ArcSys and ISS Sign Merger Agreement.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 22, 1995--ArcSys, Inc. and Integrated Silicon Systems, Inc. today announced the signing of a definitive merger agreement to merge the two companies, and that upon consummation of the merger, Gerald C. Hsu will be named as the Chairman, Chief Executive Officer, and President of the new company and James P. Poitras will be named the Vice Chairman and Executive Vice President.

"We are very excited and believe that the merger will enable us to become the dominant force in the IC physical design arena," said Mr. Poitras. "The complementary philosophy, technologies and products from both companies will unify us and strengthen our position as the leading provider of integrated design solutions for deep submicron ICs."

"One of the most important elements of a successful merger is its implementation and execution," said Mr. Hsu. "We will continue to focus on providing real benefits and strong support to our customers, concentrate on technology and product development and preserve the well-being of our shareholders and employees as we move forward."

The proposed merger transaction will be accounted for as a pooling of interests, and is anticipated to be concluded in November 1995. The merger agreement provides that each outstanding share of ISS common stock will be converted into 1.5 shares of ArcSys common stock. Following completion of the previously announced two-for-one split of the ISS common stock, which is set to occur on August 24, 1995, the exchange ratio will be reduced to three fourths of a share of ArcSys stock for each share of ISS common stock. The closing of the merger is subject to regulatory and stockholder approval, the availability of pooling-of-interests accounting treatment, and certain other closing conditions.

About the Companies

ArcSys, Inc. (Nasdaq: ARCS) develops, markets, and supports integrated circuit design automation (ICDA) software for deep submicron ICs, microprocessors, microcontrollers, application-specific standard products (ASSPs), and complex application-specific integrated circuits (ASICs). The company currently has 80 employees.

ArcSys' products help lower IC development costs by reducing die size, reduce time to market by shortening the physical design cycle, and provide more competitive, higher-performance chips through timing-driven layout. Company headquarters are located in Sunnyvale, California. Tel [phone], Fax [phone].

Integrated Silicon Systems, Inc. (Nasdaq: ISSS) is a leading supplier of advanced software products for the ICDA market. The company currently has 100 employees. The company's products enable design engineers to layout, verify, and analyze complex ICs and have become the industry standards for the verification of high-performance designs. Company headquarters are located in Research Triangle Park, North Carolina. Tel [phone], Fax [phone].

CONTACT: ArcSys, Inc., Sunnyvale

Lois DuBois, 408/523-8857 (Tel) or 408/738-8508 (Fax);

[e-mail]

or

Integrated Silicon Systems, Inc., Research Triangle

Park

John P. Huyett, 919/941-6635 (Tel) or

919/941-6700 (Fax); [e-mail]