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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
QUICKTURN DESIGN SYSTEMS, INC.
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(Name of Registrant as Specified In Its Charter)
MENTOR GRAPHICS CORPORATION
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[MENTOR GRAPHICS LOGO]
VOTE YOUR GOLD PROXY CARD TODAY!
November 11, 1998
Dear Stockholder:
We want to personally thank the many Quickturn stockholders who showed their
strong support for our $12.125 per share, fully financed, all-cash offer by
tendering their shares. On October 30, 1998, the number of Quickturn shares
tendered by all of you together with the shares already owned by Mentor
represented approximately 53% of Quickturn's outstanding shares.
We now need your support once more. We ask all stockholders -- whether or
not they have tendered shares -- to take a stand at this time on our offer by
voting your GOLD proxy card promptly.
VOTE TO REPLACE THE CURRENT QUICKTURN BOARD
WITH INDEPENDENT DIRECTORS WHO WILL LISTEN TO YOU!
Unfortunately, even though a majority of the outstanding shares have clearly
expressed their support for our offer, neither the Quickturn Board nor its
financial advisors will agree to even sit down at the negotiating table with
Mentor. Don't let the Quickturn Board continue to ignore you.
DON'T LET THE CURRENT BOARD STAND IN YOUR WAY
TAKE THE NEXT STEP TO CASH IN ON OUR PREMIUM OFFER!
Vote your proxies now for the special meeting, currently scheduled by Mentor
to be held on November 24, 1998. Elect five independent nominees who, subject to
their fiduciary duties, will have the power to remove all other obstacles to our
premium offer if we are successful in our challenge in Delaware Chancery Court
to Quickturn's poison pill amendments. Vote to approve the three other proposals
designed to remove obstacles as well.
YOU CAN NO LONGER TRUST THE QUICKTURN BOARD!
The Quickturn Board has been so caught up in their entrenchment tactics that
they have lost sight of the facts. Here are the facts:
- The Quickturn Board wants you to believe that our $12.125 per share offer
is inadequate. KEEP IN MIND THAT OUR OFFER REPRESENTS MORE THAN A 51%
PREMIUM OVER THE CLOSING PRICE ON THE DAY PRIOR TO THE COMMENCEMENT OF OUR
OFFER.
- OUR $12.125 OFFER PRICE REPRESENTS NEARLY 40 TIMES NEXT YEAR'S CONSENSUS
EARNINGS ESTIMATES AND 25 TIMES PROJECTED EARNINGS FOR THE YEAR 2000.
- The Quickturn Board has told you all about the bright future of Quickturn.
IF THEY TRULY BELIEVED THAT, WHY DID THE QUICKTURN BOARD ITSELF REPRICE
DOWNWARD THE EXERCISE PRICE OF 1.5 MILLION EMPLOYEE STOCK OPTIONS TO $7.44
PER SHARE A MERE EIGHT WEEKS BEFORE WE MADE OUR OFFER?
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- Quickturn would like you to believe that the Asian economic crisis is
primarily responsible for the steep drop last spring in the price of
Quickturn shares and for its poor stock price for several months prior to
our offer. WE BELIEVE THAT QUICKTURN'S LACKLUSTER SALES AND POOR EARNINGS
PERFORMANCE ARE THE MAJOR REASONS WHY QUICKTURN'S SHARES TUMBLED.
- Quickturn's third quarter results just reported on October 13, 1998, show
that Quickturn's sales CONTINUE TO BE FLAT OR DECLINING -- NOW FOR 2 1/2
YEARS.
- Quickturn's earnings per share for the third quarter, when adjusted for
take-over related expenses, DROPPED DRAMATICALLY compared to earnings per
share in the same quarter last year, adjusted for one time acquisition
charges. QUICKTURN'S ADJUSTED EARNINGS PER SHARE IN THE QUARTER DROPPED TO
$.04 FROM $.13 PER SHARE IN THE SAME QUARTER LAST YEAR -- A NEARLY 70%
DROP.
