-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jFTBjnSf3e4cXACZ4R0PzUTaBHhcJ9u89694eDAVHabArbvsGzSZ+qLFxTTNVxmB T2kH6MZVEMKJKE+cNcH/ZA== 0000813672-94-000013.txt : 19940519 0000813672-94-000013.hdr.sgml : 19940519 ACCESSION NUMBER: 0000813672-94-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CADENCE DESIGN SYSTEMS INC CENTRAL INDEX KEY: 0000813672 STANDARD INDUSTRIAL CLASSIFICATION: 7372 IRS NUMBER: 770148231 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10606 FILM NUMBER: 94528472 BUSINESS ADDRESS: STREET 1: 555 RIVER OAKS PKWY CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4089431234 MAIL ADDRESS: STREET 1: 555 RIVER OAKS PARKWAY CITY: SAN JOSE STATE: CA ZIP: 95134 FORMER COMPANY: FORMER CONFORMED NAME: ECAD INC /DE/ DATE OF NAME CHANGE: 19880609 10-Q 1 FIRST Q94 10Q FORM 10-Q ______________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) X Quarterly Report PURSUANT TO Section 13 or 15(d) of the - - -- Securities Exchange Act of 1934 For the quarterly period ended March 31, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________to_________________ Commission file number 0-14386 CADENCE DESIGN SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 77-0148231 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) number) 555 River Oaks Parkway, San Jose, California 95134 (Address of principal executive offices) (Zip Code) (408) 943-1234 Registrant's telephone number, including area code Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ At March 31, 1994 there were 41,227,171 shares of the registrant's Common Stock, $0.01 par value outstanding. CADENCE DESIGN SYSTEMS, INC. INDEX PART I. FINANCIAL INFORMATION PAGE NO. Item 1. Financial Statements Condensed Consolidated Balance Sheets: March 31, 1994 and December 31, 1993 3 Condensed Consolidated Statements of Income: Three Months Ended March 31, 1994 and 1993 4 Condensed Consolidated Statements of Cash Flows: Three Months Ended March 31, 1994 and 1993 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 13 CADENCE DESIGN SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31, 1994 1993 ASSETS (Unaudited) Current Assets: Cash and cash investments $ 62,259 $ 61,382 Short-term investments 43,550 31,423 Accounts receivable, net 88,580 101,890 Inventories 5,187 5,744 Prepaid expenses and other assets 15,865 18,036 Total current assets 215,441 218,475 Property, plant and equipment, net 94,601 61,477 Software development costs, net 31,401 31,265 Purchased software and other intangibles, net 10,935 12,787 Other assets 10,970 15,297 Total assets $363,348 $339,301 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term obligations $ 27,540 $ 3,962 Accounts payable 12,234 13,513 Accrued liabilities 56,870 51,352 Income taxes payable 2,595 6,541 Deferred revenue 46,104 38,111 Total current liabilities 145,343 113,479 Long-term obligations 2,378 4,001 Lease liabilities 9,109 10,722 Deferred income taxes 2,008 2,243 Other noncurrent liabilities 2,981 2,734 Total long-term liabilities 16,476 19,700 Stockholders' Equity: Common stock 462 460 Additional paid-in capital 251,177 250,501 Treasury shares at cost (4,964,853 and 4,857,200 shares, respectively) (53,886) (52,178) Retained earnings 4,210 8,527 Accumulated translation adjustment (434) (1,188) Total stockholders' equity 201,529 206,122 Total liabilities and stockholders' equity $363,348 $339,301 The accompanying notes are an integral part of these statements. CADENCE DESIGN SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) Three Months Ended March 31, March 31, 1994 1993 REVENUE: (Unaudited) Product $ 61,147 $ 47,114 Maintenance 35,631 29,003 Total revenue 96,778 76,117 COST OF REVENUE: Product 19,716 16,889 Maintenance 3,825 3,958 Total cost of revenue 23,541 20,847 Gross margin 73,237 55,270 OPERATING EXPENSES: Marketing and sales 39,024 37,499 Research and development 16,989 16,918 General and administrative 10,599 9,477 Restructuring costs - - - 13,450 Provision for settlement of litigation 12,104 - - - Total operating expenses 78,716 77,344 LOSS FROM CONTINUING OPERATIONS (5,479) (22,074) Other income, net 347 504 Loss from continuing operations before benefit for income taxes (5,132) (21,570) Benefit for income taxes 1,283 5,732 NET LOSS FROM CONTINUING OPERATIONS (3,849) (15,838) LOSS FROM DISCONTINUED OPERATIONS - - (478) NET LOSS $ (3,849) $ (16,316) NET LOSS PER SHARE: From continuing operations $ (.09) $ (.36) From discontinued operations - - - (.01) Net loss per share $ (.09) $ (.37) Weighted average