SC TO-I/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3 to

SCHEDULE TO

(Rule 13e-4)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

MENTOR GRAPHICS CORPORATION

(Name of Subject Company (Issuer) and Filing Person (Offeror))

Options to Purchase Common Stock, No Par Value (Title of Class of Securities) 587200106 (CUSIP Number of Class of Securities (Underlying Common Stock))

Dean M. Freed

Vice President and General Counsel

Mentor Graphics Corporation

8005 S.W. Boeckman Road

Wilsonville, Oregon 97070

(503) 685-7000

(Name, address, and telephone number of person authorized to receive notices and communications on behalf of Filing Person)

Copies To:

Danielle Benderly

Perkins Coie LLP

1120 N.W. Couch Street, Tenth Floor

Portland, OR 97209

(503) 727-2000

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee**
$16,951,203.76	$1,209.00

* Estimated solely for purposes of calculating the Amount of Filing Fee. The calculation of the Transaction Valuation assumes that all options to purchase shares of the issuer’s common stock that may be eligible for exchange in the offer will be tendered pursuant to the offer. These options cover an aggregate of 8,992,204 shares of the issuer’s common stock and have an aggregate value of $16,951,203.76 as of December 31, 2009, calculated based on a Black-Scholes option pricing model.

** The Amount of Filing Fee, calculated in accordance with Rule 0-11(b) of the Securities Exchange Act of 1934, as amended, equals $71.30 per $1,000,000 of the aggregate amount of the Transaction Valuation. The Transaction Valuation set forth above was calculated for the sole purpose of determining the Amount of Filing Fee and should not be used for any other purpose.

x Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

Amount Previously Paid:	$1,209.00	Filing Party:	Mentor Graphics Corporation
Form or Registration No.:	000-13442	Date Filed:	January 7, 2010

¨ Check the box if the filing relates solely to preliminary communications made before the commencement of the tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

¨ third party tender offer subject to Rule 14d-1.

x issuer tender offer subject to Rule 13e-4.

¨ going private transaction subject to Rule 13e-3.

¨ Amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:  ¨

TABLE OF CONTENTS

EXPLANATORY NOTE

This Amendment No. 3 (this “Amendment No. 3”) amends and supplements the Tender Offer Statement on Schedule TO (the “Schedule TO”) filed with the Securities and Exchange Commission on January 7, 2010, and as amended by Amendment No. 1 to Schedule TO filed with the Securities and Exchange Commission on January 7, 2010 (“Amendment No. 1”) and Amendment No. 2 to Schedule TO filed with the Securities and Exchange Commission on January 21, 2010 (“Amendment No. 2”), relating to an offer by Mentor Graphics Corporation, an Oregon corporation (the “Company”), to certain eligible employees to exchange some or all of their outstanding options to purchase shares of the Company’s common stock for restricted stock units on the terms and conditions set forth in the Offer to Exchange Certain Stock Options for Restricted Stock Units, dated January 7, 2010 (the “Offer to Exchange”), filed as Exhibit (a)(1)(A) to the Schedule TO.

The Company is amending its Offer to Exchange as set forth below to clarify that in the event eligible employees are unable to make an election to tender eligible stock options, or to withdraw a previous election to tender eligible stock options, using the Exchange Offer website at https://mentor.equitybenefits.com/, they may tender eligible stock options, or withdraw a previous election to tender eligible stock options, via facsimile.

Except as specifically provided in this Amendment No. 3, the information contained in the Schedule TO and the Offer to Exchange, as amended by Amendments No. 1 and No. 2, remains unchanged. This Amendment No. 3 should be read in conjunction with the Schedule TO, the Offer to Exchange, and Amendments No. 1 and No 2. All defined terms used in this Amendment No. 3 have the same meaning as in the Offer to Exchange.

