-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ir0upJtWvhP/dY7ehGzT+zVfyhLNUXk89iycOfPxDCGpJVezhEGZOxB1U3W6H95a qi0RNb1HhGU01Lfp3hgiFA== 0000891618-98-005467.txt : 19981228 0000891618-98-005467.hdr.sgml : 19981228 ACCESSION NUMBER: 0000891618-98-005467 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19981223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNOPSYS INC CENTRAL INDEX KEY: 0000883241 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 561546236 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-68011 FILM NUMBER: 98774636 BUSINESS ADDRESS: STREET 1: 700 E MIDDLEFIELD RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043-4033 BUSINESS PHONE: 4159625000 MAIL ADDRESS: STREET 1: 700 E MIDDLEFIELD RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043-4033 S-3/A 1 AMENDMENT NO. 1 TO FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1998 REGISTRATION NO. 333-39713 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 SYNOPSYS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 700 EAST MIDDLEFIELD ROAD 56-1546236 (STATE OR OTHER JURISDICTION OF MOUNTAIN VIEW, CALIFORNIA 94043 (IRS EMPLOYER INCORPORATION OR ORGANIZATION) (650) 962-5000 IDENTIFICATION NUMBER) (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
AART J. DE GEUS CHIEF EXECUTIVE OFFICER SYNOPSYS, INC. 700 EAST MIDDLEFIELD ROAD MOUNTAIN VIEW, CALIFORNIA 94043 (650) 962-5000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES TO: THOMAS C. DEFILIPPS, ESQ. WILSON SONSINI GOODRICH & ROSATI PROFESSIONAL CORPORATION 650 PAGE MILL ROAD PALO ALTO, CALIFORNIA 94304 (650) 493-9300 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------- PROPOSED PROPOSED TITLE OF EACH CLASS AMOUNT MAXIMUM MAXIMUM OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(2) - ---------------------------------------------------------------------------------------------------------------------- Common Stock, $0.01 par value....................... 637,284 shares $49.5625 $31,585,388.25 $8,780.74 - ----------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and low sales prices as reported on the Nasdaq National Market on November 24, 1998. (2) A filing fee of $8,796.97 was paid to the Commission on November 25, 1998. The $8,780.74 fee above is an amount amended to reflect the removal of 1,178 shares from the Registration Statement after November 25, 1998. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 SUBJECT TO COMPLETION, DATED DECEMBER 23, 1998 PROSPECTUS Synopsys, Inc. 700 East Middlefield Road Mountain View, California 94043 Telephone Number: (650) 962-5000 637,284 SHARES LOGO COMMON STOCK ------------------------ These shares may be offered and sold from time to time by certain stockholders of the Company identified in this prospectus. See "Selling Stockholders." The selling stockholders acquired the shares on November 20, 1998 in connection with the acquisition by Synopsys, Inc. ("Synopsys") of Everest Design Automation Inc. ("Everest") pursuant to that certain Agreement of Merger and Plan of Reorganization by and among Synopsys, Tenzing Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Synopsys, and Everest, dated as of October 26, 1998 (the "Merger Agreement"). The selling stockholders will receive all of the net proceeds from the sale of the shares. These stockholders will pay all underwriting discounts and selling commissions, if any, applicable to the sale of the shares. The Company will not receive any proceeds from the sale of the shares. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 3 OF THIS PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY. Synopsys's common stock is quoted on the Nasdaq National Market under the symbol "SNPS." On December 22, 1998, the last reported sale price of the common stock was $50.00 per share. ------------------------ The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ------------------------ December 23, 1998 3 TABLE OF CONTENTS
PAGE ---- Forward Looking Information................................. 2 Synopsys, Inc............................................... 3 Risk Factors................................................ 3 Where to Find More Information about Synopsys............... 7 Information Incorporated by Reference....................... 7 Use of Proceeds............................................. 7 Selling Stockholders........................................ 8 Plan of Distribution........................................ 9 Legal Matters............................................... 10 Experts..................................................... 10
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The selling stockholders are offering to sell, and seeking offers to buy, shares of Synopsys common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the shares. In this prospectus, unless indicated otherwise, "Synopsys," the "Company," "we," "us," and "our" refer to Synopsys, Inc. and its subsidiaries. FORWARD LOOKING INFORMATION This prospectus, including the information incorporated by reference herein, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. Our actual results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth below. In particular, please review the sections captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the fiscal year ended September 30, 1998, which report is incorporated herein by reference and such section of any subsequently filed Exchange Act reports. In connection with forward-looking statements which appear in these disclosures, prospective purchasers of the shares offered hereby should carefully consider the factors set forth in this prospectus under "Risk Factors." 