<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
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)
------------------------
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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<PAGE>
SCHEDULE 14D-1
CUSIP NO. 74838E102
________________________________________________________________________________
(1) Name of reporting persons: Mentor Graphics Corporation
I.R.S. Identification No. of above person (entities only): 93-0786033
________________________________________________________________________________
(2) Check the appropriate box if a member of a group (see instructions):
(a) / /
(b) / /
________________________________________________________________________________
(3) SEC use only
________________________________________________________________________________
(4) Source of funds (see instructions): BK, WC
________________________________________________________________________________
(5) Check box if disclosure of legal proceedings is required pursuant to Items
2(e) or 2(f)
/ /
________________________________________________________________________________
(6) Citizenship or place of organization: Oregon
________________________________________________________________________________
(7) Aggregate amount beneficially owned by each reporting person: 791,500 shares
of common stock(1)
________________________________________________________________________________
(8) Check box if the aggregate amount in Row (7) excludes certain shares (see
instructions):
/ /
________________________________________________________________________________
(9) Percent of class represented by amount in Row (7): 4.4%(1)
________________________________________________________________________________
(10) Type of reporting person (see instructions): CO
________________________________________________________________________________
(1) 200,000 shares are represented by a warrant to acquire (after taking into
account a reverse stock split) 200,000 shares of Company Common Stock at an
exercise price of $30.00 per share, which warrant expires on February 27,
2000.
2
<PAGE>
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. 2. Capitalized terms used herein and not defined have the
meanings ascribed to them in the Statement.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Parent is the holder of an unsecured subordinated promissory note of the
Company dated September 29, 1993 (the "Promissory Note"), a copy of which is
attached hereto as Exhibit (c)(1) and is incorporated herein by reference,
issued in connection with the termination of a Remarketing Agreement between
Parent and PiE Design Systems, Inc., which merged with the Company in June 1993.
Pursuant to the terms of the Promissory Note, the Company agreed to pay Parent
the principal sum of $3,000,000, together with interest on the outstanding
principal sum at a rate of four percent (4%) per annum, in five equal
installments commencing on September 30, 1994. The final installment of $600,000
under the Promissory Note is due and payable on September 30, 1998.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
On February 28, 1992, the Company granted Parent a warrant (the "Warrant"),
a copy of which is attached hereto as Exhibit (c)(2) and is incorporated herein
by reference, in connection with the sale by Parent to the Company of a patent
covering certain emulation technology and related assets. After giving effect to
a reverse stock split of the Company Common Stock in December 1993, the Warrant
entitles Parent to acquire 200,000 shares of Company Common Stock at an exercise
price of $30.00 per share. The Warrant expires on February 27, 2000. Also on
February 28, 1992, Parent and the Company entered into a registration rights
agreement (the "Registration Rights Agreement"), a copy of which is attached
hereto as Exhibit (c)(3) and is incorporated herein by reference. The
Registration Rights Agreement provides for the registration of the shares
issuable upon exercise of the Warrant at such time as the Company proposes to
register any of its stock or other securities under the Securities Act, subject
to certain limitations set forth therein.
Parent is also the holder of the Promissory Note as described above under
Item 3.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
Parent is the holder of the Promissory Note and Warrant, each as described
above under Items 3 and 6. Parent and the Company have entered into the
Registration Rights Agreement as described above under Item 6.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(f) of the Statement is hereby amended and supplemented by the
following:
1. On August 24, 1998, Parent issued a press release, a copy of which is
attached hereto as Exhibit (a)(9) and is incorporated herein by reference.
2. The following paragraph is added and inserted after the first paragraph
under the heading "Other Information" on page 17 of the Offer to Purchase:
Parent is the holder of an unsecured subordinated promissory note of the
Company dated September 29, 1993 (the "Promissory Note"), issued in connection
with the termination of a Remarketing
3
<PAGE>
Agreement between Parent and PiE Design Systems, Inc., which merged with the
Company in June 1993. Pursuant to the terms of the Promissory Note, the Company
agreed to pay Parent the principal sum of $3,000,000, together with interest on
the outstanding principal sum at a rate of four percent (4%) per annum, in five
equal installments commencing on September 30, 1994. The final installment of
$600,000 under the Promissory Note is due and payable on September 30, 1998.
