-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CLb/rLSt85qTdEPP88rSE8Q/vVweu4MVxjSe1ZqZBOxWGwEX+j9jmIrgbnKMqN75 0S/H5CYI6krMA0FsIlCppw== 0000912057-00-024577.txt : 20000516 0000912057-00-024577.hdr.sgml : 20000516 ACCESSION NUMBER: 0000912057-00-024577 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFORMIX CORP CENTRAL INDEX KEY: 0000799089 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943011736 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15325 FILM NUMBER: 633337 BUSINESS ADDRESS: STREET 1: 4100 BOHANNON DR CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 6509266300 MAIL ADDRESS: STREET 1: 4100 BOHANNON DRIVE CITY: MENLOW PARK STATE: CA ZIP: 94025 10-Q 1 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE --------- SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000. OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE --------- SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______. COMMISSION FILE NUMBER 0-15325 - -------------------------------------------------------------------------------- INFORMIX CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 94-3011736 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4100 BOHANNON DRIVE, MENLO PARK, CA 94025 (Address of principal executive office) (zip code) Registrant's telephone number, including area code: (650) 926-6300 - -------------------------------------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES /X/ NO --------- -------- At April 30, 2000, 280,389,905 shares of the Registrant's Common Stock were outstanding. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INFORMIX CORPORATION FORM 10-Q QUARTERLY PERIOD ENDED MARCH 31, 2000 TABLE OF CONTENTS PART I. FINANCIAL INFORMATION
Page ---- Item 1. Financial Statements Unaudited Condensed Consolidated Statements of Operations for the three month periods ended March 31, 2000 and 1999.......................... 3 Unaudited Condensed Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999......................................... 4 Unaudited Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 2000 and 1999.......................... 5 Notes to Unaudited Condensed Consolidated Financial Statements.......................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................ 14 Item 3. Quantitative and Qualitative Disclosures about Market Risk.............................. 33 PART II. OTHER INFORMATION Item 1. Legal Proceedings....................................................................... 35 Item 2. Changes in Securities and Use of Proceeds............................................... 35 Item 3. Defaults Upon Senior Securities......................................................... 35 Item 4. Submission of Matters to a Vote of Security Holders..................................... 35 Item 5. Other Information....................................................................... 35 Item 6. Exhibits and Reports on Form 8-K........................................................ 35 Signatures....................................................................................... 37
FORWARD LOOKING STATEMENTS THIS QUARTERLY REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS DESCRIBED HEREIN AND IN OTHER DOCUMENTS. READERS SHOULD PAY PARTICULAR ATTENTION TO THE SECTION OF THIS REPORT ENTITLED "FACTORS THAT MAY AFFECT FUTURE RESULTS" AND SHOULD ALSO CAREFULLY REVIEW THE RISK FACTORS DESCRIBED IN THE OTHER DOCUMENTS THE COMPANY FILES FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION. PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INFORMIX CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended March 31, ----------------------------- 2000 1999 ----------- ----------- NET REVENUES Licenses .................................................................... $ 119,279 $ 115,517 Services .................................................................... 131,605 112,014 ----------- ----------- 250,884 227,531 COSTS AND EXPENSES Cost of software distribution................................................ 12,585 10,942 Cost of services............................................................. 48,732 51,164 Sales and marketing.......................................................... 98,798 89,281 Research and development..................................................... 43,355 44,850 General and administrative................................................... 20,244 20,397 Merger, integration and restructuring charges................................ 50,034 (578) ----------- ----------- 273,748 216,056 ----------- ----------- Operating income (loss)......................................................... (22,864) 11,475 OTHER INCOME (EXPENSE) Interest income.............................................................. 3,302 3,111 Interest expense............................................................. (171) (1,242) Other, net................................................................... 3,513 (1,481) ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES............................................... (16,220) 11,863 Income taxes................................................................. 6,763 3,920 ----------- ----------- NET INCOME (LOSS)............................................................... (22,983) 7,943 Preferred stock dividend..................................................... (87) (303) ----------- ----------- NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS............................. $ (23,070) $ 7,640 =========== =========== NET INCOME (LOSS) PER COMMON SHARE Basic........................................................................... $ (0.08) $ 0.03 =========== =========== Diluted......................................................................... $ (0.08) $ 0.03 =========== =========== SHARES USED IN PER SHARE CALCULATIONS Basic........................................................................... 283,615 245,698 =========== =========== Diluted......................................................................... 283,615 269,912 =========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements. 3 INFORMIX CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
March 31, December 31, 2000 1999 ----------- ----------- ASSETS CURRENT ASSETS Cash and cash equivalents...................................................... $ 201,364 $ 170,118 Short-term investments......................................................... 102,085 102,469 Accounts receivable, net....................................................... 249,062 266,647 Deferred income taxes.......................................................... 5,544 5,544 Other current assets........................................................... 28,043 38,056 ----------- ----------- Total current assets.............................................................. 586,098 582,834 PROPERTY AND EQUIPMENT, net....................................................... 68,320 68,581 SOFTWARE COSTS, net............................................................... 48,047 45,722 LONG-TERM INVESTMENTS............................................................. 20,425 17,272 INTANGIBLE ASSETS, net............................................................ 73,438 77,537 OTHER ASSETS...................................................................... 16,256 16,536 ----------- ----------- Total Assets...................................................................... $ 812,584 $ 808,482 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable............................................................... $ 36,916 $ 30,694 Accrued expenses............................................................... 53,886 58,740 Accrued employee compensation.................................................. 49,322 70,875 Income taxes payable........................................................... 28,938 21,803 Deferred revenue............................................................... 163,050 156,182 Advances from customers........................................................ 26,585 34,302 Accrued merger and restructuring costs......................................... 31,999 8,675 Other current liabilities...................................................... 1,518 3,878 ----------- ----------- Total current liabilities......................................................... 392,214 385,149 OTHER NON-CURRENT LIABILITIES..................................................... 1,510 1,420 STOCKHOLDERS' EQUITY Convertible preferred stock.................................................... -- -- Common stock; par value........................................................ 2,800 2,756 Shares to be issued for litigation settlement.................................. 61,228 61,228 Additional paid-in capital..................................................... 654,345 632,743 Accumulated deficit............................................................ (288,106) (265,123) Treasury stock................................................................. (3,100) (3,163) Accumulated other comprehensive loss........................................... (8,307) (6,528) ----------- ----------- Total stockholders' equity........................................................ 418,860 421,913 ----------- ----------- Total Liabilities and Stockholders' Equity........................................ $ 812,584 $ 808,482 =========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements. 4 INFORMIX CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Three Months Ended March 31, ----------------------------- 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss)............................................................... $ (22,983) $ 7,943 Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities: License fees received in advance............................................... (8,980) (21,258) Depreciation and amortization.................................................. 15,893 14,710 Amortization of capitalized software........................................... 5,752 4,758 Foreign currency transaction losses (gains).................................... (1,197) 601 Gain on sales of marketable securities......................................... (2,895) -- Deferred tax expense........................................................... -- 976 Non-cash merger, integration and restructuring charges......................... 5,418 (578) Other.......................................................................... 752 191 Changes in operating assets and liabilities: Accounts receivable.......................................................... 18,567 3,809 Other current assets......................................................... 3,286 (8,452) Accounts payable, accrued expenses and other liabilities..................... 7,474 (18,695) Deferred maintenance revenue................................................. 3,912 13,291 ----------- ----------- Net cash and cash equivalents provided by (used in) operating activities........... 24,999 (2,704) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Investments of excess cash: Purchases of available-for-sale securities................................... (42,919) (44,834) Maturities of available-for-sale securities.................................. 21,694 6,498 Sales of available-for-sale securities....................................... 21,433 12,217 Purchases of strategic investments.............................................. (5,000) -- Proceeds from sales of marketable securities.................................... 5,130 -- Purchases of property and equipment............................................. (10,942) (5,736) Additions to software costs..................................................... (8,077) (6,552) Other........................................................................... 1,081 249 ----------- ----------- Net cash and cash equivalents used in investing activities......................... (17,600) (38,158) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Advances from customers......................................................... 3,108 1,013 Proceeds from issuance of common stock, net..................................... 21,658 10,092 Payments for structured settlements with resellers.............................. (129) (1,357) Principal payments on capital leases............................................ (931) (2,684) Net borrowings under line of credit............................................. -- 35 ----------- ----------- Net cash and cash equivalents provided by financing activities..................... 23,706 7,099 ----------- ----------- ADJUSTMENT TO CONFORM FISCAL YEAR OF POOLED COMPANY................................ -- (731) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS....................... 141 (2,811) ----------- ----------- Increase (decrease) in cash and cash equivalents................................... 31,246 (37,305) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................... 170,118 209,626 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD......................................... $ 201,364 $ 172,321 =========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements. 5 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE A - PRESENTATION OF INTERIM FINANCIAL STATEMENTS The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of management, all significant adjustments which are normal, recurring in nature and necessary for a fair presentation of the financial position and results of the operations of the Company, have been consistently recorded. The operating results for the interim periods presented are not necessarily indicative of expected performance for the entire year. Certain previously reported amounts have been reclassified to conform to the current presentation format. The unaudited information should be read in conjunction with the audited financial statements of the Company and the notes thereto for the year ended December 31, 1999 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. On March 1, 2000, the Company acquired Ardent Software, Inc. ("Ardent") in a transaction that has been accounted for as a pooling of interests and therefore all historical financial information has been restated to include the historical information of Ardent. NOTE B - NET INCOME (LOSS) PER SHARE The following table sets forth the computation of basic and diluted net income (loss) per common share (in thousands, except per share data):
Three Months Ended March 31, ----------------------------- 2000 1999 ----------- ----------- Numerator: Net income (loss)............................................................ $ (22,983) $ 7,943 Preferred stock dividends.................................................... (87) (303) ----------- ----------- Numerator for basic and diluted net income (loss) per common share........... $ (23,070) $ 7,640 =========== =========== Denominator: Denominator for basic net income (loss) per common share - Weighted-average shares outstanding........................................ 277,559 245,698 Weighted-average shares to be issued for litigation settlement............. 6,056 -- ----------- ----------- 283,615 245,698 =========== =========== Effect of dilutive securities: Employee stock options and restricted common stock......................... -- 23,765 Common stock warrants...................................................... -- 449 ----------- ----------- Denominator for diluted net income (loss) per common share - adjusted weighted-average shares and assumed conversions................... 283,615 269,912 =========== =========== Basic net income (loss) per common share.......................................... $ (0.08) $ 0.03 =========== =========== Diluted net income (loss) per common share........................................ $ (0.08) $ 0.03 =========== ===========
The Company excluded potentially dilutive securities for each period presented from its diluted net income (loss) per share computation because either the exercise price of the securities exceeded the average fair value of the Company's Common Stock or the Company had net losses and, therefore, these securities were anti-dilutive. A summary of the excluded potential dilutive securities and the related exercise/conversion features for the three-month period ended March 31, 2000 follows (in thousands): 6 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Potential dilutive securities: Stock options............................................................. 37,648 Common Stock Warrants (Series B Warrants)................................. 1,033 Cloudscape Restricted Common Stock........................................ 107 Series B Convertible Preferred Stock...................................... 7
The stock options have per share exercise prices ranging from $0.05 to $33.25 and are exercisable through March 2010. The warrants to purchase shares of Common Stock of the Company (the "Series B Warrants") were issued in connection with the conversion of certain shares of the Company's Series B Preferred into shares of Common Stock of the Company. Upon conversion of the Series B Preferred, the holders are eligible to receive Series B Warrants to purchase that number of shares of the Company's Common Stock equal to 20% of the shares of the Company's Common Stock into which the Series B Preferred Stock is convertible. As of March 31, 2000, approximately 1,926,000 Series B Warrants were outstanding and exercisable through November 2002 at a per share exercise price of $7.84. Certain of the outstanding shares of Cloudscape Common Stock held by employees are subject to repurchase upon termination of employment. The number of shares subject to this repurchase right decreases as the shares vest over time, generally for four years. As of March 31, 2000, approximately 107,000 shares were subject to repurchase at a weighted-average exercise price of $0.24. NOTE C - COMPREHENSIVE INCOME The following table sets forth the calculation of other comprehensive income (loss) for the three-month periods ended March 31, 2000 and 1999 (in thousands):
