EXHIBIT 6
PAGE 1
CONTACTS:
QUICKTURN DESIGN SYSTEMS, INC. ABERNATHY MACGREGOR FRANK
Joan Powell Pauline Yoshihashi / Matt Sherman
Director, Marketing Communications In San Jose 8/24 (408) 914-6000
(408) 914-6701 In New York 8/25 (212) 371-5999
joan@quickturn.com
FOR IMMEDIATE RELEASE
QUICKTURN DESIGN SYSTEMS BOARD OF DIRECTORS
REJECTS MENTOR GRAPHICS' UNSOLICITED OFFER
SAN JOSE, CALIF. (August 24, 1998) Quickturn Design Systems, Inc. (Nasdaq:
QKTN) today announced that its board of directors rejected an unsolicited tender
offer by Mentor Graphics Corporation (Nasdaq: MENT) to purchase all of the
outstanding shares of Quickturn for $12.125 per share in cash. The board
determined that the Mentor offer is inadequate, does not reflect the inherent
value of the company, and is not in the best interests of Quickturn or its
stockholders. Accordingly, the Quickturn board recommended Quickturn
stockholders not tender their shares to Mentor pursuant to Mentor's offer.
"This opportunistic, inadequate offer comes at a moment of weakness for
Quickturn's stock price and a moment of desperation for Mentor's design
verification strategy," Keith R. Lobo, president and chief executive officer
of Quickturn Design Systems, Inc. said. "Weakness for Quickturn's stock price,
because of the economic downturn in the Asia/Pacific region and the
corresponding slowdown in the region's new electronics product design.
Desperation for Mentor's design verification strategy, because we are beating
them in the marketplace, and we are beating them in the courts. Mentor's bid
implicitly acknowledges the inferiority of their product position."
"We are rejecting Mentor's bid because we see, as they do, the potential
for renewed growth in our key technologies. As the industry transitions to
deep submicron design, increasing chip complexity demands Quickturn's
technology and expertise. Assuming even a minimal recovery in the Asia/Pacific
region, we are comfortable with industry research projections of 22% annual
growth in total emulation revenue through 2001, and 42% annual growth in total
high performance simulation revenue, also through 2001," Mr. Lobo said.
PAGE 2
"As demand for these products grows, we believe customers will turn to
Quickturn. Quickturn is the acknowledged emulation technology and
implementation leader. Our new Mercury/TM/ product, which supports design
complexities up to 10 million logic gates, has the potential to do for
Quickturn in 1999 and 2000 what System Realizer/TM/ did for our company in
1995 and 1996. Among Mercury's numerous innovations is the breakthrough
SimServer/TM/ technology, which expands our verification expertise beyond
traditional emulation boundaries into a new class of high-performance
solutions. We are also working on enhancements to our CoBALT/TM/ product,
which will address the verification needs of customers' synchronous
designs with complexities in the 8 million to 20 million logic gate range, as
well as integration with our high-performance SpeedSim/TM/ cycle-based
simulator," Mr. Lobo continued.
"Mentor understands the forces that will drive demand for these
products, and they understand the scarcity value of Quickturn's position in
the industry. We have the patents, we have the installed base, we have the
R&D, and we have the people. Others have tried to beat us; they've failed. We
believe Quickturn stockholders will find the superior potential of this
company amply demonstrated in 1999 and 2000," Mr. Lobo said.
In its recommendation to Quickturn stockholders, the board of directors
considered, among other things:
. Quickturn's established position as the leading provider of emulation
technology and a leader in cycle-based simulation, for the integrated
circuit design verification market, as well as its reputation in the
industry as a technological leader and innovator in this area. In this
regard, the board of directors noted that the company has supplied more
than 80% of the installed base of emulation systems worldwide;
. Quickturn's prospects for future growth based upon its current and
future product plan, including the recently introduced Mercury/TM/
Design Verification System, which offers substantially improved
performance and ease of use, as well as the company's additional
products and enhancements planned for introduction at appropriate
intervals over the next few years;
. Quickturn's proven technical expertise, reflected in an estimated 4,000
completed customer design projects and developed over years of activity
in the design verification market;
. Quickturn's expenditures of over $60 million on research and development
in the past three years, leading to current and future planned products;
. Quickturn's strong intellectual property position, including 25 issued
United States patents, 25 pending United States patent applications and
numerous international patents and patent application filings;
. Quickturn's reputation for high-quality worldwide customer service and
support resulting in the completion of an estimated 4,000 customer design
projects;
. Quickturn's acknowledged strength in the sale and implementation of
emulation products;
. Quickturn's acknowledged high-quality manufacturing infrastructure;
. Anticipated growth in demand for emulation and cycle-based simulation
resulting from continuing substantial increases in semiconductor
design complexity;
. Current conditions in Quickturn's business and markets, including the
current adverse economic conditions in Asia, which have had a substantial
effect upon the company's recent quarterly financial performance and
recent stock price;
. The historical trading prices of Quickturn's common stock, including the
fact that Mentor's offer is more than 25% below the stock's highest
closing price over the last year, and less than 4% above its average
closing price during the same period; and
. An opinion from the investment banking firm of Hambrecht & Quist LLC that
Mentor's offer is inadequate, from a financial point of view, to Quickturn
stockholders, as of the date of such opinion, supported by, among other
things, analyses performed by H&Q of Quickturn's historical and projected
financial performance,
PAGE 3
and consequent implied valuations of the company.
Quickturn announced today that it is filing with the Securities and
Exchange Commission, and will mail to stockholders, a Solicitation/
Recommendation Statement on Schedule 14D-9 setting forth the company's formal
recommendation with respect to Mentor's offer. Additional information with
respect to the board's decision to recommend that stockholders reject the
Mentor offer and the matters considered by the board in reaching such decision
is contained in the Schedule 14D-9.
In addition, Quickturn announced that its board of directors amended
certain provisions of the company's Bylaws and authorized certain amendments
to its Preferred Shares Rights Agreement. The amendment to the Bylaws
specifies certain procedures concerning the calling of a special meeting of
the stockholders by holders representing at least 10 percent of the votes,
including that the board shall set a date for such meeting not less than 90
days nor more than 100 days after the receipt of a valid request for a
meeting.
The proposed amendments to the company's Preferred Shares Rights
Agreement remove the so-called "dead-hand" provisions that require the
concurrence of continuing directors to undertake certain actions, including
redeeming the Rights or amending the Rights Agreement in the event of a change
of control of the board. The proposed amendments also provide that the Rights
cannot be redeemed or exchanged and the Rights Agreement 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 redemption, exchange or amendment is
reasonably likely to facilitate a change in control transaction with certain
acquirors.
Quickturn Design Systems, Inc. is the leading provider of verification
products and time-to-market engineering (TtME/TM/) services for the design of
complex integrated circuit 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.
# # #
Quickturn, the Quickturn logo, Mercury, SimServer, SpeedSim, System Realizer
and CoBALT are registered trademarks or trademarks of Quickturn Design
Systems, Inc.