3. The following paragraph is added and inserted after the first full
paragraph of Schedule II of the Offer to Purchase:
Parent is the holder of a warrant to acquire 200,000 shares of Company
Common Stock at an exercise price of $30.00 per share (the "Warrant"). The
Warrant was issued on February 28, 1992 in connection with the sale by Parent to
the Company of a patent covering certain emulation technology and related assets
and expires on February 27, 2000. Parent and the Company entered into a
registration rights agreement on February 28, 1992 which provides for the
registration of the shares issuable upon exercise of the Warrant at such time as
the Company proposes to register any of its stock or other securities under the
Securities Act, subject to certain limitations set forth therein.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(9)--Press Release dated August 24, 1998
(c)(1)--Unsecured Subordinated Promissory Note dated September 29, 1993
(c)(2)--Warrant granted by the Company to Parent dated February 28, 1992
(c)(3)--Registration Rights Agreement between Parent and the Company dated
February 28, 1992
4
<PAGE>
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: August 25, 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>
5
<PAGE>
Exhibit 99(a)(9)
MENTOR GRAPHICS REITERATES ITS COMMITMENT TO TRANSACTION IN RESPONDING TO
QUICKTURN'S REJECTION OF ITS $12.125 PER SHARE
ALL-CASH OFFER
WILSONVILLE, ORE., AUGUST 24, 1998 -- Dr. Walden C. Rhines, President and Chief
Executive Officer of Mentor Graphics Corporation (Nasdaq: MENT), said today that
the actions taken by the board of Quickturn Design Systems, Inc. (Nasdaq: QKTN)
in rejecting Mentor's all-cash, premium, fully financed offer are "deplorable
and not in the best interests of Quickturn stockholders." Dr. Rhines reiterated
Mentor's commitment to completing the proposed transaction.
"We believe that Quickturn's rejection of our $12.125 per share all-cash offer
is unjustifiable in light of the 51.6 percent premium that offer represents over
Quickturn's closing share price the day before our offer was announced," Dr.
Rhines said. "The $12.125 per share price is also approximately forty times
First Call consensus estimates for Quickturn in 1999. Nevertheless, we are
fully committed to our offer, which we believe provides significant value to the
stockholders and customers of both companies.
"The claim by Quickturn President and CEO Keith R. Lobo that Mentor's offer
comes at a 'moment of weakness' for Quickturn's stock price is hardly credible.
The facts are that this so-called moment of weakness has lasted for six months.
Quickturn's stock has languished since February of this year as Quickturn's
management has failed to develop and execute a value-enhancing business plan.
"Moreover, if Mr. Lobo honestly believes this is only a 'moment of weakness,'
why did Quickturn reprice 1.546 million stock options in June of this year to
$7.44 per share?"It would appear, in short, that the actions of Quickturn in
response to our offer--including the rejection of that offer, and the amendments
to the Quickturn by-laws with regard to the company's special stockholders
meeting and 'poison pill'-- are unreasonable and serve to entrench management
rather than deliver value to Quickturn stockholders."
Dr. Rhines said: "The strategic fit of Mentor Graphics, with its primary focus
on the software side of electronic design automation (EDA), and Quickturn, the
market leader in system-level hardware emulation solutions, is compelling. That
strategic fit, and the resulting ability to provide our respective semiconductor
and systems customers throughout the world with the industry's broadest range of
software and hardware solutions, is what this transaction is about. This
transaction is NOT just about resolving the ongoing patent litigation between
the two companies. We would pursue this strategic combination even if this
litigation didn't exist.
(more)
<PAGE>
"For these reasons, we intend to take all actions necessary to remove the
obstacles to consideration of our offer so Quickturn stockholders can realize
the benefits of our offer as quickly as possible," Dr. Rhines concluded.