2 4 SYNOPSYS, INC. Synopsys develops, markets, and supports electronic design automation ("EDA") products for designers of integrated circuits ("ICs") and electronic systems. Synopsys offers a range of design tools, verification tools and systems, design reuse products and physical design tools that significantly improve designers' productivity by offering improved time to market, reduced development and manufacturing costs, and enhanced design quality of results when compared to earlier generations of EDA products. Synopsys also provides training, support and consulting services for its customers. RISK FACTORS You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition, or results of operations could be materially adversely affected. In such case, the trading price of our common stock could decline and you may lose all or part of your investment. This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a variety of factors, including those set forth in the following risk factors and elsewhere in, or incorporated by reference into, this prospectus. In evaluating an investment in the shares you should consider carefully the following risk factors in addition to the other information presented in this prospectus or incorporated by reference into this prospectus. POTENTIAL EARNINGS FLUCTUATIONS We attempt to plan our business to achieve quarter-to-quarter revenue and earnings growth. Achieving predictable revenue and earnings growth is difficult. Quarterly revenue and earnings are affected by many factors, including customer product demand, product license terms, the size of our backlog, and the timing of revenue recognition on products and services sold. The following factors could affect our revenues and earnings per share in a particular quarter or over several quarterly or annual periods: - Our orders are seasonal. Historically, our first fiscal quarter ending December 31 is our weakest, and may have a book-to-bill ratio below one. - Our products are complex, and before buying them potential customers spend a great deal of time reviewing and testing them. This is particularly true if they are new customers or current customers purchasing a new product or switching from a competitor's product. The sales cycle does not necessarily match quarterly periods, and if by the end of any quarter our sales force has not sold enough new licenses, our orders and revenues could be substantially reduced. - Like many companies in the software industry, we receive a disproportionate volume of orders in the last week of a quarter, and recognize a disproportionate amount of revenue in the last week of a quarter. In addition, the proportion of our business attributable to our largest customers is increasing. As a result, if any order, and especially a large order, is delayed beyond the end of a fiscal period, our orders and revenue for that period could be substantially reduced. - The accounting rules we are required to follow only permit us to recognize revenue when certain criteria are met. Orders for certain of the Company's products and services, including certain time-based product licenses, consulting services, and software support, yield revenue (or a significant portion thereof) over multiple quarters (often extending beyond the current fiscal year) or upon completion of performance rather than at the time of sale. In addition, in negotiating a purchase order with a customer, we may agree to terms that have the effect of requiring deferral of revenue in whole or in part. As a result, it may be difficult for us to convert orders, particularly those received late in a quarter, 3 5 or backlog, to revenue in any given quarter. It is therefore possible for the Company to fall short in its revenue and/or earnings plan for a given quarter even while orders and backlog remain on plan. COMPETITION The EDA industry is highly competitive. We compete against other EDA vendors, and with customers' internally developed design tools and internal design capabilities, for a share of the overall EDA budgets of our customers. Our competitors include companies that offer a broad range of products and services, such as Cadence Design Systems, Inc. ("Cadence"), Mentor Graphics, Inc. ("Mentor") and Avant! Corporation ("Avant!"), as well as companies, including numerous start-up companies, that offer products focused on a discrete phase of the IC design process. In order to remain successful against such competition, we must continue to enhance our current products and bring to market new products that address the increasingly sophisticated needs of our customers on a timely and cost-effective basis. We also will have to expand our ability to offer consulting services. The failure to enhance existing products, develop and/or acquire new products or to expand our ability to offer such services would have a material adverse effect on our business, financial condition and results of operations. Technology advances and customer requirements are fueling a change in the nature of competition among EDA vendors. Increasingly, EDA companies compete on the basis of "design flows" involving a broad range of products (including both logic and physical design tools) and services rather than on the basis of individual "point" tools performing a discrete phase of the design process. No single EDA company currently offers its