Three Months Ended March 31, ----------------------------- 2000 1999 ----------- ----------- Net income (loss)............................................................ $ (22,983) $ 7,943 Other comprehensive income (loss): Change in unrealized gains (losses) on available-for-sale securities....... (1,014) 1,728 Change in accumulated foreign currency translation adjustments............. (765) 321 ----------- ----------- $ (24,762) $ 9,992 =========== ===========
The tax effect on components of other comprehensive income (loss) is not significant. NOTE D - STOCKHOLDERS' EQUITY Reconciliation of outstanding shares (in thousands): Shares outstanding at December 31, 1999................................... 275,594 Shares issued upon exercises of stock options............................. 3,681 Shares sold and issued to employees under ESPP............................ 439 Shares issued upon exercises of warrants.................................. 412 Shares repurchased under Cloudscape repurchase agreements................. (126) --------- Shares outstanding at March 31, 2000...................................... 280,000 =========
7 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE E - BUSINESS COMBINATIONS On March 1, 2000, the Company completed its acquisition of Ardent Software, Inc. ("Ardent"), a leading provider of data integration infrastructure software for data warehouse, business intelligence, and e-business applications. In the acquisition, the former shareholders of Ardent received 3.5 shares of the Company's common stock in exchange for each outstanding Ardent share (the "Merger"). An aggregate of 70,473,000 shares of Informix common stock were issued pursuant to the Merger, and an aggregate of 17,162,000 options to purchase Ardent common stock were assumed by Informix. The Merger was accounted for as a pooling-of-interests combination and, accordingly, the consolidated financial statements for periods prior to the combination have been restated to include the accounts and results of operations of Ardent and all intercompany transactions have been eliminated. On October 8, 1999, the Company completed its acquisition of Cloudscape, a privately-held provider of synchronized database solutions for the remote and occasionally connected workforce. The acquisition of Cloudscape was accounted for as a pooling-of-interests combination and, accordingly, the consolidated financial statements for the periods prior to the combination have been restated to include the accounts and results of operations of Cloudscape. The results of operations previously reported by the separate pooled enterprises and the combined amounts presented in the accompanying consolidated financial statements are summarized below (in thousands):
Three Months Ended March 31, 1999 -------------------- Net revenues: Informix.................................... $ 196,598 Ardent...................................... 30,587 Cloudscape.................................. 346 --------------- Combined.................................... $ 227,531 =============== Net income (loss): Informix.................................... $ 7,546 Ardent...................................... 2,417 Cloudscape.................................. (2,020) --------------- Combined.................................... $ 7,943 ===============
NOTE F - ACCRUED MERGER AND RESTRUCTURING CHARGES In connection with the merger with Ardent completed on March 1, 2000, the Company recorded a charge of $39.9 million for accrued merger and restructuring costs. This amount included $14.5 million for financial advisor, legal and accounting fees related to the merger and $25.4 million for costs associated with combining the operations of the two companies, including expenditures of $15.1 million for severance and employment related costs, $6.8 million for the closure of facilities and equipment costs and $3.5 million for the write-off of redundant technology and other duplicate costs. As of March 31, 2000, $7.9 million had been paid for financial advisor, legal and accounting fees, $2.5 million had been paid for severance and employment related costs, $0.8 million had been incurred for facilities and equipment costs and $2.3 million had been incurred for the write-off of redundant technology and other duplicate costs. As of March 31, 2000, $26.4 million remained as a liability in the financial statements. As part of the Company's acquisition of Cloudscape completed on October 8, 1999, the Company recorded a charge of $2.8 million for accrued merger and restructuring costs. This amount included $1.2 million for financial 8 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS advisor, legal and accounting fees related to the merger and $1.6 million for costs associated with combining the operations of the two companies including expenditures of $0.7 million for severance and related costs, $0.4 million for closure of facilities and $0.5 million for the write-off of redundant assets and other costs. As of March 31, 2000, $1.2 million had been paid for financial advisor, legal and accounting fees, $0.5 million had been paid for severance and related costs, $0.2 million had been paid for closure of facilities and $0.2 million had been incurred for the write-off of redundant assets. As of March 31, 2000, $0.7 million remained as a liability in the financial statements. On April 26, 1999, Ardent acquired Prism Solutions, Inc. ("Prism"), a provider of data warehouse management software that assists customers in developing, managing and maintaining data warehouses. In connection with the merger with Prism, Ardent recorded a charge of $9.7 million for accrued merger and restructuring costs. The accrual included approximately $2.9 million for professional fees and other acquisition-related costs, $3.5 million for severance and related benefits and $3.3 million for costs associated with the shutdown and consolidation of Prism facilities. As of March 31, 2000, approximately $1.8 million remained unpaid and comprised principally of future rental obligations on idle facilities which run through 2005. In May of 1999, Ardent adopted a formal plan to exit the operations of O2 Technologies, Inc., which had been acquired by Ardent in December of 1997, and recorded a charge of $9.9 million for accrued restructuring charges. The charge was comprised of $5.9 million for asset impairment, $3.6 million for severance and related costs and $0.4 million for facility closings and other obligations. As of March 31, 2000, approximately $0.6 million remained unpaid and was comprised principally of severance and related benefits and rental obligations on idle facilities, all of which is expected to be paid in 2000. On December 31, 1998, the Company acquired Red Brick Systems, Inc. ("Red Brick"). Accrued merger and restructuring costs recorded in connection with the acquisition of Red Brick included approximately $1.6 million for severance and other acquisition-related costs, $4.7 million for costs associated with the shutdown and consolidation of the Red Brick facilities and $1.6 million for costs associated with settling acquired royalty commitments for abandoned technology. As of March 31, 2000, approximately $1.2 million remained unpaid, of which $0.9 million related to future rental obligations on idle facilities and $0.3 million related to royalty commitments. In June and again in September 1997, the Company approved plans to restructure its operations in order to bring expenses in line with forecasted revenues. In connection with these restructurings, the Company substantially reduced its worldwide headcount and consolidated facilities and operations to improve efficiency. As of March 31, 2000, approximately $1.3 million remained unpaid and related primarily to rental obligations as the Company has substantially completed actions associated with its restructuring except for subleasing or settling its remaining long-term operating leases related to vacated properties. The terms of such operating leases expire at various dates through 2003. NOTE G - BUSINESS SEGMENTS In recent years, the Company has operated under four reportable operating segments which report to the Company's president and chief executive officer, (the "Chief Operating Decision Maker"). These reportable operating segments, North America, Europe, Asia/Pacific and Latin America, are organized, managed and analyzed geographically and operate in one industry segment: the development and marketing of information management software and related services. The Company has evaluated operating segment performance based primarily on net revenues and certain operating expenses. The Company's products are marketed internationally through the Company's subsidiaries and through application resellers, OEMs and distributors. Financial information for the Company's North America, Europe, Asia/Pacific and Latin America operating segments is summarized below for the three-month periods ended March 31, 2000 and 1999: 9 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three months ended North Asia Latin March 31, America Europe Pacific America Eliminations Total - ------------------------------- ----------- ---------- ----------- ----------- -------------- ----------- (In thousands) 2000: - ----- Net revenues from unaffiliated customers....... $ 130,262 $ 80,782 $ 25,546 $ 14,294 $ -- $ 250,884 Transfers between segments..... (6,767) 967 4,465 1,335 -- -- Total net revenues............. 123,495 81,749 30,011 15,629 -- 250,884 Operating income (loss)........ (31,687) 7,116 1,177 418 112 (22,864) Net income (loss).............. $ (29,461) $ 7,488 $ 2,733 $ 4,562 $ (8,305) $ (22,983) 1999: - ----- Net revenues from unaffiliated customers....... $ 122,021 $ 68,763 $ 23,687 $ 13,060 $ -- $ 227,531 Transfers between segments..... (5,998) 2,406 2,295 1,297 -- -- Total net revenues............. 116,023 71,169 25,982 14,357 -- 227,531 Operating income (loss)........ (5,642) 12,571 4,598 (756) 704 11,475 Net income (loss).............. $ (218) $ 10,698 $ 3,927 $ (4,319) $ (2,145) $ 7,943
On October 1, 1999, the Company created four new business groups which began reporting to the Company's Chief Operating Decision Maker: the TransAct Business Group, which is responsible for delivering on-line transaction processing products; the i.Foundation Business Group, which is responsible for delivering products that provide the technological foundation for Internet-based electronic commerce solutions; the i.Informix Business Group, which is responsible for delivering Internet-based solutions for electronic commerce; and the i.Intelligence Business Group, which is responsible for delivering Internet-based data warehouse products and solutions. Net revenues for the Company's TransAct, i.Foundation, i.Informix and i.Intelligence business groups for the first quarter of 2000 is summarized below (other information was not practicable to obtain for the current and prior year):
Transact i.Foundation i.Intelligence i.Informix Total ---------- ------------ -------------- ------------ ---------- Total net revenues (in thousands)..... $147,062 $49,200 $43,082 $11,540 $250,884
NOTE H - LITIGATION Commencing in April 1997, a series of class action lawsuits purportedly by or on behalf of stockholders and a separate but related stockholder action were filed in the United States District Court for the Northern District of California. These actions name as defendants the Company, certain of its present and former officers and directors and, in some cases, its former independent auditors. The complaints allege various violations of the federal securities laws and seek unspecified but potentially significant damages. Similar actions were also filed in California state court and in Newfoundland, Canada. Stockholder derivative actions, purportedly on behalf of the Company and naming virtually the same individual defendants and the Company's former independent auditors, were also filed, commencing in August 1997, in California state court. While these actions allege various violations of state law, any monetary judgments in these derivative actions would accrue to the benefit of the Company. Pursuant to Delaware law and certain indemnification agreements between the Company and each of its current 10 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS and former officers and directors, the Company is obligated to indemnify its current and former officers and directors for certain liabilities arising from their employment with or service to the Company. This includes the costs of defending against the claims asserted in the above-referenced actions and any amounts paid in settlement or other disposition of such actions on behalf of these individuals. The Company's obligations do not permit or require it to provide such indemnification to any such individual who is adjudicated to be liable for fraudulent or criminal conduct. Although the Company has purchased directors' and officers' liability insurance to reimburse it for the costs of indemnification for its directors and officers, the coverage under its policies is limited. Moreover, although the directors' and officers' insurance coverage presumes that 100 percent of the costs incurred in defending claims asserted jointly against the Company and its current and former directors and officers are allocable to the individuals' defense, the Company does not have insurance to cover the costs of its own defense or to cover any liability for any claims asserted against it. The Company has not set aside any financial reserves relating to any of the above-referenced actions. On May 26, 1999, the Company entered into a memorandum of understanding regarding the settlement ("Settlement") of pending private securities and related litigation against the Company. The Settlement will resolve all material litigation arising out of the restatement of the Company's financial statements that was publicly announced in November, 1997. In accordance with the terms of the Settlement, the Company paid approximately $3.2 million in cash during the second quarter of 1999 and an additional amount of approximately $13.8 million of insurance proceeds was contributed directly by certain insurance carriers on behalf of certain of the Company's current and former officers and directors. The Company will also contribute a minimum of 9 million shares of the Company's common stock, which will have a guaranteed value of $91 million for a maximum term of one year from the date of the final approval of the settlement by the courts. The first distribution of shares of the Company's common stock occurred in November and December 1999 when the Company issued approximately 2.9 million shares to the plaintiff's counsel. The Company will issue the remainder of the shares to be issued under the Settlement after the claims administrator notifies the Company that it has processed all of the claims submitted by class members. The Company's former independent auditors, Ernst & Young LLP, will pay $34 million in cash. The total amount of the settlement, which has received final approval from both the federal and state courts will be $142 million. EXPO 2000 filed an action against Informix Software GmbH (the Company's German subsidiary) in the Hanover (Germany) district court in September 1998 seeking recovery of approximately $6.0 million, plus interest, for breach of a sponsorship contract signed in 1997. Informix Software GmbH filed a counterclaim for breach of contract and seeks recovery of approximately $3.1 million. In August 1999, the court entered a judgment against Informix Software GmbH in the amount of approximately $6.0 million, although approximately $2.1 million of judgment is conditioned upon the return by EXPO 2000 of certain software. Informix Software GmbH has filed an appeal. The Company has reserved $2.2 million for the expected outcome of the appeal. On February 3, 2000, International Business Machines Corporation ("IBM") filed an action against the Company in the United States District Court for the District of Delaware alleging infringement of six United States patents owned by IBM. In the complaints, IBM seeks against the Company, and the Company seeks against IBM, permanent injunctions against further alleged infringement, unspecified compensatory damages, unspecified treble damages, and interest, costs and attorneys' fees. On March 28, 2000, the Company filed an answer and counterclaims in the United States District Court for the District of Delaware against IBM denying IBM's allegations of patent infringement and alleging infringement by IBM of four United States patents owned by the Company. In addition, on March 28, 2000, the Company filed a separate action against IBM in the United States District Court for the Northern District of California alleging infringement of four other United States patents