Amended Terms and Conditions of the Exchange Offer

The Company has amended the disclosure included in the Offer to Exchange Certain Stock Options For Restricted Stock Units, dated January 7, 2010 (the “Exchange Offer”), filed as Exhibit (a)(1)(A) to the Schedule TO, and as amended by Amendments No. 1 and No. 2, as follows. The following amendments to the Exchange Offer also apply to the other documents filed as exhibits to the Schedule TO, as amended, to the extent the original provisions of such other documents would conflict or be inconsistent with the Exchange Offer, as amended.

1. The section of the Exchange Offer entitled Summary Term Sheet — Questions and Answers is revised as follows:

a. A new fourteenth paragraph is inserted as follows:

If you are unable to make an election to tender eligible options, or to withdraw a previous election to tender eligible options, using the Exchange Offer website at https://mentor.equitybenefits.com/, you can submit your election, or withdraw a previous election, using a paper election and withdrawal form that is available on the Exchange Offer website at https://mentor.equitybenefits.com/ or by written request made by facsimile at (503) 685-1485. Please include your first and last name, telephone number, address and email address on any such request. You can submit the paper election and withdrawal form by facsimile at (503) 685-1485.

b. Question Q30 is deleted and replaced with the following:

Q30 What if I have questions regarding the Exchange Offer, if I need a paper copy or additional copies of this Exchange Offer document or any documents attached or referred to in this document, or if I am unable to make an election to tender eligible options, or to withdraw a previous election to tender eligible options, using the Exchange Offer website?

c. A new third paragraph in the answer provided for Q30 is inserted as follows:

If you are unable to make an election to tender eligible options, or to withdraw a previous election to tender eligible options, using the Exchange Offer website at https://mentor.equitybenefits.com/, you can submit your election, or withdraw a previous election, by facsimile. A paper election and withdrawal form is available on the Exchange Offer website at https://mentor.equitybenefits.com/ or by written request made by facsimile at (503) 685-1485. Please include your first and last name, telephone number, address and email address on any such request. You can submit the paper election and withdrawal form by facsimile at (503) 685-1485.

2. In the section of the Exchange Offer entitled The Exchange Offer: Section 3, Procedures for Surrendering Eligible Stock Options, a new fourth paragraph is inserted as follows:

If you are unable to make an election to tender eligible options using the Exchange Offer website at https://mentor.equitybenefits.com/, you can submit your election by facsimile. A paper election and withdrawal form is available on the Exchange Offer website at https://mentor.equitybenefits.com/ or by written request made by facsimile at (503) 685-1485. Please include your first and last name, telephone number, address and email address on any such request. You can submit the paper election and withdrawal form by facsimile at (503) 685-1485.

3. In the section of the Exchange Offer entitled The Exchange Offer: Section 4, Withdrawal Rights, a new fifth paragraph is inserted as follows:

If you are unable to withdraw a previous election to tender eligible options using the Exchange Offer website at https://mentor.equitybenefits.com/, you can withdraw a previous election by facsimile. A paper election and withdrawal form is available on the Exchange Offer website at https://mentor.equitybenefits.com/ or by written request made by facsimile at (503) 685-1485. Please include your first and last name, telephone number, address and email address on any such request. You can submit the paper election and withdrawal form by facsimile at (503) 685-1485.

Amended Items of Schedule TO

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment No. 3 amends and restates only the items and exhibits to the Schedule TO that are being amended and restated, and unaffected items and exhibits are not included herein. This Amendment No. 3 should be read in conjunction with the Schedule TO and Amendments No. 1 and No. 2.

ITEM 1. SUMMARY TERM SHEET.

The information set forth in the Offer to Exchange, as amended by Amendment No. 2 and this Amendment No. 3, under Summary Term Sheet—Questions and Answers, is incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION

(a) Name and Address.