- Contrast these poor results to Mentor's outstanding recent results. While
Mentor was exposed to the same market conditions, it posted a 400%
year-to-year earnings gain for the same period. MAYBE QUICKTURN'S
LEADERSHIP IS THE PROBLEM -- NOT ASIA?
- Quickturn wants you to believe that its pending patent litigation claims
against Mentor may be worth $225 million ($75 million trebled). When our
expert was given the opportunity to analyze the same data as Quickturn and
its own expert, he projected the MAXIMUM amount of damages -- if Quickturn
actually proves Mentor infringed a valid patent -- would be about $3
million ($1 million trebled). WHY ARE QUICKTURN'S NUMBERS SO GROSSLY
INFLATED?
- When considering the believability of Quickturn's grossly inflated claim
amount -- remember Quickturn didn't even develop the number based on the
totally new wild theories until October 5, 1998 -- NEARLY SEVEN WEEKS AFTER
WE LAUNCHED OUR OFFER.
- Quickturn's latest letter wants you to reject our offer because of a report
made to Mentor in 1997 by Arthur Andersen. Quickturn also neglected to tell
you that Arthur Andersen's report -- which was made twelve months ago --
was based upon financial projections that assumed Quickturn would have
attained revenues of $136.2 million and net income of $14 million in 1998.
CLEARLY, QUICKTURN HAS NOT ACHIEVED EVEN CLOSE TO THESE LOFTY EXPECTATIONS
AS IT CONTINUES TO LOSE MONEY AND CONSISTENTLY REPORT FLAT OR DECLINING
REVENUES.
WHEN WILL THE QUICKTURN BOARD COME CLEAN
AND TELL YOU THE WHOLE TRUTH?
TELL THE QUICKTURN BOARD TO STOP STONEWALLING AND STOP SPENDING YOUR MONEY ON
EXPENSIVE LITIGATION AND OTHER OBSTRUCTIVE TACTICS!
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The trial in which Mentor is challenging the validity of amendments made to
the poison pill and bylaws of Quickturn recently ended. Post trial briefs have
been filed paving the way for the Delaware court to render a prompt decision.
A FAVORABLE RULING WILL SATISFY ONE MAJOR CONDITION TO COMPLETING OUR
$12.125 PER SHARE FULLY FINANCED, ALL-CASH OFFER. WE NEED YOUR SUPPORT NOW MORE
THAN EVER TO SATISFY ANOTHER MAJOR CONDITION TO OUR OFFER -- THE REMOVAL OF THE
QUICKTURN BOARD WHICH IS PREVENTING YOU FROM BEING ABLE TO ACCEPT AND COMPLETE
OUR CASH OFFER.
VOTE THE GOLD PROXY "FOR" OUR NOMINEES AND PROPOSALS!
THE NEXT CRITICAL STEP IS IN YOUR HANDS!
Time is short. Even if you have already tendered your shares, you must send
in your GOLD proxy card if you want to replace the current Board with our
independent nominees.
WE STRONGLY URGE YOU TO TAKE A MOMENT NOW TO SIGN, DATE AND RETURN THE
ENCLOSED GOLD PROXY CARD IN THE ENVELOPE PROVIDED.
IF YOU HAVE PREVIOUSLY SIGNED A BLUE QUICKTURN PROXY, YOU HAVE EVERY PROPER
AND LEGAL RIGHT TO CHANGE YOUR VOTE BY SIMPLY SIGNING AND RETURNING A LATER
DATED GOLD PROXY CARD. ONLY THE LATEST DATED PROXY CARD THAT IS TIMELY RECEIVED
WILL BE COUNTED.
We appreciate your prompt consideration of this extremely important vote.
Sincerely,
/s/ Dr. Walden C. Rhines
Dr. Walden C. Rhines
President and Chief Executive
Officer
Even if you have tendered your shares, it is important that you complete and
return the GOLD proxy card today. If you have any questions or need assistance
in completing the GOLD proxy card, please contact:
MacKenzie Partners, Inc.
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
CALL TOLL-FREE (800) 322-2885 OR (212) 929-5500 (COLLECT)