owned by the Company. The Company strongly believes that the allegations in IBM's complaint are without merit and intends to defend the action vigorously. Ardent is a defendant in actions filed against Unidata prior to its merger with Ardent, one in May 1996 in the U.S. District Court for the Western District of Washington, and one in September 1996 in the U.S. District Court for the District of Colorado. The plaintiff, a company controlled by a former stockholder of Unidata and a distributor of its products in certain parts of Asia, alleges in both actions the improper distribution of certain Unidata products in the plaintiff's exclusive territory and asserts damages of approximately $30,000,000 under claims for fraud, breach of 11 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS contract, unfair competition, racketeering and corruption, and trademark and copyright infringement, among other relief. Unidata denied the allegations against it in its answers to the complaints. In the Colorado action, Unidata moved that the matter be resolved by arbitration in accordance with its distribution agreement with the plaintiff. In May 1999, the U.S. District Court for the District of Colorado issued an order compelling arbitration. The Colorado action is currently in the discovery stage with arbitration scheduled for July 2000. Discovery has not commenced in the Washington action, pending the outcome of the Colorado arbitration. In addition, it is likely that Unidata will be joined in an action against an end-user in China arising out of the same facts at issue in the U.S. actions against Unidata. It is possible that either Ardent or the Company will also be joined in the proceedings in China. While the outcome cannot be predicted with certainty, the Company believes that the actions against Ardent are without merit and plans to continue to oppose them vigorously. Ardent is the defendant in an action filed in July 1998 in the U.S. District Court for the Southern District of Ohio. The plaintiff, with whom Ardent entered into a joint venture in 1996 to develop the Object Studio product, has alleged claims in excess of $14 million. Ardent denied its alleged liability and filed certain counterclaims against the plaintiff seeking an amount in excess of $9.0 million. Discovery has been completed. The trial of the action is expected in July 2000. While the outcome cannot be predicted with certainty, the Company plans to continue to oppose the action vigorously. From time to time, in the ordinary course of business, the Company is involved in various legal proceedings and claims. The Company does not believe that any of these proceedings and claims will have a material adverse effect on the Company's business or financial condition. NOTE I - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities," which establishes standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS 133 is effective for fiscal years beginning after June 15, 2000. Earlier application of SFAS 133 is encouraged but should not be applied retroactively to financial statements of prior periods. The Company is currently evaluating the requirements and impact of SFAS 133. In December 1999, the Securities and Exchange Commission staff released Staff Accounting Bulletin No. 101, "Revenue Recognition," ("SAB No. 101") to provide guidance on the recognition, presentation and disclosure of revenue in financial statements; however, SAB No. 101 does not change existing literature on revenue recognition. SAB No. 101 explains the staff's general framework for revenue recognition, stating that four criteria need to be met in order to recognize revenue. The four criteria, all of which must be met, are the following: - There must be persuasive evidence of an arrangement, - Delivery must have occurred or services must have been rendered, - The selling price must be fixed or determinable, and - Collectibility must be reasonably assured The Company will adopt SAB No. 101 during the second quarter of 2000. The Company believes that its current revenue recognition policy is in compliance with this guidance; however, the Company continues to evaluate the impact, if any, of SAB No. 101 and any possible, subsequent interpretations of SAB No. 101 on the Company's policies and procedures. 12 INFORMIX CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The FASB issued Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation - an Interpretation of APB Opinion No. 25" ("FIN No. 44") in March 2000. The Interpretation clarifies the application of Opinion 25 for only certain issues such as the following: (a) the definition of employee for purposes of applying Opinion 25, (b) the criteria for determining whether a plan qualifies as a noncompensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock option or award, and (d) the accounting for an exchange of stock compensation awards in a business combination. The Company must adopt FIN No. 44 by July 1, 2000. Management does not believe that the interpretation will have a material effect on the Company's results of operations, financial position or liquidity. In March 2000, the Emerging Issues Task Force ("EITF") issued EITF No. 00-2, "Accounting for Web Site Development Costs." EITF No. 00-2 establishes accounting and reporting standards for capitalization of web site development costs in accordance with Statement of Accounting Principle No. 98-1. EITF No. 00-2 is effective for web site development costs incurred for fiscal quarters beginning after June 30, 2000. The Company is currently evaluating whether the adoption of this EITF will have a material impact on the results of operations. 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF INFORMIX, WHICH INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER "FACTORS THAT MAY AFFECT FUTURE RESULTS," AND ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10-Q. References to or comparisons between the same "period" in this Form 10-Q refer to the Company's first fiscal quarter of the relevant fiscal year. OVERVIEW Informix Corporation is a leading supplier of information management software and solutions to governments and enterprises worldwide. We design, develop, manufacture, market and support - Object-relational and relational database management systems - Connectivity interfaces and gateways - Graphical and character-based application development tools for building database applications that allow customers to access, retrieve and manipulate business data Our software solutions include high performance online transaction processing applications, data warehouse applications, and dynamic web/content management applications. We offer complete database solutions by building strategic relationships with application, hardware, and systems integration providers. Our solutions are used in many industries, including retail, telecommunications, financial services, healthcare, pharmaceutical/biochemistry, manufacturing, and media and publishing. On March 1, 2000, we acquired Ardent Software, Inc. ("Ardent"), a leading provider of data integration infrastructure software for data warehouse, business intelligence, and e-business applications. In the acquisition, the former shareholders of Ardent received 3.5 shares of our common stock in exchange for each outstanding Ardent share and Informix assumed all outstanding Ardent options and warrants. The transaction has been accounted for as a pooling of interests and therefore all historical financial information has been restated to include the historical information of Ardent. We believe the acquisition of Ardent will enhance our ability to deliver complete, integrated software solutions for data processing, data movement and analysis in electronic commerce. 14 RESULTS OF OPERATIONS The following table and discussion compares the results of operations for the three-month periods ended March 31, 2000 and 1999, respectively.
Three Months Ended March 31, ------------------- 2000 1999 --------- -------- NET REVENUES Licenses ................................................ 48% 51% Services ................................................ 52 49 --------- -------- 100 100 COSTS AND EXPENSES Cost of software distribution............................ 5 5 Cost of services......................................... 20 22 Sales and marketing...................................... 39 39 Research and development................................. 17 20 General and administrative............................... 8 9 Merger, integration and restructuring charges............ 20 -- --------- -------- 109 95 --------- -------- Operating income (loss)..................................... (9) 5 OTHER INCOME (EXPENSE) Interest income.......................................... 1 1 Interest expense......................................... -- -- Other, net............................................... 2 (1) --------- -------- INCOME (LOSS) BEFORE INCOME TAXES (6) 5 Income taxes............................................. (3) (2) --------- -------- NET INCOME (LOSS)........................................... (9)% 3% ========= ========
Excluding the $50.0 million non-recurring merger, integration and restructuring charges related primarily to the acquisition of Ardent, our operating results for the quarter ended March 31, 2000 improved over the same period of the prior year. Net revenue growth was 10%, while operating expenses, excluding merger, integration and restructuring costs, increased by only 3%. Growth in consolidated revenues was experienced by all regions during the first quarter of 2000 as total sales in Asia/Pacific, Europe, Latin America and North America increased by 16%, 15%, 9% and 6%, respectively. As a percentage of net revenues, all operating expense categories, except merger, integration and restructuring charges, either decreased or remained consistent when compared to the prior year period as we continued our efforts to keep operating expenses in line with revenues. REVENUES We derive revenues from licensing software and providing post-license technical product support and updates to customers and from consulting and training services. LICENSE REVENUES. License revenues may involve the shipment of product by us or the granting of a license to a customer to manufacture products. Our products are sold directly to end-user customers or through resellers, including OEMs, distributors and value added resellers (VAR's). License revenues for the first quarter of 2000 increased 3% to $119.3 million from $115.5 million for the same period in 1999. 15 Revenue from license agreements with resellers is recognized as earned by us when the licenses are resold or utilized by the reseller and all of our related obligations have been satisfied. Accordingly, amounts received from customers in advance of revenue being recognized are recorded as a liability in "advances from customers" in our financial statements. Advances in the amount of $26.6 million and $34.3 million had not been recognized as earned revenue as of March 31, 2000 and December 31, 1999, respectively. During the quarter ended March 31, 2000, we received $3.1 million in customer advances and recognized revenue from resellers with previously recorded customer advances of $9.0 million. Included in the $9.0 million recognized were $7.1 million of licenses which were resold or utilized by the reseller, $0.8 million related to contractual reductions in customer advances and $1.1 million related to previously-deferred revenue for solution sales which has now been recognized as services have been completed. Contractual reductions result from settlements between us and resellers in which the customer advance contractually expires or a settlement is structured wherein the rights to resell our products terminate without sell through or deployment of the software. As of March 31, 2000, we had reached structured settlements with two resellers with remaining rights to resell a total of $0.9 million of our products, which will be utilized by December 31, 2000 pursuant to the minimum future reduction terms of the settlement. Our license transactions can be relatively large in size and difficult to forecast both in timing and dollar value. As a result, license transactions have caused fluctuations in net revenues and net income (loss) because of the relatively high gross margin on such revenues. As is common in the industry, a disproportionate amount of our license revenue is derived from transactions that close in the last weeks or days of a quarter. The timing of closing large license agreements also increases the risk of quarter-to-quarter fluctuations. We expect that these types of transactions and the resulting fluctuations in revenue will continue. SERVICE REVENUES. Service revenues are comprised of maintenance, consulting and training revenues. Service revenues increased 17% to $131.6 million from $112.0 million during the first quarter of 2000. Service revenues accounted for 52% and 49% of net revenues for the first quarters of 2000 and 1999, respectively. The increase in service revenues, both in absolute dollars and as a percentage of total revenues, was attributable primarily to the renewal of maintenance contracts in connection with our growing installed customer base. As our products continue to grow in complexity, more support services are expected to be required. We intend to satisfy this requirement through internal support, third-party services and OEM support. During the first quarter of 2000, maintenance revenues increased 25% to $101.9 million from $81.9 million for the prior year quarter while consulting and training revenues decreased 2% to $29.7 million for the first quarter of 2000 from $30.1 million for the same period in 1999. COSTS AND EXPENSES COST OF SOFTWARE DISTRIBUTION. Cost of software distribution consists primarily of: (1) manufacturing and related costs such as media, documentation, product assembly and purchasing costs, freight, customs and third party royalties; and (2) amortization of previously capitalized software development costs and any write-offs of previously capitalized software. Cost of software distribution increased $1.6 million to $12.6 million for the first quarter of 2000 from $10.9 million for the same period in 1999. This increase was primarily due to an increase in royalties related to new product offerings in our web and business intelligence markets. Amortization of capitalized software remained relatively consistent with the prior year quarter. COST OF SERVICES. Cost of services consists primarily of maintenance, consulting and training expenses. Cost of services decreased approximately 5% to $48.7 million for the first quarter of 2000, or 37% of net service revenues, from $51.2 million, or 46% of net service revenues for the same period in 1999. The decrease in absolute dollars and as a percentage of net service revenues is primarily due to improved margins in the web and business intelligence solutions deliveries as compared to traditional database service deliveries. SALES AND MARKETING EXPENSES. Sales and marketing expenses consist primarily of salaries, commissions, marketing and communications programs and related overhead costs. Sales and marketing expenses increased 11% to $98.8 million 16 in the first quarter of 2000 compared to $89.3 million for the same period in 1998. This increase was in line with the 10% growth in net revenues and, as a result, sales and marketing expenses remained consistent at 39% of net revenues for both periods. The increase in absolute dollars was due primarily to increased marketing costs for advertising and marketing programs focused on our new web and business intelligence markets and our solutions for the Internet. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses consist primarily of salaries, project consulting and related overhead costs for product development. Research and development expenses for the first quarter of 2000 were $43.4 million, or 17% of net revenues and $44.9 million or 20% of net revenues for the first quarter of 1999. The decrease in research and development expenses in absolute dollars for the first quarter of 2000 is attributable primarily to an increase in the amount of product development expenditures capitalized in the first quarter of 2000 compared to the first quarter of 1999. This increase in capitalized expenditures is attributable primarily to expenditures related to an increased number of new product offerings primarily in the web and business intelligence markets as well as the latest versions of our Informix Dynamic Server products, which have not yet been commercially released. GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist primarily of finance, legal, information systems, human resources, bad debt expense and related overhead costs. During the first quarter of 2000, general and administrative expenses decreased slightly to $20.2 million from $20.4 million during the same period in 1999. This decrease was due primarily to the realization of efficiencies and improved effectiveness of our back office operations. MERGER, INTEGRATION AND RESTRUCTURING CHARGES. During the first quarter of 2000, we recorded a charge of $50.0 million associated with the merger with Ardent. Of this amount, approximately $10.1 million related to integration and transition costs incurred during the quarter ended March 31, 2000. Also included in the $50.0 million was approximately $39.9 million of accrued merger and restructuring costs which consisted of the following components: $14.5 million for financial advisor, legal and accounting fees related to the merger; $15.1 million for severance and employment related costs; $6.8 million for the closure of facilities and equipment costs and $3.5 million for the write-off of redundant technology and other duplicate costs. During the first quarter of 1999, an adjustment of $0.6 million was recorded to the results of operations, which appears as a credit to merger, integration and restructuring charges in our financial statements, to adjust the estimated severance and facility components of the 1997 restructuring charge to actual costs incurred. (See Note F to the Consolidated Financial Statements) OTHER INCOME (EXPENSE) INTEREST INCOME. Interest income for the first quarter of 2000 increased to $3.3 million from $3.1 million for the same period in 1999 due to an increase in the average interest-bearing cash and short-term investment balances in 2000 provided by increased sales and operating cash flows. INTEREST EXPENSE. Interest expense decreased to $0.2 million for the quarter ended March 31, 2000 from $1.2 million for the same period in 1999 due primarily to a decline in interest charges related to the line of credit which was terminated effective December 31, 1999. OTHER INCOME (EXPENSE), NET. Other income (expense), net, increased to net other income of $3.5 million in the first quarter of 2000 from a net other expense of $1.5 million during the same period in 1999. During the quarter ended March 31, 2000, other income included approximately $2.9 million of net realized gains on the sale of long-term investments and approximately $0.4 million of net foreign currency transaction gains. During the first quarter of 1999, other expense of $1.5 million was primarily a result of foreign currency transaction losses that were realized in the Latin America region due primarily to the devaluation of the Brazilian Real. 17 INCOME TAXES During the first quarter of 2000 and 1999, income tax expense resulted from foreign withholding taxes and taxable earnings in certain foreign jurisdictions where we have fully utilized our net operating loss carryforwards. The effective tax rate for the quarter ended March 31, 2000 was 20%. We expect the effective tax rate to increase gradually over time as we continue to fully utilize our net operating loss carryforwards in various jurisdictions. 18 LIQUIDITY AND CAPITAL RESOURCES