customers industry-leading products in a complete design flow. We offer a wide range of logic design tools but currently offer a relatively limited range of physical design tools. In November 1998 we acquired Everest, a private company developing physical design software. We will need to develop or acquire additional physical design tools in order to offer a complete design flow. We are also attempting to expand our capacity to offer professional services, but for the foreseeable future will continue to have less capacity than Cadence to provide such services. The market for physical design tools is dominated by Cadence and Avant!, both of which are attempting to complete their design flows. Cadence recently acquired Ambit Design Systems, a private company offering synthesis and other logic design products, as well as certain physical design verification products from Lucent Technologies, both of which will increase the direct competition between Synopsys and Cadence. In addition, Cadence's acquisition of logic design products may lead to reductions in purchases of our logic design software by Cadence, which was one of Synopsys' ten largest customers in fiscal 1998. Avant! also recently acquired a private company offering logic synthesis software, which will increase the direct competition between Synopsys and Avant!. SUCCESS OF NON-SYNTHESIS PRODUCTS Historically, much of the Company's growth has been attributable to the strength of its logic synthesis products. Opportunities for growth in market share in this area are limited, and synthesis revenues are expected to grow more slowly than our target for overall revenue growth. Synthesis and related "design creation" products account for approximately 45-50% of our revenue. As a result, in order to meet our revenue plan, non-synthesis design creation products, high level verification products and deep submicron products and our services business will have to grow faster than our overall revenue growth target. Our PrimeTime timing analysis, Formality formal verification, Module Compiler datapath synthesis and VCS Verilog simulation products are expected to be among the most important contributors to product revenue growth. These products have achieved initial customer acceptance, but we will only derive significant revenue from these products if they are accepted by a broad range of customers. Product success is difficult to predict. The introduction of new products and growth of a market for such products cannot be assured in a highly competitive environment like EDA. In the past we, like all companies, have had products that despite initial successes, have failed to meet our revenue expectations. Expanding our capacity to offer consulting services and our revenues derived therefrom will require us to recruit, hire and train a large number of talented people, and to implement management controls on bidding and executing on services engagements. The consulting business is significantly different than the software business, however, and as indicated by recent layoffs announced by Cadence in its service business, increasing consulting orders and revenue while 4 6 maintaining an adequate level of profit can be difficult. There can be no assurance that the Company will be successful in expanding revenues from existing or new products at the desired rate or expanding its services business, and the failure to do so would have a material adverse effect on the Company's business, financial condition and results of operations. INTEGRATION OF ACQUIRED BUSINESSES We have acquired or merged with a number of companies in recent years, including EPIC Design Technology, Inc., Viewlogic Systems, Inc., Systems Science Inc. and Everest, and as part of our efforts to expand our product and services offerings we may acquire additional companies in the future. In addition to direct costs, acquisitions pose a number of risks, including potential dilution of earnings per share, problems of integrating the acquired products and employees into our business, the failure to realize expected synergies or cost savings, the drain on management time for acquisition-related activities, possible adverse effects on customer buying patterns due to uncertainties resulting from an acquisition, and assumption of unknown liabilities. While we attempt to review proposed acquisitions carefully and negotiate terms that are favorable to the Company, there is no assurance that any individual acquisition will have the projected effect on the Company's performance. DEPENDENCE ON SEMICONDUCTOR AND ELECTRONICS BUSINESSES Our business has benefited from the rapid worldwide growth of the semiconductor industry. Purchases of our products are largely dependent upon the commencement of new design projects by semiconductor manufacturers and their customers. The outlook for the semiconductor industry for the remainder of calendar year 1998 and 1999 is uncertain, owing in part to adverse economic conditions in Asia and to potential slowing of growth in the United States. A number of the Company's customers have announced layoffs of their employees or the suspension of investment plans, and although the Company has not seen a significant drop-off in demand from these customers, their EDA budgets could be reduced, alone or as part of overall expense control efforts. In addition, there have been a number of mergers in the semiconductor and systems industries, which may reduce the aggregate level of purchases of our products and services