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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 3)
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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<PAGE>
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 deleting the last sentence of
the third paragraph of the section entitled "Patent Litigation with Mentor"
and replacing it with the following:
On August 27, 1998, the U.S. District Court for the Northern District of
California granted Quickturn's motion for summary judgment and dismissed
Aptix's suit against Quickturn.
The response to Item 8 is hereby amended further by adding the following to
the end of the third paragraph of the section entitled "Litigation Concerning
the Offer":
On August 27, 1998, Howard Shapiro filed an Amended Class Action
Complaint in full substitution of the Shapiro Complaint (the "Amended
Shapiro Complaint"). The Amended Shapiro Complaint is filed as Exhibit 18
hereto and is incorporated herein by reference.
The response to Item 8 is hereby amended further by deleting the Section
entitled "Additional Antitrust Matters" and replacing it with the following:
Additional Antitrust Matters.
On August 28, 1998, the Company filed its premerger notification form
with the FTC and the DOJ. The waiting period under the HSR Act expired at
11:59 p.m. New York City time on September 4, 1998.
2
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The response to Item 8 is hereby amended further by adding the following
after the final paragraph of Item 8:
Revocation of Agent Designations Solicitation.
On September 2, 1998, the Company filed preliminary proxy materials with
the SEC to solicit revocations of agent designations in opposition to the
Solicitation.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
The response to Item 9 is hereby amended by deleting Exhibit 13 originally
filed on August 28, 1998 and replacing it with a new Exhibit 13 filed with this
statement.
The response to Item 9 is hereby amended further by the addition of the
following new exhibit:
<TABLE>
<C> <S>
Exhibit 18 Amended Class Action Complaint in Howard Shaprio V. Quickturn
Design Systems, Inc., et. al., filed in the Court of Chancery
of the State of Delaware on August 27, 1998.
</TABLE>
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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: September 8, 1998 QUICKTURN DESIGN SYSTEMS, INC.
By: /s/ Keith R. Lobo
-----------------------------------
Keith R. Lobo
President and Chief Executive
Officer
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EXHIBIT 13
August 21, 1998
Confidential
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The Board of Directors
Quickturn Design Systems, Inc.
55 West Trimble Road
San Jose, CA 95131
Gentlemen:
You have requested our opinion as to the adequacy, from a financial point
of view, to the holders of the outstanding shares of common stock, par value
$0.001 per share (the "Common Stock") of Quickturn Design Systems, Inc.
("Quickturn" or the "Company"), other than Mentor Graphics Corporation
("Mentor"), of the terms of the Offer to Purchase (as hereinafter defined). For
purposes of this opinion, the "Offer to Purchase" means the offer described
below pursuant to that certain Offer to Purchase included in the Schedule 14D-1
filed with the Securities and Exchange Commission on August 12, 1998 by MGZ
Corp, (the "Bidder"), a wholly-owned subsidiary of Mentor.
As more specifically set forth in the Schedule 14D-1, the Bidder has
offered, subject to certain conditions set forth in the Offer to Purchase, to
purchase all the outstanding shares of Common Stock of the Company, and the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement between the Company and the First National Bank of Boston, dated
January 10, 1996, as Rights Agent (the "Rights Agreement"), at a purchase price
of $12.125 per share (and associated right) net to seller in cash.
Hambrecht & Quist LLC ("Hambrecht & Quist"), as part of its investment
banking services, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, strategic transactions,
corporate restructurings, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements and valuations for corporate
and other purposes. We have acted as a financial advisor to the Board of
Directors of Quickturn in connection with the proposed Offer to Purchase, and we
will receive a fee for our services. We will also receive a fee upon delivery
of this opinion.
