SECURITIES AND EXCHANGE COMMISSION
|
|
Washington, D.C. 20549
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SCHEDULE 13D/A
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(Rule 13d-101)
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INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
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(Amendment No. 6)*
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Mentor Graphics Corporation
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(Name of Issuer)
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Common Stock, without par value
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(Title of Class of Securities)
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587200106
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(CUSIP Number)
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Casablanca Capital LLC
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450 Park Avenue, Suite 1403
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New York, NY 10022
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Attn: Douglas Taylor
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(212) 759-5626
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with a copy to:
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David E. Rosewater
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Schulte Roth & Zabel LLP
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919 Third Avenue
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New York, New York 10022
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(212) 756-2000
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(Name, Address and Telephone Number of Person
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Authorized to Receive Notices and Communications)
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April 25, 2011
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(Date of Event which Requires
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Filing of this Schedule)
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CUSIP No. 587200106
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SCHEDULE 13D/A
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Page 2 of 14 Pages
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1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Casablanca Special Opportunities Fund I, LLC
|
|||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
WC
|
|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
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||
6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
573,683
|
|||
9
|
SOLE DISPOSITIVE POWER
0
|
|||
10
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SHARED DISPOSITIVE POWER
573,683
|
|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
573,683
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
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||
13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.5%
|
|||
14
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TYPE OF REPORTING PERSON
OO
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CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 3 of 14 Pages
|
1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Casablanca Capital I LLC
|
|||
2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
AF
|
|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
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||
6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
573,683
|
|||
9
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SOLE DISPOSITIVE POWER
0
|
|||
10
|
SHARED DISPOSITIVE POWER
573,683
|
|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
573,683
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.5%
|
|||
14
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TYPE OF REPORTING PERSON
IA, OO
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CUSIP No. 587200106
|
SCHEDULE 13D/A
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Page 4 of 14 Pages
|
1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Casablanca Capital LLC
|
|||
2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
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SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
OO, AF (See Item 3)
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|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
746,352
|
|||
9
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SOLE DISPOSITIVE POWER
0
|
|||
10
|
SHARED DISPOSITIVE POWER
746,352
|
|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
746,352
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.7%
|
|||
14
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TYPE OF REPORTING PERSON
IA, OO
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CUSIP No. 587200106
|
SCHEDULE 13D/A
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Page 5 of 14 Pages
|
1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Donald G. Drapkin
|
|||
2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
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SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
PF, OO, AF (See Item 3)
|
|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
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CITIZENSHIP OR PLACE OF ORGANIZATION
USA
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
25,410
|
||
8
|
SHARED VOTING POWER
746,352
|
|||
9
|
SOLE DISPOSITIVE POWER
25,410
|
|||
10
|
SHARED DISPOSITIVE POWER
746,352
|
|||
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
771,762
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.7%
|
|||
14
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TYPE OF REPORTING PERSON
IN
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
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Page 6 of 14 Pages
|
1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Douglas Taylor
|
|||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
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SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
OO and AF (See Item 3)
|
|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
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CITIZENSHIP OR PLACE OF ORGANIZATION
USA
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
746,352
|
|||
9
|
SOLE DISPOSITIVE POWER
0
|
|||
10
|
SHARED DISPOSITIVE POWER
746,352
|
|||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
746,352
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.7%
|
|||
14
|
TYPE OF REPORTING PERSON
IN
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 7 of 14 Pages
|
1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Francisco D'Agostino
|
|||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
OO, AF (See Item 3)
|
|||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Spain
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
782,652
|
|||
9
|
SOLE DISPOSITIVE POWER
0
|
|||
10
|
SHARED DISPOSITIVE POWER
782,652
|
|||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
782,652
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.7%
|
|||
14
|
TYPE OF REPORTING PERSON
IN
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 8 of 14 Pages
|
1
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NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Element Multi Strategy Fund Ltd.
|
|||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
WC
|
|||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
36,300
|
|||
9
|
SOLE DISPOSITIVE POWER
0
|
|||
10
|
SHARED DISPOSITIVE POWER
36,300
|
|||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
36,300
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.0%
|
|||
14
|
TYPE OF REPORTING PERSON
CO
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 9 of 14 Pages
|
1
|
NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Element Capital Advisors Ltd.
|
|||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
AF
|
|||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
0
|
||
8
|
SHARED VOTING POWER
36,300
|
|||
9
|
SOLE DISPOSITIVE POWER
0
|
|||
10
|
SHARED DISPOSITIVE POWER
36,300
|
|||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
36,300
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
0.0%
|
|||
14
|
TYPE OF REPORTING PERSON
IA, CO
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 10 of 14 Pages
|
1
|
NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Her Majesty the Queen in Right of the Province of Alberta as represented by Alberta Investment Management Corporation
|
|||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) x
(b) ¨
|
||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS
OO
|
|||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Alberta, Canada
|
|||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
|
7
|
SOLE VOTING POWER
5,205,282
|
||
8
|
SHARED VOTING POWER
0
|
|||
9
|
SOLE DISPOSITIVE POWER
5,205,282
|
|||
10
|
SHARED DISPOSITIVE POWER
0
|
|||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
5,205,282
|
|||
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
¨
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5)
4.6%
|
|||
14
|
TYPE OF REPORTING PERSON
IA, OO
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 11 of 14 Pages
|
Item 4.