by the merged companies. Slower growth in the semiconductor and systems industries, a reduced number of design starts, tightening of customers' operating budgets or continued consolidation among the Company's customers may have a material adverse effect on our business, financial condition and results of operations. INTERNATIONAL EXPOSURE In fiscal 1998, international revenue accounted for 39% of our revenue, after accounting for 41% and 42% of our revenue in fiscal 1997 and 1996, respectively. We expect that international revenue will continue to account for a significant portion of our revenue in the future. As a result, the Company's performance may be negatively affected by changes in foreign currency exchange rates and changes in regional or worldwide economic or political conditions. In particular: - Revenue from sales in Japan during fiscal 1998 was adversely affected by the weakness of the yen against the dollar, overall weakness in the Japanese economy and the deferral of investments in semiconductor facilities and technology by Japanese companies. Continued weakness of the Japanese economy during fiscal 1999 is likely to adversely affect revenue from Japan during the year. The yen has recently strengthened, but the exchange rate for fiscal 1999 remains subject to unpredictable fluctuations. Renewed weakness of the yen could adversely affect revenue from Japan during fiscal 1999. - Significant declines in the value of the Korean won during fiscal 1998, and the subsequent economic crisis had a significant adverse affect on our business in Korea during the year, and is likely to continue to affect our orders and revenue from Korea in fiscal 1999. Declines in the currencies of other countries in the Asia Pacific region, particularly Taiwan, have also negatively affected the Company's sales in the region. Continued instability in Asian currency markets and weaknesses in Asian economies would continue to have an adverse effect on our orders and revenues from the Asia Pacific region. 5 7 RISKS OF JOINT DEVELOPMENT In February 1996, we entered into a six-year joint development and license agreement with IBM, pursuant to which the two companies agreed to develop certain new products. Joint development of products is subject to risks and uncertainties over and above those affecting internal development. During fiscal year 1997, the first joint product resulting from the alliance, PrimeTime, was introduced, and the parties agreed to terminate efforts to develop a product in one of the product areas covered by the agreement. A second joint product is expected to be introduced in January 1999, and development of the fourth product to be developed under the agreement has been suspended. Synopsys and IBM are currently discussing the future of the alliance. There can be no assurance that joint development will continue, or that the products developed by the alliance will be successful. NEED TO RECRUIT AND RETAIN KEY PERSONNEL Our success is dependent on technical and other contributions of key employees. We participate in a dynamic industry, with significant start-up activity, and our headquarters is in Silicon Valley, where skilled technical, sales and management employees are in high demand. There is a limited number of qualified EDA engineers, and the competition for such individuals is intense. Experience at Synopsys is highly valued in the EDA industry, and our employees are recruited aggressively by our competitors and by start-up companies. Our salaries are competitive in the market, but under certain circumstances, start-up companies can offer more attractive stock option packages. As a result, we have experienced, and may continue to experience, significant employee turnover. In addition, there can be no assurance that we can continue to recruit and retain key personnel. Failure to successfully recruit and retain such personnel could have a material adverse effect on our business, financial condition and results of operations. POISON PILL PROVISIONS The Company has adopted a number of provisions that could have anti-takeover effects. The Board of Directors has adopted a Preferred Shares Rights Plan, commonly referred to as a "poison pill." In addition, the Board of Directors has the authority, without further action by its stockholders, to fix the rights and preferences of, and issue shares of, authorized but undesignated shares of Preferred Stock. This provision and other provisions of the Company's Restated Certificate of Incorporation and Bylaws and the Delaware General Corporation Law may have the effect of deterring hostile takeovers or delaying or preventing changes in control or management of the Company, including transactions in which the stockholders of the Company might otherwise receive a premium for their shares over then current market prices. YEAR 2000 Synopsys presently believes that we will not experience significant operational problems arising from the Year 2000 problem (i.e., the inability of certain computer programs to correctly process date information on or after January 1, 2000). However, if unforeseen Year 2000 issues arise with respect to Synopsys products, one or more important customers experiences Year 2000-related problems that interferes with their purchases of Synopsys products, or we are not able to identify and fix Year 2000 problems relating to the computer systems and software we rely on to run our business, we may experience a disruption in our business, which could have a material