As of or for the Three Months Ended March 31, --------------------------- 2000 1999 ------------ ------------ Cash, cash equivalents, and short-term investments........................... $ 303.4 $ 247.2 Working capital.............................................................. $ 193.9 $ 80.6 Cash and cash equivalents provided by (used for) operations.................. $ 25.0 $ (2.7) Cash and cash equivalents used for investment activities..................... $ (17.6) $ (38.2) Cash and cash equivalents provided by financing activities................... $ 23.7 $ 7.1
OPERATING CASH FLOWS. We generated positive cash flows from operations totaling $25.0 million for the quarter ended March 31, 2000, primarily from improved operating profitability, excluding merger, integration and restructuring charges related to our merger with Ardent. Also contributing to the increase in operating cash flows was a reduction in the effect on cash flows of a change in operating assets and liabilities. INVESTING CASH FLOWS. During the first quarter of 2000, we decreased the amount of cash used in investing activities by approximately $20.6 million when compared to the same period in 1999. The decrease in cash used for investing activities was primarily due to a decrease in our net investment of excess cash of approximately $26.3 million and an increase in the proceeds received from sales of marketable securities of $5.1 million offset by an increase in the purchase of strategic investments of $5.0 million and an increase in capital expenditures of $5.2 million. FINANCING CASH FLOWS. Cash and cash equivalents provided by financing activities during the quarter ended March 31, 2000 increased by approximately $16.6 million when compared to the same period in 1999. This increase was due primarily to an increase in the proceeds from the sale of our common stock through the exercise of stock options and purchases under our Employee Stock Purchase Plan. SUMMARY. We believe that our current cash, cash equivalents and short-term investments balances and cash flows from operations will be sufficient to meet our working capital requirements for at least the next 12 months. EUROPEAN MONETARY CONVERSION On January 1, 1999, eleven of the fifteen member countries of the European Economic Community entered into a three-year transition phase during which a common currency, the "Euro," was introduced. Between January 1, 1999 and January 1, 2002, governments, companies and individuals may conduct business in these countries in both the Euro and existing national currencies. On January 1, 2002, the Euro will become the sole currency in these countries. During the transition phase, we will continue to evaluate the impact of conversion to the Euro on our business. In particular, we are reviewing: - Whether our internal software systems can process transactions denominated either in current national currencies or in the Euro, including converting currencies using computation methods specified by the European Economic Community - The cost to us if we must modify or replace any of our internal software systems - Whether we will have to change the terms of any financial instruments in connection with our hedging activities 19 Based on current information and our initial evaluation, we do not expect the cost of any necessary corrective action to have a material adverse effect on our business. We have reviewed the effect of the conversion to the Euro on the prices of our products in the affected countries. As a result, we have made some adjustments to our prices to attempt to eliminate differentials that were identified. However, we will continue to evaluate the impact of these and other possible effects of the conversion to the Euro on our business. We cannot guarantee that the costs associated with conversion to the Euro or price adjustments will not in the future have a material adverse effect on our business. FACTORS THAT MAY AFFECT FUTURE RESULTS OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS CAUSED BY MANY FACTORS, WHICH COULD RESULT IN OUR FAILING TO ACHIEVE REVENUE OR PROFITABILITY EXPECTATIONS. Our quarterly and annual results of operations have varied significantly in the past and are likely to continue to vary in the future due to a number of factors described below and elsewhere in this "Management's Discussion and Analysis of Financial Conditions and Results of Operations" section, many of which are beyond our control. Any one or more of the factors listed below or other factors could cause us to fail to achieve our revenue or profitability expectations. In particular, the failure to meet market expectations could cause a sharp drop in our stock price. These factors include: - Changes in demand for our products and services, including changes in industry growth rates, - The size, timing and contractual terms of large orders for our software products, - Adjustments of delivery schedules to accommodate customer or regulatory requirements, - The budgeting cycles of our customers and potential customers, - Any downturn in our customers' businesses, in the domestic economy or in international economies where our customers do substantial business, - Changes in our pricing policies resulting from competitive pressures, such as aggressive price discounting by our competitors or other factors, - Our ability to develop and introduce on a timely basis new or enhanced versions of our products and solutions, - Changes in the mix of revenues attributable to domestic and international sales, and - Seasonal buying patterns which tend to peak in the fourth quarter. OUR COMMON STOCK HAS BEEN AND LIKELY WILL CONTINUE TO BE SUBJECT TO SUBSTANTIAL PRICE AND VOLUME FLUCTUATIONS WHICH MAY PREVENT STOCKHOLDERS FROM RESELLING THEIR SHARES AT OR ABOVE THE PRICE AT WHICH THEY PURCHASED THEIR SHARES. Fluctuations in the price and trading volume of our common stock may prevent stockholders from reselling their shares above the price at which they purchased their shares. Stock prices and trading volumes for many software companies fluctuate widely for a number of reasons, including some reasons which may be unrelated to their businesses or results of operations. This market volatility, as well as general domestic or international economic, market and political conditions, could materially adversely affect the market price of our common stock without regard to our operating performance. In addition, as occurred in the quarter ended March 31, 2000, our operating results may be below the expectations of public market analysts and investors. If this were to occur again, the market price of our common stock would likely decrease significantly again. The market price of our common stock has fluctuated 20 significantly in the past and may continue to fluctuate significantly because of: - Market uncertainty about the company's business prospects or the prospects for the relational database management systems (" RDBMS") and object-relational database management systems ("ORDBMS") markets in general, - Revenues or results of operations that do not match analysts' expectations, - The introduction of new products or product enhancements by Informix or its competitors, - General business conditions in the software industry, - Changes in the mix of revenues attributable to domestic and international sales, and - Seasonal trends in technology purchases and other general economic conditions. INTENSE COMPETITION COULD ADVERSELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS OR GROW OUR BUSINESS. We may not be able to compete successfully against current and/or future competitors and such inability could impair our ability to sell our products. The market for our products is highly competitive, diverse and is subject to rapid change. Moreover, we expect that the technology for database products generally, and, in particular, the technology underlying database solutions and products for the Internet and data warehousing products, will continue to change rapidly. For example, as customers embrace the Internet, we need to develop and enhance our software solutions to support Internet applications. It is possible that our products will be rendered obsolete by technological advances. We currently face competition from a number of sources, including several large vendors that develop and market databases, applications, development tools, decision support products, consulting services and/or complete database-driven solutions for the Internet. Our principal competitors include Computer Associates, IBM, Microsoft, NCR/Teradata, Oracle and Sybase. Additionally, as we expand our business in the markets of data warehousing and Web/e-commerce, we expect to compete with a different group of companies, including small, highly-focused companies offering single products or services that we include as part of an overall solution. A number of our competitors have significantly greater financial, technical, marketing and other resources than we have. As a result, these competitors may be able to respond more quickly to new or emerging technologies, evolving markets and changes in customer requirements or to devote greater resources to the development, promotion and sale of their products than we can. IF THE RDBMS AND THE ORDBMS MARKETS DO NOT GROW OR DECLINE, WE MAY SELL FEWER PRODUCTS. If the growth rates for the relational and object-relational database management systems, or RDBMS or ORDBMS, respectively, decline for any reason, there will be less demand for our products, which would have a negative impact on our business and financial results. The future growth rate of the RDBMS market cannot be predicted. Delays in market acceptance of our ORDBMS products could result in fewer product sales. In recent years, the types and quantities of data required to be stored and managed has grown increasingly complex and includes, in addition to conventional character data, audio, video, text and three-dimensional graphics in a high-performance scalable environment. We have invested substantial resources in developing our ORDBMS product line. The market for ORDBMS products is new and evolving, and its growth depends upon a growing need to store and manage complex data and upon broader market acceptance of our products as a solution for this need. Organizations may not choose to make the transition from conventional RDBMS products to ORDBMS products. 21 CERTAIN RESELLERS MAY NOT CONTINUE TO SELL OUR PRODUCTS AND UTILIZE LICENSE FEES PREVIOUSLY PAID TO US AND RECORDED IN OUR FINANCIAL STATEMENTS AS CUSTOMER ADVANCES. If these resellers do not continue to resell our products, it could result in decreased revenue and adversely effect our operating results. Revenue from license agreements with resellers is recognized as earned by us when the licenses are resold or utilized by the reseller and all of our related obligations have been satisfied. Accordingly, amounts received from customers in advance of revenue being recognized are recorded as a liability in "advances from customers" in our financial statements. Advances in the amount of $26.6 million had not been recognized as earned revenue as of March 31, 2000. Unless these resellers continue to sell our products, we will not be able to recognize the unearned revenue from the advances from customers. In addition, because these resellers do not provide royalty reports to us until after the end of each fiscal quarter, we are unable to predict the level of sales to be expected in any given fiscal quarter. COMPETITION MAY AFFECT THE PRICING OF OUR PRODUCTS OR SERVICES, AND CHANGES IN PRODUCT MIX MAY OCCUR, EITHER OF WHICH MAY REDUCE OUR MARGINS. Existing and future competition or changes in our product or service pricing structure or product or service offerings could result in an immediate reduction in the prices of our products or services. Also, a significant change in the mix of software products and services that we sell, including the mix between higher margin software and maintenance products and lower margin consulting and training, could materially adversely affect our operating results for future quarters. Additionally, if significant price reductions in our products or services were to occur and not be offset by increases in sales volume, our operating margins would be adversely affected. Also, new or enhanced products by existing competitors or new competitors could result in greater price pressure on both our products. In addition, the following factors could affect the pricing of relational database management solutions products and related products: - The industry movement to new operating systems, like Windows NT, Linux and other low-cost operating systems available through other appliances, - Access to relational database management solutions and products through desktop computers, - Access to database-driven solutions, including ORDBMS products, through the Internet, - The bundling of software products for promotional purposes or as a long-term pricing strategy by competitors, and - Our own practice of bundling our software products for enterprise licenses or for promotional purposes with our partners. In particular, the pricing strategies of competitors in the software database industry have historically been characterized by aggressive price discounting to encourage volume purchasing by customers. We may not be able to compete effectively against competitors who continue to aggressively discount the prices of their products. DIFFICULTIES INTEGRATING ARDENT MAY PREVENT US FROM REALIZING THE BENEFITS OF THE MERGER. We may encounter difficulties integrating Ardent's operations and personnel. Integration difficulties may disrupt the combined company's business and could prevent the achievement of the anticipated benefits of the merger. The difficulties, costs and delays involved in integrating the companies, which may be substantial, may include: - Distracting management and other key personnel, particularly sales and marketing personnel and senior engineers involved in product development and product definition, from the business of the combined 22 company, - Inability to effectively market and distribute Ardent's products or develop Ardent technology so as to produce new or enhanced products that will be accepted in the marketplace, - Perceived and potential adverse changes in business focus or product offerings, - Failure to generate significant revenue from the sale of newly developed Ardent products, - Failure to integrate complex software technology, product lines and software development plans, - Potential incompatibility of business cultures, - Costs and delays in implementing common systems and procedures, particularly integrating different information systems, - Inability to retain and integrate key management, technical, sales and customer support personnel, - Inability to maintain Ardent's existing relationships with its partners, - Inability to maintain Ardent's existing customers base or replace the Ardent products used by those customers with Informix products, and - Disruption in our sales force may result in a loss of