common and common equivalent shares outstanding 41,208 44,136 The accompanying notes are an integral part of these statements. CADENCE DESIGN SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended March 31, March 31, 1994 1993 (Unaudited) CASH AND CASH INVESTMENTS AT BEGINNING OF PERIOD $ 61,382 $ 78,976 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss (3,849) (16,316) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 10,600 10,873 Lease liabilities (1,619) (1,174) Deferred income taxes, noncurrent (235) 1,253 Writeoffs of capitalized software development costs and purchased software and intangibles 807 377 Accruals for severance and facilities restructure costs - - - 9,573 Increase in other noncurrent liabilities 247 82 Write down and reserve of assets related to restructure - - - 3,500 Net changes in current assets and liabilities, net of purchase of third-party interests in partnerships- Decrease in accounts receivable 14,891 33,590 Decrease (increase) in inventories 560 (1,604) Decrease (increase) in prepaid expenses and other assets 2,267 (6,516) Decrease in accrued liabilities and payables (735) (11,949) Increase in deferred revenue 7,698 4,621 Net cash provided by operating activities 30,632 26,310 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in short-term investments (12,127) (3,499) Purchase of property and equipment (2,340) (5,012) Capitalization of software development costs (3,362) (3,760) Decrease (increase) in other assets and purchased software and intangibles 593 (333) Payment for purchase of third-party interests in partnerships, net of cash acquired (8,729) - - - Net cash used for investing activities (25,965) (12,604) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term obligations (2,057) (1,978) Sale of common stock, net of notes receivable from stockholders 678 5,597 Purchase of treasury stock, net (1,708) (4,245) Net cash used for financing activities (3,087) (626) EFFECT OF EXCHANGE RATE CHANGES ON CASH (703) (1,044) INCREASE IN CASH AND CASH INVESTMENTS 877 12,036 CASH AND CASH INVESTMENTS AT END OF PERIOD $ 62,259 $ 91,012 The accompanying notes are an integral part of these statements. CADENCE DESIGN SYSTEMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1993. The unaudited condensed consolidated financial statements included herein reflect all adjustments (which include only normal, recurring adjustments) that are, in the opinion of management, necessary to state fairly the results for the periods presented. The results for such periods are not necessarily indicative of the results to be expected for the full fiscal year. 2. Acquisition of Third-Party Interests in Real Estate Partnerships In March 1994 the Company acquired all third-party interests in two real estate partnerships in which it was a 46.5% and 80% limited partner, respectively, for approximately $9 million in cash and the assumption of a secured construction loan of approximately $23.5 million. The Company leases buildings from one of the limited partnerships and the second limited partnership owns unencumbered land adjacent to the leased property. The Company paid off the construction loan with its cash reserves in May 1994. 3. Discontinued Operations In December 1993 the Company sold its Automated Systems ("ASI") division. The operating results of the Company have been restated for 1993 and prior periods to report discontinued operations of ASI as a separate line item in the consolidated statements of income. Revenue of the discontinued division was $3,223,000 for the quarter ending March 31, 1993. 4. Purchase of Comdisco Systems, Inc. In June 1993 the Company acquired the business and certain assets of Comdisco Systems, Inc. ("Comdisco"), a subsidiary of Comdisco, Inc. in exchange for 1,050,000 shares of the Company's common stock and a warrant to purchase 1,300,000 shares of the Company's common stock. The acquisition was accounted for as a purchase. Accordingly, the results of Comdisco from the date of acquisition forward have been recorded in the Company's consolidated financial statements. Comparative pro forma financial information has not been presented as the results of operations for Comdisco are not material to the Company's consolidated financial statements for 1993. 