-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H/f8SYBpTFVMDsF/RfklcYczsVMUsJ4bfrPHO+mxTa8PS8FWPJffZv1pzbhfbUg3 fsCc0a/0x/0ArL19DIrV0A== 0001047469-98-032631.txt : 19980826 0001047469-98-032631.hdr.sgml : 19980826 ACCESSION NUMBER: 0001047469-98-032631 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980825 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUICKTURN DESIGN SYSTEMS INC CENTRAL INDEX KEY: 0000914252 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 770159619 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-43785 FILM NUMBER: 98697239 BUSINESS ADDRESS: STREET 1: 55 W TRIMBLE ROAD CITY: SAN JOSE STATE: CA ZIP: 951311013 BUSINESS PHONE: 4089146000 MAIL ADDRESS: STREET 1: 55 W TRIMBLE ROAD CITY: SAN JOSE STATE: CA ZIP: 95131-1013 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MENTOR GRAPHICS CORP CENTRAL INDEX KEY: 0000701811 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 930786033 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 8005 SW BOECKMAN RD CITY: WILSONVILLE STATE: OR ZIP: 97070 BUSINESS PHONE: 5036857000 SC 14D1/A 1 14D1/A - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 2 TO SCHEDULE 14D-1 TENDER OFFER STATEMENT (PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) QUICKTURN DESIGN SYSTEMS, INC. (Name of Subject Company) MENTOR GRAPHICS CORPORATION MGZ CORP. (Bidders) COMMON STOCK, PAR VALUE $.001 PER SHARE (including the Associated Rights) (Title of Class of Securities) 74838E102 (CUSIP Number of Class of Securities) ------------------------ WALDEN C. RHINES PRESIDENT AND CHIEF EXECUTIVE OFFICER MENTOR GRAPHICS CORPORATION 8005 S.W. BOECKMAN ROAD WILSONVILLE, OREGON 97070-7777 (503) 685-1200 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of Bidders) COPY TO: JOHN J. HUBER, ESQ. CHRISTOPHER L. KAUFMAN, ESQ. LATHAM & WATKINS LATHAM & WATKINS 1001 PENNSYLVANIA AVENUE, N.W. 75 WILLOW ROAD WASHINGTON, DC 20004 MENLO PARK, CALIFORNIA 94025 (202) 637-2200 (650) 328-4600 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE 14D-1 CUSIP NO. 74838E102 ________________________________________________________________________________ (1) Name of reporting persons: Mentor Graphics Corporation I.R.S. Identification No. of above person (entities only): 93-0786033 ________________________________________________________________________________ (2) Check the appropriate box if a member of a group (see instructions): (a) / / (b) / / ________________________________________________________________________________ (3) SEC use only ________________________________________________________________________________ (4) Source of funds (see instructions): BK, WC ________________________________________________________________________________ (5) Check box if disclosure of legal proceedings is required pursuant to Items 2(e) or 2(f) / / ________________________________________________________________________________ (6) Citizenship or place of organization: Oregon ________________________________________________________________________________ (7) Aggregate amount beneficially owned by each reporting person: 791,500 shares of common stock(1) ________________________________________________________________________________ (8) Check box if the aggregate amount in Row (7) excludes certain shares (see instructions): / / ________________________________________________________________________________ (9) Percent of class represented by amount in Row (7): 4.4%(1) ________________________________________________________________________________ (10) Type of reporting person (see instructions): CO ________________________________________________________________________________ (1) 200,000 shares are represented by a warrant to acquire (after taking into account a reverse stock split) 200,000 shares of Company Common Stock at an exercise price of $30.00 per share, which warrant expires on February 27, 2000. 2 MGZ Corp., a Delaware corporation ("Purchaser"), and Mentor Graphics Corporation, an Oregon corporation ("Parent"), hereby amend and supplement their Tender Offer Statement on Schedule 14D-1 filed on August 12, 1998 (the "Statement"), as amended, with respect to the offer by Purchaser to purchase all outstanding shares of Common Stock, par value $.001 per share, of Quickturn Design Systems, Inc., a Delaware corporation, for a purchase price of $12.125 per share, net to the seller in cash, without interest thereon, as set forth in this Amendment No. 2. Capitalized terms used herein and not defined have the meanings ascribed to them in the Statement. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. Parent is the holder of an unsecured subordinated promissory note of the Company dated September 29, 1993 (the "Promissory Note"), a copy of which is attached hereto as Exhibit (c)(1) and is incorporated herein by reference, issued in connection with the termination of a Remarketing Agreement between Parent and PiE Design Systems, Inc., which merged with the Company in June 1993. Pursuant to the terms of the Promissory Note, the Company agreed to pay Parent the principal sum of $3,000,000, together with interest on the outstanding principal sum at a rate of four percent (4%) per annum, in five equal installments commencing on September 30, 1994. The final installment of $600,000 under the Promissory Note is due and payable on September 30, 1998. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. On February 28, 1992, the Company granted Parent a warrant (the "Warrant"), a copy of which is attached hereto as Exhibit (c)(2) and is incorporated herein by reference, in connection with the sale by Parent to the Company of a patent covering certain emulation technology and related assets. After giving effect to a reverse stock split of the Company Common Stock in December 1993, the Warrant entitles Parent to acquire 200,000 shares of Company Common Stock at an exercise price of $30.00 per share. The Warrant expires on February 27, 2000. Also on February 28, 1992, Parent and the Company entered into a registration rights agreement (the "Registration Rights Agreement"), a copy of which is attached hereto as Exhibit (c)(3) and is incorporated herein by reference. The Registration Rights Agreement provides for the registration of the shares issuable upon exercise of the Warrant at such time as the Company proposes to register any of its stock or other securities under the Securities Act, subject to certain limitations set forth therein. Parent is also the holder of the Promissory Note as described above under Item 3. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. Parent is the holder of the Promissory Note and Warrant, each as described above under Items 3 and 6. Parent and the Company have entered into the Registration Rights Agreement as described above under Item 6. ITEM 10. ADDITIONAL INFORMATION. Item 10(f) of the Statement is hereby amended and supplemented by the following: 1. On August 24, 1998, Parent issued a press release, a copy of which is attached hereto as Exhibit (a)(9) and is incorporated herein by reference. 2. The following paragraph is added and inserted after the first paragraph under the heading "Other Information" on page 17 of the Offer to Purchase: Parent is the holder of an unsecured subordinated promissory note of the Company dated September 29, 1993 (the "Promissory Note"), issued in connection with the termination of a Remarketing 3 Agreement between Parent and PiE Design Systems, Inc., which merged with the Company in June 1993. Pursuant to the terms of the Promissory Note, the Company agreed to pay Parent the principal sum of $3,000,000, together with interest on the outstanding principal sum at a rate of four percent (4%) per annum, in five equal installments commencing on September 30, 1994. The final installment of $600,000 under the Promissory Note is due and payable on September 30, 1998. 3. The following paragraph is added and inserted after the first full paragraph of Schedule II of the Offer to Purchase: Parent is the holder of a warrant to acquire 200,000 shares of Company Common Stock at an exercise price of $30.00 per share (the "Warrant"). The Warrant was issued on February 28, 1992 in connection with the sale by Parent to the Company of a patent covering certain emulation technology and related assets and expires on February 27, 2000. Parent and the Company entered into a registration rights agreement on February 28, 1992 which provides for the registration of the shares issuable upon exercise of the Warrant at such time as the Company proposes to register any of its stock or other securities under the Securities Act, subject to certain limitations set forth therein. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(9)--Press Release dated August 24, 1998 (c)(1)--Unsecured Subordinated Promissory Note dated September 29, 1993 (c)(2)--Warrant granted by the Company to Parent dated February 28, 1992 (c)(3)--Registration Rights Agreement between Parent and the Company dated February 28, 1992 4 SIGNATURES After due 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. Dated: August 25, 1998 MENTOR GRAPHICS CORPORATION By: /s/ Gregory K. Hinckley Name: Gregory K. Hinckley Title: Executive Vice President, Chief Operating Officer and Chief Financial Officer MGZ CORP. By: /s/ Gregory K. Hinckley Name: Gregory K. Hinckley Title: Secretary and Chief Financial Officer
5 EX-99.(A)(9) 2 PRESS RELEASE Exhibit 99(a)(9) MENTOR GRAPHICS REITERATES ITS COMMITMENT TO TRANSACTION IN RESPONDING TO QUICKTURN'S REJECTION OF ITS $12.125 PER SHARE ALL-CASH OFFER WILSONVILLE, ORE., AUGUST 24, 1998 -- Dr. Walden C. Rhines, President and Chief Executive Officer of Mentor Graphics Corporation (Nasdaq: MENT), said today that the actions taken by the board of Quickturn Design Systems, Inc. (Nasdaq: QKTN) in rejecting Mentor's all-cash, premium, fully financed offer are "deplorable and not in the best interests of Quickturn stockholders." Dr. Rhines reiterated Mentor's commitment to completing the proposed transaction. "We believe that Quickturn's rejection of our $12.125 per share all-cash offer is unjustifiable in light of the 51.6 percent premium that offer represents over Quickturn's closing share price the day before our offer was announced," Dr. Rhines said. "The $12.125 per share price is also approximately forty times First Call consensus estimates for Quickturn in 1999. Nevertheless, we are fully committed to our offer, which we believe provides significant value to the stockholders and customers of both companies. "The claim by Quickturn President and CEO Keith R. Lobo that Mentor's offer comes at a 'moment of weakness' for Quickturn's stock price is hardly credible. The facts are that this so-called moment of weakness has lasted for six months. Quickturn's stock has languished since February of this year as Quickturn's management