The tender offer is scheduled to expire at 12:00 midnight, New York City time,
on September 9, 1998, unless extended. As previously indicated, the 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; the inapplicability of the Delaware
business combination statute; and the expiration or termination of the
Hart-Scott-Rodino waiting period. The Offer to Purchase and ancillary documents
are available on a Mentor Graphics World Wide Web site at
http://www.mentorg.com/file.
This news release does not constitute an offer to purchase any securities, nor a
solicitation of a proxy, consent, authorization or agent designation with
respect to a meeting of the Quickturn stockholders. The tender offer and the
agent designation solicitation are being made pursuant to separate materials in
compliance with the requirements of applicable federal and state law.
Mentor Graphics' financial advisor with regard to the transaction is Salomon
Smith Barney. MacKenzie Partners, Inc. is acting as Information Agent for the
Offer and as solicitor for the agent designation solicitation, and can be
reached by collect call at 212-929-5500 or, toll-free, at 800-322-2885.
Contacts: Anne M. Wagner Gregory K. Hinckley
Vice President, Marketing COO and CFO
503-685-1462 503-685-4833
Dennis Weldon Roy Winnick
Treasurer Kekst and Company
503-685-1462 212-521-4842
<PAGE>
Exhibit 99(c)(1)
QUICKTURN DESIGN SYSTEMS, INC.
UNSECURED SUBORDINATED PROMISSORY NOTE
--------------------------------------
$3,000,000 Wilsonville, Oregon
September 29, 1993
FOR VALUE RECEIVED, Quickturn Design Systems, Inc., a California
corporation, whose principal address is 440 Clyde Avenue, Mountain View,
California 94043 (the "COMPANY"), promises to pay to Mentor Graphics
Corporation, an Oregon corporation, whose principal address is 8005 S.W.
Boeckman Road, Wilsonville, Oregon 97007 ("MENTOR GRAPHICS"), the principal sum
of Three Million Dollars ($3,000,000), together with interest on the outstanding
principal sum at the rate of four percent (4%) per annum. Principal shall be
due and payable annually in five equal installments of $600,000 on the 30th day
of each September commencing on September 30, 1994. Interest accrued hereon
shall be due and payable quarterly in arrears on the last day of each calendar
quarter for the calendar quarter then ending, commencing with the calendar
quarter ending December 31, 1993.
Payment of principal and interest shall be made in lawful money of the
United States at Mentor Graphic's principal office or at such other place as
Mentor Graphics may from time to time designate in writing. Interest shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
The following is a statement of the terms and conditions to which this Note
is subject and with respect to which, by acceptance of this Note, the holder
hereof agrees:
1. PREPAYMENT
The Company shall have the right to prepay without premium or penalty,
at any time, in whole or in part, the unpaid principal and interest due on this
Note.
2. SUBORDINATION
The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all the Company's senior Indebtedness.
"Senior Indebtedness" shall mean the principal of (and premium, if
any) and unpaid interest on (i) all indebtedness of the Company or with respect
to which the Company is a guarantor, whether outstanding on the date hereof
created, to banks, insurance companies, lease financing institutions or other
lending institutions, regularly engaged in the business of lending money, which
is for money borrowed (or purchase of equipment in the case of lease funding) by
the Company or a subsidiary of the Company, whether or not secured, and (ii) any
amendments, modifications, deferrals, increases, renewals or extensions of any
such indebtedness or any
<PAGE>
debentures, notes or other evidence of indebtedness issued in exchange for such
Senior Indebtedness.
Upon any receivership, insolvency, assignment for the benefit of
creditors, bankruptcy, reorganization, or arrangements with creditors (whether
or not pursuant to bankruptcy or other insolvency laws), sale of all or
substantially all of the assets, dissolution, liquidation, or any other
marshaling of the assets and liabilities of the Company or in the event this
Note shall be declared due and payable upon the occurrence of an event of
default (as specified herein), (i) no amount shall be paid by the Company in
respect of the principal of or interest on this Note at the time outstanding,
unless and until the principal of and interest on the Senior Indebtedness then
outstanding shall be paid in full, and (ii) no claim or proof of claim shall be
filed with the Company by or on behalf of the holder of this Note which shall
assert any right to receive any payments in respect of the principal of and
interest on this Note except subject to the payment in full of the principal of
and interest on all of the Senior Indebtedness then outstanding.