5. Disclosure of Noncash Investing Activities As discussed in Note 2 the Company purchased all third-party interests in two real estate partnerships for approximately $9 million. In connection with the acquisition, net assets acquired were as follows (in thousands): Property and other assets $ 36,083 Liabilities assumed (23,576) Less cash acquired (3,778) Total $ 8,729 6. Investments in Debt and Equity Securities Effective January 1, 1994 the Company adopted Statement of Financial Accounting Standards No. 115 "Accounting for Certain Investments in Debt and Equity Securities". There was no effect on the Company's operating results due to the adoption. The Company classifies its investments as "heldto-maturity" for the purposes of this statement. The investments mature at various dates through December 1994. 7. Net Loss Per Share Net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock. 8. Inventories Inventories which consist primarily of testing equipment are stated at the lower of cost (first-in, first-out method) or market. Cost includes labor, material and manufacturing overhead. Inventories consisted of the following (in thousands): March 31, December 31, 1994 1993 (Unaudited) Raw materials and supplies $1,361 $2,240 Work-in progress 2,661 2,214 Finished goods 1,165 1,290 Total $5,187 $5,744 9. Commitments and Contingencies Stockholder class action lawsuits were filed against the Company and certain of its officers and directors in the United States District Court for the Northern District of California, San Jose Division, on April 8 and 9, 1991. The suits were subsequently consolidated into a single lawsuit and the class period changed to include purchasers of the Company's common stock during the period from October 18, 1990 through April 3, 1991. The lawsuit alleges violation of certain federal securities laws by maintaining artificially high market prices for the Company's common stock through alleged misrepresentations and nondisclosures regarding the Company's financial condition. On June 2, 1993 the District Court granted in part and denied in part the Company's motion to dismiss the complaint in the class action originally filed in April 1991. The effect of this ruling was to limit the class period to include purchasers of the Company's common stock between January 29, 1991 and April 3, 1991. Trial of this matter was scheduled to commence August 8, 1994. On March 23, 1993 a separate class action lawsuit was filed against the Company and certain of its directors and officers in the United States District Court, Northern District of California, San Jose Division. Two additional complaints identical to the complaint filed on March 23, 1993 except for the identities of the plaintiffs, were filed later in March and in April 1993. All three complaints were consolidated into a single lawsuit which seeks unspecified damages on behalf of all purchasers of the Company's common stock between October 12, 1992 and March 19, 1993. The lawsuit alleges violation of certain federal securities laws by maintaining artificially high market prices for the Company's common stock through alleged misrepresentations and nondisclosures regarding the Company's financial condition. On November 18, 1993, the District Court granted the Company's motion to dismiss the 1993 complaint. The effect of the ruling was to dismiss the complaint except as to a statement allegedly made on January 28, 1993, but plaintiffs were granted leave to further amend their complaint. In April 1994 the Company entered into tentative agreements to settle both of the above class action lawsuits. The agreements are subject to negotiation and execution of final settlement agreements, final court approval and certain contingencies. The tentative agreements provide for payment by the Company, net of insurance proceeds, of approximately $11 million in the second quarter of 1994. The Company is seeking to recover a portion of this payment from one of its insurers. The provision for settlement of litigation recorded in the first quarter includes the above settlement amount as well as legal costs associated with the settlement. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Revenue for the first quarter ended March 31, 1994 was $96.8 million compared with $76.1 million for the same period of the prior year, an increase of 27%. This increase was partially due to improved economic conditions, increased demand for the Company's products including the addition of the business of Comdisco and higher maintenance revenue from a larger installed product base. Also, revenue for the first quarter of 1993 was adversely impacted by a shift in the Company's systems product strategy. Maintenance revenue increased in absolute dollars by $6.6 million for the three months ended March 31, 1994 as compared to the same period in 1993, in part because of a larger customer base, the increased focus on customer renewals and the addition of Comdisco operations. Total cost of revenue was $23.5 million for the three months ended March 31, 1994 as compared to $20.8 million for the same period in 1993, an increase of 13%. Cost of product was $19.7 million for the first quarter of 1994 as compared to $16.9 million for the same period in 1993. This increase in cost of product was partially due to an increase in the amortization and write-off of purchased software and intangibles, as well as increased expenses related to the addition of Comdisco operations. Cost of maintenance decreased in absolute dollars for the first quarter of 1994 as compared to the same period in the prior year. The slight decrease was due to the streamlining of the maintenance renewal process which includes a more cost effective update program and lower cost media. Gross margin was 76% and 73% for the first quarter ended March 31, 1994 and 1993, respectively. Marketing and sales expenses were $39.0 million for the first quarter ended March 31, 1994 compared with $37.5 million in the same period of the prior year, an increase of 4%. This increase was primarily due to the addition of Comdisco operations. Research and development expenses for the first quarter ended March 31, 1994 were $17.0 million compared with $16.9 million in the same period of the prior year. Capitalization of software development costs for the quarters ended March 31, 1994 and 1993 was $3.4 million and $3.8 million, which represented 17% and 18% of total research and development expenditures made in each of those periods, respectively. Gross research and development expenditures decreased from $20.7 million to $20.4 million for the three months ended March 31, 1993 as compared to March 31, 1994. The decrease was due to reduced equipment maintenance and facility costs partially offset by increased expenses related to the addition of Comdisco operations. General and administrative expenses increased to $10.6 million for the first quarter ended March 31, 1994 from $9.5 million in the same period of 1993, an increase of 12%. This increase was primarily due to increases in legal expenses, expenses related to the addition of Comdisco operations and increased bad debt expense. In March 1994 the Company recorded a provision of $12.1 million for settlement of the stockholder class action lawsuits filed against the Company and certain of its officers and directors in 1991 and 1993. This provision includes costs related to the settlement payments as well as legal costs associated with the settlement. In March 1993 the Company recorded restructuring costs of $13.5 million associated with a planned restructure of certain areas of sales, operations and administration due to business conditions. The restructuring charge primarily reflects costs associated with excess facilities, the write off of software development costs and purchased software and intangibles and employee terminations arising from required adjustments to the Company's cost structure necessitated by lower revenue levels. Net other income for the first quarter ended March 31, 1994 was $.3 million compared with $.5 million for the same period in 1993. This decrease was primarily due to increased expense related to foreign exchange loss and other expenses which were partially offset by an increase in interest income. The Company's estimated annual effective tax rate for fiscal 1994 is 25% as compared to 26% for the same period in the prior year. As previously discussed, the Company sold its ASI division in December 1993 and restated the financial information of prior periods to report discontinued operations of ASI as a separate line item in the consolidated statements of income. In the first quarter of 1993 the Company recorded a $.5 million loss related to the operating results of the discontinued division. The Company's operating expenses are partially based on its expectations of future revenue. The Company's results of operations may be adversely affected if revenue does not materialize in a quarter as expected. Since expense levels are usually committed in advance of revenues and because only a small portion of expenses vary with revenue, the Company's operating results may be impacted significantly by lower revenue. Based on the Company's operating history and factors that may cause fluctuations in the quarterly