In the past, we have provided investment banking and other financial
advisory services to Quickturn and Mentor and have received fees for rendering
these services. Hambrecht & Quist served as co-manager in the Company's
December 15, 1993 initial public offering, advised the Company in the January
10, 1996 adoption of its Shareholder Rights Plan, advised the Company in its
February 1997 merger with SpeedSim, Inc., and advised the Company in its June
1997 acquisition of the assets of Arkos Design, Inc. Hambrecht & Quist was
engaged in March 1998 to pursue the possible sale of a business unit of Mentor
unrelated to the electronic design automation business. This engagement, which
has been inactive for several months, has now been terminated by
<PAGE>
Hambrecht & Quist. In the ordinary course of business, Hambrecht & Quist acts as
a market maker and broker in the publicly traded securities of Quickturn and
Mentor and receives customary compensation in connection therewith, and also
provides research coverage for Quickturn and Mentor. In the ordinary course of
business, Hambrecht & Quist actively trades in the equity and derivative
securities of Quickturn and Mentor for its own account and for the accounts of
its customers and, accordingly, may at any time hold a long or short position in
such securities. Moreover, Hambrecht & Quist and its affiliates own 40,000
shares of Common Stock of the Company.
In connection with our review of the proposed Offer to Purchase, and in
arriving at our opinion, we have, among other things:
1. reviewed the publicly available consolidated financial statements
of Quickturn for
recent years and interim periods to date and certain other relevant financial
and operating data of Quickturn (including its capital structure) made available
to us from published sources and from the internal records of Quickturn;
2. reviewed the Offer to Purchase, the Schedule 14D-1 and certain
related documents;
3. reviewed certain internal financial and operating information,
including certain projections, relating to Quickturn prepared by
the management of Quickturn;
4. discussed the operations, business strategy, financial
condition and prospects of Quickturn with certain of its
officers;
5. reviewed the publicly available consolidated financial statements
of Mentor for recent years and interim periods to date and
certain other relevant financial and operating data of Mentor
made available to us from published sources;
6. reviewed the recent reported prices and trading activity for
the common stocks of Quickturn and Mentor and compared such
information and certain financial information for Quickturn and
Mentor with similar information for certain other companies
engaged in businesses we deemed comparable;
7. reviewed the financial terms, to the extent publicly available,
of certain comparable merger and acquisition transactions; and
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8. performed such other analyses and examinations and considered
such other information, financial studies, analyses and
investigations and financial, economic and market data as we
deemed relevant.
In rendering our opinion, we have assumed and relied upon the accuracy and
completeness of all of the information concerning Quickturn or Mentor considered
in connection with our review of the proposed Offer to Purchase, and we have not
assumed any responsibility for independent verification of such information. We
have not prepared any independent valuation or appraisal of any of the assets or
liabilities of Quickturn or Mentor, nor have we conducted a physical inspection
of the properties and facilities of either company. With respect to the
financial, forecasts and projections made available to us and used in our
analysis, we have assumed that they reflect the best currently available
estimates and judgments of the expected future financial performance of
Quickturn and Mentor. For purposes of this opinion, we have assumed that
neither Quickturn nor Mentor is a party to any pending transactions, including
external financings, recapitalizations or material merger discussions, other
than the proposed Offer to Purchase and those activities undertaken in the
ordinary course of conducting their respective businesses. Our opinion is
necessarily based upon market, economic, financial and other conditions as they
exist and can be evaluated as of the date of this letter and any change in such
conditions would require a reevaluation of this opinion.
We were not requested to, and did not, solicit indications of interest from
any other parties in connection with a possible acquisition of, or business
combination with, Quickturn.
It is understood that this letter is for the information of the Board of
Directors and may not be used for any other purpose without our prior written
consent; provided, however, that this letter may be reproduced in full in the
14D-9. This letter does not constitute a recommendation to any stockholder as
to whether to tender shares of Common Stock pursuant to the Offer to Purchase.
Based upon and subject to the foregoing and after considering such other
matters as we deem relevant, we are of the opinion that as of the date hereof
the consideration to be received by the holders of the Common Stock in the
proposed Offer to Purchase is inadequate, from a financial point of view, to
such holders.