In the instance of an event of default which has been declared in
writing with respect to any Senior Indebtedness, or in the instrument under
which it is outstanding, permitting the holder to accelerate the maturity
thereof, then, unless and until such event of default shall have been cured or
waived or shall have ceased to exist, or all Senior Indebtedness shall have been
paid in full, (i) the Company shall promptly notify Mentor Graphics in writing
of such default and (ii) no payment shall be made in respect of the principal of
or interest on this Note, unless within twelve (12) months after the happening
of such event of default, the maturity of such Senior Indebtedness shall not
have been accelerated.
In case cash, securities or other property otherwise payable or
deliverable to the holder of this Note shall have been applied to the payment of
Senior Indebtedness, then and in each such case, upon the payment in full of all
Senior Indebtedness, the holder of this Note shall be subrogated to the rights
of the holders of Senior Indebtedness to receive all further payments and
distributions made on Senior Indebtedness until all principal of and interest on
this Note shall have been paid in full; and no such payments or distributions to
the holders of this Note by reason of such subrogation of cash, securities or
other property which otherwise would be payable or distributable to the holders
of Senior Indebtedness shall, as between the Company and its creditors (other
than the holders of Senior Indebtedness), on the one hand, and the holder of
this Note, on the other, be deemed to be a payment of the Company on account of
this Note.
Nothing contained in this Section 2 shall impair, as between the
Company and the holder of this Note, the obligation of the Company, which is
absolute and unconditional, to pay to the holder thereof the principal hereof
and interest hereon as and when the same become due and payable, or shall
prevent the holder of this Note, upon default under this Note, from exercising
all rights, powers and remedies otherwise provided herein or by applicable law,
all subject to the rights, if any, of the holders of Senior Indebtedness under
this Section 2 to receive cash, securities or other properties otherwise payable
or deliverable to the holder of this Note.
3. EVENTS OF DEFAULT
<PAGE>
If one or more of the following events (herein called "EVENTS OF
DEFAULT") shall have occurred and be continuing, that is to say:
(a) If the Company (i) shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, dissolution, liquidation,
winding-up, or any other relief under the Bankruptcy Code, as amended, or (ii)
shall make a general assignment for the benefit of creditors; or
(b) If any proceedings are commenced or any other action is taken
against the Company in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, or for any other relief under the Bankruptcy Code, as
amended; and any such event continues for ninety (90) days undismissed or
undischarged; or
(c) If the Company shall default in the performance of any of its
obligations under this Note, such default shall have continued unremedied for a
period of thirty (30) days and the obligation is not being contested in good
faith by appropriate legal proceedings;
then the holder of this Note may at any time at such holder's option by written
notice to the Company declare the principal amount of and the accrued interest
on this Note to be immediately due and payable, and thereupon the same shall
become so due and payable; and the Company will reimburse the holder of this
Note for its reasonable costs and expenses, including attorneys' fees, incurred
in connection with the enforcement of its rights under this Note.
Notwithstanding the foregoing, upon the failure of the Company to pay any amount
of principal or interest hereunder when due as set forth in the first paragraph
of this Note, the holder of this Note shall be entitled to exercise all rights
and remedies available to it.
4. WAIVER
The waiver by the holder hereof of any breach of or default under any
term, covenant or condition contained herein shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach of or default under
the same or any other such term, convenant or condition.
5. GENERAL PROVISIONS
(a) GOVERNING LAW: This Note shall be governed by and construed in
accordance with the laws of the State of Oregon.
(b) SUCCESSORS AND ASSIGNS: The terms of this Note shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective distributees, legal representatives, successors and assigns.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name this 29th day of September 1993.