results, quarter to quarter comparisons should not be relied upon as indicators of future performance. LIQUIDITY AND CAPITAL RESOURCES During the three months ended March 31, 1994 the Company's cash and cash investments and short-term investments increased $13.0 million from $92.8 million to $105.8 million. This increase was primarily due to net cash generated from operating activities ($30.6 million) exceeding net cash used for investing activities ($13.8 million, excluding the $12.1 million increase in short-term investments) and net cash used for financing activities ($3.1 million). In addition to $105.8 million in cash and cash investments and short-term investments at March 31, 1994, the Company had available $15.0 million under equipment lease lines and $17.5 million under bank lines of credit. The Company was not in compliance with certain covenants related to its lines of credit at March 31, 1994. The Company subsequently obtained waivers of the noncompliance from the banks. The bank lines of credit expire in May and June 1994. The Company anticipates it will obtain new bank lines of credit to replace the expiring lines. Anticipated cash requirements in 1994 include payments related to the pay off of the $23.5 million construction loan (paid in May 1994), the settlement of the class action lawsuits (approximately $11 million to be paid during the second quarter), the purchase of treasury stock, contemplated additions of capital equipment and restructure costs accrued at March 31, 1994. Prior to 1993, the Company authorized the repurchase of up to 2.8 million shares of common stock in the open market over the next several years to satisfy its estimated requirements for shares to be issued under its employee stock option and stock purchase plans. In April 1993 the Company authorized the repurchase of an additional 4.0 million shares of common stock from time to time in the open market. In addition, in February 1994 the Company authorized the repurchase of an additional 2.9 million shares. In total, as of March 31, 1994 approximately 5.9 million shares had been repurchased. The Company anticipates that current cash and short-term investment balances, cash flows from operations and unused balances on equipment lease lines and lines of credit will be sufficient to meet its working capital and capital expenditure requirements for at least the next year. PART II. OTHER INFORMATION Item 1. Legal Proceedings See Part I, Item 1., Note 9 of Notes to Condensed Consolidated Financial Statements. Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are filed herewith: Exhibit Number Exhibit Title 10.01 The Registrant's 1987 Stock Option Plan, as amended to date, (incorporated by reference to Exhibit 4.01 to the Registrant's Form S-8 Registration Statement (No. 33-48371) filed on June 4, 1992 (the "1992 Form S-8")).* 10.02 Form of Stock Option Agreement and Form of Stock Option Exercise Request, as currently in effect under the Registrant's 1987 Stock Option Plan (incorporated by reference to Exhibit 4.01 to the Registrant's Form S-8 Registration Statement (No. 33-22652) filed on June 20, 1988).* 10.03 The Registrant's 1988 Directors Stock Option Plan, as amended to date, including the Stock Option Grant and Stock Option Exercise Notice and Agreement (the first document is incorporated by reference to Exhibit 4.02 of the Registrant's 1992 Form S-8 and the latter two documents are incorporated by reference to Exhibit 10.08 - 10.10 of the 1988 Form S-1).* 10.04 The Registrant's 1993 Directors Stock Option Plan including the Stock Option Grant (incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 1993 (the "1993 Form 10-K")).* 10.05 The Registrant's 1990 Stock Purchase Plan (incorporated by reference to Exhibit 4.03 of the 1992 Form S-8).* 10.06 The Registrant's Senior Executive Bonus Plan for 1993 (incorporated by reference to Exhibit 10.07 of the Registrant's Form 10-K for the fiscal year ended December 31, 1992 (the "1992 Form 10-K")).* 10.07 The Registrant's Key Contributor Bonus Plan for 1993 (incorporated by reference to Exhibit 10.08 of the 1992 Form 10-K).* 10.08 The Registrant's Senior Executive Bonus Plan for 1994 (incorporated by reference to the 1993 Form 10-K).* 10.09 The Registrant's Key Contributor Bonus Plan for 1994 (incorporated by reference to the 1993 Form 10-K).* 10.10 The Registrant's Cash or Deferred Profit Sharing Plan, as currently in effect (certain amendments are incorporated by reference to the 1993 Form 10-K; the Plan itself is incorporated by reference to Exhibit 10.12 to the Registrant's Form S-4 Registration Statement (No. 33-31673), originally filed on October 18, 1989 (the "1989 Form S4")).