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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 32)
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
QUICKTURN DESIGN SYSTEMS, INC.
(Name of Subject Company)
QUICKTURN DESIGN SYSTEMS, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(including the associated preferred stock purchase rights)
(Title of Class of Securities)
74838E102
(CUSIP Number of Class of Securities)
KEITH R. LOBO
President and Chief Executive Officer
Quickturn Design Systems, Inc.
55 W. Trimble Road
San Jose, California 95131
(408) 914-6000
(Name, address and telephone number of person authorized to receive
notice and communications on behalf of person(s) filing statement)
COPY TO:
LARRY W. SONSINI, ESQ.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
(650) 493-9300
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INTRODUCTION
The Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), originally filed on August 24, 1998, by Quickturn Design Systems,
Inc., a Delaware corporation (the "Company" or "Quickturn"), relates to an
offer by MGZ Corp., a Delaware corporation ("MGZ") and a wholly owned
subsidiary of Mentor Graphics Corporation, an Oregon corporation ("Mentor"),
to purchase the outstanding shares of the common stock, par value $.001 per
share (including the associated preferred stock purchase rights), of the
Company. All capitalized terms used herein without definition have the
respective meanings set forth in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
The response to Item 4 is hereby amended by adding the following after the
final paragraph of Item 4(a):
On December 28, 1998, Mentor announced that it was reducing the number of
shares being sought in its unsolicited tender offer for shares of the
Company from all shares of the Company to 2,100,000 shares and increasing
its offering price for such reduced number of shares to $14.00 cash per
share from $12.125 cash per share (the "Reduced Offer"). Mentor has stated
that the Reduced Offer, if successfully consummated and when combined with
Mentor's current holdings, would result in Mentor holding approximately
14.9% of the Company's outstanding shares.
On December 28, 1998, the Board of Directors of Quickturn met with its
financial and legal advisors to consider the Reduced Offer.
On December 29, 1998, the Board of Directors met again with its financial
and legal advisors to consider the Reduced Offer and, at the conclusion of
such meeting, determined that the Reduced Offer is not in the best
interests of Quickturn and its stockholders for the reasons set forth under
Item 4(c) below.
ACCORDINGLY, THE BOARD RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS REJECT
THE REDUCED OFFER AND NOT TENDER THEIR SHARES PURSUANT TO THE REDUCED
OFFER.
A copy of the Company's press release relating to the Board's
recommendation is included as Exhibit 66 hereto and is incorporated herein
by reference.
The response to Item 4 is hereby amended further by adding the following
after the final paragraph of Item 4(b):
(c) Reasons for the Recommendation to Reject the Reduced Offer.
In determining that the Reduced Offer is not in the best interests of
Quickturn and its stockholders, and in making its recommendation that
Quickturn stockholders reject the Reduced Offer, the Board considered the
following reasons and factors:
. The Board determined that the Reduced Offer, which is limited to an
offer to purchase 2,100,000 shares, purports to be part of a process
pursuant to which Mentor proposes to undertake a "proposed second-step
merger." As expressed in its announcement of the Reduced Offer, Mentor's
proposal for a second-step merger is highly conditional in nature. The
Board noted that these conditions include, among other things, a legal
ruling invalidating certain provisions of the merger agreement between
Quickturn and Cadence, the negotiation of a merger agreement between
Quickturn and Mentor, and completion of due diligence. The Board
believes that these conditions are highly unlikely to be satisfied.
. The Board noted that Mentor did not state that it has sufficient
financing to complete its second-step merger, and the Board believes it
is not at all certain that Mentor can finance a transaction to acquire
all of Quickturn's outstanding stock and fulfill other commitments
required under the Cadence merger agreement. Accordingly, the Board
determined that there was significant uncertainty concerning whether a
second-step merger with Mentor could occur, as well as what the
consideration in such a transaction would be.
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. The Board determined that the Reduced Offer could interfere with or
threaten Quickturn's proposed transaction with Cadence, which the Board
determined again to be in the best interests of the Quickturn
stockholders. The Board noted that the Reduced Offer purported to be a
first step of a multi-step transaction that conflicts with the proposed
combination with Cadence.
. The Board noted that Mentor's ownership of 14.9% of the Quickturn's
shares, as well as its obtaining control of Quickturn's board of
directors, could raise serious concerns about Quickturn's ability to
engage in any "pooling-of-interests" transaction, including the proposed
combination with Cadence.
