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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 7
TO SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
QUICKTURN DESIGN SYSTEMS, INC.
(Name of Subject Company)
MENTOR GRAPHICS CORPORATION
MGZ CORP.
(Bidders)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(including the Associated Rights)
(Title of Class of Securities)
74838E102
(CUSIP Number of Class of Securities)
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WALDEN C. RHINES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MENTOR GRAPHICS CORPORATION
8005 S.W. BOECKMAN ROAD
WILSONVILLE, OREGON 97070-7777
(503) 685-1200
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPY TO:
JOHN J. HUBER, ESQ. CHRISTOPHER L. KAUFMAN, ESQ.
LATHAM & WATKINS LATHAM & WATKINS
1001 PENNSYLVANIA AVENUE, N.W. 75 WILLOW ROAD
WASHINGTON, DC 20004 MENLO PARK, CALIFORNIA 94025
(202) 637-2200 (650) 328-4600
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MGZ Corp., a Delaware corporation ("Purchaser"), and Mentor Graphics
Corporation, an Oregon corporation ("Parent"), hereby amend and supplement their
Tender Offer Statement on Schedule 14D-1 filed on August 12, 1998 (the
"Statement"), as amended, with respect to the offer by Purchaser to purchase all
outstanding shares of Common Stock, par value $.001 per share, of Quickturn
Design Systems, Inc., a Delaware corporation, for a purchase price of $12.125
per share, net to the seller in cash, without interest thereon, as set forth in
this Amendment No. 7. Capitalized terms used herein and not defined have the
meanings ascribed to them in the Statement.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(f) of the Statement is hereby amended and supplemented by the
following:
1. On September 11, 1998, Parent issued a press release, a copy of which is
attached hereto as Exhibit (a)(16) and is incorporated herein by reference.
2. On September 11, 1998, Parent commenced mailing a letter to the
stockholders of the Company, a copy of which is attached hereto as Exhibit
(a)(17) and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(16) Press Release dated September 11, 1998.
(a)(17) Letter to Quickturn Stockholders dated September 11, 1998.
2
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C> <C>
Dated: September 11, 1998 MENTOR GRAPHICS CORPORATION
By: /s/ Gregory K. Hinckley
Name: Gregory K. Hinckley
Title: Executive Vice President, Chief Operating
Officer and Chief Financial Officer
MGZ CORP.
By: /s/ Gregory K. Hinckley
Name: Gregory K. Hinckley
Title: Secretary and Chief Financial Officer
</TABLE>
3
<PAGE>
MENTOR GRAPHICS SETS SPECIAL MEETING OF QUICKTURN STOCKHOLDERS
FOR OCTOBER 29, 1998
-- PROXY MATERIALS BEING MAILED TODAY TO QUICKTURN STOCKHOLDERS
NAME FIVE INDEPENDENT DIRECTOR NOMINEES TO REPLACE QUICKTURN BOARD --
-- MENTOR GRAPHICS PRESIDENT/CEO WALDEN C. RHINES, IN LETTER TO QUICKTURN
STOCKHOLDERS, DESCRIBES QUICKTURN BOARD'S ENTRENCHING ACTIONS THAT
PREVENT STOCKHOLDERS FROM REALIZING BENEFITS OF MENTOR'S
$12.125 PER SHARE ALL-CASH, PREMIUM OFFER --
WILSONVILLE, ORE., SEPTEMBER 11, 1998 -- Mentor Graphics Corporation (Nasdaq:
MENT) today announced that, having received more than the requisite level of
support from the stockholders of Quickturn Design Systems, Inc. (Nasdaq: QKTN),
it has called a Special Meeting of the stockholders for October 29, 1998.
The purpose of the Special Meeting is to vote on replacing the Quickturn Board
of Directors with a slate of independent directors nominated by Mentor Graphics.
If the nominees are elected, Mentor Graphics expects that, subject to their
fiduciary duties to all Quickturn stockholders, the nominees will take the steps
necessary to facilitate the stockholders' ability to accept Mentor's $12.125 per
share all-cash offer at the earliest practicable date.
The record date for Quickturn stockholders to be able to vote at the Special
Meeting is September 10, 1998.
In its proxy materials, which are first being mailed today, Mentor asks
Quickturn stockholders to consider for themselves the actions the Quickturn
Board took two weeks after the commencement of Mentor's tender offer. These
actions included:
- - Amending Quickturn's "dead hand poison pill" to make it impossible for a
new board elected by a majority of Quickturn's stockholders to take the
steps necessary to approve Mentor's all-cash offer and related merger
proposal for at least six months after the Special Meeting election.
- - Adopting certain anti-takeover bylaw amendments which impose a minimum
delay of 90 to 100 days before Quickturn stockholders can vote to remove
the Board that is opposing Mentor's offer--even if stockholders
representing a majority of Quickturn's stockholders fully support that
offer.
