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This conforming electronic
document is being submitted
pursuant to Rule 424(B)4.
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1,857,211 SHARES
AVANT! CORPORATION
COMMON STOCK
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This Prospectus relates to the public offering, which is not being
underwritten, of 1,857,211 shares (the "Shares") of Common Stock, $.0001 par
value (the "Common Stock") of Avant! Corporation ("Avant!" or the "Company").
The Shares are outstanding shares that may be sold from time to time by or on
behalf of certain stockholders of the Company (the "Selling Stockholders"). The
Selling Stockholders acquired the Shares in separate private transactions in
which the Company acquired FrontLine Design Automation, Inc. and NexSyn Design
Technology Inc.
The Shares may be offered by the Selling Stockholders from time to time in
transactions in the over-the-counter market, on the Nasdaq National Market, in
privately negotiated transactions, or by a combination of such methods of sale,
at fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Shares to or through broker-dealers and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or the purchasers of the Shares for whom such
broker-dealers may act as agent or to whom they sell as principal or both (which
compensation to a particular broker-dealer might be in excess of customary
commissions). See "Selling Stockholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Stockholders. The Company has agreed to bear certain expenses in
connection with the registration of the Shares being offered by the Selling
Stockholders. In addition, the Company has agreed to indemnify the Selling
Stockholders with respect to the Shares offered hereby against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended (the "Securities Act"), or, if such indemnity is unavailable, to
contribute toward amounts required to be paid in respect of such liabilities.
On January 31, 1997, the average of the high and low price for the Company's
Common Stock was $32.25 per share. The Company's Common Stock is traded on the
Nasdaq National Market under the symbol "AVNT."
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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 Section 2(11) of the Securities Act, and
any commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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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.
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THE DATE OF THIS PROSPECTUS IS JANUARY 31, 1997
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AVAILABLE INFORMATION
Avant! is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, it files reports, proxy statements and other information
with the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and at Seven World Trade Center (13th Floor), New York, New
York 10048. Copies of such materials may be obtained by mail from the Public
Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC also makes electronic
filings publicly available on the Internet within 24 hours of acceptance. The
SEC's Internet address is http://www.sec.gov. The SEC web site also contains
reports, proxy and information statements, and other information regarding
registrants that file electronically with the SEC. Avant! Common Stock is quoted
on the Nasdaq National Market, and the reports, proxy statements and other
information referred to above can also be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
Avant! has filed with the SEC a registration statement on Form S-3, including
this Prospectus and other information (herein, together with all amendments,
exhibits and schedules, referred to as the "Registration Statement"), with
respect to the Shares offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC, and to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any document referred to are not necessarily complete. With respect to each
such document filed as an exhibit to the Registration Statement, reference is
made to the exhibit for a more complete description of the matter involved, and
each such statement shall be deemed qualified in its entirety by such reference.
The Registration Statement, including the exhibits and schedules thereto, may be
inspected at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
material may be obtained from the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the Commission
(File No. 0-25864) pursuant to the Exchange Act are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K, as amended, for the year
ended December 31, 1995, filed with the SEC on March 29, 1996;
2. The Company's Proxy Statement for the Annual Meeting of Stockholders
held on May 30, 1996, filed with the SEC on April 26, 1996;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996, filed with the SEC on May 14, 1996;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1996, filed with the SEC on August 14, 1996;
5. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, filed with the SEC on November 14, 1996; and
6. The Company's Current Reports on Form 8-K dated October 16, 1996,
October 24, 1996, November 13, 1996, November 27, 1996 and December 20,
1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus but prior to
the termination of the offering to which this Prospectus relates shall be deemed
to be incorporated by reference in this Prospectus and to be part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the
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extent that a statement contained herein or in any other subsequently filed
document which also is incorporated herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, in its
unmodified form, to constitute a part of this Prospectus.
Upon written or oral request, the Company will provide without charge to each
person to whom a copy of the Prospectus is delivered a copy of the documents
incorporated by reference herein (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference herein). Requests
should be submitted in writing or by telephone at (408) 738-8881 to John P.
Huyett, Chief Financial Officer, Avant! Corporation, 1208 East Arques Avenue,
Sunnyvale, California 94086.
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RISK FACTORS
This Prospectus, including the documents incorporated by reference herein,
contains forward-looking statements that involve risks and uncertainties. The
statements contained in this Prospectus or incorporated by reference herein that
are not purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, including
without limitation statements regarding the Company's expectations, beliefs,
intentions or strategies regarding the future. All forward-looking statements
included in this document or incorporated by reference herein are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward-looking statements. The Company's
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those set
forth in "Risk Factors" and elsewhere in this Prospectus. In evaluating the
Company's business, prospective investors should consider carefully the
following factors in addition to the other information set forth in this
Prospectus and incorporated by reference herein.
LITIGATION RISK
On December 6, 1995, Cadence Design Systems, Inc. ("Cadence") filed an action
titled Cadence Design Systems, Inc. vs. Avant! Corporation, formerly AscSys,
Inc.; Gerald C. Hsu; Mitsuru Igusa; Opher Segev; and Chih-Liang Cheng against
Avant! and certain of its officers in the United States District Court for the
Northern District of California alleging copyright infringement, unfair
competition, misappropriation of trade secrets, conspiracy, breach of contract,
inducing breach of contract and false advertising. The essence of the complaint
is that certain Avant! employees who formerly were Cadence employees allegedly
misappropriated and improperly copied source code for certain important
functions of Avant! place and route products from Cadence, and that Avant! has
allegedly competed unfairly by making false statements concerning Cadence and
its products. The action also alleges that Avant! induced certain individual
defendants to breach their agreements of employment and confidentiality with
Cadence. In addition to actual and punitive damages, which were not quantified
by Cadence, Cadence seeks to enjoin the sale of certain place and route products
and has filed a motion to obtain a preliminary injunction pending trial of the
action. Avant! filed its opposition to Cadence's motion on June 28, 1996.
Cadence filed a reply to Avant!'s opposition on August 27, 1996. The preliminary
injunction hearing took place on September 10, 1996. The court has the matter
under submission and there has been no ruling on Cadence's motion for a
preliminary injunction as of the date hereof.
On January 16, 1996, Avant! filed a counterclaim alleging antitrust
violations, racketeering, false advertising, defamation, trade libel, unfair
competition, unfair trade practices, negligent and intentional interference with
prospective economic advantage and intentional interference with contractual
relations. Although Avant!'s counterclaim seeks unquantified damages according
to proof, Avant! specifically alleges that it has suffered losses in excess of
$500 million. The alleged losses are due largely to the decline in Avant!'s
stock market valuation caused by Cadence's alleged misconduct.
