Cadence Proposes to Acquire Mentor Graphics for $16.00 per Share in Cash

Transaction Valued at $1.6 Billion

SAN JOSE, Calif. -- Jun 17, 2008 -- Cadence Design Systems, Inc. (NASDAQ: CDNS), today announced that it submitted a proposal to the Board of Directors of Mentor Graphics Corporation (NASDAQ: MENT) to acquire Mentor Graphics for $16.00 per share in cash. Cadence's all-cash proposal, which is not subject to any financing condition, represents a 30% premium over the closing price of Mentor Graphics common stock on June 16, 2008, the last trading day prior to public disclosure of Cadence's proposal, a 59% premium over the closing price of Mentor Graphics common stock on May 2, 2008, when Cadence presented the terms of the proposal to Mentor Graphics, and a 46% premium over Mentor Graphics' average closing price for the past 30 trading days. The transaction price represents a total enterprise value of $1.6 billion on a fully diluted basis, which reflects Mentor Graphics' net debt of $69 million.

"A combined Cadence-Mentor will offer customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next-generation product development," said Michael J. Fister, president and chief executive officer of Cadence. "Together, we will accelerate the rate and efficiency of customers' innovation by making it possible for them to develop products that better meet end user needs."

"We believe the combination of Cadence and Mentor Graphics delivers significant benefits to both companies' shareholders that are simply too compelling to ignore," said Kevin S. Palatnik, senior vice president and chief financial officer of Cadence. "Our $16.00 per share all-cash proposal provides Mentor Graphics shareholders with a substantial cash premium for their investment in Mentor Graphics. It remains our strong preference to work cooperatively with Mentor Graphics, and to immediately commence discussions with Mentor Graphics regarding our proposal."

Cadence's proposal is subject to the negotiation of a mutually agreeable merger agreement, the completion of certain limited and confirmatory due diligence, and the satisfaction of other customary conditions, including receipt of regulatory approvals.

Deutsche Bank Securities Inc. is acting as financial advisor to Cadence and Davis Polk & Wardwell is acting as legal counsel.

Below is the text of the letter that was sent earlier today to the Board of Directors of Mentor Graphics, in care of Walden C. Rhines, Chairman and Chief Executive Officer of Mentor Graphics:

June 17, 2008 The Board of Directors of Mentor Graphics Corporation c/o Walden C. Rhines Chairman of the Board of Directors and Chief Executive Officer Mentor Graphics Corporation 8005 S.W. Boeckman Road Wilsonville, OR 97070 Dear Wally: 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 discussions. As you will recall, you and I first spoke about combining Cadence and Mentor Graphics on April 16, 2008. On May 2, 2008, Bill Porter and I met with you and Greg Hinckley in Portland where we presented the terms of our proposal to acquire Mentor Graphics for $16.00 per share in cash. Following the May 2nd meeting, we repeatedly attempted to bring the Cadence and Mentor Graphics leadership teams together to discuss our proposal. On May 23, 2008, however, 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. It remains our preference to bring Cadence and Mentor Graphics together through a negotiated transaction. However, given Mentor Graphics' refusal to engage in substantive discussions with us concerning our all-cash premium acquisition proposal and the importance of this transaction to both companies' respective shareholders, we have decided to publicly disclose our proposal. We believe there are clear and compelling advantages to a combination of Cadence and Mentor Graphics. As Bill and I explained to you on May 2, based upon our knowledge of Mentor Graphics from currently available public information, Cadence is prepared to acquire Mentor Graphics for $16.00 per share in cash. Our proposal is not subject to any financing condition. This proposal is a full and fair price and provides an attractive opportunity for your shareholders to realize, with certainty, significant value for their investment in Mentor Graphics. This price represents a 30% premium over the closing price of Mentor Graphics common stock on June 16, 2008, the last trading day prior to public disclosure of our proposal, a 59% premium over the closing price of Mentor Graphics common stock on May 2, when we presented the terms of our proposal, and a 46% premium over Mentor Graphics' average closing price for the past 30 trading days. We believe that a combined Cadence-Mentor will provide customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next-generation product development. From increasing complexity to stringent cost targets, developers must optimize and prioritize their efforts across the entire spectrum of specification, architecture, design, implementation, verification, and manufacturing. Combining Cadence and Mentor Graphics and aligning the creative talents of our respective hard-working and innovative employees will deliver more comprehensive cutting-edge solutions and an entirely new level of customer experience and satisfaction. Together we can accelerate the rate and efficiency of customers' innovation by making it possible for them to develop products that better meet end user needs. Our proposal is subject to the negotiation of a mutually acceptable merger agreement and completion of certain limited and confirmatory due diligence, which we believe we will be able to complete expeditiously, as well as satisfaction of other customary conditions, including receipt of regulatory approvals. We and our advisors have carefully analyzed the combination of Cadence and Mentor Graphics and are confident that the proposed transaction will receive the necessary regulatory approvals. We strongly believe that a combination of Cadence and Mentor Graphics will create significant value for both companies' respective shareholders and customers. Our leadership team and advisors remain prepared to meet with you and your advisors at your earliest convenience to conduct the necessary due diligence and negotiate a merger agreement. I am confident that the Cadence and Mentor Graphics teams working together can make this transaction a success. The Board of Directors of Cadence unanimously supports this proposal and the combination of Cadence and Mentor Graphics. We expect you and the Mentor Graphics Board to give this proposal serious consideration. I look forward to hearing from you soon. Sincerely yours, /s/ Michael J. Fister Michael J. Fister President and Chief Executive Officer

Audio Webcast and Conference Call Information
Cadence will host an analyst and investor audio webcast and conference call today, June 17, 2008, at 7:00 a.m. (Pacific) / 10:00 a.m. (Eastern) to discuss the proposed transaction. Attendees are asked to dial into the conference call or register at the Website at least 10 minutes prior to the scheduled webcast. Webcast access and accompanying slides will be available at www.cadence.com/company/investor_relations. Please see the website for details on how to access the webcast. The conference call can be accessed by dialing (888) 562-3356 (toll-free, U.S.) or (973) 582-2700 (toll, international); the conference ID number is 52206067. An archive of the webcast will be available starting today, June 17, 2008, at 10:00 a.m. (Pacific) / 1:00 pm (Eastern) and ending at 8:59 p.m. (Pacific) / 11:59 pm (Eastern) on Friday, June 20, 2008. The replay can be accessed through Cadence's website or by dialing (800) 642-1687 (toll-free, U.S.) or (706) 645-9291 (toll, international); the conference ID number is 52206067.

About Cadence
Cadence enables global electronic-design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software and hardware, methodologies, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. Cadence reported 2007 revenues of approximately $1.6 billion, and has approximately 5,100 employees. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company, its products, and services is available at www.cadence.com.