SC 14D9/A

 
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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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EX-99.66

                                                                      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.



 
"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 info@quickturn.com.

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