Mentor Graphics Corporation, an Oregon corporation (the “Company” or “Mentor Graphics”), is the issuer of the securities subject to the Offer to Exchange. The Company’s principal executive offices are located at 8005 SW Boeckman Road, Wilsonville, Oregon 97070-7777. The Company’s telephone number is (503) 685-7000.

(b) Securities.

This Tender Offer Statement on Schedule TO relates to an offer by the Company to certain employees of the Company and its majority-owned subsidiaries, subject to specified conditions, to exchange some or all of their outstanding options to purchase shares of the Company’s common stock, no par value. A stock option will be eligible for exchange and referred to herein as an “Eligible Stock Option” if it (a) has an exercise price equal to or greater than $11.00, (b) was granted prior to January 7, 2009, and (c) is scheduled to expire after August 5, 2010. Employees surrendering Eligible Stock Options will receive in exchange newly issued restricted stock units (the “RSUs”) to be granted under the Mentor Graphics 1982 Stock Option Plan, as amended (the “1982 Plan”).

The Company is making the offer to all employees of the Company and its majority-owned subsidiaries who hold Eligible Stock Options, and who, as of the date the offer commences, are actively employed by the Company or one of its majority-owned subsidiaries (excluding the Company’s executives who are subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), members of our Board of Directors or any former employees). These employees are collectively referred to as the “Eligible Employees.” To remain eligible to surrender Eligible Stock Options for exchange, and receive RSUs, the Eligible Employee must be employed by the Company or one of its majority-owned subsidiaries on the date the exchange offer commences and remain employed through the date the RSUs are granted. The actual number of shares of common stock subject to the options to be exchanged in the offer will depend on the number of shares of common stock subject to Eligible Stock Options surrendered by Eligible Employees and accepted for exchange. The Company is making the offer upon the terms and subject to the conditions set forth in the Offer to Exchange.

Our common stock is traded on the NASDAQ Global Select Market under the symbol “MENT.” As of December 11, 2009, the number of shareholders of record of our common stock was approximately 589, and the number of outstanding shares of our common stock was 98,310,089. On December 11, 2009, the closing price of our common stock as reported on the NASDAQ Global Select Market was $8.30 per share.

The information set forth in the Offer to Exchange, as amended by Amendment No. 2 and this Amendment No. 3, under Summary Term Sheet—Questions and Answers, Risk Factors, and The Exchange Offer: Section 1, Eligible Stock Options; Eligible Employees; Expiration Date; Section 5, Acceptance of Eligible Stock Options; Newly Issued RSUs; Section 7, Price Range of Our Common Stock; and Section 8, Source and Amount of Consideration; Terms of RSUs, is incorporated herein by reference.

(c) Trading Market and Price.

The information set forth in the Offer to Exchange under The Exchange Offer: Section 7, Price Range of Our Common Stock, is incorporated herein by reference

ITEM 4. TERMS OF THE TRANSACTION.

(a) Material Terms.

The information set forth in the Offer to Exchange, as amended by Amendments No. 1, No. 2. and No. 3, under Summary Term Sheet—Questions and Answers, and The Exchange Offer: Section 1, Eligible Stock Options; Eligible Employees; Expiration Date; Section 3, Procedures for Surrendering Eligible Stock Options; Section 4, Withdrawal Rights; Section 5, Acceptance of Eligible Stock Options; Newly Issued RSUs; Section 6, Conditions of the Exchange Offer; Section 8, Source and Amount of Consideration; Terms of RSUs; Section 9, Information Concerning Us; Financial Information; Section 11, Status of Eligible Stock Options Acquired by Us in the Exchange Offer; Accounting Consequences of the Exchange Offer; Section 12, Legal Matters; Regulatory Approvals; Section 13, Material U.S. Federal Income Tax Consequences; and Section 14, Extension of the Exchange Offer; Termination; Amendment, and Schedules A through T, is incorporated herein by reference.

(b) Purchases.

