David Schechter - Why his background is relevant to Mentor and our Plan B?

David has a background as an investor in publicly traded companies that the existing Board appears to lack and currently serves as a Portfolio Manager of the Sargon Portfolio for Icahn Capital (Mentor's largest shareholder with 14.3%). This activist investment portfolio holds Mentor Graphics and therefore David is highly incentivized to both limit the issuance of dilutive securities and offer views on shareholder friendly activities that unlock value. Within this portfolio, David serves as a board member of The Hain Celestial Group where he has worked cooperatively with the board and management and has led a large investment in another software company, Lawson Software, that has announced a strategic review process. David has a clear track record of success as the portfolio he co-manages generated an 80% return on its initial capital of $300 million since inception on 4/1/10 through 3/31/11.(vii) In addition to this strong investment record, David has extensive experience implementing cost controls at companies controlled by Carl Icahn. At several of these companies, David has served as director and has engaged leading consulting firms which collaborated with Icahn Sourcing, Carl Icahn's organization for managing cost efficiency opportunities, identifying and eliminating unnecessary expenses to improve efficiencies across major cost centers.

All three of our nominees are highly qualified with transparent career success from a scale, performance, and relevancy perspective. It is not clear to us if any of the three directors we seek to replace could say the same about their performance in their last job.(viii) Don't we as shareholders deserve new directors with strong backgrounds who can give a fresh perspective considering the actions the Board has taken and the fact that these three directors we seek to replace have served for an average of 22 years? Two of our three nominees are or have recently been CEOs of publicly traded companies with industry experience directly relevant to Mentor Graphics. We strongly encourage all shareholders to look at the collective background and performance of our nominees and compare them to the three directors we seek to replace.

Look at the record on corporate governance in terms of a sale of the Company and the treatment of shareholders. The CEO of Cadence wrote a letter in June 2008 to Walden Rhines saying "over the last two months, we have sought to engage you and your Board of Directors in discussions regarding our proposal to combine Cadence Design Systems, Inc. and Mentor Graphics Corporation. We are disappointed that, despite our best efforts, you have thus far been unwilling to meaningfully participate in such discussion" and "you informed us that, even without any substantive discussion with us or negotiation of our proposal, Mentor Graphics concluded that it did not wish to pursue discussions with us given Mentor Graphics' desire to stay independent." Shortly after becoming aware of our investment in Mentor, the Board implemented a "poison pill" to limit our ownership to 15%. The day after learning of another shareholder's investment in the Company (Casablanca Capital), Mentor announced an annual meeting date several months in advance of the prior year's meeting, thereby leaving shareholders just ten days to nominate directors (a strategy we believe was used to impede the nomination of directors by shareholders). The Board made this decision on January 17th but didn't bother disclosing it to shareholders until February 4th! After rejecting our offer to buy the Company for $17.00 per share and to serve as a stalking horse (with no break up fees) so that the Company could seek superior offers, this Board publicly named its "logical strategic buyers" and detailed publicly in a presentation filed with the SEC why there may be regulatory issues. These series of events lead us to question this Board's intent.

Look at the facts that we have presented on the Board's oversight of SG&A and on dilution. The record is clear as we highlighted earlier. Just one day after rejecting our offer of $17.00 as undervalued, this Board, despite no urgency and clear alternatives that required no dilution, announced and priced a dilutive convertible debt security. It took this Board seven days to publicly acknowledge that in the event of an acquisition of the Company for cash, the conversion price drops to a price far below the headline conversion price of $20.54.

Now is your chance for a change. Don't let yourself be susceptible to fear mongering. Our nominees, if elected would collectively represent a minority of the Board with just three of eight seats. Therefore, change can occur only with the support of several existing directors. We are confident in our plans outlined to enhance value and the ability of our nominees to improve governance. Mentor Graphics has tremendous assets developed through its world class research and development organization, and we are confident in our investment and the future for Mentor Graphics shareholders if our nominees are elected to the Board.

Mentor Graphics needs new ideas, new blood, and a new way of thinking. Over two decades of entrenchment, this Board has lost the drive to perform. They have not been held accountable. As a result, they allowed the expenses of the Company to grow year after year without the proper systems of control in place necessary to maintain efficiency. They have allowed for outsized share dilution year after year while the shareholders suffered. We believe our nominees can bring change. We are confident that if you vote for our nominees, shareholders will no longer feel compelled to go on television and call this Company a "country club." We strongly encourage you to vote the GOLD proxy card.

Sincerely yours,

CARL C. ICAHN

If you have any questions or require any assistance in executing your proxy, please call:

D.F. King & Co., Inc.
Shareholders call toll−free: (800) 714−3313
Banks and Brokerage Firms call: (212) 269−5550

Important Disclosures

These materials are based solely on information contained in the public domain. We have relied upon and assumed, have not attempted to independently investigate or verify, and do not assume any responsibility for, the accuracy, completeness or reasonableness of such information. No representation or warranty, express or implied, is made as to the accuracy or completeness of any information included or otherwise used herein, and nothing contained herein is, or shall be relied upon as, a representation or warranty, whether as to the past, the present or the future. These materials are necessarily based upon information available to us, and financial, stock market and other existing conditions and circumstances that are known to us, as of the date of these materials. We do not have any obligation to update or otherwise revise these materials.

The information contained in these materials does not purport to be an appraisal of any of the assets or liabilities of Mentor Graphics or any of its business units or subsidiaries, or any other companies mentioned herein, and does not express any opinion as to the price at which the securities of any such entities may trade at any time. The information and opinions provided in these materials take no account of any investor's individual circumstances and should not be taken as specific advice on the merits of any investment decision. Moreover, nothing contained herein should be construed as providing any legal, tax or accounting advice, and you are encouraged to consult with your legal, tax, accounting and investment advisors. You should consider these materials as only one of many factors to be considered in making any investment or other decisions. We do not accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of these materials.

ON APRIL 1, 2011, CARL C. ICAHN AND AFFILIATES ("ICAHN") FILED A DEFINITIVE PROXY STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") IN CONNECTION WITH THE UPCOMING 2011 ANNUAL MEETING OF SHAREHOLDERS OF MENTOR GRAPHICS. SHAREHOLDERS ARE ADVISED TO READ ICAHN'S DEFINITIVE PROXY STATEMENT, AND ANY OTHER RELEVANT DOCUMENTS FILED BY ICAHN WITH THE SEC, BEFORE MAKING ANY VOTING OR INVESTMENT DECISION BECAUSE THEY CONTAIN IMPORTANT INFORMATION. THE DEFINITIVE PROXY STATEMENT IS, AND ANY OTHER RELEVANT DOCUMENTS AND OTHER MATERIAL FILED BY ICAHN WITH THE SEC CONCERNING MENTOR GRAPHICS WILL BE, WHEN FILED, AVAILABLE FREE OF CHARGE AT HTTP://WWW.SEC.GOV AND WWW.READMATERIAL.COM/MENTOR . IN ADDITION, COPIES OF THE PROXY MATERIALS MAY BE REQUESTED FROM ICAHN'S PROXY SOLICITOR, D.F. KING & CO., INC., BY TELEPHONE AT (800) 714−3313.