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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
QUICKTURN DESIGN SYSTEMS, INC.
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(Name of Issuer)
Common Stock, par value $0.001 per share
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(Title of Series of Securities)
74838E102
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(CUSIP number)
R.L. Smith McKeithen
Senior Vice President, General Counsel and Secretary
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5
San Jose, California 95134
(408) 943-1234
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
Kenneth R. Lamb
Gregory J. Conklin
Gibson, Dunn & Crutcher LLP
One Montgomery Street, 26th Floor
San Francisco, California 94104
(415) 393-8200
December 8, 1998
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), (f) or (g), check the following box / /.
NOTE. Schedules filed in paper format shall include a signed original
and five copies of this schedule, including all exhibits. SEE Rule 13d-7(b)
for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, SEE the NOTES).
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CUSIP No. 74838E102 13D Page 2 of 8 Pages
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(1) Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Cadence Design Systems, Inc.
77-0148231
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
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(3) SEC Use Only
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(4) Source of Funds*
WC
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(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
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(6) Citizenship or Place of Organization
Delaware
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Number of Shares (7) Sole Voting
Beneficially Owned Power
by Each Reporting
Person With 3,619,100
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(8) Shared Voting
Power
None
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(9) Sole Dispositive
Power
3,619,100
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(10) Shared Dispositive
Power
None
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,619,100
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(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*
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(13) Percent of Series Represented by Amount in Row (11)
19.99%
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(14) Type of Reporting Person*
CO
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (this "Schedule 13D") relates to the
common stock, par value $0.001 per share (the "Shares"), of Quickturn Design
Systems, Inc., a Delaware corporation (the "Issuer"). The address of the
principal executive offices of the Issuer is 55 West Trimble Road, San Jose,
California 95131.
The responses to each item of this Schedule 13D are qualified in
their entirety by the provisions of the Exhibits hereto.
ITEM 2 - IDENTITY AND BACKGROUND
a) This statement is filed on behalf of Cadence Design Systems, Inc.,
a Delaware corporation (the "Reporting Person").
b) The address of the principal office for the Reporting Person is
Cadence Design Systems, Inc., 2655 Seely Avenue, Building 5, San Jose,
California 95134. The principal business of the Reporting Person is the
development, manufacture and sale of electronic design automation software
technology and provision of professional services in connection therewith.
c) The name; residence or business address; present principal
occupation or employment of each of the executive officers and directors of
the Reporting Person; and the name, principal business and address of any
corporation or other organization in which such employment is conducted, is
set forth on Schedule I hereto.
d) & e) During the last five years, neither the Reporting Person
nor, to the best knowledge of the Reporting Person, any of its executive
officers or directors named in Schedule I hereto has (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
f) The Reporting Person is a corporation organized under the laws of
the State of Delaware. All of the executive officers and directors of the
Reporting Person are citizens of the United States except for
Dr. Sangiovanni-Vincentelli, who is a citizen of The Republic of Italy.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The irrevocable option (the "Option") to purchase 3,619,100 shares
(the "Option Shares") representing approximately 19.99% of the outstanding
shares of common stock of the Issuer (without giving effect to shares subject
to the Option) is exercisable upon the terms and subject to the conditions
set forth in the Stock Option Agreement, dated as of December 8, 1998,
between the Issuer and the Reporting Person (the "Option Agreement"), a copy
of which is attached hereto as Exhibit 1 and hereby expressly incorporated
herein by reference. The price at which the Option may be exercised is $14.00
per share (subject to adjustment under certain circumstances). Although no
final decision has been made, it is presently intended that the Reporting
Person will obtain all of the funds to purchase the Option Shares from
internally generated funds.
ITEM 4. PURPOSE OF TRANSACTION
On December 8, 1998, the Issuer, the Reporting Person and CDSI
Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of the
Reporting Person ("Acquisition"), entered into an Agreement and Plan of
Merger (the "Plan of Merger"), a copy of which is attached hereto as Exhibit 2
and hereby expressly incorporated herein by reference, pursuant to which
(upon satisfaction or waiver of certain conditions) Acquisition will be
merged with and into the Issuer (the "Merger") and the Issuer will become the
surviving corporation and a wholly-owned subsidiary of the Reporting Person.