The Santa Clara County District Attorney's office also is investigating the
allegations of misappropriation of trade secrets set forth in Cadence's lawsuit,
described above. On December 5, 1995, a search warrant was executed at Avant!'s
Sunnyvale, California, facility to determine whether there was evidence of
criminal conduct. No criminal charges have been filed against Avant!, Avant!'s
management or its employees, but no assurance can be given that such charges
will not be filed in the future. A criminal complaint, if filed against Avant!,
Avant!'s management or its employees, could result in a loss of management and
other personnel and could have other material adverse effects on the Company. On
December 15, 1995, Paul Margetis and Helen Margetis filed in the United States
District Court for the Northern District of California the securities fraud
class action complaint Paul Margetis and Helen Margetis, On Behalf of Themselves
and All Others Similarily Situated vs. Avant! Corporation; Gerald C. Hsu;
Yuh-Zen Liao; and Stephen Tzyh-Lih Wuu. In addition, on December 19, 1995, Fred
Tarca filed in the United States District Court for the Northern District of
California the class action complaint for violation of the federal securities
laws Fred Tarca, On Behalf of Himself and All Others Similarily Situated vs.
Avant! Corporation; Gerald C. Hsu; Yuh-Zen Liao; Stephen Tzyh-Lih Wuu; Jon A.
Bode; Robert C. Kagle; Tench Coxe; Wessels, Arnold & Hendersen L.L.C. and Alex.
Brown & Sons. These class action
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lawsuits allege certain securities law violations, including omissions and/or
misrepresentation of material facts. The alleged omissions and/or
misrepresentations are largely consistent with the allegations outlined in the
Cadence claim. These class action lawsuits are pending resolution of the
litigation with Cadence.
When the lawsuits were originally filed against the Company, the Company
experienced delays in orders by customers due to the uncertainty of the pending
lawsuits against the Company. If the Company suffers an adverse outcome in
either the civil or criminal proceedings, then the Company would likely
experience future delays in orders from customers, and would likely suffer the
loss of customers. If such events were to occur, there would be a material
adverse effect on the Company's business, financial condition and results of
operations.
It is Avant!'s position that the plaintiffs' claims are without merit. Avant!
believes it has sufficient defenses to all of the plaintiffs' claims and intends
to defend itself vigorously. If, however, Avant!'s defenses are unsuccessful,
Avant! may be enjoined from selling certain place and route products and may be
required to pay damages to Cadence. In such event, Avant!'s business, operating
results and financial condition would be materially adversely affected. In
particular, Avant!'s place and route products in dispute, ArcCell-BV and
ArcCell-XO (which have been replaced by Aquarius-BV and Aquarius-XO), accounted
for approximately 20% of Avant!'s total supplemental consolidated revenues for
the three-year period ended December 31, 1995. In addition, it is likely that an
adverse judgment against Avant! would result in a steep decline in the market
price of Avant! Common Stock. Although the Company believes, based on
information it presently possesses, that the conclusion of these claims will not
have a material adverse effect on the Company's supplemental consolidated
financial position, there can be no assurance that an adverse judgement, if
granted, on any claim would not have a material adverse effect on the Company's
business, supplemental consolidated financial position, or supplemental
consolidated results of operations.
In the opinion of Avant! management, based on information it presently
possesses, the conclusion of these claims will not have a material adverse
effect on Avant!'s supplemental consolidated financial position.
Meta, a wholly owned subsidiary of the Company, has a long-standing
technology relationship with Cadence pursuant to which, among other things, Meta
and Cadence cross-license certain aspects of their respective technologies
including Meta's MASTER Toolbox and HSPICE products in order to develop certain
interfaces between Cadence's products and Meta's selling and supporting such
products. Meta licenses Cadence's maskwork layout software for use by Meta-Labs
services for generating maskworks for MetaTestchip. In light of Avant!'s pending
litigation with Cadence, it is almost certain that Cadence will sever its
relationship with Meta following the Meta Acquisition. In such event, Meta would
experience delays in generating new MetaTestchips as a result of the need to
transition to Avant!'s layout software. Further, Meta currently integrates a
portion of Cadence technology with HSPICE to provide a data output format for
Cadence's waveform viewing products and uses certain Cadence products to provide
Cadence product support for MASTER Toolbox which may no longer be available at a
reasonable price or profit after the Meta Acquisition. Additionally, Cadence
sells Spectre circuit simulation software which directly competes with Meta's
HSPICE product. Accordingly, termination of Meta's relationship with Cadence
could have a material adverse effect upon the Company's business, operating
results and financial condition.
The preceding pending litigation and any future litigation against the
Company or its employees, regardless of the outcome, is expected to result in
substantial costs and expenses to the Company and significant diversion of
attention by the Company's technical and management personnel. Accordingly, any
such litigation could have a material adverse effect on the Company's business,
operating results or financial condition.
UNCERTAINTY RELATING TO INTEGRATION OF OPERATIONS AND PRODUCT LINES; MANAGEMENT
OF GROWTH
The integration of Anagram's, Meta's and FrontLine's business and personnel,
which were acquired by Avant! in September 1996, October 1996 and November 1996,
respectively, presents difficult challenges for Avant!'s management. Each of
Avant!, Anagram, Meta and FrontLine entered into their respective
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merger agreements with the expectation that their merger will result in
synergies for the Company. The Company, however, is more complex and diverse
than either Avant!, Anagram, Meta or FrontLine individually, and the combination
and continued operation of their distinct business operations will be difficult.
While the management and Boards of Avant!, Anagram, Meta and FrontLine believe
that the contemporaneous combination of Avant!, Anagram, Meta and FrontLine can
be effected in a manner that will realize the value of the Company, the
management group of the Company has limited experience in combinations of this
complexity or size. Accordingly, there can be no assurance that the process of
effecting these business combinations can be effectively managed to realize the
synergies anticipated to result therefrom.
Following the acquisition of Anagram, Meta and FrontLine (collectively, the
"Acqusitions"), in order to maintain and increase profitability, the Company
will need to successfully integrate and streamline overlapping functions.
Avant!, Anagram, Meta and FrontLine each have different systems and procedures
in many operational areas that must be rationalized and integrated. There can be
no assurance that such integration will be accomplished effectively,
expeditiously or efficiently. The difficulties of such integration may be
increased by the necessity of coordinating geographically separated divisions.