In a letter sent today by Dr. Walden C. Rhines, President and Chief Executive
Officer of Mentor Graphics, to Quickturn stockholders along with the proxy
materials, Dr. Rhines wrote: "The effect of these desperate anti-takeover
tactics is to delay greatly consummation of our offer and subject Quickturn
stockholders to unreasonable and unnecessary market and business risk."
(more)
<PAGE>
In the letter, Dr. Rhines also described Mentor's position that Quickturn's
Board and management have failed to deliver value to the company's stockholders,
citing as reasons to support the position the fact that Quickturn has generated
earnings per share significantly below consensus analyst estimates in three of
the last four quarters; the fact that Quickturn's earnings have declined each
year since 1996; and the fact that, following a less than one percent revenue
increase in 1997, Quickturn revenues for the first six months of 1998 have
actually declined from the comparable 1997 period.
Dr. Rhines said: "We believe that Quickturn's Board and management have had more
than enough time to implement a successful business plan for the benefit of its
stockholders. In our opinion," he said, "they have failed to deliver value."
Dr. Rhines asked: "How can the Quickturn Board claim that our offer of $12.125
per share is 'inadequate,' when, less than a month before our offer commenced,
the Board itself lowered the exercise price of all 1.9 million employee stock
options to $7.44 per share? We believe the Quickturn Board would only have
taken this drastic action if it believed that the Company's business had been
significantly impaired and that the options as repriced accurately reflected
fair market value."
He added: "The primary beneficiaries of this repricing were the Company's senior
managers. Obviously, stockholders cannot reprice their shares."
At the Special Meeting, Quickturn stockholders will be asked to elect as
directors a slate of five Board nominees to replace the incumbent Quickturn
Board. The five individuals nominated by Mentor Graphics are: Gideon Argov,
Chairman, President and CEO of Kollmorgen Corporation; Scott H. Bice, Dean of
the University of Southern California Law Center; Harry L. Demorest, Chief
Executive Officer of Columbia Forest Products, Inc.; C. Scott Gibson, President
of Gibson Enterprises; and Michael J.K. Savage, Managing Director of the San
Francisco Opera and founder and former President of Savage Petroleum Company.
The full text of the letter from Dr. Rhines being mailed today to Quickturn
stockholders together with the proxy materials follows:
September 11, 1998
Dear Quickturn Stockholder:
For the past month, we have stood ready to discuss our $12.125 per share
all-cash, premium offer with the Quickturn Board of Directors. Rather than even
discuss this full and fair offer, we believe the Quickturn Board has taken
actions to entrench themselves and prevent you from realizing the benefits of
our offer.
(more)
<PAGE>
Their actions to entrench themselves have forced us to take the steps necessary
to call a special meeting to vote on replacing the Quickturn Board of Directors.
We are pleased that we have received more than the requisite level of support
from the stockholders of Quickturn to call a Special Meeting for October 29,
1998.
We need your support because we believe that the Quickturn Board will only meet
with us if you send them a message by giving us your vote.
In deciding whether it is time to replace the Quickturn Board, consider for
yourself the actions the Quickturn Board took two weeks after we made our offer:
- - The Board amended its "dead hand poison pill" to make it impossible for a
new board elected by a majority of Quickturn's stockholders to take the
steps necessary to approve Mentor's all-cash offer and related merger
proposal--for at least six months after the Special Meeting election.
- - The Board also adopted certain anti-takeover bylaw amendments which impose
a minimum delay of 90 to 100 days before stockholders can vote to remove
the Board that is opposing Mentor's offer--even if stockholders
representing a majority of Quickturn's stockholders fully support that
offer.
- - The effect of these desperate anti-takeover tactics is to delay greatly
consummation of our offer and subject Quickturn stockholders to
unreasonable and unnecessary market and business risk.
TO SUPPORT MENTOR'S OFFER AND ENCOURAGE THE QUICKTURN BOARD
TO STOP WASTING TIME AND YOUR MONEY,
VOTE THE GOLD PROXY TODAY!
While we are seeking to have the Board's actions invalidated in the Delaware
courts, we need your support to send the Board a message to stop wasting your
money by entrenching themselves and raising roadblocks to our offer.
VOTE THE GOLD PROXY CARD TO REPLACE QUICKTURN'S BOARD,
TELL THEM JUST SAYING NO TO OUR OFFER IS JUST NOT GOOD ENOUGH!
We believe that Quickturn's Board and management have had more than enough time
to implement a successful business plan for the benefit of its stockholders. In
our opinion, they have failed to deliver value:
- - Quickturn has generated earnings per share significantly below consensus
analyst estimates in three of the last four quarters.
- - Quickturn's earnings have declined each year since 1996.
