Mentor Graphics Acquires IKOS

Hardware assisted design verification firm IKOS Systems Inc. announced Tuesday that it has agreed to merge with
Mentor Graphics Corp. . The announcement came on the heels of IKOS’ declaration that Synopsys Inc. had failed to
improve its initial offer to acquire IKOS.

Under the terms of the deal, Wilsonville, Ore.-based hardware and software design solutions provider Mentor Graphics will acquire
all outstanding shares of IKOS for $11 per share in cash. IKOS said it will pay a $5.5 million termination fee to Synopsys.

“IKOS’ emulation product line and patented technology substantially strengthen our existing emulation business and provide us with a
product that we can sell in the United States immediately after the transaction is consummated,” said Walden C. Rhines, chairman and
chief executive officer of Mentor. “Mentor Graphics will now offer customers a broader range of emulation products and price points.
IKOS also brings us a proven North American emulation sales and service infrastructure, which we expect to leverage across our
entire product line.”

The IKOS board unanimously approved Mentor’s tender offer and merger, and has recommended that all IKOS stockholders tender their
shares in the offer. Additionally, upon completion of the tender offer, the deal calls for Mentor to consummate a second-step merger
under which those shares not tendered will be converted into the right to receive $11 per share in cash.

San Jose, Calif.-based IKOS said that the closing of the tender offer is contingent on Mentor holding more than 50 percent of the fully-diluted common
stock of IKOS between the shares it already holds and those tendered. The second-step merger can be completed without a vote or
meeting of IKOS’ stockholders if Mentor holds 90 percent of the outstanding shares following completion of the tender offer.

“IKOS’ board carefully considered all alternatives for the company and determined that Mentor’s offer represents the best value for
the IKOS stockholders,” said Ramon Nunez, president and CEO of IKOS. “The purchase represents a 49.5 percent premium over the
closing price of IKOS stock on June 29, 2001, the last trading day before the terminated merger agreement with Synopsys was
announced.”

IKOS will report to Mentor Graphics’ emulation division in France.