<PAGE>
QUICKTURN DESIGN SYSTEMS, INC.
By: /s/ Raymond K. Ostby
------------------------------
Title: Vice President
---------------------------
AGREED TO AND ACCEPTED:
MENTOR GRAPHICS CORPORATION
By: /s/ Frank S. Delia
----------------------------
Title: Vice President
-------------------------
<PAGE>
Exhibit 99(c)(2)
THESE WARRANTS AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE
STATE LAW, AND NO INTEREST IN SUCH WARRANTS MAY BE SOLD, DISTRIBUTED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES OR (B) THE
COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES
STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION AND SUCH OPINION IS IN
FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY AND FROM COUNSEL SATISFACTORY TO
THE COMPANY.
No. W-2
STOCK PURCHASE WARRANTS
TO PURCHASE SHARES OF COMMON STOCK
QUICKTURN SYSTEMS, INC.
400,000 WARRANTS
THIS IS TO CERTIFY that, for value received, MENTOR GRAPHICS CORPORATION, or its
assigns (Holder), is entitled, at any time after February 28, 1992 and not later
than 5:00 p.m. Pacific Time on February 27, 2000 (Expiration Date), subject to
the provisions of these Warrants, to purchase 400,000 shares of fully paid and
nonassessable shares of the Common Stock of QUICKTURN SYSTEM, INC. a California
corporation (Company), at a price of $15.00 per share (the Purchase Price Per
Share) (such number of shares and the Purchase Price Per Share being subject to
adjustment as provided in these Warrants), upon the surrender of this
certificate (with the attached form of Election to Purchase completed and
executed by the Holder) and delivery of a check payable to the Company, in the
amount of the Purchase Price Per Share multiplied by the number of shares for
which these Warrants are being exercised, to the Company at its principal
office. Such surrender and payment are referred to as the exercise of these
Warrants.
All or part of these Warrants may be assigned at any time prior to the
Expiration Date. In the case of any assignment, upon request and upon surrender
of this certificate to the Company at its principal office with the attached
form of Assignment duly completed and executed, the Company will cause to be
executed and delivered one or more certificates of like tenor evidencing in the
aggregate the number of Warrants to which this certificate relates registered in
the name of the person or persons entitled to such certificate upon assignment.
At any time prior to the Expiration Date, upon surrender of this certificate to
the Company, this certificate may be exchanged, alone or with other certificates
of like tenor, for a new certificate or certificates of like tenor evidencing in
the aggregate the number of Warrants, to which this Certificate and such other
certificates relate, registered in the name of the Holder.
<PAGE>
The Warrants evidenced by this certificate shall be void and of no effect and
the Holder's rights shall cease after 5:00 p.m. Pacific Time on the Expiration
Date.
For the purpose of these Warrants the term "Common Stock" shall mean, subject to
the provisions of subdivision 2 below, shares of the class designated as Common
Stock of the Company at February 28, 1992 or shares of any class or classes
resulting form any reclassification or reclassifications of such Common Stock;
provided that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
The Warrants evidenced by this certificate are subject to the following
additional terms and conditions:
1. In case the Company shall issue any shares of its Common Stock as a stock
dividend or subdivide the number of outstanding shares of Common Stock into
a greater number of shares, then in either of such cases, the Purchase
Price Per Share in effect at the time of such action shall be
proportionately reduced and the number of shares of Common Stock at that
time purchasable pursuant to these Warrants shall be proportionately
increased; and, conversely, in the event the Company shall contract the
number of outstanding shares of Common Stock by combining such shares into
a smaller number of shares, then, in such case, the Purchase Price Per
Share in effect at the time of such action shall be proportionately
increased and the number of shares of Common Stock at the time purchasable
pursuant to these Warrants shall be proportionately decreased. Any
dividend paid or distributed on the Common Stock in stock of any other
class of securities convertible into shares of Common Stock shall be
treated as a dividened paid in Common Stock in the extent that shares of
Common Stock are issuable upon the conversion.
