54,146 shares of Common Stock beneficially owned by the
Selling Stockholders that are subject to an escrow pursuant to the
Reorganization Agreement (the "Escrowed Shares"). Such escrow will
expire on February 28, 1998 to the extent no claims on the escrow are
outstanding. A number of shares equivalent to the Escrowed Shares have
been included in this Registration Statement, but they are not included
in this column of the table. An amended prospectus will be filed to
reflect any change in the number of shares offered by the individual
Selling Stockholders.
(3) Assumes the sale of all Common Stock offered hereby.
(4) Mr. Butler was the Company's Vice President, Business Development from
February 28, 1997 to July 4, 1997.
(5) Includes 8,688 shares issuable upon exercise of stock options as of
April 1, 1998.
(6) Includes 180 shares issuable upon exercise of stock options as of
April 1, 1998.
(7) Includes 180 shares issuable upon exercise of stock options as of
April 1, 1998.
(8) Includes 5,251 shares issuable upon exercise of stock options as of
April 1, 1998 and 13,291 shares subject to repurchase by the Company.
(9) Includes 11,652 shares issuable upon exercise of stock options as of
April 1, 1998 and 11,393 shares subject to repurchase by the Company.
-12-
<PAGE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time
to time by the Selling Stockholders or by their pledgees, donees, transferees
or other successors in interest that receive such shares as a gift,
partnership distribution or other non-sale related transfer. The Selling
Stockholders will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale. The Selling Stockholders
may sell the Shares being offered hereby on one or more exchanges, including
the Nasdaq National Market, or in the over-the-counter market or otherwise,
at prices and at terms then prevailing or at prices related to the then
current market prices or in negotiated transactions. The Shares may be sold
by one or more of the following means of distribution: (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 own account pursuant to this Prospectus; and (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers. This Prospectus may be amended and supplemented from time to
time to describe a specific plan of distribution. In connection with
distributions of the Shares or otherwise, the Selling Stockholders may enter
into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the Company's Common
Stock in the course of hedging the positions they assume with Selling
Stockholders. The Selling Stockholders may also sell the Company's Common
Stock 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 or other financial institutions which require the delivery to
such broker-dealer or other financial institution of the Common Stock offered
hereby, which Common Stock such broker-dealer or other financial institution
may resell pursuant to this Prospectus (as supplemented or amended to reflect
such transaction). The Selling Stockholders may also pledge the shares of
Common Stock registered hereunder to a broker-dealer or other financial
institution and, upon a default, such broker-dealer or other financial
institution may effect sales of the pledged Common Stock pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to this Prospectus.
In effecting sales, brokers, dealers or agents engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate.
Brokers, dealers or agents may receive commissions, discounts or concessions
from the Selling Stockholders in amounts to be negotiated prior to the sale.
Such brokers or dealers and any other participating brokers or 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. The Company will pay all expenses incident to the offering
and sale of the Shares to the public other than any commissions and discounts
of underwriters, dealers or agents and any transfer taxes.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
The Company has advised the Selling Stockholders that the
anti-manipulation rules set forth in Regulation M under the Exchange Act may
apply to sales of the Shares in the market and to the activities of the
Selling Stockholders and its 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.
The Selling Stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the Shares against certain liabilities,
including liabilities arising under the Securities Act.
At the time a particular offer of the shares of Common Stock registered
hereunder is made, if required, a Prospectus Supplement will be distributed
that will set forth the number of shares being offered and the terms of the
offering, including the name of any underwriter, dealer or agent, the
purchase price paid by any underwriter, any discount, commission and other
item constituting compensation, any discount, commission or concession
allowed or reallowed or paid to any dealer, and the proposed selling price to
the public.
There can be no assurance that the Selling Stockholders will sell all or
any of the Shares.
-13-
<PAGE>
The Company has agreed with the Selling Stockholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
for the earlier of (i) such time as all of the Shares can be sold by the
Selling Stockholders in a three-month period in accordance with Rule 144 or
(ii) two years following February 28, 1997, the effective date of the
TriQuest Merger. The Company intends to de-register any of the Shares not
sold by the Selling Stockholders at the end of such period; however, at such
time, any unsold shares may be freely tradable subject to compliance with
Rule 144 of the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo
Alto, California, counsel to the Company.
EXPERTS
The financial statements and financial statement schedule for the
companies listed below and incorporated by reference in this Prospectus have
been incorporated herein in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing:
(a) Consolidated balance sheets of Summit Design, Inc. and
subsidiaries, as of December 31, 1995 and 1996 and the consolidated
statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1996 and
the related financial statement schedule;
(b) Balance sheets of TriQuest Design Automation, Inc. as of December
31, 1995 and 1996 and the statements of operations, stockholders'
equity and cash flows for the period from inception, February 15,
1995, to December 31, 1995, and the year ended December 31, 1996.
(c) Balance sheets of Simulation Technologies Corp. as of December 31,
1995 and 1996 and June 30, 1997 and the statements of income,
stockholders' equity and cash flows for each of the two years in
the period ended December 31, 1996 and the six months ended June
30, 1997.
-14-
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE BY THIS
PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY SELLING STOCKHOLDER OR BY ANY OTHER PERSON. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE OF OR OFFER TO SELL THE SHARES MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
Available Information................................. 2
Incorporation of Certain
Documents By Reference.............................. 2
The Company........................................... 3
Forward-Looking Statements............................ 3
Risk Factors.......................................... 4
Use Of Proceeds....................................... 11
Selling Stockholders.................................. 11
Plan of Distribution.................................. 13
Legal Matters......................................... 14
Experts............................................... 14
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SUMMIT DESIGN, INC.
