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Icahn Comments on Mentor Graphics
Mar 29, 2011 (03:03 PM EDT)


NEW YORK, March 29, 2011 /PRNewswire/ -- Carl C. Icahn announced today that the following letter has been delivered to the board of directors of Mentor Graphics Corporation:

CARL C. ICAHN

767 Fifth Avenue, 47th Floor

New York, New York 10153

March 29, 2011

Via Federal Express and Email

Board of Directors

Mentor Graphics Corporation

8005 S.W. Boeckman Road

Wilsonville, OR 97070-7777

Gentlemen and Ladies:

In the dark of night, just one day after its Board rejected our offer of $17 per share, on March 29, 2011, the Company announced that it is going to offer to sell, in a private placement to institutional investors, between $220 and $253 million of convertible debt. This news should outrage our fellow shareholders as it does us.

The continual dilution of the Mentor Graphics common stockholder appears to be business as usual for the Company. On the one hand, the Company indicates that the price that we offered as a stalking horse bid for the Company is far too low and a sale of the Company to a strategic acquirer is too risky; on the other hand, it is choosing to issue securities convertible into stock that would dilute shareholders and make a tender offer or other acquisition proposal by a potential acquirer a great deal more difficult to accomplish.

The real question is why is the Board doing this? Considering the Company's earnings forecast for its next fiscal year of $1.00 per share, we don't believe it is in the interest of stockholders to potentially issue more shares pursuant to this refinancing process and dilute shareholders. The Company should have used its earnings to retire this debt or, to the extent insufficient, borrowed money without any conversion features. This is an example of why the composition of the Board cries out for new blood – members who consider what is best for our fellow shareholders and are not satisfied with the status quo.

Why would the Company do this? For the last seventeen years, the Company's share price has been in the doldrums. Walden Rhines has pocketed seventeen years of salaries and bonuses and the longstanding members of the Board of Directors have been unchallenged and keep re-nominating themselves and getting elected. It looks as though they are trying to ensure that they can keep the country club going for the next seventeen years while the shareholders may face continuing dilutive issuances by the Company.

We strongly protest what you are doing. We have heard from other shareholders outraged by your convertible debt proposal. We encourage the existing Board of Directors to act in the interest of shareholders and drop this proposal and not enter into any financing that will act to derail an acquisition proposal. After seventeen years of a stock that has done nothing, isn't it time for the shareholders to be given every opportunity to determine if they want to sell their company rather than to have these opportunities sabotaged?

Very truly yours,

Carl C. Icahn

SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY CARL C. ICAHN AND HIS AFFILIATES FROM THE STOCKHOLDERS OF MENTOR GRAPHICS CORPORATION FOR USE AT ITS 2011 ANNUAL MEETING WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF MENTOR GRAPHICS CORPORATION AND WILL ALSO BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION IS CONTAINED IN THE PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A FILED BY CARL C. ICAHN AND HIS AFFILIATES WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 17, 2011.

SOURCE Carl Icahn