|
PURPOSE OF TRANSACTION.
|
ITEM 5.
|
INTEREST IN SECURITIES OF THE ISSUER.
|
(i)
|
the Casablanca Fund:
|
||||
(a)
|
As of the date hereof, the Casablanca Fund may be deemed the beneficial owner of 573,683 Shares.
|
||||
Percentage: Approximately 0.5% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 573,683 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 573,683 Shares
|
(ii)
|
Casablanca I:
|
||||
(a)
|
As of the date hereof, the Casablanca I may be deemed the beneficial owner of 573,683 Shares.
|
||||
Percentage: Approximately 0.5% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 573,683 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 573,683 Shares
|
(iii)
|
Casablanca:
|
||||
(a)
|
As of the date hereof, Casablanca may be deemed the beneficial owner of 746,352 Shares.
|
||||
Percentage: Approximately 0.7% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 746,352 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 746,352 Shares
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 12 of 14 Pages
|
(iv)
|
Mr. Drapkin:
|
||||
(a)
|
As of the date hereof, Mr. Drapkin may be deemed the beneficial owner of 771,762 Shares.
|
||||
Percentage: Approximately 0.7% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 25,410 Shares
|
|||
2.
|
Shared power to vote or direct vote: 746,352 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 25,410 Shares
|
||||
4.
|
Shared power to dispose or direct the disposition: 746,352 Shares
|
(v)
|
Mr. Taylor:
|
||||
(a)
|
As of the date hereof, Mr. Taylor may be deemed the beneficial owner of 746,352 Shares.
|
||||
Percentage: Approximately 0.7% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 746,352 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 746,352 Shares
|
(vi)
|
Mr. D'Agostino:
|
||||
(a)
|
As of the date hereof, Mr. D'Agostino may be deemed the beneficial owner of 782,652 Shares.
|
||||
Percentage: Approximately 0.7% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 782,652 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 782,652 Shares
|
(vii)
|
the Element Fund:
|
||||
(a)
|
As of the date hereof, the Element Fund may be deemed the beneficial owner of 36,300 Shares.
|
||||
Percentage: Approximately 0.0% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 36,300 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 36,300 Shares
|
(viii)
|
Element Advisor:
|
||||
(a)
|
As of the date hereof, Element Advisor may be deemed the beneficial owner of 36,300 Shares.
|
||||
Percentage: Approximately 0.0% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 0
|
|||
2.
|
Shared power to vote or direct vote: 36,300 Shares
|
||||
3.
|
Sole power to dispose or direct the disposition: 0
|
||||
4.
|
Shared power to dispose or direct the disposition: 36,300 Shares
|
(ix)
|
AIMCo:
|
||||
(a)
|
As of the date hereof, AIMCo may be deemed the beneficial owner of 5,205,282 Shares.
|
||||
Percentage: Approximately 4.6% as of the date hereof.
|
|||||
(b)
|
1.
|
Sole power to vote or direct vote: 5,205,282 Shares
|
|||
2.
|
Shared power to vote or direct vote: 0
|
||||
3.
|
Sole power to dispose or direct the disposition: 5,205,282 Shares
|
||||
4.
|
Shared power to dispose or direct the disposition: 0
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 13 of 14 Pages
|
Item 7.
|
MATERIAL TO BE FILED AS EXHIBITS.
|
Exhibit
|
Description
|
1
|
Joint Filing Agreement. (Previously Filed)
|
2
|
Form of Casablanca Investment Advisory Agreements with clients with respect to the securities of the Issuer. (Previously Filed)
|
3
|
Investment Advisory Agreement, dated November 9, 2010, between AIMCo and Casablanca. (Previously Filed)
|
4
|
Letter dated February 7, 2011 from Casablanca Capital LLC to board of directors of Mentor Graphics Corporation. (Previously Filed)
|
5
|
Notice dated February 11, 2011 from Casablanca Special Opportunities Fund I, LLC to board of directors of Mentor Graphics Corporation. (Previously Filed)
|
6
|
The Amended and Restated Operating Agreement of Casablanca Special Opportunities Fund I, LLC dated October 19, 2010. (Previously Filed)
|
7
|
Nominee Agreement with Donald G. Drapkin. (Previously Filed)
|
8
|
Nominee Agreement with Arthur Becker. (Previously Filed)
|
9
|
Nominee Agreement with Michael Barr. (Previously Filed)
|
10
|
Letter dated March 14, 2011, from Casablanca Special Opportunities Fund I, LLC to Mentor Graphics Corporation. (Previously filed)
|
11
|
Letter dated March 31, 2011, from Casablanca Capital LLC to Mentor Graphics Corporation (Previously filed)
|
12
|
Letter dated April 25, 2011, from Casablanca Capital LLC to the shareholders of Mentor Graphics Corporation
|
CUSIP No. 587200106
|
SCHEDULE 13D/A
|
Page 14 of 14 Pages
|
Casablanca Special Opportunities Fund I, LLC
|
|||
By:
|
Casablanca Capital LLC, its Investment Manager
|
||
By:
|
/s/ Douglas Taylor
|
||
Name:
|
Douglas Taylor
|
||
Title:
|
Chief Executive Officer
|
||
Casablanca Capital I LLC
|
|||
By:
|
/s/ Douglas Taylor
|
||
Name:
|
Douglas Taylor
|
||
Title:
|
Chief Executive Officer
|
||
Casablanca Capital LLC
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By:
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/s/ Douglas Taylor
|
||
Name:
|
Douglas Taylor
|
||
Title:
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Chief Executive Officer
|
||
/s/ Donald G. Drapkin
|
|||
Donald G. Drapkin
|
|||
/s/ Douglas Taylor
|
|||
Douglas Taylor
|
|||
/s/Francisco A'Agostino
|
|||
Francisco D'Agostino
|
|||
Element Multi Strategy Fund Ltd.