The integration of certain operations following the Acquisitions will require
the dedication of management resources that may temporarily distract attention
from the day-to-day business of the Company. The business of the Company may
also be disrupted by employee uncertainty and lack of focus during such
integration. Failure to effectively accomplish the integration of the operations
of Avant!, Anagram, Meta and FrontLine could have a material adverse effect on
the Company's business, operating results and financial condition. Moreover,
uncertainty in the marketplace or customer hesitation relating to the
Acquisitions could negatively affect the Company's business, operating results
and financial condition.
Avant!, Anagram, Meta and FrontLine entered into their respective merger
agreements in order to achieve potential mutual benefits from combining each of
their respective expertise and product lines for the physical design of
high-density, high-performance ICs. Realization of these potential benefits will
require, among other things, integrating the Company's respective product
offerings and coordinating the Company's sales and marketing and research and
development efforts. Failure to efficiently achieve such integration could have
a material adverse effect on the Company's business, operating results and
financial condition.
Each of Avant!, Anagram, Meta and FrontLine has experienced periods of rapid
growth and expansion that has placed and will continue to place significant
strains upon their respective management systems and resources. In addition,
certain of the Company's senior management personnel have worked together only
for a short period of time and must learn to work together effectively. The
Company's ability to compete effectively and to manage future growth, if any,
will require the Company to continue to implement and improve operational,
financial and management information systems on a timely basis and to expand,
train, motivate and manage its work force. There can be no assurance that the
Company's personnel, systems, procedures and control will be adequate to support
the Company's operations.
DEPENDENCE UPON KEY PERSONNEL
The Company's future operating results depend in significant part upon the
continued service of its key management and technical personnel. Few of the
Company's employees are bound by employment or non-competition agreements, and
due to the intense competition for such personnel as well as the uncertainty
caused by the integration of Avant!'s, Anagram's, Meta's and FrontLine's
businesses, it is possible that the Company will be unable to retain such key
technical and managerial personnel. There are only a limited number of qualified
ICDA engineers, and competition for such individuals is intense. If the Company
is unable to attract, hire and retain qualified personnel in the future, the
development of new products and the management of an increasingly complex
business would be impaired, which would materially adversely affect the
Company's business, operating results and financial condition. Additionally, if
a criminal complaint is filed against the Company, the Company's management or
any of its employees relating to the matters underlying the pending litigation
between Avant! and Cadence, thereby resulting in a loss of Avant! personnel,
then the Company's business, operating results and financial condition may be
materially adversely affected. See "--Litigation Risk."
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COMPETITION
The ICDA software market in which Avant! competes is intensely competitive
and subject to rapid change. Avant! currently faces competition from major ICDA
vendors, including Cadence, which currently holds a dominant share of the market
for IC physical design software, Mentor Graphics Corporation ("Mentor"),
Viewlogic Systems Incorporated ("Viewlogic") and EPIC Design Technology, Inc.
("EPIC"). As the Company expands its product offerings to include other library
generation tools and other electronic design automation ("EDA") tools, it will
compete increasingly with these established EDA vendors. Certain of these
established vendors have a longer operating history and significantly greater
financial, technical and marketing resources, greater name recognition and a
larger installed customer base than the Company. Each of these competitors will
likely be able to respond more quickly to new or emerging technologies and
changes in customer requirements and to devote greater resources to the
development, promotion and sale of their products than the Company. Moreover,
the industry in which the Company competes is undergoing a trend toward
consolidation that is expected to result in large, more financially flexible
competitors with a broad range of product offerings. In addition to competition
from EDA vendors, the Company also faces competition from semiconductor
companies that have internal design groups that develop their own customized
place and route and simulation tools for their own particular needs and
therefore may be reluctant to purchase products offered by the Company or other
independent vendors. 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, operating results and financial condition. If the Company is unable to
compete successfully against current and future competitors, the Company's
business, operating results and financial condition will be materially adversely
affected.
POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS
The quarterly operating results of the Company may vary substantially from
period to period depending on factors such as the outcome of outstanding
litigation, increased competition, the size, timing and structure of significant
licenses, the timing of revenue recognition under its time-based license
agreements, the timing of new or enhanced product announcements, introductions,
or delays in the introductions, of new or enhanced versions of the Company's
products, changes in pricing policies by the Company or its competitors, market
acceptance of new and enhanced versions of the Company's products, the
cancellation of time-based licenses or maintenance agreements, the
unavailability of technology of third parties which is incorporated in certain
of the products of the Company, the mix of direct and indirect sales, changes in
operating expenses, changes in the Company's strategy, seasonal factors,
personnel changes, foreign currency exchange rates and general economic factors.
Due to the foregoing factors, and particularly the variability of the size,
timing and structure of significant licenses, quarterly revenue and operating
results are difficult to forecast. In particular, Avant! has adopted a flexible
pricing strategy pursuant to which Avant! offers both perpetual and time-based
software licenses to customers, depending on customer requirements and financial
constraints. Because each time-based license may have a different structure and
could be subject to cancellation, future revenue is unpredictable. In addition,
Meta's quarterly operating results have in the past fluctuated as a result of
seasonality of customer buying patterns, with revenues for the first quarter of
a year often lower than those for the last quarter of the preceding year, and a
significant portion of revenue in a quarter typically is received in the last
few weeks or days of that quarter. The Company's expense levels are based, in
part, on expectations as to future revenue levels. Accordingly, net income, if
any, may be disproportionately affected by a reduction in revenue because only a
small portion of the Company's expenses fluctuate with revenue. If revenue
levels are below expectations, the Company's business, operating results and
financial condition are likely to be materially adversely affected. Such
shortfalls in the Company's revenue or operating results from levels expected by
public market analysts and investors could have an immediate and significant
material adverse effect on the market price of Avant!'s Common Stock.
Additionally, the Company may not learn of such revenue shortfalls or earnings
shortfalls or other failures to meet market expectations for results of
operations until late in a fiscal quarter, which could result in an even more
immediate and material adverse effect on the trading price of Avant!'s Common
Stock. In such event, the market price of Avant!'s Common Stock would be
materially adversely affected. Due to the foregoing, Avant! believes that period
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to period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as indications of future performance.
See "Selected Consolidated Financial Data."
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of Avant!'s Common Stock is likely to be highly volatile and
may be significantly affected by many factors, including the outcome of
outstanding litigation, actual or anticipated fluctuations in the Company's
operating results, announcements of technological innovations and new products
by competitors, new contractual relationships with strategic partners by the
Company or its competitors, proposed acquisitions by the Company or competitors
and financial results that fail to meet public market analyst expectations of
performance. In addition, the U.S. equity markets have from time to time
experienced significant price and volume fluctuations that have particularly
affected the market prices for the common stocks of technology companies. These
broad market fluctuations may materially adversely affect the market price of
Avant!'s Common Stock in future periods. See "Market Price of Avant! Common
Stock; Dividends."