2. In case the Company shall be recapitalized by reclassifying its outstanding
Common Stock, then as a condition of such recapitalization lawful and
adequate provision shall be made under which the Holder shall have the
right to purchase, upon the terms and conditions specified in these
Warrants, in lieu of the shares of Common Stock previously purchasable upon
the exercise of these Warrants, the kind and amount of shares of stock and
other securities and property receivable upon such recapitalization by the
owner of the number of shares of Common Stock which the Holder might have
purchased immediately prior to such recapitalization.
3. In case the Company shall consolidate or merge with or convey all or
substantially all its property and assets to any other corporation, or
corporations, then as a condition of such consolidation, merger or
conveyance, lawful and adequate provision shall be made in which the Holder
shall have the right to purchase, upon the terms and conditions specified
in these Warrants, in lieu of the shares of Common Stock previously
purchasable upon the exercise of these Warrants, the kind and amount of
shares of stock and other securities and property receivable upon such
consolidation, merger or conveyance by a holder of the number of
<PAGE>
shares of Common Stock which the Holder might have purchased immediately
prior to such consolidation, merger or conveyance.
4. Whenever the Purchase Price Per Share of the kind or amount of securities
purchasable under these Warrants shall be adjusted pursuant to any of the
provisions of this certificate, the Company shall cause to be sent to the
Holder by first-class mail at his address as it appears upon the records of
the Company, a certificate setting forth the adjustments in the Purchase
Price Per Share and/or in said number of shares, and also setting forth in
detail the facts requiring such adjustments including, without limitation,
a statement of the consideration received or deemed to have been received
by the Company for any additional shares of stock issued by it.
5. The holder of these Warrants shall be entitled to those registration rights
set forth in Exhibit G to that certain Asset Purchase Agreement dated
February 28, 1992.
6. No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of these Warrants. If the exercise of these
Warrants would, but for the provisions of this subdivision 6, result in the
right to receive a fraction of a share of Common Stock, the Company shall,
in lieu thereof, make payment in cash for such fractional interest
(computed to the nearest 1/100th of a share) calculated on the basis of the
last reported sales price (or bid price if there be no sale) of the Common
Stock as reported (i) on any stock exchange designated by the Company on
which the Common Stock may be traded, or (ii) by any reputable quotation
reporting service, if the Common Stock be not traded on any stock exchange,
or (iii) by any dealer in securities dealing in the Common Stock, if such
quotations be not reported by any such reporting service, on the day on
which the Warrants shall be exercised, or, if none is reported on such
date, on the date of the last such reported sale or bid, or (iv) if there
is no dealer in securities who is dealing in the Common Stock, at the last
sale price of any shares of Common Stock sold by the Company.
7. These Warrants shall not entitle the Holder to any voting rights or any
other rights as a shareholder of the Company, or to any other rights except
the rights stated in this certificate; and no dividend or interest shall be
payable or shall accrue in respect of these Warrants of the shares
purchasable hereunder unless, and until, and except to the extent that
these Warrants shall be exercised.
WITNESS, the seal of the Company and the signatures of its duly authorized
officers.
February 28, 1992
QUICKTURN SYSTEM, INC.
By /s/ Phil Kaufman
- ---------------------------
Its President
<PAGE>
/s/ Dennis Favero
- ---------------------------
Its Secretary
<PAGE>
To QUICKTURN SYSTEMS, INC.
ELECTION TO PURCHASE
The undersigned irrevocably elects to purchase shares of Common Stock issuable
upon the exercise of the attached Warrants, and requests that certificates for
such shares shall be issued in the name of and delivered to the address of the
undersigned, at the address stated below and, if the number of shares shall not
be all the shares which may be purchased pursuant to the attached Warrants, that
new Warrants evidencing the right to purchase the balance of such shares be
registered in the name of, and delivered to, the undersigned at the address set
forth below. The undersigned agrees with and represents to the Company that the
shares of the Common Stock are acquired for investment and not with a view to,
or for sale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended.