current customers or the inability to close sales with potential customers. WE MAY NOT BE ABLE TO RETAIN OUR KEY PERSONNEL OR TO INTEGRATE AND RETAIN ARDENT'S KEY PERSONNEL, WHICH MAY PREVENT US FROM MEETING OUR BUSINESS OBJECTIVES. We may not be able to retain our key personnel, including certain sales, consulting, technical and marketing personnel, or attract other qualified personnel in the future. In addition, we may not be able to retain Ardent's key personnel. Our success depends upon the continued service of key qualified personnel. The competition to attract, retain and motivate these personnel is intense. We have at times experienced, and continue to experience, difficulty recruiting qualified software, customer support and other personnel. The loss of such key personnel could result in our inability to effectively develop, market and sell our products thereby harming our financial results. IF WE DO NOT RESPOND ADEQUATELY TO OUR INDUSTRY'S EVOLVING TECHNOLOGY STANDARDS OR DO NOT CONTINUE TO MEET THE SOPHISTICATED NEEDS OF OUR CUSTOMERS, SALES OF OUR SOLUTION OR PRODUCTS MAY DECLINE. Our future success will depend on our ability to address the increasingly sophisticated needs of our customers by supporting existing and emerging hardware, software, database and networking platforms. We will have to develop and introduce commercially viable enhancements to our existing products and solutions on a timely basis to keep pace with technological developments, evolving industry standards and changing customer requirements. If we do not enhance our products to meet these evolving needs, we will not sell as many products. Our position in existing, emerging or potential markets could be eroded rapidly by product advances. Our product development efforts will continue to require substantial financial and operational investment. We may not have sufficient resources to make the necessary investment or to attract and retain qualified software development engineers. In addition, we may not be able to internally develop new products or solutions quickly enough to respond to market forces. As a result, we may have to acquire technology or access to products or solutions through 23 mergers and acquisitions, investments and partnering arrangements. We may not have sufficient cash, access to funding, or available equity to engage in such transactions. Moreover, we may not be able to forge partnering arrangements or strategic alliances on satisfactory terms, or at all, with the companies of our choice. IF THE INTERNET DOES NOT DEVELOP AS A MARKET FOR OUR PRODUCT OFFERINGS, WE MAY NOT BE ABLE TO GROW OUR BUSINESS. The Internet is a rapidly evolving market. We are unable to predict whether and to what extent Internet computing and electronic commerce will be embraced by consumers and traditional businesses. Our successful introduction of database-driven products and solutions for the Internet market will depend in large measure on: - The commitment by hardware and software vendors to manufacture, promote and distribute Internet access appliances, - The lower cost of ownership of Internet computing relative to client/server architecture, and - The ease of use and administration of the Internet relative to client/server architecture. In addition, if a sufficient number of vendors do not undertake a commitment to the market, the market may not accept Internet computing or Internet computing may not generate significant revenues for our business. Also, standards for network protocols, as well as other industry-adopted and de facto standards for the Internet, are evolving rapidly. There can be no assurance that standards we have chosen will position our products to compete effectively for business opportunities as they arise on the Internet. The widespread acceptance and adoption of the Internet by traditional businesses for conducting business and exchanging information is likely only if the Internet provides these businesses with greater efficiencies and improvements. The failure of the Internet to continue to develop as a commercial or business medium could materially adversely affect our business. Even if the Internet and electronic commerce are widely accepted and adopted by consumers and businesses, our database products and database-driven solutions for the Internet may not succeed. This market is new to our product development, marketing and sales organizations. We may not be able to market and sell products and solutions in this market successfully. In addition, our database products and database-driven solutions for the Internet may not compete effectively with our competitors' products and solutions. Further, we may not generate significant revenue and/or margin in this market. Any of these events could materially, adversely affect our business, operating results and financial condition. IF THE DATA WAREHOUSE MARKET DOES NOT CONTINUE TO GROW, OR IF OUR PRODUCT OFFERINGS IN THIS MARKET ARE NOT ACCEPTED, WE MAY NOT BE ABLE TO SELL OUR PRODUCTS OR GROW OUR BUSINESS. The data warehouse market may not continue to grow, or may not grow rapidly, and our customers may not expand their use of data warehouse products. In addition, we may not be able to market and sell our products and solutions in this market or otherwise compete effectively and generate significant revenue. Although demand for data warehouse software has grown in recent years, the market is still emerging. Our future financial performance in this area will depend to a large extent on: - Continued growth in the number of organizations adopting data warehouses, - Our success in developing partnering arrangements with developers of software tools and applications for the data warehouse market, and - Existing customers expanding their use of data warehouses. 24 WE HAVE EXPERIENCED, AND ANTICIPATE THAT WE WILL CONTINUE TO EXPERIENCE, TURNOVER AT OUR SENIOR MANAGEMENT LEVELS, WHICH COULD HARM OUR BUSINESS AND OPERATIONS. During the last nine months of 1999, and the first four months of 2000, several of our senior executive officers resigned. In particular, Howard A. Bain III, our executive vice president and chief financial officer, resigned effective March 20, 2000, and Philip L. Rugani, our Senior Vice President, Americas, has resigned to be effective May 17, 2000. It is possible that this high turnover at our senior management levels will continue and that other senior executive officers could also resign. In addition, we do not maintain key man life insurance on our employees and have no plans to do so. The loss of the services of one or more of our current senior executive officers or key employees could harm our business and could affect our ability to successfully implement our business objectives. Our future success will depend to a significant extent on the continued service of our current senior executives. If we were to lose the services of one or more of our current senior executives or key employees, this could adversely affect our ability to grow our business and achieve our business objectives, particularly if one or more of those executives or key employees decided to join a competitor or otherwise compete directly or indirectly with Informix. OUR EXECUTIVE TEAM MAY NOT BE ABLE TO SUCCESSFULLY WORK TOGETHER TO MEET ITS BUSINESS OBJECTIVES. Since the beginning of 1998, we have expanded our ability to deliver products and solutions for the Internet, including e-commerce solutions, and business intelligence solutions driven by our data warehouse technology. And in October 1999, we created four new business groups to focus our business operations on these new developing market segments. Because of the continuing turnover among our senior management, the addition of new executives to operate our new business groups and the addition of former Ardent executives, our management team has not worked together for a significant length of time and may not be able to successfully implement our business strategies. If the management team is unable to accomplish our business objectives, it could materially adversely affect our ability to grow our business. RECENT ORGANIZATIONAL CHANGES COULD DISRUPT OUR BUSINESS OPERATIONS AND COULD ADVERSELY AFFECT THE SALES OF OUR PRODUCTS. On October 1, 1999, we reorganized our operating business divisions into four new business groups: the TransAct Business Group, which is responsible for delivering on-line transaction processing products; the i.Foundation Business Group, which is responsible for delivering products that provide the technological foundation for Internet-based electronic commerce solutions; the i.Informix Business Group, which is responsible for delivering Internet-based solutions for electronic commerce; and the i.Intelligence Business Group, which is responsible for delivering Internet-based data warehouse products and solutions. We may not achieve the anticipated benefits of this reorganization. In addition, the reorganization could disrupt our current business operations, including our product development and sales efforts. Further, any such disruption or other operational difficulty resulting from the reorganization could distract our management team and cause uncertainty and confusion among our customers. ANY CANCELLATIONS OR DELAYS IN PLANNED CUSTOMER PURCHASES OF OUR PRODUCTS OR SERVICES COULD MATERIALLY ADVERSELY AFFECT OUR NET INCOME AND COULD SUBSTANTIALLY REDUCE QUARTERLY REVENUES. Because we do not know when, or if, potential customers will place orders and finalize contracts, we cannot accurately predict revenue and operating results for future quarters. If there is a downturn in potential customers' businesses, the domestic economy in general, or in international economies where we derive substantial revenue, potential customers may defer or cancel planned purchases of our products. Because we base operating expenses on anticipated revenue levels and because a high percentage of our expenses are relatively fixed, delays in the recognition of revenues from even a limited number of product license transactions could cause significant variations in operating results from quarter to quarter, which could cause net income to fall significantly short of anticipated levels. 25 IF A LARGE NUMBER OF THE ORDERS THAT ARE TYPICALLY BOOKED AT THE END OF A QUARTER ARE NOT BOOKED, OUR NET INCOME FOR THAT QUARTER COULD BE SUBSTANTIALLY REDUCED. Our software license revenue in any quarter often depends on orders booked and shipped in the last month, weeks or days of that quarter. At the end of each quarter, we typically have either minimal or no backlog of orders for the subsequent quarter. If a large number of orders or several large orders do not occur or are deferred, revenue in that quarter could be substantially reduced. SEASONAL TRENDS IN SALES OF OUR SOFTWARE PRODUCTS COULD ADVERSELY AFFECT OUR QUARTERLY OPERATING RESULTS. Our sales of software products have been affected by seasonal purchasing trends that materially affect our quarter-to-quarter operating results. We expect these seasonal trends to continue in the future. Revenue and operating results in our quarter ending December 31 are typically higher relative to other quarters because many customers make purchase decisions based on their calendar year-end budgeting requirements and because we measure our sales incentive plans for sales personnel on a calendar year basis. As a result, we have historically experienced a substantial decline in revenue in the first quarter of each fiscal year relative to the preceding quarter. THE LENGTHY SALES CYCLE FOR PRODUCTS MAKES REVENUES SUSCEPTIBLE TO FLUCTUATIONS. Any delay in the sales cycle of a large transaction or a number of smaller transactions could result in significant fluctuations in our quarterly operating results. Our sales cycles typically take many months to complete and vary depending on the product, service or solution that is being sold. The length of the sales cycle may vary depending on a number of factors over which we have little or no control, including the size of a potential transaction and the level of competition that we encounter in our selling activities. The sales cycle can be further extended for sales made through third party distributors. OUR FUTURE REVENUE AND OUR ABILITY TO MAKE INVESTMENTS IN DEVELOPING OUR PRODUCTS IS SUBSTANTIALLY DEPENDENT UPON OUR INSTALLED CUSTOMER BASE CONTINUING TO LICENSE OUR PRODUCTS AND RENEW OUR SERVICE AGREEMENTS. We depend on our installed customer base for future revenue from services and licenses of additional products. If our customers fail to renew their maintenance agreements, our revenue will be harmed. The maintenance agreements are generally renewable annually at the option of the customers and there are no minimum payment obligations or obligations to license additional software. Therefore, current customers may not necessarily generate significant maintenance revenue in future periods. In addition, customers may not necessarily purchase additional products or services. Our services revenue and maintenance revenue also depend upon the continued use of these services by our installed customer base. Any downturn in software license revenue could result in lower services revenue in future quarters. Moreover, if either license revenue or revenue from services declines, we may not have sufficient cash to finance investments or acquire technology. THE SUCCESS OF OUR INTERNATIONAL OPERATIONS IS DEPENDENT UPON MANY FACTORS WHICH COULD ADVERSELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS INTERNATIONALLY AND COULD AFFECT OUR PROFITABILITY. International sales represented approximately 51% of our total revenue during the quarter ended March 31, 2000. The international operations are, and any expanded international operations will be, subject to a variety of risks associated with conducting business internationally that could adversely affect our ability to sell our products internationally, and therefore, our profitability, including the following: - Difficulties in staffing and managing international operations, - Problems in collecting accounts receivable, - Longer payment cycles, 26 - Fluctuations in currency exchange rates, - Seasonal reductions in business activity during the summer months in Europe and certain other parts of the world, - Uncertainties relative to regional, political and economic circumstances, - Recessionary environments in foreign economies, and - Increases in tariffs, duties, price controls or other restrictions on foreign currencies or trade barriers imposed by foreign countries. In particular, instability in the Asian/Pacific and Latin American economies and financial markets, which together accounted for approximately 18% of our total net revenues during the quarter ended March 31, 2000, could adversely affect our ability to sell our products internationally. FLUCTUATIONS IN THE VALUE OF FOREIGN CURRENCIES COULD RESULT IN CURRENCY TRANSACTION LOSSES. Despite efforts to manage foreign exchange risk, our hedging activities may not adequately protect us against the risks associated with foreign currency fluctuations. As a consequence, we may incur losses in connection with fluctuations in foreign currency exchange rates. Most of our international revenue and expenses are denominated in local currencies. Due to the substantial volatility of currency exchange rates, among other factors, it is not possible to predict the effect of exchange rate fluctuations on our future operating results. Although we take into account changes in exchange rates over time in our pricing strategy, we do so only on an annual basis, resulting in substantial pricing exposure as a result of foreign exchange volatility during the period between annual pricing reviews. In addition, as noted previously, the sales cycles for our products is relatively long. Foreign currency fluctuations could, therefore, result in substantial changes in the financial impact of a specific transaction between the time of initial customer contact and revenue recognition. We have implemented a foreign exchange hedging program consisting principally of the purchase of forward foreign exchange contracts in the primary European and Asian currencies. This program is intended to hedge the value of intercompany accounts receivable or intercompany accounts payable denominated in foreign currencies against fluctuations in exchange rates until such receivables are collected or payables are disbursed. Additionally, uncertainties related to the Euro conversion could adversely affect our hedging activities. IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, COMPETITORS MAY BE ABLE TO USE OUR TECHNOLOGY OR TRADEMARKS AND THIS WOULD WEAKEN OUR COMPETITIVE POSITION, REDUCE OUR REVENUE AND INCREASE COSTS. Our success will continue to be heavily dependent upon proprietary technology. We rely primarily on a combination of patent, copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect our proprietary rights. These means of protecting proprietary rights may not be adequate, and the inability to protect intellectual property rights may adversely affect our business and/or financial condition. We currently hold eight United States patents and several pending applications. There can be no assurance that any other patents covering our inventions will be issued or that any patent, if issued, will provide sufficiently broad protection or will prove enforceable in actions against alleged infringers. Our ability to sell our products and prevent competitors from