COST OF INTEGRATION; TRANSACTION EXPENSES
Transaction costs relating to the Acqusitions and the anticipated combination
of certain operations of Avant!, Anagram, Meta and FrontLine are expected to
result in one-time charges to the Company's earnings. Although it will not be
feasible to determine the actual amount of these charges until the operational
and transition plans are completed, the management of Avant! believes that the
aggregate charge will be approximately $8.9 million before taxes, although such
amount may be increased by unanticipated additional expenses incurred in
connection with the Acquisitions. This aggregate charge is expected to include
the estimated costs associated with financial advisory, accounting and legal
fees, printing expenses, filing fees and other merger-related costs. While the
exact timing of these expenses cannot be determined at this time, Avant!
incurred $920,000 of such costs in the quarter ended September 30, 1996 and the
management of Avant! anticipates the remaining charge to earnings will be
recorded in the quarter ending December 31, 1996. The effects of these costs
have not been reflected in the unaudited condensed combined statements of
income, except to the extent such costs were actually incurred in the quarter
ended September 30, 1996.
POTENTIAL DILUTIVE EFFECT TO STOCKHOLDERS
Although Avant! believes that beneficial synergies will result from the
Acquisitions, there can be no assurance that the combining of Avant!'s,
Anagram's, Meta's and FrontLine's businesses, even if achieved in an efficient
and effective manner, will result in combined results of operations and
financial condition superior to that which would have been achieved by each
company independently, or as to the period of time required to achieve such
result. The issuance of Avant! Common Stock in connection with the Acquisitions
is likely to have a dilutive effect on Avant!'s earnings per share and there is
no assurance that Avant! stockholders would not achieve greater returns on
investment were Avant! to remain an independent company.
SHARES ELIGIBLE FOR PUBLIC SALE
Sales of substantial amounts of Avant! Common Stock in the public market
after the consummation of the Acqusitions could materially adversely affect
prevailing market prices of Avant!'s Common Stock. The shares of Avant! Common
Stock issued in the Acquisitions are eligible for immediate sale in the public
market, subject to certain limitations under the Securities Act applicable to
affiliates of the Company and certain agreements to be entered into by certain
affiliates of the acquired companies which prohibit such persons from disposing
of any Avant! Common Stock during the period immediately following the
respective closing of the transactions.
PRODUCT CONCENTRATION
The Company expects that revenue from the licensing and support of Aquarius
(formerly known as ArcCell), the Company's place and route software product
family, Hercules (formerly known as
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VeriCheck), the Company's design verification software product, and ADM and
HSPICE, the Company's circuit simulation and analysis products, respectively,
will account for a substantial percentage of the Company's revenues for the
foreseeable future. As a result, the Company's business, operating results and
financial condition are significantly dependent upon continued market acceptance
and purchases of Aquarius, Hercules, ADM and HSPICE. A decline in demand for any
of these products as a result of competition, technological change or other
factors would have a material adverse effect on the business, operating results
and financial condition of the Company. There can be no assurance that Aquarius,
Hercules, ADM or HSPICE will achieve continued market acceptance, or that the
Company will be successful in marketing such products or any new or enhanced
products. Failure to develop or acquire additional products, or to successfully
market such products on a profitable basis, could have a material adverse effect
on the Company's business, operating results and financial condition.
RISKS ASSOCIATED WITH INTERNATIONAL LICENSING
International revenue accounted for approximately 33% and 32% of the
Company's supplemental consolidated revenue in 1994 and 1995, respectively. The
Company primarily sells its products internationally in Japan, Korea and Taiwan.
The Company expects that international license and service revenue will continue
to account for a significant portion of the Company's total revenue. The
Company's international revenue involves a number of risks, including the impact
of possible recessionary environments in economies outside the U.S., longer
receivables collection periods and greater difficulty in accounts receivable
collection, difficulties in staffing and managing foreign operations, political
and economic instability, unexpected changes in regulatory requirements, reduced
protection of intellectual property rights in some countries and tariffs and
other trade barriers. Currency exchange fluctuations in countries in which the
Company licenses its products could also materially adversely affect the
Company's business, operating results and financial condition by resulting in
pricing that is not competitive with products priced in local currencies.
Furthermore, there can be no assurance that in the future the Company will be
able to continue to price its products and services internationally in U.S.
dollars because of changing sovereign restrictions on importation and
exportation of foreign currencies as well as other practical considerations. In
addition, the laws of certain countries do not protect the Company's products
and intellectual property rights to the same extent as do the laws of the U.S.
Accordingly, there can be no assurance that these factors will not have a
material adverse effect on the Company's future international sales and,
consequently, on the Company's business, operating results and financial
condition. In addition, there can be no assurance that the Company will be able
to sustain or increase revenue derived from international licensing and service
or that the foregoing factors will not have a material adverse effect on the
Company's future international license and service revenue, and, consequently,
on the Company's business, operating results and financial condition.
DEPENDENCE UPON DISTRIBUTORS AND MANUFACTURER'S REPRESENTATIVES
The Company relies on distributors and manufacturer's representatives ("Third
Party Sellers") for licensing and support of its products in China, Japan,
Korea, Singapore and Taiwan. A substantial portion of Avant!'s international
license and service revenue results from a limited number of these Third Party
Sellers. During 1994 and 1995 revenue from three distributors and two
manufacturer's representatives accounted for an aggregate of approximately 11%
of Avant!'s total supplemental consolidated revenue. There can be no assurance
that Avant!'s current Third Party Sellers will choose to or be able to market or
service and support the Company's products effectively, that economic conditions
or industry demand will not materially adversely affect these or other Third
Party Sellers or that these Third Party Sellers will not devote greater
resources to marketing and supporting products of the Company's competitors. In
particular, the Company has opened a sales office in Tokyo, Japan, which may
affect its relationship with a distributor and the distributor's performance as
a distributor of the Company's products. Additionally, because the Company's
products are used by highly skilled professional engineers, a Third Party Seller
must possess sufficient technical, marketing and sales resources in order to be
effective and must devote these resources to a lengthy sales cycle, customer
training and product service and support. Only a limited number of Third Party
Sellers possess such resources. Accordingly, the loss of or a decision by Avant!
not to renew agreements with, or a significant reduction in revenue from, one of
Avant!'s Third Party Sellers
9
<PAGE>
or any other Third Party Sellers on which the Company's revenues may, in the
future, become dependent, could have a material adverse effect on the Company's
business, operating results and financial condition.
NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE
The ICDA industry is characterized by extremely rapid technological change,
frequent new product introductions and enhancements, evolving industry standards
and rapidly changing customer requirements. The Company's future business,
operating results and financial condition will depend in part upon its ability
to enhance its current products and to develop and introduce new products on a
timely and cost-effective basis that will keep pace with technological
developments and evolving industry standards and methodologies, as well as
address the increasingly sophisticated needs of the Company's customers. New
technologies developed by the Company or its competitors could render existing
products obsolete. The Company's success will depend upon its ability to enhance
existing products and to introduce new products on a timely and cost-effective
basis that meet changing customer requirements. There can be no assurance that
the Company will be successful in developing new products or enhancing existing
products or that such new or enhanced products will receive market acceptance.
On occasion, the Company has experienced delays in the scheduled introductions
of new and enhanced products, and there can be no assurance that it will be able
to introduce products on a timely basis in the future. Delays in the scheduled
availability of products, for technological or other reasons, or a lack of
market acceptance of such products, or the Company's failure to accurately
anticipate customer demand, would have a material adverse effect on its
business, operating results and financial condition.
DEPENDENCE UPON SEMICONDUCTOR AND ELECTRONICS INDUSTRIES; GENERAL ECONOMIC AND
MARKET CONDITIONS
Avant! is dependent upon the semiconductor and, more generally, the
electronics industries. Each of these industries is characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
capacity and pricing and gross margin pressures. Segments of these industries
have from time to time experienced significant economic downturns characterized
by decreased product demand, production over-capacity, price erosion, work
slowdowns and layoffs. Over the past few years, these industries have
experienced an extended period of significant economic growth, although during
1996 certain sectors of the semiconductor industry have experienced slower
growth than in 1995. There can be no assurance that economic growth in these
industries will continue, and if it does not, any downturn could be especially
severe on the Company. During such downturns, the number of new IC design
projects often decreases. Because acquisitions of new licenses from the Company
are largely dependent upon the commencement of new design projects, any slowdown
in these industries could have a material adverse effect on the Company's
business, operating results and financial condition. The Company's business,
operating results and financial condition may in the future reflect substantial
fluctuations from period to period as a consequence of patterns and general
economic conditions in either the semiconductor or electronics industry.
LIMITATIONS ON PROTECTION OF INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
The Company relies on a combination of patents, trade secret, copyright and
trademark laws, as well as contractual commitments, to protect its proprietary
rights in its software products. The Company generally enters into
confidentiality or license agreements with its employees, distributors and
customers, and limits access to and distribution of its software, documentation
and other proprietary information. Despite these precautions, there can be no
assurance that a third party will not copy or otherwise obtain and use the
Company's products or technology without authorization, or develop similar
technology independently. In particular, the Company has on occasion distributed
its products pursuant to "shrink wrap" licenses, whereby the license agreement
covering the product is contained in the product packaging but is not signed by
the user. There can be no assurance that such licenses are enforceable. In
addition, effective copyright and trade secret protection may be unavailable or
limited in certain foreign countries. The Company expects that software
companies will increasingly be subject to infringement claims as the number of
products and competitors in the industry in which Avant! currently competes
grows and the functionality of products in different industry segments overlaps.
In particular, Avant!'s current litigation
10
<PAGE>
with Cadence involves such infringement claims. Responding to such claims,
regardless of merit, could be time-consuming, result in costly litigation, cause
product shipment 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, which could have a
material adverse effect upon the Company's business, operating results and
financial condition. There can be no assurance that infringement claims will not
be asserted against the Company in the future or that any such claims will not
require the Company to enter into royalty arrangements or result in costly
litigation, which could materially adversely affect the Company's business,
operating results and financial condition. See "--Litigation Risk."
RISK OF PRODUCT DEFECTS
Software products as complex as those offered by the Company may contain
defects or failures when introduced or when new versions are released. Avant!
has in the past discovered software defects in certain of its products and may
experience delays or lost revenue to correct such defects in the future. There
can be no assurance that, despite testing by the Company, errors will not be
found in new products or releases after commencement of commercial shipments,
resulting in loss of market share or failure to achieve market acceptance. Any
such occurrence could have a material adverse effect upon the Company's
business, operating results and financial condition.
DEPENDENCE UPON RELATIONSHIP WITH SYNOPSYS
Avant! currently has a cooperative technical and marketing agreement with
Synopsys, Inc. ("Synopsys") that expires by its terms in March 1997, and is
automatically renewed for one year unless either party gives notice otherwise.
The agreement provides that Synopsys will share certain technical information
with Avant! concerning Synopsys' high level design automation products, which
information has assisted Avant! in the development and marketing of its
products. Synopsys has no obligation to continue to provide similar information
in the future, and if Synopsys were to stop sharing technical information with
Avant!, to favor competitors of Avant! or to develop software products that are
competitive with those of Avant!, Avant!'s business, operating results and
financial condition could be materially adversely affected. While Avant!
believes its relationship with Synopsys is good, there can be no assurance that
the Acquisitons will not have an adverse effect on the existing relationship
with Synopsys.
CONCENTRATION OF STOCK OWNERSHIP; CHANGE OF CONTROL PROVISIONS
Based on the stock ownership of the Company as of November 30, 1996, the
directors and principal stockholders of the Company and their affiliates will
beneficially own a significant amount of the outstanding Avant! Common Stock. As
a result, these stockholders will be able to exercise significant influence over
all matters requiring stockholder approval, including the election of directors
and approval of significant corporate transactions. Such concentration of
ownership may have the effect of delaying or preventing a change in control of
Avant!. In addition, the Company's Board of Directors will have the authority to
issue up to 5,000,000 shares of Preferred Stock, to determine the powers,
preferences and rights and the qualifications, limitations or restrictions
granted to or imposed upon any unissued series of Preferred Stock and to fix the
number of shares constituting any series and the designation of such series,
without any further vote or action by the Company's stockholders. The Preferred
Stock could be issued with voting, liquidation, dividend and other rights
superior to the rights of the Common Stock. The issuance of Preferred Stock
under certain circumstances could have the effect of delaying or preventing a
change in control of the Company.
11
<PAGE>
THE COMPANY
Avant! develops, markets and supports integrated circuit design automation
("ICDA") software for the physical design, layout, verification, simulation and
analysis of high-density, high-performance integrated circuits ("ICs"), commonly
known as computer chips. Avant!'s objective is to establish a significant market
position as a supplier of physical design software (software used to design the
layout of transistors in a computer chip) for the ICDA market. To achieve this
objective, Avant! has adopted its mission, which is to provide innovative
technology, products, and business models that enable customers to solve the
toughest problems in deep submicron (less than 0.5-micron or one-twenty
thousandth of a centimeter feature size) IC design, improve their productivity
and achieve a high return on their investment. To effect its mission, Avant! has
adopted the strategies of maintaining focus on technological innovation and
creating strategic relationships with customers. The principal executive offices
of Avant! are located at 1208 East Arques Avenue, Sunnyvale, California 94086.