(more)
<PAGE>
- - Following a less than one percent revenue increase in 1997, Quickturn
revenues for the first six months of 1998 have actually declined from the
comparable 1997 period.
How can the Quickturn Board claim that our offer of $12.125 per share is
"inadequate" when, less than a month before our offer commenced, the Board
itself lowered the exercise price of all 1.9 million employee stock options to
$7.44 per share? We believe the Quickturn Board would only have taken this
drastic action if it believed that the Company's business had been significantly
impaired and that the options as repriced accurately reflected fair market
value.
- - The primary beneficiaries of this repricing were the Company's senior
managers.
- - Obviously, stockholders cannot reprice their shares.
IF THE BOARD WON'T NEGOTIATE WITH MENTOR,
WE BELIEVE IT IS TIME TO REPLACE THEM!
We urge you to read our enclosed proxy materials, which discuss the four
proposals that we are asking you to vote FOR at the Special Meeting. If the
nominees are elected, Mentor Graphics expects that, subject to their fiduciary
duties to all stockholders, the nominees will take the steps necessary to
facilitate your ability to accept Mentor's all-cash offer at the earliest
practicable date.
Unless we are successful in overturning the anti-takeover impediments erected by
the current Board, you may be forced to wait more than nine months to get the
$12.125 per share in cash that we are offering today.
The five nominees we are nominating are: Gideon Argov, Chairman, President and
CEO of Kollmorgen Corporation; Scott H. Bice, Dean of the University of Southern
California Law Center; Harry L. Demorest, Chief Executive Officer of Columbia
Forest Products, Inc.; C. Scott Gibson, President of Gibson Enterprises; and
Michael J.K. Savage, Managing Director of the San Francisco Opera and founder
and former President of Savage Petroleum Company.
WE URGE YOU TO VOTE YOUR GOLD PROXY EARLY TO SEND A STRONG MESSAGE TO THE
EXISTING DIRECTORS THAT
YOU WANT ACTION NOW--NOT IN NINE MONTHS!
We appreciate your prompt consideration of this extremely important vote. We
believe our offer is good for stockholders and good for the customers and the
employees of both companies.
Sincerely,
/s/ Walden C. Rhines
Dr. Walden C. Rhines
President and Chief Executive Officer
(more)
<PAGE>
* * *
Mentor's tender offer was commenced on August 12, 1998. The offer price of
$12.125 per share in cash represents a premium of 51.6 percent over Quickturn's
closing price of $8.00 per share on August 11, 1998, the day before the Mentor
offer was announced. Based on Quickturn's 17,922,518 shares outstanding at
July 31, 1998 (including 591,500 shares owned by Mentor, or approximately
3.3 percent of the total), the transaction is valued at $217 million.
As previously announced, Mentor's tender offer is scheduled to expire at 12:00
midnight, New York City time, on Tuesday, October 6, 1998, unless extended. The
offer is not subject to any financing condition. The tender offer is subject to
terms and conditions including a majority of outstanding Quickturn shares being
validly tendered and not withdrawn; redemption or removal of Quickturn's
shareholder rights plan; and the inapplicability of the Delaware business
combination statute.
As Mentor indicated at the time it commenced its offer, Quickturn's bylaws
require that stockholders representing at least 10 percent of the company's
stock execute agent designations to call for a Special Meeting. Stockholders
representing approximately 17 percent of Quickturn stock have executed such
agent designations.
The Offer to Purchase and ancillary documents are available on a Mentor Graphics
World Wide Web site at http://www.mentorg.com/file.
The Dealer Manager for the Offer is Salomon Smith Barney. The Information Agent
for the Offer is MacKenzie Partners, Inc., which can be reached toll-free at
800-322-2885 or by collect call at 212-929-5500.
Contacts: Anne M. Wagner Roy Winnick
Vice President, Marketing Kekst and Company
503-685-1462 212-521-4842
<PAGE>
[MENTOR GRAPHICS CORPORATION LOGO]
September 11, 1998
Dear Quickturn Stockholder:
For the past month, we have stood ready to discuss our $12.125 per share
all-cash, premium offer with the Quickturn Board of Directors. Rather than even
discuss this full and fair offer, we believe the Quickturn Board has taken
actions to entrench themselves and prevent you from realizing the benefits of
our offer.
Their actions to entrench themselves have forced us to take the steps
necessary to call a special meeting to vote on replacing the Quickturn Board of
Directors. We are pleased that we have received more than the requisite level of
support from the stockholders of Quickturn to call a Special Meeting for October
29, 1998.
WE NEED YOUR SUPPORT BECAUSE WE BELIEVE THAT THE QUICKTURN BOARD WILL ONLY
MEET WITH US IF YOU SEND THEM A MESSAGE BY GIVING US YOUR VOTE.