has failed to develop and execute a value-enhancing business plan. "Moreover, if Mr. Lobo honestly believes this is only a 'moment of weakness,' why did Quickturn reprice 1.546 million stock options in June of this year to $7.44 per share?"It would appear, in short, that the actions of Quickturn in response to our offer--including the rejection of that offer, and the amendments to the Quickturn by-laws with regard to the company's special stockholders meeting and 'poison pill'-- are unreasonable and serve to entrench management rather than deliver value to Quickturn stockholders." Dr. Rhines said: "The strategic fit of Mentor Graphics, with its primary focus on the software side of electronic design automation (EDA), and Quickturn, the market leader in system-level hardware emulation solutions, is compelling. That strategic fit, and the resulting ability to provide our respective semiconductor and systems customers throughout the world with the industry's broadest range of software and hardware solutions, is what this transaction is about. This transaction is NOT just about resolving the ongoing patent litigation between the two companies. We would pursue this strategic combination even if this litigation didn't exist. (more) "For these reasons, we intend to take all actions necessary to remove the obstacles to consideration of our offer so Quickturn stockholders can realize the benefits of our offer as quickly as possible," Dr. Rhines concluded. The tender offer is scheduled to expire at 12:00 midnight, New York City time, on September 9, 1998, unless extended. As previously indicated, the offer is subject to terms and conditions including a majority of outstanding Quickturn shares being validly tendered and not withdrawn; redemption or removal of Quickturn's shareholder rights plan; the inapplicability of the Delaware business combination statute; and the expiration or termination of the Hart-Scott-Rodino waiting period. The Offer to Purchase and ancillary documents are available on a Mentor Graphics World Wide Web site at http://www.mentorg.com/file. This news release does not constitute an offer to purchase any securities, nor a solicitation of a proxy, consent, authorization or agent designation with respect to a meeting of the Quickturn stockholders. The tender offer and the agent designation solicitation are being made pursuant to separate materials in compliance with the requirements of applicable federal and state law. Mentor Graphics' financial advisor with regard to the transaction is Salomon Smith Barney. MacKenzie Partners, Inc. is acting as Information Agent for the Offer and as solicitor for the agent designation solicitation, and can be reached by collect call at 212-929-5500 or, toll-free, at 800-322-2885. Contacts: Anne M. Wagner Gregory K. Hinckley Vice President, Marketing COO and CFO 503-685-1462 503-685-4833 Dennis Weldon Roy Winnick Treasurer Kekst and Company 503-685-1462 212-521-4842 EX-99.(C)(1) 3 PROMISSORY NOTE Exhibit 99(c)(1) QUICKTURN DESIGN SYSTEMS, INC. UNSECURED SUBORDINATED PROMISSORY NOTE -------------------------------------- $3,000,000 Wilsonville, Oregon September 29, 1993 FOR VALUE RECEIVED, Quickturn Design Systems, Inc., a California corporation, whose principal address is 440 Clyde Avenue, Mountain View, California 94043 (the "COMPANY"), promises to pay to Mentor Graphics Corporation, an Oregon corporation, whose principal address is 8005 S.W. Boeckman Road, Wilsonville, Oregon 97007 ("MENTOR GRAPHICS"), the principal sum of Three Million Dollars ($3,000,000), together with interest on the outstanding principal sum at the rate of four percent (4%) per annum. Principal shall be due and payable annually in five equal installments of $600,000 on the 30th day of each September commencing on September 30, 1994. Interest accrued hereon shall be due and payable quarterly in arrears on the last day of each calendar quarter for the calendar quarter then ending, commencing with the calendar quarter ending December 31, 1993. Payment of principal and interest shall be made in lawful money of the United States at Mentor Graphic's principal office or at such other place as Mentor Graphics may from time to time designate in writing. Interest shall be calculated on the basis of a 360-day year and the actual number of days elapsed. The following is a statement of the terms and conditions to which this Note is subject and with respect to which, by acceptance of this Note, the holder hereof agrees: 1. PREPAYMENT The Company shall have the right to prepay without premium or penalty, at any time, in whole or in part, the unpaid principal and interest due on this Note. 2. SUBORDINATION The indebtedness evidenced by this Note is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all the Company's senior Indebtedness. "Senior Indebtedness" shall mean the principal of (and premium, if any) and unpaid interest on (i) all indebtedness of the Company or with respect to which the Company is a guarantor, whether outstanding on the date hereof created, to banks, insurance companies, lease financing institutions or other lending institutions, regularly engaged in the business of lending money, which is for money borrowed (or purchase of equipment in the case of lease funding) by the Company or a subsidiary of the Company, whether or not secured, and (ii) any amendments, modifications, deferrals, increases, renewals or extensions of any