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Mentor Graphics Corp. said preliminary results show that its shareholders elected three new directors nominated by billionaire investor Carl Icahn, helping to boost the company's stock by 6 percent Thursday.
The software maker, based in Wilsonville, Ore., announced the preliminary results after its annual shareholders met Thursday. The move could transform a company that has added only 2 directors since 2000. The ousted directors joined the board between 1983 and 1994.
In a statement, Icahn called the vote "a major triumph for shareholder democracy generally."
"We hope this marks the beginning of a secular change in corporate governance that will usher in a new era in which director accountability to shareholders becomes the rule rather than the exception," he said.
Mentor makes software to test electronics components for aerospace, automotive and electronics companies.
The current board pledged to aim for a smooth transition after the bruising proxy battle.
"Our Board and management team will do our utmost to work cooperatively with the new directors to continue to create value for Mentor Graphics shareholders," Mentor said in a statement.
Shareholders also re-elected five management director nominees and approved all five proposals Mentor Graphics placed on the meeting agenda.
Icahn and his affiliates own 15 percent of Mentor. Icahn tried to buy the software maker in February for about $1.9 billion, or $17 per share. The current board said his offer was too low.
Icahn's main complaint, he said, was that the company's shares are undervalued. Mentor's stock price is the same as it was in 1994, Icahn said last week. Since then, the outgoing board had paid Chairman and CEO Walden Rhines $65 million, Icahn said.
Mentor's board had argued that its own plans were better for shareholders. It said there was no reason to elect Icahn's nominees, because the company already was implementing many of his suggestions.
The directors nominated by Icahn are Jose Maria Alapont, Gary Meyers and David Schechter. They will replace James Fiebiger, Marsha Congdon and Fontaine Richardson.
Five directors will continue on the board: Rhines, Gregory Hinckley, Sir Peter Bonfield, Patrick McManus and Kevin McDonough.
Mentor shares jumped 79 cents, or 6 percent, to close Thursday at $15.12.