Very truly yours,
HAMBRECHT & QUIST LLC
By /s/ Paul B. Cleveland
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Paul B. Cleveland
Managing Director
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EXHIBIT 18
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
HOWARD SHAPIRO, )
)
Plaintiff, )
)
- against - ) C.A. No. 16588-NC
)
GLEN M. ANTLE, KEITH R. LOBO, )
RICHARD C. ALBERDING, MICHAEL R. )
D'AMOUR, YEN-SON HUANG, DAVID K. )
LAM, WILLIAM A. HASLER, CHARLES D. )
KISSNER and QUICKTURN DESIGN )
SYSTEMS, INC. )
)
Defendants. )
_____________________________________)
AMENDED CLASS ACTION COMPLAINT
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Plaintiff, by his attorneys, for his complaint against defendants, alleges
upon information and belief, except for paragraph 3 hereof, which is alleged
upon knowledge as follows:
NATURE OF THE ACTION
--------------------
1. This is a stockholder's class action lawsuit brought on behalf of the
public stockholders of Quickturn Design Systems, Inc. ("Quickturn" or the
"Company"). The Individual Defendants, who constitute the Company's Board of
Directors, have wrongfully refused to negotiate or appropriately consider a
value maximizing proposal for the Company made by Mentor Graphics Corporation
("Mentor"), have impermissibly exploited and expanded anti-takeover defenses to
entrench themselves in their positions of control, have infringed upon
shareholder voting rights, and have acted unreasonably in relation to any
arguable threat posed by Mentor's offer. The actions of the Individual
Defendants described below constitute breaches of their fiduciary duties to
Quickturn and its shareholders.
2. Plaintiff brings this action pursuant to Rule 23 of the Rules of the
Court of Chancery on his behalf and as a class action on behalf of all persons,
other than defendants and those in privity with them, who own the common stock
of Quickturn.
<PAGE>
3. Plaintiff has been the owner of the common stock of the Company since
prior to the transaction herein complained of and continuously to date.
4. Defendant Quickturn is a corporation duly organized and existing under
the laws of the State of Delaware. The Company designs, manufactures, markets
and supports system level verification solutions for the design of integrated
circuits and electronic systems.
5. Defendant Glen M. Antle is and was at all relevant times the Chairman
of the Board and a director of Quickturn.
6. Defendant Keith R. Lobo is and was at all relevant times Chief
Executive officer, President and a director of Quickturn.
7. Defendants Richard C. Alberding, Michael R. D'Amour, Yen-Son Huang,
David K. Lam, William A. Hasler and Charles D. Kissner are and were at all
relevant times directors of Quickturn.
8. The Individual Defendants named in paragraphs 4 through 7 are in a
fiduciary relationship with the plaintiff and the other public stockholders of
Quickturn and owe them the highest obligations of good faith, due care, candor
and fair dealing.
CLASS ACTION ALLEGATIONS
------------------------
9. Plaintiff brings this action on his own behalf and as a class action,
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all
security holders of the Company (except the defendants herein and any person,
firm, trust, corporation, or other entity related to or affiliated with any of
the defendants) and their successors in interest, who are or will be threatened
with injury arising from defendants' actions as more fully described herein.
10. This action is properly maintainable as a class action.
11. The class is so numerous that joinder of all members is impracticable.
As of April 30, 1998, there were approximately 17.8 million shares of Quickturn
common stock outstanding, owned by shareholders located throughout the country.
12. There are questions of law and fact which are common to the class and
which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following: (a) whether defendants
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have breached their fiduciary and other common law
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duties owed by them to plaintiff and the members of the class; (b) whether
defendants are unlawfully impeding a takeover attempt and improperly seeking to
entrench themselves in their own positions at the expense of the public
shareholders of Quickturn; (c) whether defendants' actions hereinafter
described, constitute a breach of their fiduciary duties in response to a
legitimate, fully-financed offer to acquire the Company and unlawfully infringe
on shareholder rights to self-determination; and (d) whether the class is
entitled to injunctive relief or damages as a result of the wrongful conduct
committed by defendants.
13. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class.
14. Defendants have acted in a manner which affects plaintiff and all
members of the class, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the class as a whole.
15. The prosecution of separate actions by individual members of the Class
would create a risk of inconsistent or varying adjudications with respect to
individual members of the Class, which would establish incompatible standards of
conduct for defendants, or adjudications with respect to individual members of
the Class which would, as a practical matter, be dispositive of the interests of
other members or substantially impair or impede their ability to protect their
interests.
SUBSTANTIVE ALLEGATIONS
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16. On or about August 12, 1998, Mentor Graphics Corp. ("Mentor")
announced that it had offered to purchase all the outstanding shares of
Quickturn's common stock that it did not already own (approximately 97% of the
outstanding shares) for $12.125 per share in cash. The offer is fully financed,
non-coercive and non-discriminatory. The total value of the proposed
transaction is approximately $216 million. In response to this announcement,
the price of Quickturn common stock soared over $3.00 per share (or 38%), from
its August 11, 1998 closing price of $8.00 per share to $11.03125 per share.