Members of the Company’s Board of Directors, executives who are subject to the provisions of Section 16 of the Exchange Act, and former employees are not eligible to participate in the offer. The information set forth in the Offer to Exchange, as amended by Amendment No. 2 and this Amendment No. 3, under The Exchange Offer: Section 3, Procedures for Surrendering Eligible Stock Options; and Section 10, Interests of Directors and Executive Officers; Transactions and Arrangements Concerning Our Securities, is incorporated herein by reference.

ITEM 12. EXHIBITS.

Exhibit No.	Document
(a)(1)(A) *	Offer to Exchange Certain Stock Options for Restricted Stock Units, dated January 7, 2010
(a)(1)(B) *	Form of Announcement Email from Mentor Graphics to All Employees, dated January 7, 2010, Announcing Commencement of Option Exchange Program
(a)(1)(C) *	Form of Email from Walden C. Rhines to Eligible Employees, dated January 7, 2010
(a)(1)(D) *	Screenshots of Option Exchange Program Website
(a)(1)(E) *	Form of Expiration Reminder Email Communication to Eligible Employees
(a)(1)(F) *	Forms of Confirmation Messages of Acceptance or Decline of Offer
(a)(1)(G) *	Form of Restricted Stock Units Grant Agreement under the 1982 Stock Option Plan
(a)(1)(H) *	Annual Report on Form 10-K for the fiscal year ended January 31, 2009 filed with the Securities and Exchange Commission on March 18, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(I) *	Quarterly Report on Form 10-Q for the quarter ended April 30, 2009 filed with the Securities and Exchange Commission on June 9, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(J) *	Quarterly Report on Form 10-Q for the quarter ended July 31, 2009 filed with the Securities and Exchange Commission on September 4, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(K) *	Quarterly Report on Form 10-Q for the quarter ended October 31, 2009 filed with the Securities and Exchange Commission on December 7, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(L) *	Form of Email from Mentor Graphics to Eligible Employees, dated January 20, 2010, Regarding Facsimile Number for Requesting Assistance
(a)(1)(M)	Form of Email from Mentor Graphics to Eligible Employees, dated January 28, 2010, Regarding Availability of Paper Election and Withdrawal Form
(a)(1)(N)	Form of Election and Withdrawal Form
(b)	Not applicable
(d)	Mentor Graphics Corporation 1982 Stock Option Plan, as amended effective December 14, 2009 (filed as Appendix 1 to the Company’s definitive proxy statement on Schedule 14A with respect to a special shareholders meeting filed with the Securities and Exchange Commission on November 12, 2009 (SEC File No. 000-13442) and incorporated herein by reference)
(g)	Not applicable
(h)	Not applicable

* Previously filed.

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

MENTOR GRAPHICS CORPORATION
By:	/S/    DEAN FREED
Name:	Dean Freed
Title:	Vice President and General Counsel