In deciding whether it is time to replace the Quickturn Board, consider for
yourself the actions the Quickturn Board took two weeks after we made our offer:
- The Board amended its "dead hand poison pill" to make it impossible for a
new board elected by a majority of Quickturn's stockholders to take the
steps necessary to approve Mentor's all-cash offer and related merger
proposal--FOR AT LEAST SIX MONTHS AFTER THE SPECIAL MEETING ELECTION.
- The Board also adopted certain anti-takeover bylaw amendments which impose
a minimum delay of 90 to 100 days before stockholders can vote to remove
the Board that is opposing Mentor's offer--EVEN IF STOCKHOLDERS
REPRESENTING A MAJORITY OF QUICKTURN'S STOCKHOLDERS FULLY SUPPORT THAT
OFFER.
- THE EFFECT OF THESE DESPERATE ANTI-TAKEOVER TACTICS IS TO DELAY GREATLY
CONSUMMATION OF OUR OFFER AND SUBJECT QUICKTURN STOCKHOLDERS TO
UNREASONABLE AND UNNECESSARY MARKET AND BUSINESS RISK.
TO SUPPORT MENTOR'S OFFER AND ENCOURAGE THE QUICKTURN
BOARD TO STOP WASTING TIME AND YOUR MONEY,
VOTE THE GOLD PROXY TODAY!
<PAGE>
While we are seeking to have the Board's actions invalidated in the Delaware
courts, we need your support to send the Board a message to stop wasting your
money by entrenching themselves and raising roadblocks to our offer.
VOTE THE GOLD PROXY CARD TO REPLACE QUICKTURN'S BOARD, TELL
THEM JUST SAYING NO TO OUR OFFER IS JUST NOT GOOD ENOUGH!
We believe that Quickturn's Board and management have had more than enough
time to implement a successful business plan for the benefit of its
stockholders. IN OUR OPINION, THEY HAVE FAILED TO DELIVER VALUE:
- Quickturn has generated earnings per share SIGNIFICANTLY BELOW CONSENSUS
ANALYST ESTIMATES in three of the last four quarters.
- QUICKTURN'S EARNINGS HAVE DECLINED EACH YEAR SINCE 1996.
- Following a less than one percent revenue increase in 1997, Quickturn
revenues for the first six months of 1998 have actually declined from the
comparable 1997 period.
HOW CAN THE QUICKTURN BOARD CLAIM THAT OUR OFFER OF $12.125 PER SHARE IS
"INADEQUATE" WHEN, LESS THAN A MONTH BEFORE OUR OFFER COMMENCED, THE BOARD
ITSELF LOWERED THE EXERCISE PRICE OF ALL 1.9 MILLION EMPLOYEE STOCK OPTIONS TO
$7.44 PER SHARE? We believe the Quickturn Board would only have taken this
drastic action if it believed that the Company's business had been significantly
impaired and that the options as repriced accurately reflected fair market
value.
- THE PRIMARY BENEFICIARIES OF THIS REPRICING WERE THE COMPANY'S SENIOR
MANAGERS.
- OBVIOUSLY, STOCKHOLDERS CANNOT REPRICE THEIR SHARES.
IF THE BOARD WON'T NEGOTIATE WITH MENTOR,
WE BELIEVE IT IS TIME TO REPLACE THEM!
We urge you to read our enclosed proxy materials, which discusses the four
proposals that we are asking you to vote FOR at the Special Meeting. If the
nominees are elected, Mentor Graphics expects that, subject to their fiduciary
duties to all stockholders, the nominees will take the steps necessary to
facilitate your ability to accept Mentor's all-cash offer at the earliest
practicable date.
Unless we are successful in overturning the anti-takeover impediments
erected by the current Board, you may be forced to wait more than nine months to
get the $12.125 per share in cash that we are offering today.
2
<PAGE>
The five nominees we are nominating are: Gideon Argov, Chairman, President
and CEO of Kollmorgen Corporation; Scott H. Bice, Dean of the University of
Southern California Law Center; Harry L. Demorest, Chief Executive Officer of
Columbia Forest Products, Inc.; C. Scott Gibson, President of Gibson
Enterprises; and Michael J.K. Savage, Managing Director of the San Francisco
Opera and founder and former President of Savage Petroleum Company.
WE URGE YOU TO VOTE YOUR GOLD PROXY EARLY TO SEND A STRONG MESSAGE TO THE
EXISTING DIRECTORS THAT YOU WANT ACTION NOW -- NOT IN NINE
MONTHS!
We appreciate your prompt consideration of this extremely important vote. We
believe our offer is good for stockholders and good for the customers and the
employees of both companies.
Sincerely,
/s/ Walden C. Rhines
Dr. Walden C. Rhines
President and
Chief Executive Officer
If you have any questions or need assistance in completing the GOLD proxy card,
please contact:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
CALL TOLL-FREE (800) 322-2885 OR (212) 929-5500 (COLLECT)