adverse impact on our business, financial condition and results of operations. CHANGES IN FINANCIAL ACCOUNTING STANDARDS We prepare our financial statements in conformity with generally accepted accounting principles ("GAAP"). GAAP are subject to interpretation by the American Institute of Certified Public Accountants ("AICPA"), the Securities and Exchange Commission ("SEC") and various bodies formed to interpret and create appropriate accounting policies. A change in these policies can have a significant effect on our reported results, and may even affect our reporting of transactions completed before a change is announced. Accounting policies affecting many other aspects of our business, including rules relating to software revenue recognition, purchase and pooling-of-interests accounting for business combinations, employee stock purchase plans and 6 8 stock option grants have recently been revised or are under review by one or more groups. Changes to these rules, or the questioning of current practices, may have a significant adverse affect on our reported financial results or in the way we conduct our business. In addition, the preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of those assets and liabilities at the date of the financial statements and the recorded amounts of expenses during the reporting period. A change in the facts and circumstances surrounding these estimates could result in a change to the estimates and impact future operating results. WHERE TO FIND MORE INFORMATION ABOUT SYNOPSYS We file annual, quarterly and special reports, proxy statements, and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from our web site at http://www.synopsys.com or at the SEC's web site at http://www.sec.gov. INFORMATION INCORPORATED BY REFERENCE The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents that we have previously filed with the SEC or documents that we will file with the SEC in the future. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934 (the "Exchange Act"), until the selling stockholders sell all the shares. This prospectus is part of a Registration Statement we filed with the SEC (Registration No. 333-39713). The documents we incorporate by reference are: 1. Synopsys's Annual Report on Form 10-K for the fiscal year ended September 30, 1998; 2. The description of Synopsys's common stock contained in its Registration Statement on Form 8-A as filed on January 24, 1992. We also incorporate by reference all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities registered have been sold or which deregisters all securities then remaining unsold. Any statement contained in a document incorporated or deemed to be incorporated by reference in this Registration Statement or Prospectus shall be deemed to be modified or superseded for purposes of the Registration Statement or this Prospectus to the extent that a statement contained herein, in a Prospectus Supplement or in any other document subsequently filed with the Commission which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Synopsys, Inc., 700 East Middlefield Road, Mountain Veiw, California 94043; telephone number (650) 962-5000. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the shares by the selling stockholders. 7 9 SELLING STOCKHOLDERS The following table sets forth certain information regarding the beneficial ownership of the Company's common stock by each selling stockholder. All information contained in the table below is based on beneficial ownership as of November 20, 1998. Unless otherwise noted, none of the selling stockholders has held any position or office or had a material relationship with the Company or any of its affiliates within the past three years other than as a result of the ownership of the Company's common stock.
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP PRIOR TO OFFERING(2) NUMBER OF AFTER OFFERING(2) -------------------- SHARES --------------------- SELLING STOCKHOLDERS(1) NUMBER PERCENT OFFERED NUMBER PERCENT ----------------------- -------- -------- --------- -------- --------- Anthelion Capital, LLC...................... 64,865 * 58,379 6,486 * Bernard Aronson............................. 2,179 * 1,962 217 * Andy Bechtolsheim........................... 250,878 * 225,791 25,087 * Frederick W. W. Bolander.................... 727 * 655 72 * Brobeck, Phleger & Harrison, LLP............ 364 * 328 36 * Chemicals and Materials Enterprise Associates L.P. II........................ 54,467 * 49,021 5,446 * Robert T. Coneybeer......................... 745 * 671 74 * Vinod K. Dham............................... 2,206 * 1,986 220 * Goel Family Partnership..................... 36,312 * 32,681 3,631 * Hemraj Hingarh.............................. 1,816 * 1,635 181 * Kurt Keutzer(3)............................. 10,349 * 4,903 544 * Warren T. Lazarow(4)........................ 1,852 * 197 184 * Mezzamie Group.............................. 727 * 655 72 * NEA Presidents Fund, L.P.................... 3,268 * 2,942 326 * NEA Ventures 1998, Limited Partnership...... 364 * 328 36 * New Enterprise Associates VII, Limited Partnership............................... 163,400 * 147,060 16,340 * Raj-Dak Investments......................... 71,809 * 64,629 7,180 * Valerie and Michael Russell................. 146 * 132 14 * Saiyed Atiq Raza and Noreen Tirmizi Raza, Trustees N & A Raza Revocable Trust UA 3/22/97................................... 7,263 * 6,537 726 * J. Phillip Samper........................... 727 * 655 72 * Sang S. Wang and Janet S. Wang, Trustees of the Wang Living Trust U/T/D 10/4/96....... 2,451 * 2,206 245 * John Sanguinetti............................ 727 * 655 72 * Chester Silvestri........................... 29,710 * 26,739 2,971 * Rajvir Singh................................ 7,263 * 6,537 726 *
