8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

March 30, 2017

Date of Report (Date of earliest event reported)

Commission File No. 1-34795

MENTOR GRAPHICS CORPORATION

(Exact name of registrant as specified in its charter)

OREGON	93-0786033
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification Number)

8005 S.W. BOECKMAN ROAD

WILSONVILLE, OR 97070-7777

(Address of principal executive offices, zip code)

(503) 685-7000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On March 30, 2017, Mentor Graphics Corporation, an Oregon corporation (the “Company”) entered into a supplemental indenture dated as of March 30, 2017 (the “Supplemental Indenture”) to the indenture dated as of April 4, 2011, among the Company and Wilmington Trust Company (the “Trustee”), pursuant to which the Company’s 4.00% Convertible Subordinated Debentures due 2031 (the “Debentures”) were issued (as supplemented, the “Indenture”).

The Supplemental Indenture was entered into in connection with the previously announced Merger (as defined below). The Supplemental Indenture amends the Indenture to, among other things, provide that, effective at the Effective Time (as defined below), the Debentures shall no longer be convertible into Company Stock (as defined below) and thereafter each $1,000 in principal amount of Debentures will be convertible, in accordance with the terms of the Indenture, into the right to receive the amount of cash that a holder of a number of shares of Company Stock equal to the conversion rate immediately prior to the consummation of the Merger would have owned or been entitled to receive upon the completion of the Merger.

The foregoing description of the Supplemental Indenture does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Supplemental Indenture, which is included as Exhibit 4.1 hereto and incorporated into this Item 1.01 by reference.

Item 1.02. Termination of Material Definitive Agreement.

In connection with the consummation of the Merger, on March 30, 2017, the Company repaid in full and terminated the Credit Agreement dated as of April 26, 2011 (as amended, the “Credit Agreement”), among the Company, the lenders party thereto, and Bank of America, N.A., as administrative agent.

The Credit Agreement provided for up to $125 million in revolving advances, maturing on January 9, 2020, and bore interest at a rate equal to a LIBOR rate for the applicable borrowing period or a base rate, plus an applicable margin of between 1.00% and 1.50% (in the case of base rate loans) and 2.00% and 2.50% (in the case of LIBOR loans), in each case based on the ratio of senior indebtedness to consolidated EBITDA. As of March 30, 2017, the aggregate outstanding principal amount of loans under the Credit Agreement was $20,000,000.

Item 2.01. Completion of Acquisition or Disposition of Assets.

As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) by the Company on November 14, 2016, the Company, Siemens Industry, Inc., a Delaware corporation (“Parent”), and Meadowlark Subsidiary Corporation, an Oregon corporation and a wholly-owned subsidiary of Parent (“Merger Subsidiary”), entered into an Agreement and Plan of Merger, dated November 12, 2016 (the “Merger Agreement”). On March 30, 2017, pursuant to the terms and conditions of the Merger Agreement, Merger Subsidiary was merged with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of Parent.

At the effective time of the Merger (the “Effective Time”), (i) each outstanding share of common stock, without par value, of the Company (“Company Stock”), other than shares of Company Stock directly or indirectly owned by Parent, Merger Subsidiary or the Company, was cancelled and converted into the right to receive cash, without interest, in the amount of $37.25 (the “Merger Consideration”); (ii) each outstanding option to purchase shares of Company Stock was canceled and converted into the right to receive the Merger Consideration, net of the exercise price; and (iii) each other outstanding stock-based award was converted into the right to receive a cash payment equal to the product of the Merger Consideration and the number of shares of Company Stock subject to such award.

The foregoing summary description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 14, 2016, which is incorporated herein by reference.

The aggregate consideration paid to equityholders of the Company by Parent in the Merger was approximately $4.34 billion, without giving effect to related transaction fees and expenses.