529,603 SHARES
OF
COMMON STOCK
----------------------
PROSPECTUS
----------------------
_________________, 1998
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will bear no expenses in connection with any sale or other
distribution by the Selling Stockholders of the shares being registered other
than the expenses of preparation and filing of this Registration Statement and
the Prospectus included in this Registration Statement. Such expenses are set
forth in the following table. All of the amounts shown are estimates except the
Securities and Exchange Commission ("SEC") registration fee.
SEC registration fee....................................... $ 1,550
Legal fees and expenses.................................... 8,000
Accounting fees and expenses............................... 7,500
Miscellaneous expenses..................................... --------
Total....................................................... $ 17,050
--------
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated Certificate of Incorporation limits the
liability of directors to the maximum extent permitted by Delaware law.
Delaware law provides that a corporation's certificate of incorporation may
contain a provision eliminating or limiting the personal liability of a
director for monetary damages for breach of their fiduciary duties as
directors, except for liability (i) for any breach of their duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation Law
or (iv) for any transaction from which the director derived an improper
personal benefit.
The Company's Amended and Restated Bylaws provide that the Company shall
indemnify its directors and officers and may indemnify its employees and agents
to the fullest extent permitted by law. The Company believes that
indemnification under its Amended and Restated Bylaws covers at least
negligence and gross negligence on the part of indemnified parties.
The Company has entered into agreements to indemnify its directors and
officers in addition to the indemnification provided for in the Company's
Amended and Restated Bylaws. These agreements, among other things, indemnify
the Company's directors and officers for certain expenses (including attorney's
fees), judgments, fines and settlement amounts incurred by any such person in
any action or proceeding, including any action by or in the right of the
Company, arising out of such person's services as a director or officer of the
Company, any subsidiary of the Company or any other company or enterprise to
which the person provides services at the request of the Company.
The Company has obtained directors and officers insurance providing
indemnification for certain of the Company's directors, officers, affiliates,
partners or employees for certain liabilities.
ITEM 16. EXHIBITS.
2.1 Agreement and Plan of Reorganization dated as of February 17, 1997
(INCORPORATED HEREIN BY REFERENCE TO EXHIBIT 2.1 TO THE REGISTRANT'S
CURRENT REPORT ON FORM 8-K FILED MARCH 14, 1997).
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1* Power of Attorney.
- ------
*Previously filed with the initial filing of this Registration Statement.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING PURSUANT TO RULE 415.
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)
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.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement.
(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 paragraphs A(l)(i) and A(l)(ii) 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 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 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; and
(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 this offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE.
The undersigned Registrant hereby undertakes 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 (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.
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION.
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 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
II-2
<PAGE>
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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has duly caused this Amendment to the
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Beaverton, State of
Oregon, on this 29th day of January 1998.
SUMMIT DESIGN, INC.
By: /s/ Larry J. Gerhard
----------------------------------------
Larry J. Gerhard
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons on the 29th day of January 1998 in the capacities indicated.
SIGNATURE TITLE
- ------------------------- -------------------------------------------------
/s/ Larry J. Gerhard Chairman of the Board, President and Chief
- ------------------------- Executive Officer (PRINCIPAL EXECUTIVE OFFICER)
Larry J. Gerhard
/s/ C. Albert Koob Vice President, Finance, Chief Financial Officer
- ------------------------- and Secretary (PRINCIPAL FINANCIAL AND
C. Albert Koob ACCOUNTING OFFICER)
* Director
- -------------------------
Amihai Ben-David
* Director
- -------------------------
William V. Botts
* Director
- -------------------------
Steven P. Erwin
* Director
- -------------------------
Barbara M. Karmel
* By: /s/ Larry J. Gerhard
---------------------
Larry J. Gerhard
Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Description
- -------- --------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated as of February 28, 1997
(INCORPORATED HEREIN BY REFERENCE TO EXHIBIT 2.1 TO THE REGISTRANT'S
CURRENT REPORT ON FORM 8-K FILED FEBRUARY 21, 1997).
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1* Power of Attorney.
- ------
*Previously filed with the initial filing of this Registration Statement.
<PAGE>
EXHIBIT 5.1
January 29, 1998
Summit Design, Inc.
9305 S.W. Gemini Drive
Beaverton, Oregon 97008
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 filed by you
with the Securities and Exchange Commission on January 9, 1998 (Registration
No. 333-44003), as amended (the "Registration Statement") in connection with
the registration for resale under the Securities Act of 1933, as amended, of
up to 529,603 previously issued and outstanding shares of your Common Stock
(the "Shares"). As your legal counsel, we have also reviewed the proceedings
taken by you in connection with the issuance of the Shares.
It is our opinion that the Shares are validly issued, fully-paid and
non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Summit Design, Inc. on Form S-3 (i) of our report dated August
21, 1997 on our audits of the financial statements of Simulation
Technologies, Corp. as of December 31, 1995 and 1996 and June 30, 1997 and
for each of the two years in the period ended December 31, 1996 and the six
months ended June 30, 1997, which report is included in the Current Report on
Form 8-K dated September 9, 1997, (ii) of our report dated February 20, 1997
on our audits of the financial statements of TriQuest Design Automation,
Inc., as of December 31, 1995 and 1996 and for the period from inception,
February 15, 1995, to December 31, 1995, and for the year ended December 31,
1996, which report is included in the Current Report on Form 8-K dated
February 28, 1997 and (iii) of our report dated January 24, 1997, except for
Note 14, for which the date is February 28, 1997, on our audits of the
consolidated financial statements and financial statement schedule of Summit
Design, Inc., and its subsidiaries as of December 31, 1995 and 1996 and for
each of the three years in the period ended December 31, 1996, which report
is included in the Annual Report on Form 10-K for the year ended December 31,
1996.
We also consent to the reference to our firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Portland, Oregon
January 29, 1998
