8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): June 9, 2010

CADENCE DESIGN SYSTEMS, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware
(State or Other Jurisdiction
of Incorporation) 000-15867
(Commission File Number) 77-0148231
(I.R.S. Employer
Identification No.)

2655 Seely Avenue, Building 5
San Jose, California
(Address of Principal Executive Offices) 95134
(Zip Code)

Registrant’s telephone number, including area code: (408) 943-1234

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
	Item 3.02. Unregistered Sales of Equity Securities.
	Item 8.01. Other Events.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EX-99.1

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On June 15, 2010, Cadence Design Systems, Inc. (“Cadence”) issued $300 million aggregate principal amount of its 2.625% Cash Convertible Senior Notes due 2015 (the “Notes”) to certain qualified institutional buyers (collectively, the “Initial Purchasers”). The Notes were offered and sold to the Initial Purchasers (the “Offering”) pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Cadence received net proceeds of $288.6 million from the Offering, after deducting the Initial Purchasers’ discounts and commissions and the estimated expenses of the Offering.

The Notes are governed by an indenture, dated as of June 15, 2010, between Cadence and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”).

The Notes will bear interest at a rate of 2.625% per year, payable semi-annually in arrears in cash on June 1 and December 1 of each year, beginning on December 1, 2010. The Notes will mature on June 1, 2015, unless earlier repurchased or converted. The closing of the Offering occurred on June 15, 2010.

The Notes are convertible, as described below, into cash at an initial conversion rate equivalent to 132.5205 shares of common stock per $1,000 principal amount of the Notes, equivalent to a conversion price of approximately $7.55 per share of common stock, subject to adjustment.

In certain circumstances, the Notes are convertible into an amount in cash equal to the settlement amount, as defined in the Indenture. Holders of the Notes may freely convert their Notes on or after March 1, 2015 until the close of business on the scheduled trading day immediately preceding the maturity date. Prior to March 1, 2015, holders of the Notes may convert their Notes under the following conditions:

• during the ten business-day period after any five consecutive trading-day period (the “Measurement Period”) in which the trading price per Note for each day of such Measurement Period was less than 98% of the product of the last reported sale price of Cadence common stock and the conversion rate on each such day; or

• during any fiscal quarter after the fiscal quarter ending October 2, 2010, if the last reported sale price of Cadence common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter exceeds 130% of the applicable conversion price in effect on each applicable trading day; or

• upon the occurrence of specified corporate transactions.

Holders of the Notes who convert their Notes in connection with a fundamental change, as defined in the Indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a fundamental change, the holders of the Notes may require Cadence to purchase all or a portion of their Notes at a purchase price equal to 100% of the principal amount of Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

In connection with the Offering, Cadence entered into convertible note hedge transactions with respect to its common stock (the “Convertible Note Hedge Transactions”) with affiliates of the Initial Purchasers. Cadence used an aggregate of $64.9 million of the net proceeds from the Offering for the Convertible Note Hedge Transactions. The Convertible Note Hedge Transactions are expected generally to reduce

Cadence’s exposure under the Notes in the event that the market price per share of Cadence common stock, as measured under the terms of the Convertible Note Hedge Transactions, is greater than the strike price of the Convertible Note Hedge Transactions, which initially corresponds to the conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes.

Item 3.02. Unregistered Sales of Equity Securities.

On June 9, 2010, Cadence agreed to sell warrants to acquire its common stock, subject to customary anti-dilution adjustments, in separate transactions entered into with affiliates of certain Initial Purchasers and in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. The warrants have an exercise price of $10.78 per share, which is 75% higher than the closing price of Cadence common stock on June 9, 2010.

Cadence expects to receive aggregate proceeds of $31.6 million from these transactions. If the market price of the Cadence common stock at the time of exercise of the applicable warrants exceeds the strike price of those warrants, Cadence will owe the affiliates of certain Initial Purchasers net shares of Cadence common stock in an amount based on the excess of the then current market price of the Cadence common stock over the strike price of the applicable warrants. These transactions could have a dilutive effect to the extent that the market price per share of Cadence common stock, as measured under the terms of the warrant transactions, exceeds the strike price of the warrants.

Neither the warrants nor the underlying Cadence common stock issuable upon exercise of the warrants have been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Item 8.01. Other Events.

On June 10, 2010, Cadence issued a press release with respect to the foregoing transactions, which is filed as Exhibit 99.01 to this Current Report on Form 8-K and is incorporated herein by reference.