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On March 30, 2017, in connection with the consummation of the Merger, the Company notified The NASDAQ Stock Market, LLC (“NASDAQ”) of its intent to remove the shares of Company Stock from listing on NASDAQ and

requested that NASDAQ suspend trading of the Company Stock and file a delisting application with the SEC to delist and deregister the shares of Company Stock. On March 30, 2017, NASDAQ filed with the SEC a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 25 to delist and deregister the shares of Company Stock. Trading of the Company Stock was suspended following the closing of trading on March 30, 2017.

The Company intends to file with the SEC a certification on Form 15 under the Exchange Act, requesting the deregistration of the shares of Company Stock and the suspension of the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act.

Item 3.03. Material Modification to Rights of Security Holders.

At the Effective Time, each share of Company Stock outstanding, other than shares of Company Stock directly or indirectly owned by Parent, Merger Subsidiary or the Company, was cancelled and converted into the right to receive the Merger Consideration.

The information disclosed under Item 1.01, 3.01 and Item 5.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.03.

Item 5.01. Changes in Control of Registrant.

As a result of the consummation of the Merger, on March 30, 2017, a change in control of the Company occurred. Upon the Effective Time, the Company became a wholly-owned subsidiary of Parent.

The information disclosed under Item 3.01, Item 3.03, and Item 5.02 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In accordance with the terms of the Merger Agreement, as of the Effective Time, each of Keith L. Barnes, Sir Peter L. Bonfield, Paul A. Mascarenas, J. Daniel McCranie, Dr. Walden C. Rhines, Dr. Cheryl L. Shavers and Jeffrey M. Stafeil ceased serving as members of the board of directors of the Company, and the directors of Merger Subsidiary immediately prior to the Effective Time, which consisted of Anthony Hemmelgarn and Bernd Haetzel, became the only directors of the Company. Immediately following the Effective Time, the board of directors of the Company was enlarged to four members, and Chuck Grindstaff and Dr. Walden C. Rhines were also appointed as directors of the Company. In connection therewith, Dr. Walden C. Rhines was also appointed to serve as Chairman of the board of directors of the Company.

In accordance with the terms of the Merger Agreement, the officers of the Company immediately prior to the Effective Time remained the officers of the Company at the Effective Time. As of immediately following the Effective Time, Gregory K. Hinckley no longer serves as President and Chief Financial Officer of the Company, and the board of directors of the Company appointed Dr. Walden C. Rhines and Bernd Haetzel to replace him as President and Chief Financial Officer, respectively.

Bernd Haetzel, 51, has been with Siemens since 1988 and is currently the Executive Vice President and Chief Financial Officer of Siemens Product Lifecycle Management Software Inc. Prior to joining Siemens PLM Software, Mr. Haetzel served as Senior Vice President and Head of Strategy at Siemens Global Energy Management Division (2014-2015) and as Chief Financial Officer of Siemens’ global Smart Grid Division (2011-2014). Mr. Haetzel has held a wide range of other positions with Siemens in Germany, the United States, Switzerland and Australia, including as the business unit Chief Financial Officer for Siemens Building Technology in Zug, Switzerland (2004-2009). Bernd Haetzel holds a Bachelor of Arts degree in Business Administration from DHBW University in Stuttgart, Germany.

As of immediately following the Effective Time, Dean M. Freed no longer serves as Secretary of the Company, although he remains Vice President and General Counsel of the Company.

The foregoing description of the Merger Agreement is qualified in its entirety by the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the SEC on November 12, 2016.

Item 8.01 Other Events.

On March 30, 2017, in connection with the consummation of the Merger, the Company delivered a notice of redemption (the “Redemption Notice”) to the holders of the Debentures. The Redemption Notice provides for the Company’s redemption, pursuant to the terms of the Indenture, of all $253.0 million aggregate principal amount of its outstanding Debentures on May 1, 2017 (the “Redemption Date”) at a redemption price of 100.571% of the aggregate principal amount of the Debentures, plus accrued and unpaid interest to the Redemption Date. No Debentures will remain outstanding after the Redemption Date.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated November 12, 2016 among Company, Parent and Merger Subsidiary (incorporated by reference to Exhibit 2.1 to Company’s Current Report on Form 8-K filed November 14, 2016)
4.1	Supplemental Indenture No. 1, dated as of March 30, 2017, among the Company and Wilmington Trust Company as Trustee, supplementing that certain Indenture, dated as of April 4, 2011, pursuant to which the 4.00% Convertible Subordinated Debentures due 2031 were issued.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MENTOR GRAPHICS CORPORATION
	(Registrant)
Date: March 30, 2017	By:	/s/ Dean Freed
		Dean Freed
		Vice President and General Counsel