misappropriating our proprietary technology and trade names is dependent upon protecting our intellectual property. Our products are generally licensed to end-users on a "right-to-use" basis under a license that restricts the use of the products for the customer's internal business purposes. We also rely on "shrink-wrap" and "click-wrap" licenses, which include a notice informing the end-user that by opening the product packaging, or in the case of a click-on license by clicking on an acceptance icon and downloading the product, the end-user agrees to be bound by the license agreement. Despite such precautions, it may be possible for unauthorized third parties to copy aspects of our current or future products or to obtain and use information that is regarded as proprietary. In addition, we have licensed the source code of our products to certain customers under certain circumstances and for restricted uses. In addition, we have also 27 entered into source code escrow agreements with a number of our customers that generally require release of source code to the customer in the event the company enters bankruptcy or liquidation proceedings or otherwise ceases to conduct business. We may also be unable to protect our technology because: - Competitors may independently develop similar or superior technology, - Policing unauthorized use of software is difficult, - The laws of some foreign countries do not protect proprietary rights in software to the same extent as do the laws of the United States, - "Shrink-wrap" and/or "click-wrap" licenses may be wholly or partially unenforceable under the laws of certain jurisdictions, and - Litigation to enforce intellectual property rights, to protect trade secrets, or to determine the validity and scope of the proprietary rights of others could result in substantial costs and diversion of resources. IN THE FUTURE, THIRD PARTIES COULD, FOR COMPETITIVE OR OTHER REASONS, ASSERT THAT OUR PRODUCTS INFRINGE THEIR INTELLECTUAL PROPERTY RIGHTS. As discussed above under "Notes to Unaudited Condensed Consolidated Financial Statements--Note H--Litigation," IBM recently filed a lawsuit against us claiming that some of our products infringe certain of IBM's patents ("IBM claim"). Other third parties may claim that our current or future products infringe their proprietary rights. These claims, with or without merit, could harm our business by increasing costs and by adversely affecting our ability to sell our products. Any claim of this type, including the IBM claim, could affect our relationships with our existing customers and prevent future customers from licensing our products. Any such claim, including the IBM claim, with or without merit, could be time consuming to defend, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements. Royalty or license agreements may not be available on acceptable terms or at all. It is expected that software product developers will increasingly be subject to infringement claims as the number of products and competitors in the software industry segment grows and the functionality of products in different industry segments overlaps. OUR INABILITY TO RELY ON THE STATUTORY "SAFE HARBOR" AS A RESULT OF THE SETTLEMENT OF THE SEC INVESTIGATION COULD HARM OUR BUSINESS. In July 1997, the SEC issued a formal order of private investigation of Informix and certain unidentified other entities and persons with respect to accounting matters, public disclosures and trading activity in our securities that were not described in the formal order. During the course of the investigation, we learned that the investigation concerned the events leading to the restatement of its financial statements, including fiscal years 1994, 1995 and 1996, that was publicly announced in November 1997. Effective January 11, 2000, Informix and the SEC entered into a settlement of the investigation as to Informix. Pursuant to the settlement, we consented to the entry by the SEC of an Order Instituting Public Administrative Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease and Desist Order. Pursuant to the order, we neither admitted nor denied the findings, except as to jurisdiction, contained in the order. The order prohibits us from violating and causing any violation of the anti-fraud provisions of the federal securities laws, for example by making materially false and misleading statements concerning its financial performance. The order also prohibits us from violating or causing any violation of the provisions of the federal securities laws requiring Informix to: (1) file accurate quarterly and annual reports with the SEC; (2) maintain accurate accounting 28 books and records; and (3) maintain adequate internal accounting controls. Pursuant to the order, we are also required to cooperate in the SEC's continuing investigation of other entities and persons. In the event that we violate the order, we could be subject to substantial monetary penalties. As a consequence of the issuance of the order, we will not, for a period of three years from the date of the issuance of the order, be able to rely on the "safe harbor" for forward-looking statements contained in the federal securities laws. The "safe harbor," among other things, limits potential legal actions against us in the event a forward-looking statement concerning our anticipated performance turns out to be inaccurate, unless it can be proved that, at the time the statement was made, we actually knew that the statement was false. If we become a defendant in any private securities litigation brought under the federal securities laws, our legal position in the litigation could be materially adversely affected by our inability to rely on the "safe harbor" provisions for forward-looking statements. FAILURE TO CONTINUE TO STRENGTHEN OUR INTERNAL ACCOUNTING CONTROLS COULD ADVERSELY AFFECT OUR BUSINESS. Although we have made significant progress in our efforts to strengthen our accounting controls and processes, we may not be able to hire and retain enough finance personnel to continue to do so. If we are unable to continue to strengthen our accounting controls and processes, that inability could adversely affect our ability to accurately forecast and report our financial results. In addition, any customer uncertainty about our internal accounting controls could have an adverse effect on our ability to sell our products. WE MAY NOT BE ABLE TO REALIZE THE POTENTIAL FINANCIAL OR STRATEGIC BENEFITS OF FUTURE BUSINESS ACQUISITIONS WHICH COULD HURT OUR ABILITY TO GROW OUR BUSINESS AND SELL OUR PRODUCTS. In the future we may acquire or invest in other businesses that offer products, services and technologies that we believe would help expand or enhance our products and services or help expand our distribution channels. If we were to make such an acquisition or investment, the following risks could impair our ability to grow our business and develop new products and ultimately could impair our ability to sell our products: - Difficulty in combining the technology, operations or work force of the acquired business, - Disruption of our on-going businesses, - Difficulty in realizing the potential financial or strategic benefits of the transaction, - Difficulty in maintaining uniform standards, controls, procedures and policies, and - Possible impairment of relationships with employees and customers as a result of any integration of new businesses and management personnel. In addition, the consideration for any future acquisition could be paid in cash, shares of our common stock, or a combination of cash and common stock. If the consideration is paid in our common stock, existing stockholders would be further diluted. Any amortization of goodwill or other assets resulting from any acquisition could materially adversely affect our operating results and financial condition. THE RIGHTS OF OUR SERIES B PREFERRED STOCKHOLDERS MAY ADVERSELY AFFECT THE RIGHTS OF OUR COMMON STOCKHOLDERS. Holders of our series B preferred shares have certain rights that may adversely affect holders of our common stock. At March 31, 2000, 7,000 shares of our series B preferred stock remained outstanding. 29 RIGHTS TO CONSENT TO CORPORATE TRANSACTIONS. Our agreements with the purchasers of our series B preferred stock contain covenants that could impair our ability to engage in various corporate transactions in the future, including financing transactions and certain transactions involving a change-in-control or acquisition of our assets or equity, or that could otherwise be disadvantageous to Informix and the holders of our common stock. In particular, an acquisition of our assets or equity may not be effected without the consent of the holders of the outstanding series B preferred stock or without requiring the acquiring entity to assume the series B preferred stock or cause the series B preferred stock to be redeemed. These provisions are likely to make an acquisition more difficult and expensive and could discourage potential acquirors. We made certain covenants in connection with the issuance of the series B preferred stock which could limit our ability to obtain additional financing by, for example, providing the holders of the series B preferred stock certain rights of first offer and prohibiting Informix from issuing additional preferred stock without the consent of the series B preferred stockholders. CONVERSION RIGHTS. The shares of our series B preferred stock are convertible into shares of our common stock based on the trading prices of our common stock during future periods. Any conversion of series B preferred stock into our common stock will dilute the existing common stockholders. We are also obligated to issue upon conversion of the series B preferred stock additional warrants to acquire shares of our common stock equal to 20% of the total number of shares of common stock into which the series B preferred stock converts. The exercise of these warrants will have further dilutive effect to the holders of our common stock. As of March 31, 2000, 7,000 shares of series B preferred stock remained outstanding and, assuming a $4.00 per share conversion price, were convertible into 1,750,000 shares of our common stock, and warrants to purchase an aggregate of 350,000 additional shares of our common stock would become issuable upon such conversion. If the conversion price of the series B preferred stock is determined during a period when the trading price of our common stock is low, the resulting number of shares of common stock issuable upon conversion of the series B preferred stock could result in greater dilution to the holders of our common stock. As of March 31, 2000, series B preferred stockholders had converted an aggregate of 43,000 shares of series B preferred stock into 8,694,804 shares of our common stock and warrants to purchase an aggregate of 1,938,947 shares of our common stock. PENALTY PROVISION. The terms of our series B preferred financing agreements also include certain penalty provisions that are triggered if we fail to satisfy certain obligations. For instance, we must keep a registration statement in effect for the resale of shares of our common stock issued or issuable upon conversion of the series B preferred shares and upon exercise of the warrants. WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS THAT COULD RESULT IN SIGNIFICANT COSTS. We may be subject to claims for damages related to product errors in the future. A material product liability claim could materially adversely affect our business because of the costs of defending against these types of lawsuits, diversion of key employees' time and attention from the business and potential damage to our reputation. Although we have not experienced any product liability claims to date, the sale and support of our products entail the risk of such claims. While we carry insurance policies covering this type of liability, these policies may not provide sufficient protection should a claim be asserted. Our license agreements with our customers typically contain provisions designed to limit exposure to potential product liability claims. Such limitation of liability provisions may not be effective under the laws of certain jurisdictions to the extent local laws treat certain warranty exclusions as unenforceable. THE FAILURE OF OUR PRODUCTS TO CONFORM TO CUSTOMER SPECIFICATIONS OR EXPECTATIONS COULD RESULT IN DECREASED SALES OF OUR PRODUCTS. A key determinative factor in future success will continue to be the ability of our products to operate and perform well with existing and future leading, industry-standard application software products intended to be used in 30 connection with relational and object-relational database management system products. Failure to meet in a timely manner existing or future interoperability and performance requirements of certain independent vendors could adversely affect the market for our products. Commercial acceptance of our products and services could also be adversely affected by critical or negative statements or reports by brokerage firms, industry and financial analysts and industry periodicals about Informix, its products or business, or by the advertising or marketing efforts of competitors, or by other factors that could adversely affect consumer perception. PROVISIONS IN OUR CHARTER DOCUMENTS WITH RESPECT TO UNDESIGNATED PREFERRED STOCK MAY DISCOURAGE POTENTIAL ACQUISITION BIDS FOR INFORMIX. Our board of directors is authorized to issue up to approximately 4,000,000 shares of undesignated preferred stock in one or more series. The only preferred stock outstanding as of March 31, 2000 was 7,000 shares of series B preferred stock. Subject to the prior consent of the holders of the series B preferred stock, our board of directors can fix the price, rights, preferences, privileges and restrictions of such preferred stock without any further vote or action by its stockholders. However, the issuance of shares of preferred stock may delay or prevent a change in control transaction without further action by our stockholders. As a result, the market price of our common stock and the voting and other rights of the holders of our common stock may be adversely affected. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of our common stock, including the loss of voting control to others. OTHER PROVISIONS IN OUR CHARTER DOCUMENTS MAY DISCOURAGE POTENTIAL ACQUISITION BIDS FOR INFORMIX AND PREVENT CHANGES IN OUR MANAGEMENT THAT OUR STOCKHOLDERS MAY FAVOR. Other provisions in our charter documents could discourage potential acquisition proposals and could delay or prevent a change in control transaction that our stockholders may favor. The provisions include: - Elimination of the right of stockholders to act without holding a meeting, - Certain procedures for nominating directors and submitting proposals for consideration at stockholder meetings, and - A board of directors divided into three classes, with each class standing for election once every three years. These provisions are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions involving an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and, accordingly, could discourage potential acquisition proposals and could delay or prevent a change in control. Such provisions are also intended to discourage certain tactics that may be used in proxy fights but could, however, have the effect of discouraging others from making tender offers for shares of our common stock, and consequently, may also inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. These provisions may also have the effect of preventing changes in our management. In addition, we have adopted a rights agreement, commonly referred to as a "poison pill," that grants holders of our common stock preferential rights in the event of an unsolicited takeover attempt. These rights are denied to any stockholder involved in the takeover attempt and this has the effect of requiring cooperation with our board of directors. This may also prevent an increase in the market price of our common stock resulting from actual or rumored takeover attempts. The rights agreement could also discourage potential acquirors from making unsolicited acquisition bids. 31 DELAWARE LAW MAY INHIBIT POTENTIAL ACQUISITION BIDS WHICH MAY ADVERSELY AFFECT THE MARKET PRICE FOR OUR COMMON STOCK AND PREVENT CHANGES IN ITS MANAGEMENT THAT OURSTOCKHOLDERS MAY FAVOR. We are incorporated in Delaware and are subject to the antitakeover provisions of the Delaware General Corporation Law, which regulates corporate acquisitions. Delaware law prevents certain Delaware corporations, including those corporations, such as Informix, whose securities are listed for trading on the Nasdaq National Market, from engaging, under certain circumstances, in a "business combination" with any "interested stockholder" for three years following the date that the stockholder became an interested stockholder. For purposes of Delaware law, a "business combination" would include, among other things, a merger or consolidation involving Informix and an interested stockholder and the sale of more than 10% of our assets. In general, Delaware law defines an "interested stockholder" as any entity or person beneficially owning 15% or more of the outstanding voting stock of a corporation and any entity or person affiliated with or controlling or controlled by such entity or person. Under Delaware law, a Delaware corporation may "opt out" of the antitakeover provisions. We do not intend to "opt out" of these antitakeover provisions of Delaware law. 32 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK DISCLOSURES ABOUT MARKET RATE RISK MARKET RATE RISK. The following discussion about our market rate risk involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and equity security price risk. We do not use derivative financial instruments for speculative trading purposes. INTEREST RATE RISK. Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. We maintain a short-term investment portfolio consisting mainly of debt securities with an average maturity of less than two years. We do not use derivative financial instruments in our investment portfolio and we place our investments with high quality issuers and, by policy, limit the amount of credit exposure to any one issuer. We are averse to principal loss and ensure the safety and preservation of our invested funds by limiting default, market and reinvestment risk. These available-for-sale securities are subject to interest rate risk and will fall in value if market interest rates increase. If market interest rates were to increase immediately and uniformly by 10% from levels at March 31, 2000, the fair value of the portfolio would decline by an immaterial amount. We have the ability to hold our fixed income investments until maturity and believe that the effect, if any, of reasonably possible near-term changes in interest rates on our financial position, results of operations and cash flows would not be material. EQUITY SECURITY PRICE RISK. We hold a small portfolio of marketable-equity traded securities that are subject to market price volatility. Equity price fluctuations of plus or minus 10% would have had a $0.9 million impact on the value of these securities in 2000. FOREIGN CURRENCY EXCHANGE RATE RISK. We enter into foreign currency forward exchange contracts to reduce our exposure to foreign currency risk due to fluctuations in exchange rates underlying the value of intercompany accounts receivable and payable denominated in foreign currencies (primarily European and Asian currencies) until such receivables are collected and payables are disbursed. A foreign currency forward exchange contract obligates us to exchange predetermined amounts of specified foreign currencies at specified exchange rates on specified dates or to make an equivalent U.S. dollar payment equal to the value of such exchange. These foreign exchange forward contracts are denominated in the same currency in which the underlying foreign receivables or payables are denominated and bear a contract value and maturity date which approximate the value and expected settlement date of the underlying transactions. For contracts that are designated and effective as hedges, discounts or premiums (the difference between the spot exchange rate and the forward exchange rate at inception of the contract) are accreted or amortized to other expenses over the contract lives using the straight-line method while unrealized gains and losses on open contracts at the end of each accounting period resulting from changes in the spot exchange rate are recognized in earnings in the same period as gains and losses on the underlying foreign currency denominated receivables or payables are recognized, and generally offset. We operate in certain countries in Latin America, Eastern Europe, and Asia/Pacific where there are limited forward foreign currency exchange markets and thus we have unhedged exposures in these currencies. Most of our international revenue and expenses are denominated in local currencies. Due to the substantial volatility of currency exchange rates, among other factors, we cannot predict the effect of exchange rate fluctuations on our future operating results. Although we take into account changes in exchange rates over time in our pricing strategy, we do so only on an annual basis, resulting in substantial pricing exposure as a result of foreign exchange volatility during the period between annual pricing reviews. In addition, the sales cycle for our products is relatively long, depending on a number of factors including the level of competition and the size of the transaction. We periodically assess market conditions and occasionally reduce this exposure by entering into foreign currency forward exchange contracts to hedge up to 80% of the forecasted net income of our foreign subsidiaries of up to one year in the future. These forward foreign currency exchange contracts do not qualify as hedges for financial reporting purposes and, therefore, are marked to market. Notwithstanding our efforts to manage foreign exchange risk, there can be no assurances that our hedging activities will adequately protect us against the risks associated with foreign currency fluctuations. 33 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, CONTINUED The table below provides information about our foreign currency forward exchange contracts. The information is provided in U.S. dollar equivalents and presents the notional amount (contract amount), the weighted average contractual foreign currency exchange rates and fair value. Fair value represents the difference in value of the contracts at the spot rate at March 31, 2000 and the forward rate, plus the unamortized premium or discount. All contracts mature within twelve months. FORWARD CONTRACTS
Weighted- Contract Average AT MARCH 31, 2000 Amount Contract Rate Fair Value - ----------------- ---------------- ---------------- ------------- (In thousands) (In thousands) Foreign currency to be sold under contract: Euro......................................................... $ 32,187 1.04 $ 140 Korean Won................................................... 6,738 1,113.05 (22) Australian Dollar............................................ 2,450 1.63 (1) Swiss Franc.................................................. 2,359 1.65 19 Czech Republic Koruna........................................ 2,347 38.18 3 German Mark.................................................. 2,155 2.05 (2) Singapore Dollar............................................. 2,113 1.70 15 Thai Bhat.................................................... 2,104 38.03 (12) Taiwan Dollar................................................ 1,840 30.43 10 South African Rand........................................... 1,598 6.59 (15) French Franc................................................. 1,241 6.85 (1) Japanese Yen................................................. 1,056 104.14 14 Norwegian Kroner............................................. 90 8.41 -- ------------- ----------- Total........................................................... $ 58,278 $ 148 ============= =========== Foreign currency to be purchased under contract: British Pound................................................ $ 28,039 1.59 $ (29) Other (individually less than $1 million).................... 723 * (5) ------------- ----------- Total........................................................... $ 28,762 $ (34) ============= =========== Total........................................................... $ 87,040 $ 114 ============= ===========
- ----- * Not meaningful 34 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On February 3, 2000, International Business Machines Corporation ("IBM") filed an action against the Company in the United States District Court for the District of Delaware alleging infringement of six United States patents owned by IBM. In the complaints, IBM seeks against the Company, and the Company seeks against IBM, permanent injunctions against further alleged infringement, unspecified compensatory damages, unspecified treble damages, and interest, costs and attorneys' fees. On March 28, 2000, the Company filed an answer and counterclaims in the United States District Court for the District of Delaware against IBM denying IBM's allegations of patent infringement and alleging infringement by IBM of four United States patents owned by the Company. In addition, on March 28, 2000, the Company filed a separate action against IBM in the United States District Court for the Northern District of California alleging infringement of four other United States patents owned by the Company. The Company strongly believes that the allegations in IBM's complaint are without merit and intends to defend the action vigorously. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On March 1, 2000, a special meeting of the Stockholders of the Company was held to consider and vote on the issuance of shares of the Company's Common Stock in connection with the Company's acquisition of Ardent Software, Inc. VOTES
For Against Abstentions --- ------- ----------- 102,682,287 987,497 570,111
ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a)
EXHIBIT NO. EXHIBIT - ----------- ------- 3.2 (e) * Amendment to Bylaws, dated March 16, 2000 10.72* Informix Software, Inc. Employment Agreement, dated February 3, 2000, between the Registrant and James Foy 10.73* Informix Software, Inc. Part-Time Employment and Transition Agreement, dated March 28, 2000, between the Registrant and Peter Gyenes 10.74* Informix Corporation Separation Agreement, effective March 20, 2000, between the Registrant and Howard A. Bain, III 35 10.75* Offer of Employment Letter, dated March 9, 2000, from Registrant to Laurent Mayer 27.1 Financial Data Schedule
(b) Reports on Form 8-K. The Company filed a Current Report on Form 8-K on January 11, 2000 related to the settlement as to the Company of a formal investigation by the SEC of the Company and certain unidentified other entities and persons related to the restatement of the Company's financial statements publicly announced in November 1997. The Company filed a Current Report on Form 8-K on January 24, 2000 related to executive compensation for the fiscal year ending December 31, 1999. The Company filed a Current Report on Form 8-K on March 10, 2000 related to the completion of its merger with Ardent Software, Inc. on March 1, 2000. - ------------------- * Filed herewith 36 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INFORMIX CORPORATION Dated: May 15, 2000 By: /s/ CHARLES F. KANE ------------------------------------- Charles Kane ACTING CHIEF FINANCIAL OFFICER (PRINCIPAL FINANCIAL OFFICER) By: /s/ WILLIAM F. O'KELLY ------------------------------------- Bill O'Kelly VICE PRESIDENT CORPORATE FINANCE (PRINCIPAL ACCOUNTING OFFICER) 37 EX-3.2(E) 2 EXHIBIT 3.2(E) EXHIBIT 3.2(e) AMENDMENT TO THE BYLAWS OF INFORMIX CORPORATION a Delaware corporation I, Gary Lloyd, as Secretary of INFORMIX CORPORATION, certify that: 1. I am the Secretary of INFORMIX CORPORATION, a Delaware corporation (the "Corporation"). 2. On March 16, 2000, the Board of Directors of INFORMIX CORPORATION approved the following amendment to Article III, Section 1 of the Bylaws of INFORMIX CORPORATION, effective March 2, 2000: Section 1. Management. The property, business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors. The number of Directors of the Corporation (including Directors to be elected by the holders of any one or more series of Preferred Stock voting separately as a class or classes) shall be nine (9). As used in these Bylaws, the terms "whole Board" or "whole Board of Directors" mean the total number of Directors which the Corporation would have if there were no vacancies. In addition to the powers and authorities by these Bylaws and the Certificate of Incorporation expressly conferred upon it, the Board of Directors may exercise all such powers of the Corporation, and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. Effective March 16, 2000 INFORMIX CORPORATION /s/Gary Lloyd ------------------------------ Gary Lloyd, Secretary EX-10.72 3 EXHIBIT 10.72 EXHIBIT 10.72 INFORMIX SOFTWARE, INC. EMPLOYMENT AGREEMENT This Agreement is entered into by and among Informix Software, Inc. (the "Company") and James Foy (the "Employee") this 3rd day of February, 2000. WHEREAS, upon the effectiveness of the merger of Iroquois Acquisition Corporation, a wholly owned subsidiary of Informix Corporation ("Informix"), with and into Ardent Software, Inc. (the "Merger"), Ardent Software, Inc. ("Ardent") will become a wholly owned subsidiary of Informix; and WHEREAS, in connection with the effectiveness of the Merger, the parties desire and agree to enter into an employment relationship by means of this Agreement; NOW THEREFORE in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is mutually covenanted and agreed by and among the parties as follows: 1. EFFECTIVE DATE. This Agreement shall become effective immediately prior to the effective date of the Merger (the "Effective Date"). 2. POSITION AND DUTIES. Upon the Effective Date, Employee shall be employed as the Company's Senior Vice-President, Group Executive, TransAct Systems Group, reporting to Jean-Yves Dexmier, President and Chief Executive Officer, and shall assume and discharge such responsibilities as are commensurate with Employee's position. Employee shall have the additional responsibility of ensuring a smooth, efficient and rapid transition of Ardent to its new status as a subsidiary of Informix. Employee shall perform his duties faithfully and to the best of his ability and shall devote his full business time and effort to the performance of his duties hereunder. At the Company's discretion, Employee's position and duties may be changed to the extent the Company deems appropriate. Notwithstanding the foregoing, Employee may serve on the boards of directors of other entities and engage in charitable, religious or other activities outside of his employment with the Company, so long as such activities do not materially interfere with his duties to the Company. 3. AT-WILL EMPLOYMENT. The parties agree that the Employee's employment with the Company shall be "at-will" and may be terminated at any time with or without Cause (as defined in paragraph 6(b) herein) or notice. No provision of this Agreement shall be construed as altering or modifying the "at-will" nature of employee's employment and any representations to the contrary are unauthorized and not valid unless obtained in writing and signed by the President of the Company. 4. COMPENSATION. (a) BASE SALARY. For all services to be rendered by Employee pursuant to this Agreement, Employee shall receive an annual base salary from the Company of two-hundred fifty thousand dollars ($250,000), less all applicable withholding taxes, payable in installments in accordance with the Company's normal payroll practices. (b) ANNUAL INCENTIVE BONUS. For each fiscal year during the term of this Agreement, Employee shall be eligible to participate in the Company's executive bonus plan. Employee's target incentive under the Company's executive bonus plan for fiscal year 2000 is forty-five percent (45%) of Employee's annual base salary for fiscal year 2000. The amount of Employee's bonus, if any, will be based upon Company achievement for a fiscal year measured against objectives for the fiscal year established by the Company's Board of Directors. Each such bonus, if any, for a fiscal year will be paid by March 31st of the following calendar year. Employee must be an employee of the Company on the date the annual incentive bonus is paid to be eligible to receive such bonus. The Company may change Employee's target incentive percentage from year to year, and reserves the right to amend, modify or terminate the Company's executive bonus plan. (c) OPTION. As soon as practicable following the Effective Date, Informix shall grant Employee an option under the Informix Corporation 1994 Stock Option and Award Plan (the "Plan") to purchase two-hundred fifty-thousand (250,000) shares of Informix Common Stock (the "Shares"), at an exercise price per Share equal to the fair market value per Share on the grant date (the "Option"). Such Option shall vest in four (4) successive equal annual installments upon the Employee's completion of each year of service with the Company measured from the grant date. The Option shall be subject to the terms and conditions of the Plan and the stock option agreement evidencing the Option (the "Option Agreement"). (d) VACATION. Employee shall be entitled to vacation in accordance with Company's current policy. 