- --------------- * Less than 1%. (1) The selling stockholders acquired the shares in connection with the acquisition by Synopsys of Everest Design Automation Inc. (the "Everest Acquisition"). All of the shares offered hereby are being offered by the selling stockholders. Pursuant to the terms of the Registration Rights Agreement, dated as of October 26, 1998, which was made in connection with the Everest Acquisition (the "Registration Rights Agreement"), the Company undertook to use its best efforts to effect the registration of the shares issued to the selling stockholders. The Registration Rights Agreement also includes certain indemnification arrangements with the selling stockholders. The number of shares beneficially owned by the selling stockholders includes an aggregate of 72,232 shares of common stock that have been deposited in escrow pursuant to the terms of the merger agreement governing the Everest Acquisition to secure the respective indemnification obligations of the selling stockholders thereunder (the "Escrowed Shares"). The 8 10 Escrowed Shares will be released from escrow on October 25, 1999 to the extent that no claims have been made against the Escrowed Shares. (2) Applicable percentage ownership is based on 68,193,820 shares of common stock outstanding as of August 8, 1998, adjusted to reflect the issuance of a total of 1,392,399 shares in connection with the Everest Acquisition. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities, subject to community property laws, where applicable. Shares of common stock subject to options that are presently exercisable or exercisable within 60 days of November 20, 1998 are deemed to be beneficially owned by the person holding such options for the purpose of computing the percentage of ownership of such person but are not treated as outstanding for the purpose of computing the percentage of any other person. To the extent that any shares are issued upon exercise of options, warrants or other rights to acquire the Company's capital stock that are presently outstanding or granted in the future or reserved for future issuance under the Company's stock plans, there will be further dilution to new public investors. (3) Mr. Keutzer is the beneficial owner of a total of 10,349 shares of common stock, 4,902 of which are issuable upon the exercise of options granted to Mr. Keutzer pursuant to Everest's 1997 Stock Option/ Stock Issuance Plan. (4) Mr. Lazarow is the beneficial owner of a total of 1,852 shares of common stock, 1,667 shares of which were issued to Mr. Lazarow pursuant to Everest's 1997 Stock Option/Stock Issuance Plan and 184 shares of which were deposited in the escrow account. Of such 184 shares, 163 shares are escrowed in connection with shares of common stock issued to Mr. Lazarow pursuant to Everest's 1997 Stock Option/Stock Issuance Plan. PLAN OF DISTRIBUTION The shares covered by this prospectus may be offered and sold from time to time by the selling stockholders. Such sales may be made on the Nasdaq National Market, in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The shares may be sold by means of one or more of the following: (a) a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this prospectus; (c) an over-the-counter distribution in accordance with the rules of the Nasdaq National Market; (d) ordinary brokerage transactions in which the broker solicits purchasers; and (e) privately negotiated transactions. In effecting sales, broker-dealers engaged by the selling stockholders may arrange for other broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in resales. In connection with distributions of the shares or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers. In connection with such transactions, broker-dealers may engage in short sales of the shares registered hereunder in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also sell the shares short and redeliver the shares to close out such short positions. The selling stockholders may also enter into option or other transactions with broker-dealers which require the delivery to the broker-dealer of the shares registered hereunder, which the broker-dealer may resell or otherwise transfer pursuant to this prospectus. The selling stockholders may also loan or pledge shares registered hereunder to a broker-dealer, and the broker-dealer may sell the shares so loaned or upon a default the broker-dealer may effect sales of the pledged shares pursuant to this prospectus. Broker-dealers or agents may receive compensation in the form of commissions, discounts or concessions from the selling stockholders in amounts to be negotiated in connection with the sale. Such broker-dealers and any other participating broker-dealers may be deemed to be "underwriters" within the meaning of the Securities Act, in connection with such sales and any such commission, discount or concession may be deemed to be underwriting discounts or commissions under the Securities Act. 9 11 The Company has advised the selling stockholders that the anti-manipulation rules under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, the Company will make copies of this prospectus available to the selling