EXHIBIT INDEX

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated November 12, 2016 among Company, Parent and Merger Subsidiary (incorporated by reference to Exhibit 2.1 to Company’s Current Report on Form 8-K filed November 14, 2016)
4.1	Supplemental Indenture No. 1, dated as of March 30, 2017, among the Company and Wilmington Trust Company as Trustee, supplementing that certain Indenture, dated as of April 4, 2011, pursuant to which the 4.00% Convertible Subordinated Debentures due 2031 were issued.

EX-4.1

Exhibit 4.1

MENTOR GRAPHICS CORPORATION

as Issuer

and

WILMINGTON TRUST COMPANY

as Trustee

SUPPLEMENTAL INDENTURE NO. 1

Dated as of

March 30, 2017

4.00% Convertible Subordinated Debentures due 2031

This SUPPLEMENTAL INDENTURE NO. 1 (this “Supplemental Indenture”), dated as of March 30, 2017, is between Mentor Graphics Corporation, an Oregon corporation, as issuer (the “Company”), and Wilmington Trust Company, a Delaware trust company, as trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Company and the Trustee have heretofore entered into an Indenture, dated as of April 4, 2011 (such Indenture, as modified by this Supplemental Indenture, and as the same may be further modified, being hereinafter called the “Indenture”), pursuant to which the Company issued its 4.00% Convertible Subordinated Debentures due 2031 in an original aggregate principal amount of $253,000,000 (the “Debentures”);

WHEREAS, the Company, Siemens Industry, Inc., a Delaware corporation (“Parent”), and Meadowlark Subsidiary Corporation, an Oregon corporation and a wholly-owned subsidiary of Parent (“Purchaser”), have entered into that certain Agreement and Plan of Merger, dated as of November 12, 2016 (the “Merger Agreement”), pursuant to which, among other things, on the date of the execution of this Supplemental Indenture, Purchaser is being merged with and into the Company, with the Company being the surviving corporation in such merger (the “Merger”);

WHEREAS, in connection with the Merger, each share of the Company’s common stock, no par value (the “Common Stock”), outstanding immediately prior to the effective time of the Merger was converted into the right to receive an amount in cash, without interest, equal to $37.25 (the “Reference Property”), payable in accordance with Section 2.03 of the Merger Agreement;

WHEREAS, the Merger constitutes a “Business Combination” under the Indenture;

WHEREAS, Section 15.11 of the Indenture provides that the Company or the successor, purchasing or transferee Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 11.01(d) of the Indenture without the consent of any Debentureholders providing that the Debentureholders of the Debentures then outstanding will be entitled thereafter to convert such Debentures as provided in Article 15 of the Indenture, except that, in lieu of delivering any share of Common Stock that the Company would otherwise have been required to deliver pursuant to Article 15 of the Indenture, the Company will instead deliver the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) which a holder of one share of Common Stock would have been entitled to receive in exchange for such share of Common Stock upon such Business Combination;

WHEREAS, Section 11.01(j) of the Indenture provides, among other things, that the Company and the Trustee may enter into an indenture or indentures supplemental to the Indenture without the consent of any Debentureholders to make a change that the Company deems necessary and advisable and that does not materially adversely affect the interests of any Debentureholder;

WHEREAS, the Board of Directors of the Company (the “Board of Directors”) has duly authorized this Supplemental Indenture by resolutions adopted on March 30, 2017, and the entry into this Supplemental Indenture by the parties hereto is permitted by the provisions of the Indenture;

WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company and a valid amendment to the Indenture have been done and the Company requests that the Trustee execute and deliver this Supplemental Indenture; and

WHEREAS, the Company has heretofore delivered or is delivering contemporaneously herewith to the Trustee an Officers’ Certificate described in Section 11.05 of the Indenture and an Opinion of Counsel described in Section 11.05 of the Indenture.