On June 15, 2010, Cadence used approximately $98 million of the net proceeds from the Offering to repurchase approximately $100 million aggregate principal amount of its 1.375% Convertible Senior Notes due 2011 (the “2011 Notes”) and approximately $89 million to repurchase approximately $100 million aggregate principal amount of its 1.500% Convertible Senior Notes due 2013 (the “2013 Notes”). In connection with the repurchase of a portion of the 2011 Notes and the 2013 Notes, Cadence terminated a portion of the related convertible note hedge transactions entered into with certain initial purchasers of the 2011 Notes and the 2013 Notes, as well as a portion of the separate warrant transactions.

On June 15, 2010, Cadence also used approximately $40 million of the net proceeds from the Offering to purchase approximately 6.49 million shares of its common stock.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.01	Press Release issued by Cadence Design Systems, Inc. on June 10, 2010 regarding the pricing of cash convertible senior notes due 2015.

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 hereunto duly authorized.

Dated: June 15, 2010

CADENCE DESIGN SYSTEMS, INC.
By:	/s/ Kevin S. Palatnik
	Kevin S. Palatnik
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.01	Press Release issued by Cadence Design Systems, Inc. on June 10, 2010 regarding the pricing of cash convertible senior notes due 2015.

EX-99.1

Exhibit 99.01

For more information, please contact:

Investors and Shareholders
Jennifer Jordan
Cadence Design Systems, Inc.
408-944-7100
investor_relations@cadence.com

Media and Industry Analysts
Lynne Cox
Cadence Design Systems, Inc.
408-944-7669
publicrelations@cadence.com

CADENCE PRICES $300 MILLION
CONVERTIBLE SENIOR NOTES OFFERING

     SAN JOSE, Calif., June 10, 2010 —Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced the pricing of its offering of $300 million principal amount of cash convertible senior notes due 2015. The notes are being offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Cadence also granted the initial purchasers of the notes an option to purchase up to an additional $50 million principal amount of notes to cover over-allotments. The offering is expected to close on June 15, 2010, subject to customary closing conditions.

     Interest will be payable on the notes semi-annually at a rate of 2.625 percent per annum. Prior to March 1, 2015, the notes will be convertible into cash at the option of the holder under certain conditions and, thereafter, at any time. The notes mature on June 1, 2015. The initial conversion rate for the notes is equivalent to 132.5205 shares of common stock per $1,000 principal amount of the notes, which is equivalent to a conversion price of approximately $7.55 per share, representing a 22.5% conversion premium based on the closing price of Cadence’s common stock of $6.16 per share on June 9, 2010.

     Cadence has entered into convertible note hedge transactions with affiliates of the initial purchasers of the notes, in order to reduce its exposure under the notes to future increases in the price of Cadence common stock. Cadence has also entered into separate warrant transactions

with affiliates of the initial purchasers, and the warrants have an exercise price that is 75% higher than the closing price per share of Cadence’s common stock on June 9, 2010. The issuance of the warrants could have a dilutive effect on Cadence common stock to the extent that the market price of Cadence common stock exceeds the applicable exercise price of the warrants.

     Cadence estimates that the net proceeds of this offering will be $288.6 million (or $337.2 million if the initial purchasers’ over-allotment option is exercised in full), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses. Cadence will also receive $31.6 million from the sale of the warrants. Cadence is using $98.2 million of the net proceeds of this offering to repurchase $100.0 million aggregate principal amount of its 1.375% Convertible Senior Notes due December 15, 2011, $89.0 million of the net proceeds to repurchase $100.0 million aggregate principal amount of its 1.500% Convertible Senior Notes due December 15, 2013 and approximately $40 million to purchase approximately 6.49 million shares of its common stock pursuant to Cadence’s stock repurchase program concurrently with the pricing of the notes. Cadence is using $64.9 million of the net proceeds to fund the cost of the convertible note hedge transactions. Cadence intends to use the remainder of the net proceeds for general corporate purposes.

     In connection with the convertible note hedge transactions and the separate warrant transactions, the affiliates of the initial purchasers that are parties to those transactions have advised Cadence that they expect to enter into various derivative transactions with respect to Cadence common stock and/or purchase Cadence common stock or other Cadence securities in secondary market transactions concurrently with or shortly after the pricing of the notes, and may enter into or unwind various derivative transactions with respect to Cadence common stock and/or purchase or sell Cadence common stock or other Cadence securities in secondary market transactions concurrently with or shortly after pricing of the notes. These hedging activities, as well as the activities associated with the share repurchases and convertible note repurchases described above, could initially raise or maintain the market price of Cadence common stock or the notes and could subsequently otherwise affect the market price of Cadence common stock or the notes.

     This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

     The notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

     The matters discussed in this release include forward-looking statements. These statements are based on current expectations or beliefs and are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Cadence is providing this information as of the date of this news release and assumes no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this press release.

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