such indebtedness or any debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness. Upon any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization, or arrangements with creditors (whether or not pursuant to bankruptcy or other insolvency laws), sale of all or substantially all of the assets, dissolution, liquidation, or any other marshaling of the assets and liabilities of the Company or in the event this Note shall be declared due and payable upon the occurrence of an event of default (as specified herein), (i) no amount shall be paid by the Company in respect of the principal of or interest on this Note at the time outstanding, unless and until the principal of and interest on the Senior Indebtedness then outstanding shall be paid in full, and (ii) no claim or proof of claim shall be filed with the Company by or on behalf of the holder of this Note which shall assert any right to receive any payments in respect of the principal of and interest on this Note except subject to the payment in full of the principal of and interest on all of the Senior Indebtedness then outstanding. In the instance of an event of default which has been declared in writing with respect to any Senior Indebtedness, or in the instrument under which it is outstanding, permitting the holder to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, or all Senior Indebtedness shall have been paid in full, (i) the Company shall promptly notify Mentor Graphics in writing of such default and (ii) no payment shall be made in respect of the principal of or interest on this Note, unless within twelve (12) months after the happening of such event of default, the maturity of such Senior Indebtedness shall not have been accelerated. In case cash, securities or other property otherwise payable or deliverable to the holder of this Note shall have been applied to the payment of Senior Indebtedness, then and in each such case, upon the payment in full of all Senior Indebtedness, the holder of this Note shall be subrogated to the rights of the holders of Senior Indebtedness to receive all further payments and distributions made on Senior Indebtedness until all principal of and interest on this Note shall have been paid in full; and no such payments or distributions to the holders of this Note by reason of such subrogation of cash, securities or other property which otherwise would be payable or distributable to the holders of Senior Indebtedness shall, as between the Company and its creditors (other than the holders of Senior Indebtedness), on the one hand, and the holder of this Note, on the other, be deemed to be a payment of the Company on account of this Note. Nothing contained in this Section 2 shall impair, as between the Company and the holder of this Note, the obligation of the Company, which is absolute and unconditional, to pay to the holder thereof the principal hereof and interest hereon as and when the same become due and payable, or shall prevent the holder of this Note, upon default under this Note, from exercising all rights, powers and remedies otherwise provided herein or by applicable law, all subject to the rights, if any, of the holders of Senior Indebtedness under this Section 2 to receive cash, securities or other properties otherwise payable or deliverable to the holder of this Note. 3. EVENTS OF DEFAULT If one or more of the following events (herein called "EVENTS OF DEFAULT") shall have occurred and be continuing, that is to say: (a) If the Company (i) shall commence any proceeding or other action relating to it in bankruptcy or seek reorganization, dissolution, liquidation, winding-up, or any other relief under the Bankruptcy Code, as amended, or (ii) shall make a general assignment for the benefit of creditors; or (b) If any proceedings are commenced or any other action is taken against the Company in bankruptcy or seeking reorganization, liquidation, dissolution, winding-up, or for any other relief under the Bankruptcy Code, as amended; and any such event continues for ninety (90) days undismissed or undischarged; or (c) If the Company shall default in the performance of any of its obligations under this Note, such default shall have continued unremedied for a period of thirty (30) days and the obligation is not being contested in good faith by appropriate legal proceedings; then the holder of this Note may at any time at such holder's option by written notice to the Company declare the principal amount of and the accrued interest on this Note to be immediately due and payable, and thereupon the same shall become so due and payable; and the Company will reimburse the holder of this Note for its reasonable costs and expenses, including attorneys' fees, incurred in connection with the enforcement of its rights under this Note. Notwithstanding the foregoing, upon the failure of the Company to pay any amount of principal or interest hereunder when due as set forth in the first paragraph of this Note, the holder of this Note shall be entitled to exercise all rights and remedies available to it. 4. WAIVER The waiver by the holder hereof of any breach of or default under any term, covenant or condition contained herein shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of or default under the same or any other such term, convenant or condition. 