Avant!'s telephone number is (408) 738-8881.
RECENT DEVELOPMENTS
On August 2, 1996 Avant! announced Version 2.0 of its deep submicron product
families which include the Aquarius family of place and route tools; the Planet
family of floorplanning tools; the Star family of simulation, timing, analysis
and RC extraction tools; the Solar family of synthesis-oriented layout
refinement tools; and the Hercules family of physical verification tools. The
Aquarius family consists of Aquarius-BV, which supersedes ArcCell-BV,
Aquarius-XO, which supersedes ArcCell-XO, and Aquarius-GA, which supersedes
ArcGate. The Hercules product family supersedes Avant!'s VeriCheck product
family. The Star family is a new product that analyzes the performance of deep
submicron ICs, including the most complex, high-performance microprocessors. The
Star product family is a full-chip extraction, delay analysis and data reduction
tool for IC designers to use during physical design. Star is tightly integrated
with Avant!'s hierarchical layout and verification tools, Aquarius and Hercules,
to provide efficient, accurate and predictable IC performance. The Solar family
is a new product that optimizes the performance and area of ICs to meet new deep
submicron "golden file" needs. Solar is tightly integrated with Avant!'s
Aquarius family of place and route tools.
In September 1996, Avant! acquired Anagram, Inc. ("Anagram"), a developer of
simulation and analysis ICDA software for high-performance deep submicron ICs
(the "Anagram Acquisition"). Anagram's objective is to establish a significant
market position as a supplier of easy-to-use, high-capacity circuit simulation
and high-accuracy timing analysis software. Anagram's flagship product, ADM, is
a high-capacity circuit simulator for deep submicron processor, graphics,
memory, communications, and mixed-signal IC designs. ADM is designed to be
compatible with the most commonly used ICDA tools and to be easily integrated in
the customer's existing design environment and methodology. Anagram's products
help increase IC performance and reliability and increase designer productivity
by enabling designers to characterize large blocks; to accurately simulate
mixed-signal, dynamic logic and memory circuits where performance, signal
integrity and power analyses are essential; and to reuse high- performance
intellectual property without changing the design process. Anagram's ADM circuit
simulation and analysis tool is currently being integrated into the Star product
family. Upon the closing of the Anagram Acquisition, Anagram became a wholly
owned subsidiary of Avant! and all of the fully-diluted shares of Anagram
capital stock and stock options were exchanged for an aggregate of approximately
2,414,000 shares of Avant! Common Stock and Avant! stock options. The Anagram
Acquisition was accounted for as a pooling of interests. See "Risk
Factors--Uncertainty Relating to Integration of Operations and Product Lines;
Management of Growth," "--Cost of Integration; Transaction Expenses" and "Avant!
Business--Recent Developments."
In October 1996, Avant! acquired Meta-Software, Inc. ("Meta"), a developer of
library generation software products for use in IC design (the "Meta
Acquisition"). Meta's products include HSPICE, an industry leading circuit
simulator in use at over 1,500 commercial customer sites worldwide, and MASTER
Toolbox, an automated cell characterization and library generation program
introduced in late 1994. Meta's products assist IC designers in ascertaining
whether semiconductor devices based on their designs will meet functional and
performance specifications when fabricated in silicon. Avant! believes that
Meta's products can be used to reduce time to market, enhance IC performance,
lower design costs and
12
<PAGE>
validate designs across multiple foundries. Upon the closing of the Meta
Acquisition, Meta became a wholly owned subsidiary of Avant! and all of the
fully-diluted shares of Meta capital stock and stock options were exchanged for
an aggregate of approximately 5,080,000 shares of Avant! Common Stock and Avant!
stock options. The Meta Acquisition was accounted for as a pooling of interests.
See "Risk Factors--Uncertainty Relating to Integration of Operations and Product
Lines; Management of Growth," "--Cost of Integration; Transaction Expenses" and
"Avant! Business--Recent Developments."
In November 1996, Avant! acquired FrontLine Design Automation, Inc.
("FrontLine"), a developer of Verilog simulation solutions to improve the
productivity of hardware logic designers (the "FrontLine Acquisition").
FrontLine has developed a unified HDL simulation architechture with Verilog
compatibility that offers (i) multiple levels of abstraction; (ii) multiple
simulation of algorithms; and (iii) multiple HDL compilation techniques.
FrontLine's products run on UNIX and Windows, and provide a multi-engine
architecture with high-performance cycle based and event driven simulation
support. The tools are used by designers of complex integrated circuits and
field programmable gate arrays to verify the functionality of their chips and
systems prior to manufacturing. Upon the closing of theFrontLine Acquisition,
FrontLine became a wholly owned subsidiary of Avant! and all of the
fully-diluted shares of FrrontLine capital stock and stock options were
exchanged for an aggregate of 2,222,222 shares of Avant! Common Stock and Avant!
stock options. The FrontLine Acquisition was accounted for as a pooling of
interests. See "Risk Factors--Uncertainty Relating to Integration of Operations
and Product Lines; Management of Growth," "--Cost of Integration; Transaction
Expenses" and "Avant! Business--Recent Developments."
In December 1996, Avant! acquired NexSyn Design Technology Inc. ("NexSyn"), a
four-employee start-up company that is developing next-generation EDA software
tools (the "NexSyn Acquisition"). Upon the closing of the NexSyn Acquisition,
NexSyn became a wholly owned subsidiary of Avant! and all of the fully-diluted
shares of NexSyn capital stock and stock options were exchanged for an aggregate
of 51,282 shares of Avant! common stock and Avant! stock options. The NexSyn
Acquisition was accounted for using the purchase method of accounting. Avant!
expensed approximately $1.3 million in the fourth quarter of 1996 for the
write-off of in-process research and development.
13
<PAGE>
MANAGEMENT
The executive officers and directors of Avant! are as follows:
NAME AGE POSITION
- ---------------- ----- ---------------------------------------------------------
Gerald C. Hsu 49 President, Chief Executive Officer and Chairman of the
Board of Directors
Y. Eric Cho 48 Senior Vice President of Corporate Operations and
Director
John P. Huyett 42 Chief Financial Officer and Treasurer
Shawn M. Hailey 46 Senior Vice President of Business Development and
Director
Eric A. Brill(1) 46 Director and Secretary
Tench Coxe(1) 37 Director
Tatsuya Enomoto 55 Director
- ---------------
(1) Member of Audit and Compensation Committees.