Date: January 28, 2010

EXHIBIT INDEX

Exhibit No.	Document
(a)(1)(A) *	Offer to Exchange Certain Stock Options for Restricted Stock Units, dated January 7, 2010
(a)(1)(B) *	Form of Announcement Email from Mentor Graphics to All Employees, dated January 7, 2010, Announcing Commencement of Option Exchange Program
(a)(1)(C) *	Form of Email from Walden C. Rhines to Eligible Employees, dated January 7, 2010
(a)(1)(D) *	Screenshots of Option Exchange Program Website
(a)(1)(E) *	Form of Expiration Reminder Email Communication to Eligible Employees
(a)(1)(F) *	Forms of Confirmation Messages of Acceptance or Decline of Offer
(a)(1)(G) *	Form of Restricted Stock Units Grant Agreement under the 1982 Stock Option Plan
(a)(1)(H) *	Annual Report on Form 10-K for the fiscal year ended January 31, 2009 filed with the Securities and Exchange Commission on March 18, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(I) *	Quarterly Report on Form 10-Q for the quarter ended April 30, 2009 filed with the Securities and Exchange Commission on June 9, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(J) *	Quarterly Report on Form 10-Q for the quarter ended July 31, 2009 filed with the Securities and Exchange Commission on September 4, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(K) *	Quarterly Report on Form 10-Q for the quarter ended October 31, 2009 filed with the Securities and Exchange Commission on December 7, 2009 (SEC File No. 000-13442) and incorporated herein by reference
(a)(1)(L) *	Form of Email from Mentor Graphics to Eligible Employees, dated January 20, 2010, Regarding Facsimile Number for Requesting Assistance
(a)(1)(M)	Form of Email from Mentor Graphics to Eligible Employees, dated January 28, 2010, Regarding Availability of Paper Election and Withdrawal Form
(a)(1)(N)	Form of Election and Withdrawal Form
(b)	Not applicable
(d)	Mentor Graphics Corporation 1982 Stock Option Plan, as amended effective December 14, 2009 (filed as Appendix 1 to the Company’s definitive proxy statement on Schedule 14A with respect to a special shareholders meeting filed with the Securities and Exchange Commission on November 12, 2009 (SEC File No. 000-13442) and incorporated herein by reference)
(g)	Not applicable
(h)	Not applicable

* Previously filed.

EX-99.(A)(1)(M)

Exhibit (a)(1)(M)

TO:

FROM:

SUBJECT: EXCHANGE OFFER: Paper Election and Withdrawal Form Available

DATE: January 28, 2010

If you are unable to make an election to tender eligible options, or to withdraw a previous election to tender eligible options, using the Exchange Offer website at https://mentor.equitybenefits.com/, you can submit your election, or withdraw a previous election, by facsimile. A paper election and withdrawal form is available on the Exchange Offer website at https://mentor.equitybenefits.com/ or by written request made by facsimile at (503) 685-1485. Please include your first and last name, telephone number, address and email address on any such request. You can submit the paper election and withdrawal form by facsimile at (503) 685-1485.

EX-99.(A)(1)(N)

Exhibit (a)(1)(N)

ELECTION AND WITHDRAWAL FORM

Tender Of Eligible Stock Options Pursuant To The Offer To Exchange

Certain Outstanding Options For Restricted Stock Units

Dated January 7, 2010

The Offer Expires At 5:00 p.m. Pacific Standard Time, On February 5, 2010, Unless the Offer Is Extended By Mentor Graphics

Election to Tender. To elect to tender an eligible option, complete the chart and provide employee information, your signature and the date of election where indicated below, and check the box to indicate “Yes” for each eligible option. If you do not complete the requested information and clearly mark the “Yes” box with respect to an Eligible Option, such Eligible Option will not be exchanged.

Election to Withdraw. To elect to withdraw a previous election to tender an eligible option, complete the chart and provide employee information, your signature and the date of election where indicated below, and check the box to indicate “No” for each eligible option.

Eligible Option Grant	Eligible Option	Exercise Price	Number of Shares Subject to Eligible	Exchange Eligible Option?
Date	Number	Per Share	Option	(check the box)
				¨ Yes ¨ No
				¨ Yes ¨ No
				¨ Yes ¨ No
				¨ Yes ¨ No
				¨ Yes ¨ No

Agreement to Terms of Election. By your signature below, you acknowledge that your election is subject to the terms, conditions and restrictions contained in the Offer to Exchange Certain Stock Options for Restricted Stock Units dated January 7, 2010.

DATE OF ELECTION:

EMPLOYEE INFORMATION: (please print)	MENTOR GRAPHICS CORPORATION
Name:	8005 SW Boeckman Road
Address:	Wilsonville, OR 97070-7777
Employee #:	Processed on:
Signature:	Processed by:

Valid Signature Is Required

PLEASE FAX FORM TO 503-685-1485

CORRESP

Danielle Benderly
PHONE:	(503) 727-2011
FAX:	(503) 346-2011
EMAIL:	DBenderly@perkinscoie.com

January 28, 2010

VIA EDGAR FILING AND OVERNIGHT DELIVERY

Mellissa Campbell Duru, Esq.