|
|||
By:
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/s/ Francisco D'Agostino
|
||
Name:
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Francisco D'Agostino
|
||
Title:
|
Director
|
||
Element Capital Advisors Ltd.
|
|||
By:
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/s/ Francisco D'Agostino
|
||
Name:
|
Francisco D'Agostino
|
||
Title:
|
President and Director
|
||
Her Majesty the Queen in Right of the Province of Alberta as represented by Alberta Investment Management Corporation
|
|||
By:
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/s/ Brian Gibson
|
||
Name:
|
Brian Gibson
|
||
Title:
|
Senior Vice President,
Public Equities
|
§
|
Over the past 19 years under current management, Mentor’s share price is down 18%, with ZERO return for shareholders. How can we as shareholders support a Board that is responsible for this underperformance?
|
Ø
|
Mentor’s share price is down 18% unaffected for Casablanca’s and the Icahn Group’s purchases1 versus gains for Synopsys of 112%, 292% for Cadence and 185% for the S&P 500
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§
|
History of excessive shareholder dilution:
|
Ø
|
Mentor’s share count has increased 72% over the last 10 years, versus 10% and 23% for Cadence and Synopsys, respectively
|
Ø
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Mentor’s issuance of $253mm of convertible bonds in March 2011 was another act of dilution while also increasing the costs for potential buyers and further entrenching the company’s leadership
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§
|
Abysmal free cash flow generation:
|
Ø
|
Mentor has only delivered $113mm of free cash flow over the last 10 years versus over $2 billion each for Cadence and Synopsys
|
Ø
|
Meanwhile, Mr. Rhines has paid himself $65mm during his tenure2
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§
|
Bloated cost structure:
|
Ø
|
For calendar year 2010, Mentor spent over 34% of revenues on selling & marketing expenses while Synopsys spent 24%3
|
Ø
|
Mentor spent almost $100mm on general & administrative expenses last year, similar to Synopsys (more than twice Mentor’s size) and over 25% more than Cadence
|
-
|
These higher expenses are egregious given the lower cost of living in the suburbs of Portland, Mentor’s headquarters, versus both Cadence and Synopsys located in Silicon Valley
|
Ø
|
Lowest revenue per employee compared with peers - 16% lower:
|
-
|
$195k for Mentor versus Synopsys’ $233k while Cadence’s revenue per employee was $233-$305k from 2003 to 20074
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§
|
Obstructionist Board antagonistic to shareholder concerns:
|
Ø
|
Accelerated their 2011 shareholder meeting and rejected the Icahn Group’s $17 per share offer with little explanation
|
Ø
|
Publicly prejudged the feasibility of a third party combination despite strong strategic and financial rationale
|
Ø
|
Implemented a Poison Pill and issued a dilutive convertible bond despite non-dilutive alternatives
|
Ø
|
Entirely unaligned with shareholder interests as the Board and management collectively own less than 1% of the shares
|
§
|
Mentor’s directors, with a 15 year average tenure, have no relevant expertise aside from serving on Mentor’s Board:
|
Ø
|
None of the directors the Icahn Group has proposed to remove have been recently employed as other than an “industry consultant”, “private investor” or board director
|
§
|
By comparison, the Icahn Group’s director nominees are highly regarded professionals with a history of success in dealing with public companies:
|
Ø
|
Jose Maria Alapont – CEO of a $6 billion public auto parts supplier, which operates in a highly competitive cost conscious industry
|
Ø
|
Gary Meyers – EDA industry expertise as former CEO of a publicly listed company, Synplicity
|
Ø
|
David Schecter – proven asset manager and a direct representative of Mentor’s largest shareholder
|
§
|
There is no reason to believe in management’s ability to execute on its unimpressive strategic goals without historical precedent
|
Ø
|
Mentor has guided to 15% non-GAAP operating margins near term and 20% longer term versus 23% achieved by Synopsys and Cadence’s target of operating margins in the mid 20s
|
-
|
No detail on how management’s plan will be achieved
|
§
|
In summary, Mentor has been a persistent underperformer:
|
Ø
|
Negative share price returns
|
Ø
|
Poor operational performance
|
Ø
|
Dismissal of shareholder concerns
|