Mr. Hsu joined Avant! in March 1994 as President, Chief Executive Officer and
a director, and has been Chairman of the Avant! Board of Directors since
November 1995. From July 1991 to March 1994, Mr. Hsu was employed by Cadence,
where his last position was President and General Manager of the IC Design
Group. From June 1988 to July 1991, Mr. Hsu was employed by Sun Microsystems,
Inc., an engineering workstation company, where his last position was Director
of Strategic Business Development. Mr. Hsu holds an S.M. in Ocean Engineering
from the Massachusetts Institute of Technology, an M.S. in Mechanics and
Hydraulics from the University of Iowa and a B.S. in Applied Mathematics from
the National Chung-Hsing University.
Dr. Cho co-founded Avant! in February 1991 and has been a director of Avant!
since such date. From January 1996 to the present, Dr. Cho has served as the
Senior Vice President of Corporate Operations. From October 1993 until January
1996, he served as the Vice President of Asian Operations. From the inception of
Avant! until October 1993, Dr. Cho served as Vice President of Sales and
Marketing. From the inception of Avant! until November 1996, Dr. Cho served as
Secretary. From September 1986 to February 1991, Dr. Cho was employed by Cadence
where his last position was a Marketing Director of the IC Division. Dr. Cho
holds an M.B.A. from New York University, an M.S. and a Ph.D. in Electrical
Engineering and Computer Science from the University of California, Berkeley and
a B.S. in Electrical Engineering from the National Chiao-Tung University,
Taiwan.
Mr. Huyett has served as Chief Financial Officer and Treasurer since he
joined Avant! in connection with the merger of Integrated Silicon Solutions,
Inc. ("ISS") with and into Avant! in November 1995. From July 1993 to November
1995, Mr. Huyett served as Vice President of Finance and Chief Financial Officer
of ISS. Mr. Huyett also served as Treasurer and Secretary of ISS from October
1994 to November 1995. Prior to July 1993, Mr. Huyett was a partner with KPMG
Peat Marwick LLP, independent auditors to Avant!.
Mr. Hailey has served as Senior Vice President of Business Development and a
director since he joined Avant! in connection with the merger of Meta with and
into Avant! in October 1996. Mr. Hailey was the President, Chief Executive
Officer and Chairman of the Board of Directors of Meta since its inception in
1978. Prior to 1978, Mr. Hailey held engineering and management positions
involving circuit design at Advanced Micro Devices, Inc., where he established
the MOS Microprocessor Department and the EPROM group.
Mr. Brill has been the Secretary and director of Avant! since November 1996.
Mr. Brill is a coporate and securities attorney whose practice focuses
principally on technology companies and private investment partnerships. He has
been in private practice since 1993, and previously practiced with the San
Francisco law firm of Farella, Braun & Martel. Mr. Brill holds a B.S. in History
from Cleveland State University and a J.D. from the Harvard Law School.
Mr. Coxe has been a director of Avant! since February 1992. Mr. Coxe is a
general partner of the general partner of Sutter Hill Ventures, a venture
capital investment firm, and has been associated with Sutter Hill Ventures since
1987. Mr. Coxe holds a B.A. in Economics from Dartmouth College and an M.B.A.
from the Harvard Business School.
14
<PAGE>
Dr. Enomoto has been the President of Mitsubishi Electric Semiconductor
Software Corporation, a semiconductor engineering company and a subsidiary of
Mitsubishi Electric Corporation ("MELCO"), since June 1993. From 1962 to June
1993, Dr. Enomoto was employed by MELCO where his last position was General
Manager of the ASIC Design Engineering Center. Dr. Enomot holds a Ph.D. in
Engineering from the University of Tokyo.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of January 24, 1997,
with respect to the number of shares of Common Stock owned by each of the
Selling Stockholders. All shares held by the Selling Stockholders as of January
24, 1997 are being offered for sale hereby. The Shares are being registered to
permit public secondary trading of the Shares, and the Selling Stockholders may
offer the Shares for resale from time to time. See "Plan of Distribution."
The Shares being offered by the Selling Stockholders were acquired from the
Company in the FrontLine Acquisition and the NexSyn Acquisition. The Common
Stock issued in the FrontLine Acquisition was issued pursuant to an exemption
from the registration requirements of the Securities Act provided by Rule 506
under Regulation D, as promulgated by the Securities Act, and the Common Stock
issued in the NexSyn Acquisition was issued pursuant to an exemption from the
registration requirements of the Securities Act provided by Section 4(2)
thereof. Each Selling Stockholder that acquired Shares from the Company
represented to the Company that it was acquiring the Shares for investment and
with no present intention of distributing the Shares.
The Company has filed with the Commission, under the Securities Act, a
Registration Statement on Form S-3, of which this Prospectus forms a part, with
respect to the resale of the Shares from time to time on The Nasdaq Stock Market
or in privately-negotiated transactions. The Company has agreed to keep such
Registration Statement effective for two years from the date of effectiveness of
this Prospectus, subject to certain restrictions, or, if earlier, until the
distribution contemplated in this Prospectus has been completed.