Payment enclosed in the amount of $_____________.
Dated:__________________
Name of holder of Warrants:____________________________________
(please print)
Address:_____________________________________
_____________________________________
Signature:____________________________________
Its_______________________________________
<PAGE>
ASSIGNMENT
For value received ______________ sells, assigns and transfers unto ________-
the attached Warrants, together with all right, title and interests in such
Warrants, and irrevocably constitutes and appoints ______________ attorney, to
transfer the Warrants on the books of the Company, with full power of
substitution in the premises.
Dated:_________________, 19___.
Signature:______________________________
Its______________________________
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REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of February 28, 1992, by and between Quickturn
Systems, Inc., a California corporation (the "Company") and Mentor Graphics
Corporation, an Oregon corporation ("Holder").
1. Definitions. For purposes of this Agreement:
(a) The term "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(c) The term "Registrable Securities" means (1) up to 200,000 shares of
Common Stock issued to the Holder pursuant to that certain Asset Purchase
Agreement dated as of February 28, 1992 between the Company and the Holder, and
(2) shares of Common Stock issuable or issued upon exercise of (i) the Warrant
to purchase 500,000 shares of the Company's Common Stock at an exercise price of
$6.00 per share issued February 28, 1992 to the Holder (the "$6.00 Warrant"),
and (ii) the Warrant to purchase 400,000 shares of the Company's Common Stock at
an exercise price of $15.00 per share (the "$15 Warrant"); excluding in all
cases, however, any Registrable Securities sold by the Holder in a transaction
in which its rights under this Agreement are not assigned.
(d) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of Common Stock outstanding which
are, and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities which are Registrable Securities.
(e) The term "Holder" means Mentor Graphics Corporation, an Oregon
corporation.
(f) The term "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules or regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(g) The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted by
the Securities and Exchange Commission ("SEC") which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(h) The term "Initial Public Offering" shall mean the first firm
commitment underwritten public offering of the Company's Common Stock to the
general public at an aggregate offering price, net of underwriting discounts and
commissions, at a per share price of not less than $4.00 per share and for a
total offering of not less than $7,500,000, which is effected pursuant to a
registration statement filed with, and declared effective by, the Commission
under the Securities Act.
2. Company Registration. If, at any time or from time to time, the Company
proposes to register (including for this purpose a registration effected by the
Company for shareholders other than the Holder) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants
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in a Company stock plan or a stock plan of the Company's affiliate(s), or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give the Holder written notice of such registration. Upon the
written request of the Holder given within twenty (20) days after mailing of
such notice by the Company, the Company shall, subject to the provisions of
Section 6, cause to be registered under the Act all of the Registrable
Securities that the Holder has requested to be registered.
3. Obligations of the Company. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holder,
keep such registration statement effective for up to one hundred twenty (120)
days.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holder such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as it may reasonably request in order to
facilitate the disposition of Registrable Securities owned by it.
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holder, provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Holder shall also
enter into and perform its obligations under such an agreement.
(f) Notify the Holder at any time when a prospectus relating the
Registration Statement is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
4. Furnish Information. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement with respect to the
Registrable Securities of the Holder that the Holder shall furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
required to effect the registration of the Holder's Registrable Securities.
5. Expenses of Registration. All expenses other than underwriting discounts
and commissions, and stock transfer taxes, incurred in connection with
registrations, filings or qualifications
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pursuant to this Agreement for the Holder (which right may be assigned as
provided in Section 10), including (without limitation) all registration, filing
and qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of counsel
for the Holder (provided, however, that the Holder shall be obligated to use
counsel provided for other holders of the Company's securities exercising
registration rights at the same time as the Holder, if such counsel if
reasonably acceptable to the Holder) shall be borne by the Company.
