Cadence and Mentor Settle Dispute Over Emulation Patents, End Litigation

SAN JOSE, Calif. and WILSONVILLE, Ore.--(BUSINESS WIRE)--Sept. 23, 2003--Cadence Design Systems, Inc. (NYSE:CDN) and Mentor Graphics Corporation (Nasdaq:MENT) today announced they have agreed to settle all outstanding litigation between the companies relating to emulation and acceleration systems. The companies also reached agreement that, for a period of seven years, neither will sue the other over patented emulation and acceleration technology. Mentor will pay Cadence $18 million in cash.

"Healthy competition yields better technology platforms and results for our customers; chronic litigation does not," said Ray Bingham, president and chief executive officer of Cadence. "While it will always be important for us to protect our intellectual property, right now our customers, who face a continued weak economy and unprecedented challenges in chip design, need our undivided attention."

"We are pleased to have settled this litigation in a fair and reasonable manner," said Walden C. Rhines, chairman and chief executive officer of Mentor Graphics. "Helping customers keep pace with the growing complexity of today's SoC and ASIC designs is our overriding objective, and the end of this litigation will help us achieve that aim."

The companies further said that an immediate customer benefit of the agreement is that Mentor will now join Cadence in the OpenAccess Coalition, sponsored by Si2.

About Mentor

Mentor Graphics Corporation (Nasdaq:MENT) is a world leader in electronic hardware and software design solutions, providing products, consulting services and award-winning support for the world's most successful electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of about $650 million and employs approximately 3,500 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777; Silicon Valley headquarters are located at 1001 Ridder Park Drive, San Jose, California 95131-2314. World Wide Web site: www.mentor.com.

Statements regarding Mentor Graphics in this press release may constitute "forward-looking" statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Mentor Graphics to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: (i) Mentor Graphics' ability to continue selling products and services and managing expenses during the continuing slowdown in the electronics industry; (ii) changes in accounting or reporting rules or interpretations, changes in the tax environment worldwide, limitations on repatriation of earnings, licensing and intellectual property rights protection; (iii) Mentor Graphics' ability to successfully offer products and services that compete in the highly competitive and dynamic EDA industry including the risk that Mentor Graphics' technology, products or inventory become obsolete; and (iv) effects of the increasing volatility of foreign currency fluctuations on Mentor Graphics' business and operating results, all as may be discussed in more detail under the heading "Factors That May Affect Future Results and Financial Condition" in the Mentor Graphics' most recent Form 10-K or Form 10-Q.

About Cadence

Cadence is the world's leader in electronic design technologies, methodology services, and design services. Cadence solutions are used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications equipment, consumer electronics, and a variety of other electronics-based products. With approximately 5,000 employees and 2002 revenues of approximately $1.3 billion, Cadence has sales offices, design centers, and research facilities around the world. The company is headquartered in San Jose, Calif., and traded on the New York Stock Exchange under the symbol CDN. More information about the company, its products and services is available at www.cadence.com.

The statements contained above include forward looking statements based on current expectations or beliefs, as well as a number of preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Readers are cautioned not to put undue reliance on these forward looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties and other factors, many of which are outside the control of Cadence, including, among others: Cadence's ability to compete successfully in the design automation product and the commercial electronic design and methodology services industries; the mix of products and services sold and the timing of significant orders for its products; economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; and the acquisition of other companies or the failure to successfully integrate them. For a detailed discussion of these and other cautionary statements, please refer to the company's filings with the Securities and Exchange Commission. These include the company's Annual Report on Form 10-K for the year ended December 28, 2002 and Quarterly Report on Form 10-Q for the quarter ended June 28, 2003.

CONTACT: Cadence Design Systems, Inc.
             Jenny Gispen-Schultz, 408-944-7280
             jennyg@cadence.com
             or
             Mentor Graphics
             Ryerson Schwark, 503-685-1660
             ry_schwark@mentor.com