Mentor Graphics Enters Into Agreement to Acquire 0-In Design Automation

WILSONVILLE, Ore.—(BUSINESS WIRE)—June 7, 2004— Mentor Graphics Corporation (Nasdaq:MENT) today announced that it has entered into an agreement to acquire 0-In Design Automation, Inc., the industry-leading provider of assertion-based and formal verification solutions. Terms of the deal were not disclosed.

"The acquisition of 0-In and their talented technical team will significantly extend Mentor Graphics' leadership in solving the difficult problems of design verification. Customers require a clear and unified approach to assertion-based verification," said Robert Hum, vice president of the design verification and test division. "With the inclusion of 0-In's assertion and formal verification technology, as well as products under development, Mentor Graphics' Scalable Verification platform will become a leader in assertion-based verification."

Mentor Graphics will continue to support 0-In's existing line of products and customers and will expand distribution and support of these products with Mentor Graphics' global sales and support organization. 0-In products will become part of the Mentor Graphics Scalable Verification platform offering a complete range of integrated verification technologies including simulation, assertions, formal verification, emulation, and hardware-software co-verification.

"Mentor Graphics and 0-In are a great fit. The combination of our superior technical teams will be a powerful force for innovations in the marketplace," said Steven D. White, 0-In's president and CEO. "The companies share a clear vision of the technology and methodology required to eliminate the functional verification bottleneck. In addition, both companies are committed to the support of industry standards and interoperability that provide customers the freedom to choose best-in-class tools."

About 0-In Design Automation

0-In Design Automation, Inc. (pronounced "zero-in") is a privately held electronic design automation (EDA) company providing functional verification products that help verify multi-million gate application-specific integrated circuit (ASIC) and system-on-chip (SoC) designs. 0-In was founded in 1996 and is based in San Jose, California.

About Mentor Graphics

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 $675 million and employs approximately 3,700 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 http://www.mentor.com.

Statements in this press release regarding the Company's performance in future periods constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company or industry results 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) the Company's ability to continue selling products and services, and to manage expenses, during the current slowdown in the electronics industry; (ii) changes in tax laws, regulations or enforcement practices in the jurisdictions where the Company does business; (iii) changes in accounting or reporting rules or interpretations, limitations on repatriation of earnings, licensing and intellectual property rights protection; (iv) effects of the increasing volatility of foreign currency fluctuations on the Company's business and operating results; (v) the Company's ability to successfully offer products and services that compete in the highly competitive and dynamic EDA industry including the risk that the Company's technology, products or inventory become obsolete; (vi) the overall instability of diverse economies, including changes in regional or worldwide economic or political conditions, government trade restrictions, or war in the Middle East or elsewhere (vii) the Company's ability to successfully integrate and manage its recent and future acquisitions, and (viii) effects of unanticipated shifts in product mix on gross margin and unanticipated shifts in geographic mix on the overall tax rate, all as may be discussed in more detail under the heading "Factors That May Affect Future Results and Financial Condition" in the Company's most recent Form 10-K or Form 10-Q. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. In addition, statements regarding future performance do not reflect potential impacts of mergers or acquisitions that have not been announced or closed as of the time the statements are made. Mentor Graphics disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements to reflect future events or developments.

Mentor Graphics Corporation
Ryerson Schwark, 503-685-1660
ryschwark@mentor.com
or
Suzanne Graham, 503-685-7789
suzannegraham@mentor.com