. The Board continues to believes that, even assuming Mentor could make a
firm offer to acquire all of Quickturn's shares at a price consistent
with its conditional proposal, the strategic combination with Cadence
provides substantial and superior short- and long-term value for the
Company, its stockholders, employees and customers. In particular, the
Board continues to believe that the Cadence transaction offers
substantial strategic benefits to Quickturn which far exceed the
consideration proposed by Mentor.
. The Board considered potential antitrust issues raised by the Cadence
transaction. In this regard, the Board continues to believe that the
transaction does not raise significant antitrust issues.
. The Board considered the potential harm to Quickturn, as well as the
Company's employees and customers, if Mentor were to become a 14.9%
stockholder of the Company. In this regard, given the litigation and
competition between the Company and Mentor, the Board considered the
potential negative impact on the Company if Mentor were to become a
large stockholder of the Company.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
The response to Item 9 is hereby amended by the addition of the following
new exhibit:
Exhibit 66 Press release of the Company dated December 30, 1998.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: December 30, 1998 QUICKTURN DESIGN SYSTEMS, INC.
By: /s/ Keith R. Lobo
___________________________
Keith R. Lobo
President and Chief Executive
Officer
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EXHIBIT 66
CONTACTS:
QUICKTURN DESIGN SYSTEMS, INC. ABERNATHY MACGREGOR FRANK
Ray Ostby Pauline Yoshihashi
(408) 914-6000 (213) 630-6550
Judith Wilkinson
(212) 371-5999
FOR IMMEDIATE RELEASE
QUICKTURN BOARD REJECTS MENTOR'S REVISED UNSOLICITED PROPOSAL
TO ACQUIRE 14.9% STAKE
REMAINS COMMITTED TO STRATEGIC MERGER WITH CADENCE DESIGN SYSTEMS
SAN JOSE, Calif., December 30, 1998 -- Quickturn Design Systems, Inc.
(Nasdaq: QKTN) said today its Board of Directors unanimously recommended that
Quickturn stockholders reject a revised unsolicited proposal by Mentor Graphics
Corporation (Nasdaq: MENT) to acquire a 14.9% stake in Quickturn. The Board
continues to recommend that stockholders not tender their shares to Mentor, and
urges Quickturn stockholders who may have tendered to withdraw their shares.
In making its recommendation, the board considered, among other things, that
Mentor's revised bid is limited to an offer to purchase 2,100,000 of Quickturn's
shares, and the fact that Mentor's purported proposal for a second-step merger
is highly conditional. The board also believes that Mentor's proposal could
interfere with Quickturn's previously announced strategic combination with
Cadence, which the board has determined is in the best interests of Quickturn's
stockholders. On December 8, 1998, Quickturn's board unanimously approved a
definitive merger agreement with Cadence Design Systems, Inc. (NYSE:CDN) under
which Cadence will acquire Quickturn in a tax-free, stock-for-stock transaction
with an aggregate purchase price of $253 million for all outstanding shares.
Upon closing of the merger, each stockholder of Quickturn will receive Cadence
common stock with a value of $14 per share.
Keith R. Lobo, president and chief executive officer of Quickturn, said,
"Quickturn's board has accepted an offer from Cadence that involves no
financing issues, provides all Quickturn stockholders with an attractive,
immediate premium for their shares, and allows them to participate in the
long-term benefits from this strategic combination. In contrast, Mentor's most
recent illusory proposal does not represent a real offer to purchase the entire
company, and Mentor has not demonstrated that it has committed financing for
such a proposal. Further, as Mentor is well aware, its proposal imposes
conditions that would require Quickturn to violate its merger agreement with
Cadence.
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"We believe Mentor's actions are not designed to acquire Quickturn but to
interfere with the company's pending transaction with Cadence, thereby denying
the benefits of that transaction to Quickturn's stockholders," Mr. Lobo added.
"Our board continues to believe a transaction with Cadence is the best way to
generate value for all of Quickturn's stockholders. The board further believes
that the Cadence transaction will be completed in a timely manner, and does not
raise significant antitrust concerns."
Quickturn Design Systems, Inc. is the leading provider of verification products
and time-to-market engineering (TtME(TM)) services for the design of complex ICs
and electronic systems. The company's products are used worldwide by developers
of high-performance computing, multimedia, graphics and communications systems.
Quickturn is headquartered at 55 W. Trimble Road, San Jose, CA 95131-1013;
Telephone: 408/914-6000. For more information, visit the Quickturn Web site at
www.quickturn.com or send e-mail to [email protected].
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