stockholders and has informed them of the need for delivery of copies of this prospectus to purchasers at or prior to the time of any sale of the shares offered hereby. All costs, expenses and fees in connection with the registration of the shares will be borne by the Company. Commissions and discounts, if any, attributable to the sales of the shares will be borne by the selling stockholders. The selling stockholders may agree to indemnify any broker-dealer or agent that participates in transactions involving sales of the shares against certain liabilities, including liabilities arising under the Securities Act. The Company will not receive any proceeds from the sale of the shares. The Company may suspend the use of this prospectus for up to an aggregate of 20 trading days, if, in the reasonable judgment of the Company, a development has occurred or condition exists as a result of which the Registration Statement or the prospectus does not contain material non-public information which in the reasonable judgment of the Company is required to be included in the Registration Statement or the Prospectus for sales of the shares to be made hereunder. The Company is obligated in the event of such suspension to amend the Registration Statement or the prospectus to take all actions necessary to ensure that the use of the prospectus may be resumed as soon as practicable In addition, the Selling Stockholders are not permitted to use this prospectus for effecting resales during the following periods: (i) the period beginning March 15, 1999 and ending on the second day after Synopsys's public announcement of its results of operations for the second quarter of Synopsys's fiscal 1999 reporting year; (ii) the period beginning June 15, 1999 and ending on the second day after Synopsys's public announcement of its results of operations for the third quarter of Synopsys's fiscal 1999 reporting year; and (iii) the period beginning September 15, 1999 and ending on the second day after Synopsys's public announcement of its results of operations for the fourth quarter of Synopsys's 1999 reporting year or November 20, 1999, whichever comes first. The Company has agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until November 20, 1999. Trading of any unsold shares after November 20, 1999 will be subject to compliance with all applicable securities laws, including Rule 144. There can be no assurance that the selling stockholders will sell any or all of the shares of common stock offered by them hereunder. LEGAL MATTERS The validity of the shares of common stock offered hereby has been passed upon for the Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California. EXPERTS The consolidated financial statements and schedule of the Company as of September 30, 1998 and 1997, and for each of the years in the three-year period ended September 30, 1998, have been incorporated by reference herein and in the Registration Statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public auditors, incorporated by reference herein; and upon the authority of said firm as experts in accounting and auditing. The consolidated financial statements of EPIC Design Technology, Inc. for the year ended September 30, 1996 (none of which are presented herein) have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference from Synopsys, Inc.'s Annual Report of Form 10-K for the year ended September 30, 1998, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 10 12 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the costs and expenses, payable by the Company in connection with the sale of common stock being registered. All amounts are estimates except the SEC registration fee and Nasdaq National Market listing fee.
AMOUNT TO BE PAID ----------------- SEC registration fee........................................ $ 8,694 Nasdaq National Market listing fee.......................... 17,500 Printing expenses........................................... 10,000 Legal fees and expenses..................................... 10,000 Accounting fees and expenses................................ 7,500 Miscellaneous expenses...................................... 6,306 ------- Total............................................. $60,000 =======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 145 of the Delaware General Corporation Law permits a corporation to include in its charter documents and in agreements between the corporation and its directors and officers, provisions expanding the scope of indemnification beyond that specifically provided by the current law. Article X of the Company's Restated Certificate of Incorporation provides for the indemnification of directors to the fullest extent permitted under Delaware law. Article VII of the Company's Bylaws provides for the indemnification of officers, directors and third parties acting on behalf of the corporation to the fullest extent permitted under the General Corporation Law of Delaware. The Registrant has entered into indemnification agreements with its directors and executive officers, in addition to indemnification provided for in the Registrant's Bylaws, and intends to enter into indemnification agreements with any new directors and executive officers in the future. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. The Registration Rights Agreement dated October 26, 1998, by the Registrant made in connection with the acquisition of Everest provides that the Company will indemnify the selling stockholders against certain liabilities, including liabilities under the Securities Act. At present, there is no pending litigation or proceeding involving a director, officer, employee, or other agent of the Registrant in which indemnification is being sought, nor is the Registrant aware of any threatened litigation that may result in a claim for indemnification by any director, officer, employee, or other agent of the Registrant. 11 13 ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION ----------- ----------- 4.1 Registration Rights Agreement dated October 26, 1998, granted by the Registrant to the selling stockholders* 5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation* 23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors (relating to financial statements of Synopsys, Inc.) 23.2 Consent of Deloitte & Touche LLP, Independent Accountants (relating to financial statements of EPIC Design Technology, Inc.) 23.3 Consent of Counsel (included in Exhibit 5.1)* 24.1 Power of Attorney (See page 15)*
- ------------------------ * Previously filed on November 25, 1998 with the Company's Registration Statement on Form S-3. ITEM 17. UNDERTAKINGS The Registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act; (b) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (c) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a) and (b) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. 2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. That, for the purpose of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act, (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 5. To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. 12 14 6. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 13 15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mountain View, State of California, on the 23rd day of December 1998. SYNOPSYS, INC. By: /s/ AART J. DE GEUS* ------------------------------------ Aart J. de Geus Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE --------- ----- ---- /s/ AART J. DE GEUS* Chief Executive Officer December 23, 1998 - -------------------------------------------------------- (Principal Executive Aart J. de Geus Officer) and Chairman of the Board of Directors /s/ CHI-FOON CHAN* President, Chief Operating December 23, 1998 - -------------------------------------------------------- Officer and Director Chi-Foon Chan /s/ WILLIAM W. LATTIN* Executive Vice President December 23, 1998 - -------------------------------------------------------- and Director William W. Lattin /s/ DEBORAH COLEMAN* Director December 23, 1998 - -------------------------------------------------------- Deborah Coleman /s/ HARVEY C. JONES, JR.* Director December 23, 1998 - -------------------------------------------------------- Harvey C. Jones, Jr. /s/ RICHARD NEWTON* Director December 23, 1998 - -------------------------------------------------------- A. Richard Newton /s/ STEVEN C. WALSKE* Director December 23, 1998 - -------------------------------------------------------- Steven C. Walske /s/ DAVID SUGISHITA Chief Financial Officer December 23, 1998 - -------------------------------------------------------- (Principal Financial David Sugishita Officer and Accounting Officer) *By: /s/ DAVID SUGISHITA --------------------------------------------------- David Sugishita Attorney-in-Fact
14 16 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- 4.1 Registration Rights Agreement dated October 26, 1998, granted by the Registrant to the selling stockholders* 5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation* 23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors (relating to financial statements of Synopsys, Inc.) 23.2 Consent of Deloitte & Touche LLP, Independent Accountants (relating to financial statements of EPIC Design Technology, Inc.) 23.3 Consent of Counsel (included in Exhibit 5.1)* 24.1 Power of Attorney (See page 15)*
- ------------------------ * Previously filed on November 25, 1998 with the Company's Registration Statement on Form S-3. EX-23.1 2 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Synopsys, Inc.: We consent to incorporation by reference in the registration statement dated on or about December 23, 1998, on Amendment No. 1 to Form S-3 of Synopsys, Inc. of our report dated October 26, 1998, relating to the consolidated balance sheets of Synopsys, Inc. and subsidiaries as of September 30, 1998, and 1997, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended September 30, 1998, and the related consolidated financial statement schedule, which report is incorporated by reference in the September 30, 1998, annual report on Form 10-K of Synopsys, Inc., and to the reference to our firm under the heading "experts" in the prospectus. /S/ KPMG PEAT MARWICK LLP Mountain View, California December 18, 1998 EX-23.2 3 CONSENT OF DELOITTE & TOUCHE, LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS CONSENT OF DELOITTE & TOUCHE LLP We consent to the incorporation by reference in this Amendment No. 1 to Registration Statement No. 333-68011 of Synopsys, Inc. on Form S-3 of our report dated October 11, 1996 (relating to the consolidated financial statements of EPIC Design Technology, Inc. not presented separately therein), appearing in and incorporated by reference in the Annual Report on Form 10-K of Synopsys, Inc. for the year ended September 30, 1998 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ DELOITTE & TOUCHE LLP San Jose, California December 18, 1998 -----END PRIVACY-ENHANCED MESSAGE-----