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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9
(AMENDMENT NO. 20)
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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)
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74838E102
(CUSIP Number of Class of Securities)
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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)
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COPY TO:
LARRY W. SONSINI, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
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 all of 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 8. ADDITIONAL INFORMATION TO BE FURNISHED
The response to Item 8 is hereby amended by adding the following to the end
of the section entitled "Proxy Solicitation":
On November 19, 1998, the Company sent a letter to its stockholders in
opposition to the solicitation by Mentor and MGZ. A copy of this letter is
included as Exhibit 49 hereto and is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
The response to Item 9 is hereby amended by the addition of the following
new exhibit:
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Exhibit 49 Letter to the Company's stockholders dated November 19, 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.
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Dated: November 19, 1998 QUICKTURN DESIGN SYSTEMS, INC.
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By:/s/ Keith R. Lobo
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Keith R. Lobo
President and Chief Executive
Officer
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EXHIBIT 49
November 19, 1998
Dear Fellow Quickturn Stockholder:
DON'T TENDER YOUR SHARES! DON'T VOTE MENTOR'S GOLD PROXY CARD!
VOTE QUICKTURN'S BLUE PROXY CARD TODAY!
Let's set the record straight.
We've said all along that we believe Mentor's offer is inadequate and doesn't
reflect the inherent value of Quickturn. Here's why:
. OUR BUSINESS IS GREAT -- In the third quarter of 1998, Quickturn exceeded
consensus analysts' estimates. Net income in the third quarter was $735,000
or $0.04 per share compared to consensus analysts' estimates of a loss of
$0.03 per share./1/ During the third quarter, we witnessed the resurgence of
customer orders in design and verification. And that trend is continuing well
into the fourth quarter. One of the major factors that will drive the future
marketplace for Quickturn's verification products is denser and more complex
chip designs. Design activities are growing at a faster pace than ever
before, and we are confident that our customers will begin even more projects
during 1999.
. QUICKTURN HAS THE LARGEST BACKLOG POSITION WE'VE EVER SEEN -- As we entered
the fourth quarter of 1998, we had the strongest backlog so far this year.
During the fourth quarter, our backlog position has increased to the largest
Quickturn has ever had, partially due to a $12 million customer order from a
large Japanese electronics company for our premier emulation technology and
design services.
. OUR NEW PRODUCTS ARE COMING TO MARKET -- Our recently announced CoBALT Plus
product features the industry's highest capacity available in a single
chassis. It represents a major enhancement to CoBALT(TM), which in itself was
a quantum leap in capacity and compilation speed for emulation, setting
levels that have yet to be reached by any other emulation supplier. As CoBALT
Plus, our breakthrough Mercury(TM) product and the enhancements to our
SpeedSim(TM) product reach full production by the end of 1998, we believe
that this will translate into significant near- to mid-term value for our
stockholders.
. WE BELIEVE QUICKTURN WILL GENERATE SIGNIFICANT VALUE FOR OUR STOCKHOLDERS IN
THE NEAR-, MID- AND LONG-TERM -- We have the patents, we have the technology,
we have the customer base, we have the R&D and we have the people. Quickturn
continues to beat Mentor in the marketplace and we're beating them in the
courts.
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1 Excluding the legal and advisory expenses of approximately $4.0 million, or
$0.13 per share, net of tax, related to Quickturn's defense against Mentor's
attempted hostile takeover.
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Your board continues to believe that the value of Quickturn is well in excess
of Mentor's low-ball offer. In fact, Mentor's offer is more than 25% below the
stock's highest closing price over the last year, and less than 4% above its
average closing price during the same period.
In fact, ONE OF MENTOR'S OWN ADVISORS DETERMINED THAT QUICKTURN'S VALUE IS
SUBSTANTIALLY HIGHER THAN MENTOR'S CURRENT OFFER. The highly respected
consulting firm, Arthur Andersen, in a confidential report dated October 1997,
said MENTOR'S PURCHASE OF QUICKTURN WOULD CREATE INCREMENTAL VALUE TO MENTOR OF
$610 MILLION TO $640 MILLION -- THAT'S NEARLY THREE TIMES THE AMOUNT MENTOR IS
CURRENTLY OFFERING FOR YOUR COMPANY.
WE STRONGLY URGE YOU NOT TO TENDER YOUR SHARES TO MENTOR'S INADEQUATE OFFER AND
NOT TO VOTE MENTOR'S GOLD PROXY CARD.
The Quickturn Board has been working hard on behalf of the company and its
stockholders. Your Board's rejection of Mentor's offer is based on its
continued confidence in Quickturn's future and its determination that
stockholders should be given every opportunity to participate fully in that
future.
PARTICIPATE IN QUICKTURN'S BRIGHT FUTURE
VOTE THE BLUE PROXY CARD TODAY!
On Behalf of the Board of Directors,
Keith R. Lobo
Chief Executive Officer and President
IMPORTANT
1. REGARDLESS OF HOW MANY SHARES YOU OWN, YOUR VOTE IS VERY IMPORTANT. PLEASE
SIGN, DATE AND MAIL THE ENCLOSED BLUE PROXY CARD. PLEASE VOTE EACH BLUE
PROXY CARD YOU RECEIVE SINCE EACH ACCOUNT IN WHICH YOU OWN SHARES MUST BE
VOTED SEPARATELY. ONLY YOUR LATEST DATED PROXY CARD COUNTS.
2. WE URGE YOU NOT TO RETURN ANY GOLD PROXY CARD SENT TO YOU BY MENTOR.
3. IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER NOMINEE,
PLEASE DIRECT THE PARTY RESPONSIBLE FOR YOUR ACCOUNT TO VOTE THE BLUE
PROXY CARD AS RECOMMENDED BY THE BOARD OF DIRECTORS.
IF YOU HAVE ANY QUESTIONS on how to vote your shares, please call our proxy
solicitor:
Morrow & Co., Inc. at (800) 662-5200.