6. Underwriting Requirements. In connection with any offering involving an
underwriting of shares being issued by the Company, the Company shall not be
required under this Agreement to include any of the Holder's securities in such
underwriting unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, and then only in
such quantity as will not, in the opinion of the underwriters, jeopardize the
success of the offering by the Company or by other selling shareholders. If the
total amount of securities, including Registrable Securities, requested by the
Holder to be included in such offering exceeds the amount of securities that the
underwriters reasonably believe compatible with the success of the offering,
then the Company shall be required to include inthe offering only that number of
such securities, including Registrable Securities, which the underwriters
believe will not jeopardize the success of the offering by the Company or by
other selling shareholders. The Holder acknowledges that the Company is party to
agreements (and may, in the future, enter agreements) which provide registration
rights senior to those provided to the Holder herein.
7. Delay of Registration. The Holder shall not have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
8. Indemnification. In the event any Registrable Securities are included in
a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless the Holder, any underwriter (as defined in the Act) for the Holder and
each person, if any, who controls the Holder or underwriter within the meaning
of the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934 Act
or any state securities law; and the Company will pay to each the Holder,
underwriter or controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 8(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Holder, underwriter or controlling person.
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(b) To the extent permitted by law, the Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement, each person, if any, who controls the Company within
the meaning of the Act, any underwriter, any other selling shareholder selling
securities in such registration statement and any controlling person of any such
underwriter or other selling shareholder, against any losses, claims, damages,
or liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by the Holder expressly for use
in connection with such registration; and the Holder will pay, as incurred, any
legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 8(b), in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this section 8(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld; provided, that, in no event
shall any indemnity under this subsection 8(b) exceed the gross proceeds from
the offering received by the Holder.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
8 but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 8.
(d) The obligations of the Company and the Holder under this Section 8
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
9. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holder the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit the Holder
to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
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which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to the Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company), the Act and the 1934 Act (at any time after it
has become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing the Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
10. Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned by
the Holder to a transferee or assignee of such securities, who, after such
assignment or transfer, holds at least 100,000 shares of Registrable Securities
(subject to appropriate adjustments for stock splits, stock dividends,
combinations and other recapitalizations), provided the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and provided, further, that
such assignment shall be effective only if such transferee or assignee agrees in
writing to be bound by the provisions of this Agreement and immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act. For the purposes of
determining the number of shares of Registrable Securities held by a transferee
or assignee, the holdings of transferees and assignees of an individual or a
partnership who are spouses, ancestors, lineal descendants or siblings of such
individual or a partnership who are spouses, ancestors, lineal descendants or
siblings of such individual or partners or retired partners of such partnership
(including spouses and ancestors, lineal descendants and siblings of such
partners or spouses who acquire Registrable Securities by gift, will or
intestate succession) shall be aggregated together with the individual or
partnership, as the case may be, provided that all assignees and transferees who
would not qualify individually for assignment of Registration Rights shall have
a single attorney-in-fact for the purpose of exercising any rights or taking any
action under this Agreement.
11. "Market Stand-Off" Agreement. The Holder hereby agrees that, during the
period of duration specified by the Company and an underwriter of common stock
or other securities of the Company (up to a maximum of 180 days), following the
effective date of a registration statement of the Company filed under the Act,
it shall not, to the extent requested by the Company and such underwriter,
directly or indirectly, sell, offer to sell, contract to sell (including without
limitation any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any common
stock of the Company held by it at any time during such period except common
stock included in such registration; provided, however, that all officers and
directors of the Company and all other persons with registration rights (whether
or not pursuant to this Agreement) enter into similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
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12. Termination of Registration Rights. The registration rights granted
pursuant to this Agreement shall terminate as to the Holder at such time after
the Company's Initial Public Offering as all Registrable Securities held by the
Holder can be sold within a given three-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144 supported
by a written opinion of legal counsel for the Company which shall be reasonably
satisfactory in form and substance to legal counsel for the Holder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
QUICKTURN SYSTEMS, INC. MENTOR GRAPHICS CORPORATION
By: /s/ Phillip Kaufman By: /s/ Frank S. Delia
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Phillip Kaufman Frank S. Delia
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(Print Name) (Print Name)
President Vice President, Chief Legal and
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Title Administrative Officer
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Title
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