The Plan of Merger also provides that, at the election of the
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parties, the Merger may be structured so that the Issuer may be merged with
and into Acquisition with the result that Acquisition will become the
surviving corporation. Each of the Issuer's shares of common stock (excluding
any in treasury or held by the Reporting Person or any of its subsidiaries)
issued and outstanding (together with the associated preferred share purchase
rights issued under the Issuer's Preferred Shares Rights Agreement, dated as
of January 10, 1996, between the Issuer and BankBoston, N.A., as rights
agent, as amended) will be converted into shares of common stock of the
Reporting Person (with the appropriate number of the Reporting Person's
preferred stock purchase rights as provided in the Reporting Person's Rights
Agreement, dated as of February 9, 1996, between the Reporting Person and
Harris Trust and Savings Bank, as rights agent, whether or not such rights
shall still be attached to such shares). Immediately following execution of
the Plan of Merger, the Issuer and the Reporting Person entered into the
Option Agreement.
The Option is exercisable only upon the occurrence of certain
events, including, without limitation: (1) a recommendation by the Issuer's
Board of Directors to its stockholders of a Superior Proposal (as defined in
the Plan of Merger), (2) the withdrawal by the Issuer's Board of Directors of
its approval of the Merger, (3) the failure of the Issuer to use all
reasonable efforts to convene a stockholders' meeting to vote on the Merger,
(4) in certain circumstances, the failure to obtain stockholder approval
after a duly convened meeting, or (5) following termination of the Plan of
Merger for certain specified reasons, an agreement between the Issuer and a
third party relating to certain business combinations with a third party or a
third party's acquisition of certain assets of the Issuer. In addition, under
certain circumstances, including any person's acquisition of thirty percent
(30%) or more of the Issuer's outstanding common stock or a written
definitive agreement between the Issuer and a third party for certain
business combinations prior to the expiration date of the Option, the
Reporting Person may require the Issuer to cancel the option and pay a
cancellation amount. In some instances, the Issuer may require the Reporting
Person to sell to the Issuer any shares of Issuer common stock received by
the Reporting Person upon exercise of the Option. The Reporting Person is
limited in the total payments it may receive in connection with its exercise
of the Option to $14.075 million, minus any amounts it receives as liquidated
damages (other than for expense reimbursements) upon termination of the Plan
of Merger. The Reporting Person does not know of any event that has occurred
as of the date hereof that would allow the Reporting Person to exercise its
Option.
The Option Agreement is intended to increase the likelihood that the
transactions contemplated by the Plan of Merger will be consummated in
accordance with its terms, and may discourage persons from proposing a
competing offer to acquire the Issuer. The existence of the Option Agreement
could significantly increase the cost to a potential acquiror of acquiring
the Issuer, compared to its cost had the Issuer not entered into the Option
Agreement.
The Option Agreement will expire upon the earlier of (i) the
Effective Time of the Merger (as defined in the Plan of Merger) and (ii) upon
the twelve (12) month anniversary of the termination of the Plan of Merger in
accordance with the terms thereof.
Upon consummation of the transactions contemplated by the Plan of
Merger, the Issuer's shares of common stock will cease to be authorized to be
quoted on the Nasdaq National Market System, and they will become eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The Reporting Person is the beneficial owner of 3,619,100 shares of
the Issuer's outstanding common stock, or 19.99% of the shares outstanding,
assuming exercise of the Option. The percentage of shares outstanding as
beneficially owned by the Reporting Person on the date hereof is based upon
18,095,580 shares outstanding as of November 30, 1998 (as represented by the
Issuer in the Plan of Merger) and assuming exercise of the Option.
Except as set forth in this Schedule 13D, neither the Reporting
Person nor, to the knowledge of the Reporting Person, any of the persons
listed in Schedule I beneficially owns any shares of the Issuer's outstanding
common stock.
