EXHIBIT 4.3

                                              Original Grant Date: July 20, 1988
                                                              Option Number: 676
                                              Original Number of Shares: 192,505
                                           Shares Remaining Unexercised: 192,505


                                AMENDMENT ONE TO
                      NONQUALIFIED STOCK OPTION AGREEMENT
                                JANUARY 22, 1997


Joseph B. Costello, Optionee:

     Effective this date, Cadence Design Systems, Inc. (the "Company") has 
amended the Nonqualified Stock Option identified above (the "Option"), which 
was granted to you as optionee under the Company's 1987 Stock Option Plan 
(the "Plan"). The changes to the terms of the Option contained in this 
Amendment One are mutually agreed to by you and the Company and are set forth 
below:

     1.  Section 7 of the Option is deleted in its entirety and replaced with 
the following:

         7.  TRANSFERABILITY OF OPTION.  This Option is not transferable, 
         except (i) by will or by the laws of descent and distribution, (ii) by
         written designation which takes effect upon your death, (iii) by 
         written instruction, in a form accepted by the Company, to your spouse,
         children, stepchildren, or grandchildren (whether adopted or natural),
         to a trust created solely for the benefit of you and the foregoing 
         persons, or (iv) to your former spouse (if transfer is pursuant to a 
         judicial decree dissolving your marriage). During your life this Option
         is exercisable only by you or a transferee satisfying the above 
         conditions. The right of a transferee to exercise the transferred 
         portion of this Option after your termination of employment with the 
         Company shall terminate in accordance with your right of exercise under
         Section 5 of this Option, and after your death under Section 6 of this
         Option (treating the transferee as a person who acquired the right to 
         exercise this Option by bequest or inheritance. The terms of this 
         Option shall be binding upon the transferees, executors, 
         administrators, heirs, successors, and assigns of the Optionee.



                                       1.



     Except as Section 7 has been specifically amended and modified herein, 
the Option shall continue in force and effect pursuant to its terms, as 
originally granted, subject to the provisions of the Plan.

     Dated the 22nd day of January, 1997.

                                        Very truly yours,

                                        CADENCE DESIGN SYSTEMS, INC.


                                        By: /s/ H. Raymond Bingham
                                           -------------------------------------




     The undersigned Optionee acknowledges receipt of the foregoing Amendment 
and understands and agrees that the rights and liabilities with respect to 
the Option described therein are now contained in the Option, this Amendment One
and the Plan. Copies of the Option and the Plan have previously been received by
Optionee.


                                         /s/ Joseph B. Costello
                                        ----------------------------------------
                                               Optionee's signature


                                        Address:    ----------------------------
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                                       2.