5. GENERAL PROVISIONS (a) GOVERNING LAW: This Note shall be governed by and construed in accordance with the laws of the State of Oregon. (b) SUCCESSORS AND ASSIGNS: The terms of this Note shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective distributees, legal representatives, successors and assigns. IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name this 29th day of September 1993. QUICKTURN DESIGN SYSTEMS, INC. By: /s/ Raymond K. Ostby ------------------------------ Title: Vice President --------------------------- AGREED TO AND ACCEPTED: MENTOR GRAPHICS CORPORATION By: /s/ Frank S. Delia ---------------------------- Title: Vice President ------------------------- EX-99.(C)(2) 4 STOCK WARRANTS Exhibit 99(c)(2) THESE WARRANTS AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE LAW, AND NO INTEREST IN SUCH WARRANTS MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES OR (B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION AND SUCH OPINION IS IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY AND FROM COUNSEL SATISFACTORY TO THE COMPANY. No. W-2 STOCK PURCHASE WARRANTS TO PURCHASE SHARES OF COMMON STOCK QUICKTURN SYSTEMS, INC. 400,000 WARRANTS THIS IS TO CERTIFY that, for value received, MENTOR GRAPHICS CORPORATION, or its assigns (Holder), is entitled, at any time after February 28, 1992 and not later than 5:00 p.m. Pacific Time on February 27, 2000 (Expiration Date), subject to the provisions of these Warrants, to purchase 400,000 shares of fully paid and nonassessable shares of the Common Stock of QUICKTURN SYSTEM, INC. a California corporation (Company), at a price of $15.00 per share (the Purchase Price Per Share) (such number of shares and the Purchase Price Per Share being subject to adjustment as provided in these Warrants), upon the surrender of this certificate (with the attached form of Election to Purchase completed and executed by the Holder) and delivery of a check payable to the Company, in the amount of the Purchase Price Per Share multiplied by the number of shares for which these Warrants are being exercised, to the Company at its principal office. Such surrender and payment are referred to as the exercise of these Warrants. All or part of these Warrants may be assigned at any time prior to the Expiration Date. In the case of any assignment, upon request and upon surrender of this certificate to the Company at its principal office with the attached form of Assignment duly completed and executed, the Company will cause to be executed and delivered one or more certificates of like tenor evidencing in the aggregate the number of Warrants to which this certificate relates registered in the name of the person or persons entitled to such certificate upon assignment. At any time prior to the Expiration Date, upon surrender of this certificate to the Company, this certificate may be exchanged, alone or with other certificates of like tenor, for a new certificate or certificates of like tenor evidencing in the aggregate the number of Warrants, to which this Certificate and such other certificates relate, registered in the name of the Holder. The Warrants evidenced by this certificate shall be void and of no effect and the Holder's rights shall cease after 5:00 p.m. Pacific Time on the Expiration Date. For the purpose of these Warrants the term "Common Stock" shall mean, subject to the provisions of subdivision 2 below, shares of the class designated as Common Stock of the Company at February 28, 1992 or shares of any class or classes resulting form any reclassification or reclassifications of such Common Stock; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. The Warrants evidenced by this certificate are subject to the following additional terms and conditions: 1. In case the Company shall issue any shares of its Common Stock as a stock dividend or subdivide the number of outstanding shares of Common Stock into a greater number of shares, then in either of such cases, the Purchase Price Per Share in effect at the time of such action shall be proportionately reduced and the number of shares of Common Stock at that time purchasable pursuant to these Warrants shall be proportionately increased; and, conversely, in the event the Company shall contract the number of outstanding shares of Common Stock by combining such shares into a smaller number of shares, then, in such case, the Purchase Price Per Share in effect at the time of such action shall be proportionately increased and the number of shares of Common Stock at the time purchasable pursuant to these Warrants shall be proportionately decreased. Any dividend paid or distributed on the Common Stock in stock of any other class of securities convertible into shares of Common Stock shall be treated as a dividened paid in Common Stock in the extent that shares of Common Stock are issuable upon the conversion. 2. In case the Company shall be recapitalized by reclassifying its outstanding Common Stock, then as a condition of such recapitalization lawful and adequate provision shall be made under which the Holder shall have the right to purchase, upon the terms and conditions specified in these Warrants, in lieu of the shares of Common Stock previously purchasable upon the exercise of these Warrants, the kind and amount of shares of stock and other securities and property receivable upon such recapitalization by the owner of the number of shares of Common Stock which the Holder might have purchased immediately prior to such recapitalization. 