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17. Mentor's President and Chief Executive Officer, Dr. Walden Rhines
("Rhines") presented the offer to defendant Antle at an August 11 late-night
meeting. Rhines stated that Mentor would consider increasing its offer based on
a due diligence review, if Quickturn permitted one. Antle stated only that he
would communicate the offer to the Quickturn board.
18. Commenting on the proposed transaction, Mentor's Walden Rhines said in
a telephone interview that while the proposed transaction would eliminate an
existing patent battle between the companies, which would result in savings of
$12 million in legal fees alone, the deal made sense independent of the
litigation. Although Mentor and Quickturn have discussed merging in the past,
they could never reach an agreement, he said.
19. "We think this is something that is just plain good for the
shareholders and the companies," Mr. Rhines said. "I think the joining of the
two companies would have tremendous benefits in eliminating customer
uncertainty," he said.
20. Also on August 12, Mentor announced that it was filing with the United
States Securities and Exchange commission ("SEC") preliminary materials to
solicit agent designations to call a special meeting of the Company's
stockholders to replace the current members of Quickturn's Board of Directors.
21. Quickturn has in place a number of defensive measures including a
shareholders rights plan (the "Poison Pill"), which, if properly utilized, would
permit the Board to negotiate a favorable transaction.
22. On or about January 10, 1996, the Quickturn Board approved the
adoption of the Poison Pill and declared a dividend of one Preferred Share
purchase right (a "Right") for each common share of Quickturn stock outstanding
as of the close of business on January 22, 1996. The Rights are distributed and
become exercisable for one one-thousandth share of Quickturn's Series A
Participating Preferred Stock (the "Series A Preferred") at a price of $50 on
the close of business ten days after the earlier of (1) the first date of public
announcement that any person (other than Quickturn, any subsidiary of Quickturn
or any employee benefit plan of Quickturn or any subsidiary of Quickturn) has
acquired or obtained the right to acquire beneficial ownership of 15% or more of
Quickturn's common stock (an "Acquiring Person"), or (ii) the publication
pursuant to Rule 14-d-2(a) promulgated
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under the Securities Exchange Act of 1934 (the "Exchange Act") of a tender or
exchange offer which, if successful, would result in the beneficial acquisition
by any person of 15% or more of Quickturn's common stock (the earlier of (i) and
(ii) being referred to as the "Distribution Date"). The Rights expire on January
10, 2006, unless earlier redeemed or exchanged by Quickturn.
23. The primary purpose of the Rights Plan is not to enable the purchase
of the Series A Preferred at the greatly inflated price of $50 for each one-
thousandth share, but to allow the holder of the Right, under certain
circumstances, to purchase shares of Quickturn's or an acquiror's common stock
at a deep discount. If and when a person becomes an Acquiring Person, all
Rights other than those held by the Acquiring Person "flip-in" and each right
becomes exercisable for shares of Quickturn common stock equivalent in value to
twice the exercise price of the Right. Thus, for the exercise price of $50, the
holder of a Right may purchase Quickturn common stock having a market value of
$100. If and when Quickturn engages in a merger or a sale of 50% or more of its
assets, the Rights "flip-over" and become exercisable for shares of the
acquiror's common stock at the same deep discount price of two for the price of
one. Thus, stockholders have no economic incentive to exercise the Rights until
a person triggers the "flip-in" and/or "flip-over" provisions by becoming an
Acquiring Person.
24. The Rights are not exercisable for shares of Quickturn's common stock
if , prior to any person becoming an Acquiring Person, the Quickturn Board
declares that the tender or exchange offer is a "Permitted Offer." Under the
Rights Plan as originally adopted, a Permitted Offer is a tender or exchange
offer, issued pursuant to Section 14(d) of the Exchange Act, made when
"Continuing Directors" are in office, and determined to be, in the opinion of a
majority of Continuing Directors, "both adequate and otherwise in the best
interests of the Company and its stockholders (taking into account all factors
that such Continuing Directors deem relevant)."