15
<PAGE>
<TABLE>
The Shares offered by this Prospectus may be offered from time to time by the
Selling Stockholders named below:
<CAPTION>
SHARES BENEFICIALLY
OWNED
PRIOR TO OFFERING
---------------------
NUMBER OF NUMBER OF SHARES
NAME OF SELLING STOCKHOLDER SHARES PERCENT BEING OFFERED
- --------------------------------------------------- --------- ------- ----------------
<S> <C> <C> <C>
Agarwala, Badruddin ................................ 83,657 * 83,657
Agarwala, Badruddin, Custodian for Lamya .......... 51,899 * 51,899
Agarwala Apte, Sushama, as Custodian for Amit Apte 6,393 * 6,393
Apte, Sushama, as Custodian for Salin Apte ........ 6,227 * 6,227
Curtin, Richard .................................... 2,307 * 2,307
Desai, W.L. ........................................ 1,262 * 1,262
Dholakia, Anjana ................................... 6,872 * 6,872
Dholakia, Ansum S. ................................. 13,839 * 13,839
Dholakia, Sachi S. ................................. 13,839 * 13,839
Dholakia, Suresh ................................... 94,614 * 94,614
Dixon, Scott ....................................... 25,791 * 25,791
Duet Technologies, Inc. ............................ 6,560 * 6,560
Functionality, Inc.(1) ............................. 10,380 * 10,380
Goel Family Partnership ............................ 512,173 2.3 512,173
Goel Pooneet ....................................... 155,697 * 155,697
Goel Priyanka ...................................... 155,697 * 155,697
Holland, Sheila .................................... 5,189 * 5,189
Hsu, Yu-Chin ....................................... 14,358 * 14,358
Jhaveri, D.J. ...................................... 17,299 * 17,299
Jhaveri, J.B. ...................................... 20,413 * 20,413
Jhaveri, Krishna ................................... 118,142 * 118,142
Jhaveri, Neeta ..................................... 10,379 * 10,379
Jhaveri, Krishna, as Custodian for Kunal Jhaveri .. 25,949 * 25,949
Jhaveri, Krishna, as Custodian for Ruchi Jhaveri .. 25,949 * 25,949
Jinjuvadia, Kusum R. ............................... 13,839 * 13,839
Kaul, Sanjiv ....................................... 8,649 * 8,649
Khorakiwala, Taizoon ............................... 25,949 * 25,949
Mehta, P.J. ........................................ 17,299 * 17,299
Mehta, V.P. ........................................ 17,299 * 17,299
Mody, Arti ......................................... 1,682 * 1,682
Mody, C.J. ......................................... 34,599 * 34,599
Mody, N.C. ......................................... 34,599 * 34,599
Mody, Rajiv C. ..................................... 121,948 * 121,948
Mody, Rajiv, as Custodian for Naman Mody .......... 25,949 * 25,949
Mody, Rajiv, as Custodian for Sakhee Mody ......... 25,949 * 25,949
Pacific Design, Inc.(2) ............................ 11,793 * 11,793
Rajpura, Bakul D. .................................. 13,839 * 13,839
Rajpura, Bharti B. ................................. 13,839 * 13,839
Samejima, Muneyoshi ................................ 86,061 * 86,061
Shar, Leonard E. ................................... 2,075 * 2,075
Tsia, Fur-Shin ..................................... 14,358 * 14,358
Vaidyanathan, Vijay ................................ 830 * 830
ZyMac .............................................. 1,729 * 1,729
<FN>
- -------------
* Less than 1%
(1) These shares of Common Stock may be acquired upon the exercise of certain
rights, which rights have not fully vested as of the date hereof.
(2) Includes 6,228 shares of Common Stock which may be acquired upon the
exercise of certain rights, which rights have not fully vested as of the
date hereof.
</FN>
</TABLE>
16
<PAGE>
PLAN OF DISTRIBUTION
All or a portion of the Shares offered hereby by the Selling Stockholders may
be delivered and/or sold from time to time in transactions in the
over-the-counter market, on the Nasdaq National Market, in privately negotiated
transactions, or by a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. After the
effectiveness of the Registration Statement of which this Prospectus is a part,
the Selling Stockholders may make short sales of the Company's Common Stock and
may use the Shares to cover the resulting short positions. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that participate in the distribution may
under certain circumstances be deemed to be "underwriters" within the meaning of
the Securities Act, and any commissions received by such broker-dealers and any
profits realized on the resale of Shares may be deemed to be underwriting
discounts and commissions under the Securities Act. The Selling Stockholders may
agree to indemnify such broker-dealers against certain liabilities, including
liabilities under the Securities Act. In addition, the Company has agreed to
indemnify the Selling Stockholders with respect to the Shares offered hereby
against certain liabilities, including certain liabilities under the Securities
Act, or, if such indemnity is unavailable, to contribute toward amounts required
to be paid in respect of such liabilities.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholders (and, if it acts as agent for the
purchase of such Shares, from such purchaser). Broker-dealers may agree with the
Selling Stockholders to sell a specified number of Shares at a stipulated price
per share, and, to the extent such a broker-dealer is unable to do so acting as
agent for the Selling Stockholders, to purchase as principal any unsold Shares.
Broker-dealers who acquire Shares as principal may thereafter resell such Shares
from time to time in transactions (which may involve crosses and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described above) in the over-the-counter
market, on the Nasdaq National Market, in privately negotiated transactions, or
by a combination of such methods of sale, at fixed prices that may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices, and in connection with such
resales may pay to or receive from the purchasers of such Shares commissions
computed as described above.
The Selling Stockholders will be subject to applicable provisions of the
Exchange Act, and the rules and regulations thereunder, including, without
limitation, Rules 10b-6 and 10b-7, which provisions may limit the timing of bids
for and purchases of shares of the Company's Common Stock by the Selling
Stockholders.
The Selling Stockholders will pay all commissions and other expenses
associated with the sale of securities by them. The Shares offered hereby are
being registered pursuant to contractual obligations of the Company, and the
Company has agreed to bear certain expenses in connection with the registration
and sale of the Shares being offered by the Selling Stockholders. The Company
has not made any underwriting arrangements with respect to the sale of Shares
offered hereby.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, Menlo
Park, California.
17
<PAGE>
EXPERTS
The consolidated balance sheets of Avant! Corporation and subsidiaries as of
December 31, 1994 and 1995 and the consolidated statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995 incorporated in this Prospectus by reference from
the Company's Form 8-K filed on December 19, 1996 have been audited by KPMG Peat
Marwick LLP, independent certified public accountants, and are incorporated
herein by reference in reliance upon the report of KPMG Peat Marwick LLP, and
upon the authority of such firm as experts in accounting and auditing.
The supplemental consolidated balance sheets from Avant! Corporation and
subsidiaries as of December 31, 1994 and 1995 and the supplemental consolidated
statements of income, stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1995 incorporated in this Prospectus
by reference from the Company's Form 8-K filed on December 19, 1996 have been
audited by KPMG Peat Marwick LLP, independent certified public accountants, and
are incorporated herein by reference in reliance upon the report of KPMG Peat
Marwick LLP, and upon the authority of such firm as experts in accounting and
auditing.
18
<PAGE>
================================================================================
No dealer, salesperson, Selling Stockholder or any other person has been
authorized to give any information or to make any representations in connection
with this offering other than those 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 any
offer to buy any of the securities offered hereby by anyone in any jurisdiction
in which such offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or to any person to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of
any time subsequent to the date of the Prospectus.
-----------------
TABLE OF CONTENTS
Page
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Available Information ..................................................... 2
Information Incorporated by Reference .................................... 2
Risk Factors .............................................................. 4
The Company ............................................................... 12
Management ................................................................ 14
Selling Stockholders ...................................................... 15
Plan of Distribution ...................................................... 17
Legal Matters ............................................................. 17
Experts ................................................................... 18
1,857,211 SHARES
AVANT! CORPORATION
COMMON STOCK
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January 31, 1997
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