3. In case the Company shall consolidate or merge with or convey all or substantially all its property and assets to any other corporation, or corporations, then as a condition of such consolidation, merger or conveyance, lawful and adequate provision shall be made in which the Holder shall have the right to purchase, upon the terms and conditions specified in these Warrants, in lieu of the shares of Common Stock previously purchasable upon the exercise of these Warrants, the kind and amount of shares of stock and other securities and property receivable upon such consolidation, merger or conveyance by a holder of the number of shares of Common Stock which the Holder might have purchased immediately prior to such consolidation, merger or conveyance. 4. Whenever the Purchase Price Per Share of the kind or amount of securities purchasable under these Warrants shall be adjusted pursuant to any of the provisions of this certificate, the Company shall cause to be sent to the Holder by first-class mail at his address as it appears upon the records of the Company, a certificate setting forth the adjustments in the Purchase Price Per Share and/or in said number of shares, and also setting forth in detail the facts requiring such adjustments including, without limitation, a statement of the consideration received or deemed to have been received by the Company for any additional shares of stock issued by it. 5. The holder of these Warrants shall be entitled to those registration rights set forth in Exhibit G to that certain Asset Purchase Agreement dated February 28, 1992. 6. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of these Warrants. If the exercise of these Warrants would, but for the provisions of this subdivision 6, result in the right to receive a fraction of a share of Common Stock, the Company shall, in lieu thereof, make payment in cash for such fractional interest (computed to the nearest 1/100th of a share) calculated on the basis of the last reported sales price (or bid price if there be no sale) of the Common Stock as reported (i) on any stock exchange designated by the Company on which the Common Stock may be traded, or (ii) by any reputable quotation reporting service, if the Common Stock be not traded on any stock exchange, or (iii) by any dealer in securities dealing in the Common Stock, if such quotations be not reported by any such reporting service, on the day on which the Warrants shall be exercised, or, if none is reported on such date, on the date of the last such reported sale or bid, or (iv) if there is no dealer in securities who is dealing in the Common Stock, at the last sale price of any shares of Common Stock sold by the Company. 7. These Warrants shall not entitle the Holder to any voting rights or any other rights as a shareholder of the Company, or to any other rights except the rights stated in this certificate; and no dividend or interest shall be payable or shall accrue in respect of these Warrants of the shares purchasable hereunder unless, and until, and except to the extent that these Warrants shall be exercised. WITNESS, the seal of the Company and the signatures of its duly authorized officers. February 28, 1992 QUICKTURN SYSTEM, INC. By /s/ Phil Kaufman - --------------------------- Its President /s/ Dennis Favero - --------------------------- Its Secretary To QUICKTURN SYSTEMS, INC. ELECTION TO PURCHASE The undersigned irrevocably elects to purchase shares of Common Stock issuable upon the exercise of the attached Warrants, and requests that certificates for such shares shall be issued in the name of and delivered to the address of the undersigned, at the address stated below and, if the number of shares shall not be all the shares which may be purchased pursuant to the attached Warrants, that new Warrants evidencing the right to purchase the balance of such shares be registered in the name of, and delivered to, the undersigned at the address set forth below. The undersigned agrees with and represents to the Company that the shares of the Common Stock are acquired for investment and not with a view to, or for sale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended. Payment enclosed in the amount of $_____________. Dated:__________________ Name of holder of Warrants:____________________________________ (please print) Address:_____________________________________ _____________________________________ Signature:____________________________________ Its_______________________________________ ASSIGNMENT For value received ______________ sells, assigns and transfers unto ________- the attached Warrants, together with all right, title and interests in such Warrants, and irrevocably constitutes and appoints ______________ attorney, to transfer the Warrants on the books of the Company, with full power of substitution in the premises. Dated:_________________, 19___. Signature:______________________________ Its______________________________ EX-99.(C)(3) 5 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT This Agreement is made as of February 28, 1992, by and between Quickturn Systems, Inc., a California corporation (the "Company") and Mentor Graphics Corporation, an Oregon corporation ("Holder"). 