* 10.11 Amended and Restated Lease, dated June 29, 1989, by and between River Oaks Place Associates, a California limited partnership, ("ROPA") and the Registrant, for the Registrant's executive offices at 555 River Oaks Parkway, San Jose, California (incorporated by reference to Exhibit 10.14 to the Registrant's Form 10-K for the fiscal year ended December 31, 1990) (the "1990 Form 10-K")). 10.12 Lease dated June 29, 1989 by and between ROPA and the Registrant for the Registrant's offices at 575 River Oaks Parkway, San Jose, California (incorporated by reference to Exhibit 10.16 to the 1990 Form 10-K). 10.13 Lease dated June 29, 1989 by and between ROPA and the Registrant for the Registrant's offices at 535 and 545 River Oaks Parkway, San Jose, California (incorporated by reference to Exhibit 10.17 to the 1990 Form 10-K). 10.14 Lease dated September 3, 1985 by and among the Richard T. Peery and John Arrillaga Separate Property Trusts ("P/A Trusts") and Valid Logic Systems Incorporated ("Valid") (which merged into the Registrant) for the Registrant's offices at 75 West Plumeria Avenue, San Jose, California (incorporated by reference to Exhibit 10.16 to the Form 10-K for Valid for the fiscal year ended December 30, 1990 (the "1990 Valid Form 10-K")). 10.15 Amendment Number 1, dated March 2, 1988, to Lease Agreement for 75 West Plumeria Avenue, San Jose, California, by and among Valid and the P/A Trusts (incorporated by reference to Exhibit 10.17 to the 1990 Valid Form 10-K). 10.16 Lease dated December 19, 1988 by and among the P/A Trusts and Valid for the Registrant's offices at 2835 North First Street, San Jose, California (incorporated by reference to Exhibit 10.18 to the 1990 Valid Form 10-K). 10.17 Lease dated September 3, 1985 by and among the P/A Trusts and Valid for the Registrant's offices at 2820 Orchard Parkway, San Jose, California (incorporated by reference to Exhibit 10.14 to the 1990 Valid Form 10-K). 10.18 Amendment Number 1, dated March 2, 1988, to Lease Agreement for 2820 Orchard Parkway, San Jose, California, by and among Valid and the P/A Trusts (incorporated by reference to Exhibit 10.15 to the 1990 Valid Form 10-K). 10.19 Form of Executive Compensation Agreement dated May 1989 between Registrant and Mr. Costello (incorporated by reference to Exhibit 10.20 to the 1989 Form S-4).* 10.20 Leased dated as of June 18, 1991 by and between C.T. Montague I, L.P., a California limited partnership, and the Registrant for improved real property including office buildings located at Seely Road and Montague Avenue, San Jose, California (incorporated by reference to Exhibit 10.24 to the 1991 Form S-4). 10.21 Employment Agreement dated as of December 1, 1989 between the Registrant and Mr. Doug Hajjar (incorporated by reference to Exhibit 10.36 to Form 10-K for Valid for the fiscal year ended December 31, 1989). * 10.22 Modification to Employment Agreement with Mr. Hajjar (incorporated by reference to Exhibit 10.03 to the 1991 Form S-4). * 10.23 Amendment to Employment Agreement with Mr. Hajjar dated December 16, 1992 (incorporated by reference to Exhibit 10.18 to the Registrant's Form 10-K for the fiscal year ended December 31, 1992). * 10.24 Offer letter to H. Raymond Bingham dated May 12, 1993 (incorporated by reference to the 1993 Form 10K).* 10.25 Offer letter to M. Robert Leach dated May 17, 1993 (incorporated by reference to the 1993 Form 10-K).* 10.26 Letter agreement dated March 9, 1994 by and among C.T. Properties, Inc. ("General Partner"), Registrant, Montague Investors, L.P. ("Montague") and David M. Thede ("Thede") whereby Registrant acquired all of Thede's ownership interests in the C.T. Montague I, L.P. and C.T. Montague II, L.P. limited partnerships and the General Partner and all of Montague's interests in C.T. Montague I, L.P. (incorporated by reference to the 1993 Form 10-K). (b) No reports on Form 8-K have been filed during the quarter ended March 31, 1994. * A management contract or compensatory plan required to be filed as an exhibit to Form 10-Q. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CADENCE DESIGN SYSTEMS, INC. (Registrant) DATE: May 12, 1994 By: /s/ Joseph B. Costello JOSEPH B. COSTELLO President and Chief Executive Officer DATE: May 12, 1994 By: /s/ H. Raymond Bingham H. RAYMOND BINGHAM Executive Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----