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises, the receipt and sufficiency of which is hereby acknowledged, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Debentureholders from time to time of the Debentures (except as otherwise provided below), as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.

ARTICLE 2

AMENDMENTS

Section 2.01. Conversion of Debentures into the Reference Property. In accordance with and subject to Section 15.11 of the Indenture, as a result of the Merger, each $1,000 in principal amount of Debentures is, from and after the effective time of the Merger, convertible in accordance with the terms of the Indenture into the right to receive the amount of cash that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to the consummation of the Merger would have owned or been entitled to receive upon the Merger. For all conversions that occur from and after the effective time of the Merger in accordance with and subject to Article 15 of the Indenture, (i) the consideration due upon conversion of each $1,000 principal amount of Debentures shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 15.01(i) of the Indenture), multiplied by the price paid per share of Common Stock in the Merger and (ii) the Company shall satisfy the conversion obligation by paying cash to converting Debentureholders as promptly as practicable after the date that all calculations necessary to make such payment and delivery have been made, but in no event later than five (5) Business Days after the date on which all calculations necessary to determine the amount of cash and number of shares of Common Stock, if any, due upon conversion of a Debenture have been made in accordance with the Indenture.

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ARTICLE 3

MISCELLANEOUS PROVISIONS

Section 3.01. Effect of this Supplemental Indenture. From the date hereof, the Indenture shall be and be deemed to be modified and amended in accordance herewith, and the respective rights, limitation of rights, obligations, duties and immunities under the Indenture of the Trustee, the Company and the Debentureholders shall hereafter be determined, exercised and enforced thereunder subject in all respects to such modifications and amendments, and all the terms and conditions of this Supplemental Indenture shall be and be deemed to be part of the terms and conditions of the Indenture for any and all purposes. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. Every reference in the Indenture to the Indenture shall hereby be deemed to mean the Indenture as supplemented by this Supplemental Indenture.

Section 3.02. Trustee Matters. The Trustee accepts the Indenture, as supplemented hereby, and agrees to perform the same upon the terms and conditions set forth therein, as supplemented hereby. The Trustee shall be entitled to the benefit of every provision of the Indenture so supplemented relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided. The recitals contained in this Supplemental Indenture shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

Section 3.03. Provisions Binding on Company’s Successors. All the covenants and agreements of the Company contained in this Supplemental Indenture shall bind its successors and assigns whether so expressed or not.

Section 3.04. Official Acts by Successor Company. Any act or proceeding by any provision of this Supplemental Indenture authorized or required to be done or performed by any board, committee or authorized officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful sole successor of the Company.

Section 3.05. Governing Law. THIS SUPPLEMENTAL INDENTURE, THE INDENTURE AND EACH DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

Section 3.06. Benefits of Supplemental Indenture. Nothing in this Supplemental Indenture, expressed or implied, shall give to any Person, other than the parties hereto, any paying agent, any conversion agent, any authenticating agent, any Debenture registrar and their successors hereunder or the Debentureholders, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.

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Section 3.07. Headings, Etc. The titles and headings of the articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

Section 3.08. Execution in Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or portable document format (“PDF”) transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 3.09. Severability. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.

MENTOR GRAPHICS CORPORATION

By:
	Name:
	Title:
By:
	Name:
	Title:

[Signature Pages to Supplemental Indenture]

WILMINGTON TRUST COMPANY, as

Trustee

By:
	Name:	W. Thomas Morris II
	Title:	Vice President

[Signature Pages to Supplemental Indenture]