1. Definitions. For purposes of this Agreement: (a) The term "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. (b) The term "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document. (c) The term "Registrable Securities" means (1) up to 200,000 shares of Common Stock issued to the Holder pursuant to that certain Asset Purchase Agreement dated as of February 28, 1992 between the Company and the Holder, and (2) shares of Common Stock issuable or issued upon exercise of (i) the Warrant to purchase 500,000 shares of the Company's Common Stock at an exercise price of $6.00 per share issued February 28, 1992 to the Holder (the "$6.00 Warrant"), and (ii) the Warrant to purchase 400,000 shares of the Company's Common Stock at an exercise price of $15.00 per share (the "$15 Warrant"); excluding in all cases, however, any Registrable Securities sold by the Holder in a transaction in which its rights under this Agreement are not assigned. (d) The number of shares of "Registrable Securities then outstanding" shall be determined by the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are Registrable Securities. (e) The term "Holder" means Mentor Graphics Corporation, an Oregon corporation. (f) The term "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules or regulations of the Commission thereunder, all as the same shall be in effect at the time. (g) The term "Form S-3" means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the Securities and Exchange Commission ("SEC") which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. (h) The term "Initial Public Offering" shall mean the first firm commitment underwritten public offering of the Company's Common Stock to the general public at an aggregate offering price, net of underwriting discounts and commissions, at a per share price of not less than $4.00 per share and for a total offering of not less than $7,500,000, which is effected pursuant to a registration statement filed with, and declared effective by, the Commission under the Securities Act. 2. Company Registration. If, at any time or from time to time, the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holder) any of its stock or other securities under the Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan or a stock plan of the Company's affiliate(s), or a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give the Holder written notice of such registration. Upon the written request of the Holder given within twenty (20) days after mailing of such notice by the Company, the Company shall, subject to the provisions of Section 6, cause to be registered under the Act all of the Registrable Securities that the Holder has requested to be registered. 3. Obligations of the Company. Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holder, keep such registration statement effective for up to one hundred twenty (120) days. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Holder such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as it may reasonably request in order to facilitate the disposition of Registrable Securities owned by it. (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holder, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. The Holder shall also enter into and perform its obligations under such an agreement. (f) Notify the Holder at any time when a prospectus relating the Registration Statement is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. 4. Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities of the Holder that the Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of the Holder's Registrable Securities. 5. Expenses of Registration. All expenses other than underwriting discounts and commissions, and stock transfer taxes, incurred in connection with registrations, filings or qualifications 2 pursuant to this Agreement for the Holder (which right may be assigned as provided in Section 10), including (without limitation) all registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of counsel for the Holder (provided, however, that the Holder shall be obligated to use counsel provided for other holders of the Company's securities exercising registration rights at the same time as the Holder, if such counsel if reasonably acceptable to the Holder) shall be borne by the Company. 6. Underwriting Requirements. In connection with any offering involving an underwriting of shares being issued by the Company, the Company shall not be required under this Agreement to include any of the Holder's securities in such underwriting unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it, and then only in such quantity as will not, in the opinion of the underwriters, jeopardize the success of the offering by the Company or by other selling shareholders. If the total amount of securities, including Registrable Securities, requested by the Holder to be included in such offering exceeds the amount of securities that the underwriters reasonably believe compatible with the success of the offering, then the Company shall be required to include inthe offering only that number of such securities, including Registrable Securities, which the underwriters believe will not jeopardize the success of the offering by the Company or by other selling shareholders. The Holder acknowledges that the Company is party to agreements (and may, in the future, enter agreements) which provide registration rights senior to those provided to the Holder herein. 7. Delay of Registration. The Holder shall not have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement. 