Special Counsel

Office of Mergers & Acquisitions

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C., 20549-3628

Re:	Mentor Graphics Corporation
	Schedule TO-I
	Amendment No. 1 to Schedule TO-I
	Filed January 7, 2010
	Amendment No. 2 to Schedule TO-I
	Filed January 21, 2010
	File No. 5-38367

Dear Ms. Duru:

Pursuant to the additional oral comment we received on January 26, 2010, and on behalf of Mentor Graphics Corporation (the “Company”), we are supplementing the response to Comments Nos. 3, 4 and 5 in your letter dated January 13, 2010 (the “Comment Letter”) regarding the Company’s Tender Offer Statement on Schedule TO (the “Schedule TO”) filed on January 7, 2010, as amended by Amendment No. 1 to Schedule TO filed on January 7, 2010. For your convenience, the responses are numbered to correspond to the numbers of the comments in the Comment Letter. The responses reference Amendment No. 3 to Schedule TO, which the Company filed with the SEC today (“Amendment No. 3”).

Mellissa Campbell Duru

Special Counsel

Office of Mergers & Acquisitions

Securities and Exchange Commission

January 28, 2010

Page 2

Exhibit (a)(1)(A)-Offer to Purchase

Summary Term Sheet-Questions & Answers, page 1

How do I participate in the Exchange Offer, page 8

3. You disclose throughout the offer to purchase that the only means to tender is electronically by making an online election at the Exchange Offer website. There is no indication, however, as to the accommodations, if any, that you will provide to any eligible employee who may not have Internet access. Explain why you believe limiting the manner in which option holders may tender into the Offer in this manner is appropriate, taking into account the characteristics of the eligible option holders and any other factors you believe are relevant under the facts presented. We may have further comment.

SUPPLEMENTAL RESPONSE: Consistent with our discussion, the Company has amended the relevant disclosures as set forth in Amendment No. 3 to clarify that, in the event eligible employees are unable to make an election to tender eligible stock options, or to withdraw a previous election to tender eligible stock options, using the Exchange Offer website at https://mentor.equitybenefits.com, they can tender eligible stock options, or withdraw a previous election to tender eligible stock options, via facsimile. A copy of the form of email to eligible employees communicating this clarification and a paper election and withdrawal form for tenders and withdrawals made by facsimile are filed as exhibits to Amendment No. 3.

When and how can I withdraw…. page 8

4. You appear to limit the means of withdrawal to solely the Exchange Offer website. We further note disclosure on page 15 in which you state that withdrawals submitted by any other means will not be accepted. Please see our prior comment. Please provide us with a legal analysis as to why you believe restricting the means of withdrawing to this process is in compliance with the withdrawal rights incorporated in Rule 13e-4(f)(2). We may have additional comments.

SUPPLEMENTAL RESPONSE: Please see the response to Comment No. 3.

Mellissa Campbell Duru

Special Counsel

Office of Mergers & Acquisitions

Securities and Exchange Commission

January 28, 2010

Page 3

What if I have questions regarding the Exchange Offer... page 8

5. Please clarify whether tenders of shares may be effected via the submission of paper documents and if so, the proper method of submission of such paper documents (i.e., hand delivery, interoffice, U.S. mail (or other post), Federal Express (or similar delivery service) facsimile or email).

SUPPLEMENTAL RESPONSE: Please see the response to Comment No. 3.

The Company acknowledges the following:

• the Company is responsible for the adequacy and accuracy of the disclosure in its filings;

• Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

• the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any further comments or questions regarding this letter, please contact me at (503) 727-2011.

Very truly yours,

/s/ Danielle Benderly

Danielle Benderly

DB:TJF

cc: Dean M. Freed, Esq.