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Mentor Graphics and UGS Sign Agreement to Streamline the Electro-Mechanical Product Development Process

WILSONVILLE, Ore., Feb. 23, 2005 - Mentor Graphics Corporation (Nasdaq: MENT), a leading provider of electrical systems design solutions and UGS, a leading global provider of product lifecycle management (PLM) software and services, today announced that they have signed a joint cooperation agreement to deliver tight interoperability between their products, which provide solutions to meet the emerging needs of complex electromechanical platforms such as automobiles, airplanes and trains. The signing of this agreement represents a milestone in cooperation between leading vendors from different domains - electrical and mechanical. Both companies are investing resources to develop this integration and plan to deliver the first stage of integrated products in the second half of 2005.

UGS will enhance Teamcenter{reg} and NX™ product lines to further its "mechatronics" initiative - the synergistic integration of mechanical, electrical, electronics and software technologies into electro-mechanical products. The joint cooperation agreement will lead to enhancements in Teamcenter, the world-leading product knowledge management and lifecycle collaboration platform and NX, the world-leading digital design and analysis solution. Teamcenter will provide the integrated design of an electro-mechanical product, with electrical architecture and mechatronics sub-systems definition tied together with the overall system design. NX provides an environment to do associative electrical routing through an integrated design environment.

Mentor Graphics produces Capital{reg} Harness Systems™ (CHS), the industry-leading electrical flow for system capture, integration and analysis in the context of the platform and subsequent engineering of associated harnesses. The CHS™ product suite is unique in both the scope of its applications and the sophistication of Capital Manager™, the central design data repository supporting them. Mentor Graphics will enhance CHS though this collaboration by providing tight interoperability between the electrical and mechanical worlds.

The collaboration will also enable more efficient management of the unique change process throughout the entire product lifecycle, leveraging the skills, data, knowledge and experience of the extended enterprise, allowing customers to work collaboratively across every stage of the electro-mechanical product lifecycle.

"Tight interoperability in the customer's electro-mechanical design environment will enable the customer to view a complete bill-of-material, both mechanical and electrical, and enable better interaction between domains - thus, reducing errors and allowing early exploration of system architectures and interactions between mechanical and electrical domains," said Martin O'Brien, general manager of Mentor Graphics Integrated Electrical Systems Division.

"We are excited about this partnership because it will provide strategic value to our customers," says Chuck Grindstaff, executive vice president, Products, UGS. "By understanding and focusing on the needs and desires of our clients and their customers, we are able to maximize the value we create throughout the extended enterprise. This is an important initiative that we have embarked upon and a key step in fulfilling our pledge to deliver industry leading solutions that work across the mechanical, electrical and software domains in Mechatronics."

More information on the Capital Harness Systems product suite is available by visiting http://www.mentor.com/products/cabling_harness/.

About UGS

UGS is a leading global provider of product lifecycle management (PLM) software and services with more than 3.1 million licensed seats and 42,000 clients worldwide. Headquartered in Plano, Texas, the company promotes openness and standardization and works collaboratively with its clients in creating enterprise solutions enabling them to transform their process of innovation and thus begin to capture the value of PLM. For more information on UGS products and services, visit www.ugs.com.

About Mentor Graphics

Mentor Graphics Corporation 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 over $700 million and employs approximately 3,850 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/.

Mentor Graphics is a registered trademark and, Capital Harness Systems, is a trademark of Mentor Graphics. UGS, Teamcenter, Solid Edge and NX are trademarks or registered trademarks of UGS Corp. or its subsidiaries in the United States and in other countries. All other trademarks, registered trademarks or service marks belong to their respective holders.

For more information, please contact:

James Price
Mentor Graphics
+44 161 926 1637
james_price@mentor.com

Suzanne Graham
Mentor Graphics
503.685.7789
suzanne_graham@mentor.com