25. Under the original Rights Plan, the Quickturn Board could redeem the
Rights, at a redemption price of $.01 per Right, any time prior to the close of
business on the earlier of (i) the tenth day following the date of public
announcement of the fact than an Acquiring Person has become such, or (ii)
January 10, 2006; provided, however, that once a stockholder had become an
Acquiring Person, the Rights could be redeemed by the Quickturn Board only if
Continuing Directors remained on the
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Board and the redemption was approved by a majority of the Continuing Directors.
Continuing Directors were defined as (i) persons serving on the Quickturn Board
prior to the date of the adoption of the Rights Agreement who are not associated
or affiliated with an Acquiring Person, or (ii) persons nominated or elected to
the Quickturn Board with the approval of the majority of the Continuing
Directors after the date of the adoption of Rights Plan who are not associated
or affiliated with an Acquiring Person.
26. In addition, Quickturn has not opted out of the protection of 8 Del.
---
C. Section 203. Under the statute, only an unsolicited acquisition offer which
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results in the purchase of 85% or more of the outstanding shares may be promptly
consummated by a second step merger without approval by the incumbent directors.
27. The Board did not respond to Mentor's offer with any effort to permit
due diligence or negotiate a higher offer. Instead, the Board retained
Hambrecht & Quist LLC ("H&Q") to serve as its financial advisor, and structured
H&Q's fee to create an incentive to opine against the Mentor offer. Pursuant to
the terms of the H&Q retainer agreement, H&Q was initially paid $100,000 and
received an additional $750,000 upon delivering its initial opinion on Mentor's
offer. If Quickturn determines to remain independent and does not recommend an
offer for the company before May 14, 1999, H&Q will be paid $1 million, less any
fees already paid. H&Q will also be paid an additional $250,000 for giving
additional opinions on Mentor's offer or a bid from another party.
Additionally, if Mentor's tender offer or another bid for the Company is
successful, then H&Q will be paid 0.75% of the Merger consideration received
under the offer. However, if, with the Quickturn Board's blessing, the Company
enters into a merger agreement for the acquisition of 50% or more of the
Company's securities before May 14, 1999, then H&Q will receive as a fee 1% of
the merger consideration received. This fee structure creates a bias to opine
against any unsolicited bids for the Company. Accordingly, Quickturn
shareholders are unable to rely on the integrity of H&Q's fairness opinion.
28. On August 24, 1998, the Board announced that it had rejected Mentor's
offer and was recommending that the Company's shareholders not tender their
shares. The Quickturn Board refused to negotiate or to permit Mentor to conduct
any due diligence review of the Company, or to take any
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<PAGE>
other action to motivate Mentor to increase its offer or that would maximize
value for Quickturn's shareholders.
29. Additionally, in order to augment its already formidable arsenal of
takeover defenses, the Company announced that it was amending its bylaws
regarding the procedure for calling a special meeting of stockholders by holders
representing at least 10 percent of the votes. The amendment to the bylaws
requires that the Board shall set a date for such a meeting not less than 90
days nor more than 100 days after the receipt of a valid request for a meeting.
Previously, Quickturn's bylaws provided that a special meeting would be called
by holders of 10% or more of the Company's stock. Under that provision, the
stockholders calling the meeting could establish the meeting date, constrained
only by 8 Del. C. Section 222.
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30. Furthermore, the Company announced that the Board had amended the
Rights Plan so that the Rights cannot be redeemed or exchanged and the Rights
Plan cannot be amended for a period of 180 days following an annual or special
meeting in which a majority of the Board is elected, if such a redemption,
amendment or exchange is reasonably likely to facilitate a change in control
transaction with certain acquirors.
31. These amendments to the Company's bylaws and Rights Plan are designed
to thwart Mentor's effort to facilitate shareholder acceptance of the Mentor
offer by affording shareholders the opportunity to replace a majority of
Quickturn's Board.
32. The Mentor offer is a fully-financed, non-coercive, non-
discriminatory, all cash, all shares offer for Quickturn stock. It does not
constitute a threat to Quickturn or its shareholders. The Board's out-of-hand
rejection of the Mentor offer, refusal to permit due diligence and refusal to
commence good-faith negotiations with Mentor to achieve the highest available
value for Quickturn's shareholders constitute a breach of their fiduciary
duties.