8. Indemnification. In the event any Registrable Securities are included in a registration statement under this Agreement: (a) To the extent permitted by law, the Company will indemnify and hold harmless the Holder, any underwriter (as defined in the Act) for the Holder and each person, if any, who controls the Holder or underwriter within the meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law; and the Company will pay to each the Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by the Holder, underwriter or controlling person. 3 (b) To the extent permitted by law, the Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, any underwriter, any other selling shareholder selling securities in such registration statement and any controlling person of any such underwriter or other selling shareholder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Holder expressly for use in connection with such registration; and the Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 8(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this section 8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, that, in no event shall any indemnity under this subsection 8(b) exceed the gross proceeds from the offering received by the Holder. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 8 but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 8. (d) The obligations of the Company and the Holder under this Section 8 shall survive the completion of any offering of Registrable Securities in a registration statement under this Agreement, and otherwise. 9. Reports Under Securities Exchange Act of 1934. With a view to making available to the Holder the benefits of Rule 144 promulgated under the Act and any other rule or regulation of the SEC that may at any time permit the Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after ninety (90) days after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public; (b) take such action, including the voluntary registration of its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in 4 which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective; (c) file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and (d) furnish to the Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing the Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form. 10. Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by the Holder to a transferee or assignee of such securities, who, after such assignment or transfer, holds at least 100,000 shares of Registrable Securities (subject to appropriate adjustments for stock splits, stock dividends, combinations and other recapitalizations), provided the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if such transferee or assignee agrees in writing to be bound by the provisions of this Agreement and immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of an individual or a partnership who are spouses, ancestors, lineal descendants or siblings of such individual or a partnership who are spouses, ancestors, lineal descendants or siblings of such individual or partners or retired partners of such partnership (including spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together with the individual or partnership, as the case may be, provided that all assignees and transferees who would not qualify individually for assignment of Registration Rights shall have a single attorney-in-fact for the purpose of exercising any rights or taking any action under this Agreement. 11. "Market Stand-Off" Agreement. The Holder hereby agrees that, during the period of duration specified by the Company and an underwriter of common stock or other securities of the Company (up to a maximum of 180 days), following the effective date of a registration statement of the Company filed under the Act, it shall not, to the extent requested by the Company and such underwriter, directly or indirectly, sell, offer to sell, contract to sell (including without limitation any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any common stock of the Company held by it at any time during such period except common stock included in such registration; provided, however, that all officers and directors of the Company and all other persons with registration rights (whether or not pursuant to this Agreement) enter into similar agreements. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of the Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. 5 12. Termination of Registration Rights. The registration rights granted pursuant to this Agreement shall terminate as to the Holder at such time after the Company's Initial Public Offering as all Registrable Securities held by the Holder can be sold within a given three-month period without compliance with the registration requirements of the Securities Act pursuant to Rule 144 supported by a written opinion of legal counsel for the Company which shall be reasonably satisfactory in form and substance to legal counsel for the Holder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. QUICKTURN SYSTEMS, INC. MENTOR GRAPHICS CORPORATION By: /s/ Phillip Kaufman By: /s/ Frank S. Delia ------------------------ ----------------------------- Phillip Kaufman Frank S. Delia - --------------------------- -------------------------------- (Print Name) (Print Name) President Vice President, Chief Legal and - --------------------------- -------------------------------- Title Administrative Officer -------------------------------- Title 6 -----END PRIVACY-ENHANCED MESSAGE-----