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Except as set forth in this Schedule 13D, neither the Reporting
Person nor, to the knowledge of the Reporting Person, any of the persons
listed in Schedule I has the right to receive or the power to direct the
receipt of dividends from, or the proceeds of sale of, securities covered by
this Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
Except as set forth in this Schedule 13D, neither the Reporting
Person nor, to the knowledge of the Reporting Person, any of the persons
listed on Schedule I is a party to any contract, arrangement, understanding
or relationship with respect to any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
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<CAPTION>
EXHIBIT DESCRIPTION
<S> <C>
1* Stock Option Agreement, dated as of December 8, 1998,
between Cadence Design Systems, Inc. and Quickturn
Design Systems, Inc.
2** Agreement and Plan of Merger, dated as of December 8,
1998, by and among Cadence Design Systems, Inc., CDSI
Acquisition, Inc. and Quickturn Design Systems, Inc.
with all Exhibits thereto.
</TABLE>
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* Incorporated herein by reference to Exhibit 2.2 to the Report on Form 8-K
of Cadence Design Systems, Inc. filed December 10, 1998.
** Incorporated herein by reference to Exhibit 2.1 to the Report on Form 8-K
of Cadence Design Systems, Inc. filed December 10, 1998.
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SIGNATURE
After reasonable 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.
CADENCE DESIGN SYSTEMS, INC.
Dated: December 18, 1998
By: /s/ R.L. Smith McKeithen
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R.L. Smith McKeithen
Senior Vice President and General Counsel
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SCHEDULE I
EXECUTIVE OFFICERS AND EMPLOYEE DIRECTORS OF CADENCE
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NAME PRINCIPAL OCCUPATION OR EMPLOYMENT
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John R. Harding President, Chief Executive Officer and Director
H. Raymond Bingham Executive Vice President and Chief Financial Officer
John F. Olsen Executive Vice President, Worldwide Sales and Marketing
Shane V. Robinson Executive Vice President, Engineering
K.C. Murphy Executive Vice President, Strategic Business Group and
Corporate Strategic Planning
R.L. Smith McKeithen Senior Vice President, General Counsel and Secretary
William Porter Vice President, Controller and Assistant Secretary
</TABLE>
All individuals named in the above table are employed at Cadence Design
Systems, Inc., 2655 Seely Avenue, Building 5, San Jose, California 95134
NON-EMPLOYEE DIRECTORS OF CADENCE
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NAME AND ADDRESS OF CORPORATION OR
NAME PRINCIPAL OCCUPATION EMPLOYMENT/
---- -------------------- OTHER ORGANIZATION IN WHICH EMPLOYED
------------------------------------
<S> <C> <C>
Carol Bartz Chairman and Chief Executive Autodesk, Inc.
Officer 111 McInnis Parkway
San Rafael, CA 94903
Dr. Leonard Y.W. Liu Chairman, Chief Executive Walker Interactive Systems, Inc.
Officer and President Marathon Plaza Three North
303 Second Street
San Francisco, CA 94107
Donald L. Lucas Private Venture Capital Sand Hill Financial
Investor 3000 Sand Hill Road
Building. 3, Suite 210
Menlo Park, CA 94025
Dr. Alberto Sangiovanni- Professor of Electrical University of California
Vincentelli Engineering and Computer 520 Cory Hall
Sciences Berkeley, CA 94720
George M. Scalise President Semiconductor Industry Association
181 Metro Drive, Suite 450
San Jose, CA 95110
Dr. John B. Shoven Charles R. Schwab Stanford University
Professor of Economics 30 Alta Road
Stanford, CA 94305
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION
<S> <C>
1* Stock Option Agreement, dated as of December 8, 1998,
between Cadence Design Systems, Inc. and Quickturn
Design Systems, Inc.
2** Agreement and Plan of Merger, dated as of December 8,
1998, by and among Cadence Design Systems, Inc., CDSI
Acquisition, Inc. and Quickturn Design Systems, Inc.
with all Exhibits thereto.
</TABLE>
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* Incorporated herein by reference to Exhibit 2.2 to the Report on Form 8-K
of Cadence Design Systems, Inc. filed December 10, 1998.
** Incorporated herein by reference to Exhibit 2.1 to the Report on Form 8-K
of Cadence Design Systems, Inc. filed December 10, 1998.