33. Moreover, since the Mentor offer constitutes no threat to Quickturn or
its shareholders and Quickturn already has in place an arsenal of anti-takeover
defenses that enable the Board to fulfill its obligations to respond
appropriately to unsolicited offers, the adoption of the amendments to the
Rights Plan and bylaws are unreasonable in relation to any threat posed by the
Mentor offer.
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<PAGE>
34. Moreover, the Individual Defendants' amendment of the Rights Plan, if
effective, would preclude Quickturn's stockholders from utilizing their
stockholder franchise to permit acceptance of an offer they believe to be in
their best interests. This amendment serves no legitimate corporate interest,
has no economic or legal justification, is unreasonable in response to the
Mentor offer, constitutes an unlawful infringement on the managerial
prerogatives of a board elected at a specially called shareholders' meeting,
and, also, thereby constitutes an infringement on the free exercise of the
shareholder franchise without compelling justification.
35. The Individual Defendants have refused and continue to refuse to
negotiate with Mentor in order to protect their own substantial salaries and
perquisites, and to entrench themselves in their positions of authority and
control with the Company. Instead of fulfilling their fiduciary duties to the
public shareholders of Quickturn by immediately beginning negotiations with
Mentor to maximize shareholder value, defendants have acted to protect their own
interests.
36. As a result of the actions of the Individual Defendants, plaintiff and
the other members of the Class have been and will be damaged in that they have
not and will not receive their fair proportion of the value of Quickturn's
assets and businesses, they have been and will be prevented from obtaining a
fair and adequate price for their shares of Quickturn's common stock, and their
right to free exercises of shareholder voting rights has been infringed without
compelling justification.
37. By reason of all of the foregoing, each defendant has breached his
fiduciary duties owed by each of them to the Class.
38. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiff and the Class, and will succeed in
their plan to entrench themselves and deprive the Class of the opportunity to
maximize the value of their Quickturn holdings either in a transaction with
Mentor or some other bona fide offeror, all to the irreparable harm of the
---- ----
Class.
39. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
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<PAGE>
B. declaring that the August 21, 1998 amendments to the Quickturn bylaws
and Rights Plan are ineffective and enjoining defendants from enforcing these
amendments or taking any action pursuant to their provisions;
C. ordering the Individual Defendants to carry out their fiduciary duties
to plaintiff and the other members of the class by announcing their intention
to:
1) cooperate fully with any person or entity, having a bona fide
---- ----
interest in proposing any transaction which would maximize shareholder value,
including, but not limited to, a buyout or takeover of the Company by Mentor;
2) undertake an appropriate evaluation of Quickturn's worth as a
merger/acquisition candidate;
3) take all appropriate steps to enhance Quickturn's value and
attractiveness as a merger/acquisition candidate;
4) take all appropriate steps to effectively expose Quickturn to the
marketplace in an effort to create an active auction for Quickturn;
5) act independently so that the interests of Quickturn's public
stockholders will be protected; and
6) adequately ensure that no conflicts of interest exist between the
Individual Defendants' interest and their fiduciary obligation to maximize
stockholder value or, if such conflicts exist, to ensure that all conflicts are
resolved in the best interests of Quickturn's public stockholders;
D. ordering the Individual Defendants, jointly and severally, to account
to plaintiff and the class for all damages suffered and to be suffered by them
as a result of the acts and transactions alleged herein;
E. preliminarily and permanently enjoining defendants from proceeding
with any action that will entrench the Individual Defendants to the detriment of
maximizing the value to the Company's public shareholders;
F. awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and
G. granting such other and further relief as may be just and proper in
the premises.
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<PAGE>
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/ Norman M. Monhait
_______________________________________
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, New York 10016
(212) 779-1414
August 27, 1998
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<PAGE>
CERTIFICATE OF SERVICE
----------------------
I HEREBY CERTIFY that on this 27th day of August, 1998, two copies of the
foregoing NOTICE OF FILING AMENDED CLASS ACTION COMPLAINT and AMENDED CLASS
ACTION COMPLAINT were served, by hand, upon:
Kenneth J. Nachbar, Esquire
Morris Nichols Arsht & Tunnell
1201 N. Market Street
Wilmington, Delaware 19899
/s/ Norman M. Monhait
________________________________________
Norman M. Monhait
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