5. EXPENSES. The Company shall reimburse Employee for reasonable travel, entertainment or other expenses incurred by Employee in the furtherance of or in connection with the performance of Employee's duties hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time. 6. SEVERANCE. (a) TERMINATION WITHIN ONE YEAR OF EFFECTIVE DATE. (i) TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE. Should Employee be terminated by the Company, including a Constructive Termination, but not including a Termination for Cause, within one (1) year of the Effective Date, then Employee shall be entitled to receive benefits set forth in the Ardent Software, Inc. "Policy Regarding Termination of Executive -2- Status and Related Matters in Event of a Sale of the Company," adopted July 29, 1996, as amended on July 22, 1998 (the "Ardent Severance Policy") as attached hereto as Exhibit A. (ii) VOLUNTARY RESIGNATION/TERMINATION FOR CAUSE. If, within the one year following the Effective Date, Employee's termination of employment is pursuant to a voluntary resignation or Termination for Cause, Employee shall not be entitled to any severance or other benefits pursuant to either the Ardent Severance Policy or any other plan, policy or agreement of the Company. (iii) For sole purpose of Paragraph 6(a), the terms "Constructive Termination" and "Termination for Cause" shall have the same meaning as in the Ardent Severance Policy. (b) TERMINATION AFTER ONE YEAR OF EFFECTIVE DATE. (i) TERMINATION BY THE COMPANY WITHOUT CAUSE. If, following the one year anniversary of the Effective Date, Employee is terminated by the Company for reasons other than Cause (as defined in subparagraph 6(b)(iii) below), then Employee shall be entitled to receive severance or other benefits (if any) as may then be established under the Company's severance and benefit plans and policies existing at the time of such termination. (ii) TERMINATION FOR CAUSE/VOLUNTARY RESIGNATION. If, following the one year anniversary of the Effective Date, Employee's employment is terminated by the Company for Cause (as defined in subparagraph 6(b)(iii) below) or Employee voluntarily resigns, then Employee shall not be entitled to receive severance or other benefits pursuant to this Agreement, but may be eligible for those benefits (if any) as may then be established under the Company's severance and benefit plans and policies existing at the time of such termination. (iii) For the purposes of this Paragraph 6(b), the term "Cause" shall mean the occurrence of any one or more of the following: (A) Employee's conviction by, or entry of a plea of guilty or nolo contendre in, a court of competent jurisdiction for any crime which constitutes a felony in the jurisdiction involved; (B) Employee's misappropriation of funds or commission of an act of fraud, whether prior or subsequent to the date hereof, upon the Company; (C) gross or willful negligence by Employee in the scope of Employee's services to the Company as set forth in Section 2; (D) a breach by Employee of a material provision of this Agreement which is not cured within 30 days of notice; (E) a willful failure of Employee to substantially perform his duties hereunder after notice of such failure; or (F) material breach of the Company's policies. (c) NO MODIFICATION OF "AT-WILL" NATURE OF EMPLOYMENT. Employee acknowledges that the terms "Constructive Termination," "Termination for Cause," and "Cause" are defined in Paragraphs 6(a) and 6(b) above for the sole purpose of determining Employee's eligibility for severance and other termination benefits. Employee understands that Paragraphs 6(a) and 6(b) do not alter, modify, or otherwise change the "at-will" nature of his employment with the Company as set forth in Paragraph 3 of this Agreement. -3- 7. EXECUTION OF CONFIDENTIALITY/OWNERSHIP/NONSOLICITATION AGREEMENT. As a condition of entering into this Agreement and of receiving the benefits hereunder, Employee agrees to execute the Informix Employee Confidentiality/Ownership/Nonsolicitation Agreement (the "Confidentiality Agreement"). 8. EXECUTION OF RELEASE AGREEMENT UPON TERMINATION. As a condition of entering into this Agreement and of receiving benefits hereunder, Employee agrees to execute a release of claims agreement substantially in the form attached hereto as Exhibit B upon the termination of his employment with the Company. 9. NOTIFICATION OF NEW EMPLOYER. In the event that Employee leaves the employ of the Company, Employee hereby grants consent to notification by the Company to Employee's new employer about Employee's rights and obligations under this Agreement. 10. REPRESENTATIONS. Employee agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. Employee represents that his performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by Employee in confidence or in trust prior to Employee's employment by the Company. Employee has not entered into, and agrees that he will not enter into, any oral or written agreement in conflict herewith. 11. RIGHT TO ADVICE OF COUNSEL. Employee acknowledges that he has had the right to consult with his own separate legal counsel and is fully aware of his rights and obligations under this Agreement. 12. SUCCESSORS. (a) COMPANY'S SUCCESSORS. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term "Company," as applicable, shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this subparagraph (a) or which becomes bound by the terms of this Agreement by operation of law. (b) EMPLOYEE'S SUCCESSORS. Without the written consent of the Company, Employee shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Employee hereunder shall inure to the benefit of, and be enforceable by, Employee's personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees. -4- 13. ARBITRATION. (a) Employee agrees that any dispute or controversy arising out of, relating to, or in connection with Employee's employment, this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Santa Clara, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the "Rules"). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to rules of conflicts of law. (b) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AND THE COMPANY AGREE TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION CLAIMS. EMPLOYEE AGREES THAT EITHER PARTY MAY PETITION A COURT FOR INJUNCTIVE RELIEF WITH RESPECT TO ALLEGATIONS OR CLAIMS THAT THE OTHER HAS VIOLATED THE CONFIDENTIALITY AGREEMENT OR ANY OTHER AGREEMENT BETWEEN THE PARTIES REGARDING TRADE SECRETS, CONFIDENTIAL INFORMATION, NONSOLICITATION OR LABOR CODE Section 2870. IN THE INVENT EITHER PARTY SEEKS INJUNCTIVE RELIEF, THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER REASONABLE COSTS AND ATTORNEYS' FEES. 14. NOTICE CLAUSE. (a) MANNER. Any notice hereby required or permitted to be given shall be sufficiently given if in writing and upon mailing by registered or certified mail, postage prepaid, to either party at the address of such party or such other address as shall have been designated by written notice by such party to the other party. (b) EFFECTIVENESS. Any notice or other communication required or permitted to be given under this Agreement will be deemed given on the day when delivered in person, or the third business day after the day on which such notice was mailed in accordance with Paragraph 14(a). -5- 15. GOVERNING LAW/CONSENT TO PERSONAL JURISDICTION. This Agreement shall be governed by and construed in accordance with the internal substantive laws, but not the choice of law rules, of the State of California. Employee hereby expressly consents to the personal jurisdiction of the state and federal courts located in California for any law suit filed there against Employee by the Company arising from or relating to this Agreement. 16. SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement, or any terms hereof, shall not affect the validity or enforceability of any other provision or term of this Agreement. 17. INTEGRATION. This Agreement, the Confidentiality Agreement, the Option Agreement and the Plan, represent the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements, whether written or oral. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto. 18. TAXES. All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes. IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officers, as of the day and year first above written. INFORMIX SOFTWARE, INC. By: /s/ Gary Lloyd -------------------------------------------- Title: Vice President, General Counsel and Secretary --------------------------------------------- EMPLOYEE /s/ James Foy ------------------------------------------------- James Foy -6- EXHIBIT A ARDENT SEVERANCE POLICY -7- ARDENT SOFTWARE POLICY REGARDING TERMINATION OF EXECUTIVE STATUS AND RELATED MATTERS IN THE EVENT OF A SALE OF THE COMPANY ---------- The Company believes that, in the current environment of acquisitions and consolidation within the software industry, it is in its best interest to have a policy regarding termination of executive status and related matters which is designed, in the event of a Sale of the Company, to maintain the services of key executives during the negotiation process and thereafter. Accordingly, the Company first adopted a policy on July 29, 1996 and revised the policy on July 22, 1998. The policy, as revised, is as follows: In the event of a Sale of the Company, then: 1. All shares under stock options held by an Executive shall become exercisable immediately following the closing of the Sale. 2. In the event the executive status of an Executive is terminated by the Company, including a Constructive Termination, but not including a Termination for Cause, within one year following the closing of the Sale: a) The Company shall continue to employ the former Executive for a period of one year (two years in the case of the CEO) thereafter at an annual salary, payable not less frequently than twice per month for the one or two year period as applicable, in an amount equal to the aggregate of (i) the Executive's annual salary rate at the time of the termination and (ii) the amount of bonus, if any, paid to the executive in respect of the most recently completed fiscal year. b) The Company's obligation to make premium payments under the Split Dollar Life Insurance Agreement with the Executive, if any such Agreement exists shall continue regardless of the provisions of Section 2(a) of that Agreement. c) During the employment specified in a. above, the Former Executive shall be on special assignment to the CEO of the Company and shall have no duties other than those -8- reasonably assigned by the CEO. Any such assignments shall involve no more than five hours in any month. During such employment, the Executive shall not accrue any additional vacation time but shall be entitled to a lump sum payment for any unused vacation time accrued in accordance with the Company's policy prior thereto. d) Except as specifically set forth above, all agreements, policies and practices in connection with employment and termination thereof, including policies and practices relating to exercise of options, participation in the stock purchase plan, and use of confidential information, shall be applicable. For purposes of the foregoing: "Sale" of the Company shall refer to any transfer of stock or assets, merger, or other transaction or series of transactions which result in (i) the disposition by the Company of substantially all its business (other than in connection with a mere change of place of incorporation or business form) or (ii) the acquisition of two-thirds or more of the voting power of the Company by a person, entity or group. "Executive" shall refer from time to time to any officer employed by the Company who is deemed by the Company to be subject to the requirements of Section 16 of the Securities Exchange Act of 1934 or otherwise designated by the Board of Directors as an Executive for purposes hereof. "Constructive Termination" of executive status shall refer to the termination of such status by the Executive as a result of a material reduction in salary, benefits or level of responsibilities, a material increase in travel requirements, or a material change of assigned office to another geographic location. "Termination for Cause" shall refer to a termination of executive status by the Company for (i) the material falsification of records, embezzlement of funds or similar fraudulent acts by the Executive against the Company or its customers, (ii) the conviction of the Executive of, or the entry of a pleading of guilty or nolo contendere by the Executive to, any felony or any other crime involving fraud, deceit, dishonesty or moral turpitude, (iii) a material violation by the Executive of the Company's published policies from time to time regarding confidentiality and compliance with various laws, or (iv) -9- continued willful failure of the Executive, after reasonable notice, to observe the reasonable directives of the Board or (in the case of Executives other than the CEO) the CEO. SECTION 16 EXECUTIVES: Peter Gyenes (CEO - 2 yrs.) Peter Fiore James Foy Charles Kane Cornelius McMullan Jason Silvia James K. Walsh (Founder - 2 yrs.) EXECUTIVES FOR PURPOSES HEREOF: Ralph Breslauer Jeffrey Spotts Mary Murphy Gary Hoffman Mikael Wipperfield Joanne Protano William Gendrolius Alan Grady Gene Faessler Trevor Grey Pierre Lannadere Kim Lewin Rodger Morrill James Todhunter Lee Scheffler -10- EXHIBIT B FORM RELEASE AGREEMENT -11- RELEASE OF CLAIMS AGREEMENT This Release of Claims Agreement ("Agreement") is made by and between Informix Software, Inc. (the "Company"), and James Foy ("Employee"). WHEREAS, Employee was employed by the Company; NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Employee (collectively referred to as "the Parties") hereby agree as follows: 1. TERMINATION. Employee's employment from the Company terminated on ________________. 2. CONSIDERATION. As set forth in that certain Employment Agreement by and between the Parties dated , 2000 (the "Employment Agreement"), the Company agreed, subject to Employee entering into this Agreement, to provide Employee with certain benefits during and following Employee's employment. As additional consideration for Employee entering into this Agreement, the Company hereby agrees to pay up to ten thousand dollars ($10,000) for individual executive outplacement services performed for Employee following Employee's termination of employment. 3. CONFIDENTIAL INFORMATION. Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Informix Employee Confidentiality/Ownership/Nonsolicitation Agreement between Employee and the Company (the "Confidentiality Agreement"). Employee shall return all the Company property and confidential and proprietary information in his possession to the Company on the Effective Date of this Agreement. 4. PAYMENT OF SALARY. Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee on the Effective Date of this Agreement except those benefits provided in the Employment Agreement. 5. RELEASE OF CLAIMS. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company. Employee, on behalf of him- or herself, and Employee's respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation, -12- (a) any and all claims relating to or arising from Employee's employment relationship with the Company and the termination of that relationship; (b) any and all claims relating to, or arising from, Employee's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; (c) any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion; (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the Family Medical and Leave Act, the California Fair Employment and Housing Act, and Labor Code section 201, ET SEQ. and section 970, ET SEQ. and all amendments to each such Act as well as the regulations issued thereunder; (e) any and all claims for violation of the federal, or any state, constitution; (f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and (g) any and all claims for attorneys' fees and costs. Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. 6. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Employee acknowledges that he is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and voluntary. Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that Employee has been advised by this writing that (a) Employee should consult with an attorney PRIOR to executing this Agreement; (b) Employee has at least twenty-one (21) days within which to consider this Agreement; (c) Employee has seven (7) days following the execution of this Agreement by the -13- parties to revoke the Agreement; and (d) this Agreement shall not be effective until the revocation period has expired. Any revocation should be in writing and delivered to Mr. Wayne Page, Vice-President Human Resources, Informix Software, Inc., by close of business on the seventh day from the date that Employee signs this Agreement. 7. CIVIL CODE SECTION 1542. Employee represents that Employee is not aware of any claims against the Company other than the claims that are released by this Agreement. Employee acknowledges that he has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Employee, being aware of said code section, agrees to expressly waive any rights he may have thereunder, as well as under any other statute or common law principles of similar effect. 8. NO PENDING OR FUTURE LAWSUITS. Employee represents that Employee has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Employee also represents that Employee does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein. 9. APPLICATION FOR EMPLOYMENT. Employee understands and agrees that, as a condition of this Agreement, Employee shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and Employee hereby waives any right, or alleged right, of employment or re-employment with the Company. Employee further agrees that he will not apply for employment with the Company, its subsidiaries, its parents, or related companies, or any successor and will not apply to work as an independent contractor for the Company, its parents, its subsidiaries or any successor. 10. CONFIDENTIALITY. Employee agrees to use Employee's best efforts to maintain in confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as "Settlement Information"). Employee agrees to take every reasonable precaution to prevent disclosure of any Settlement Information to third parties, and agrees that there will be no publicity, directly or indirectly, concerning any Settlement Information. Employee agrees to take every precaution to disclose Settlement Information only to those attorneys, accountants, governmental entities, and family members who have a reasonable need to know of such Settlement Information. -14- 11. NO COOPERATION. Employee agrees he will not act in any manner that might damage the business of the Company. Employee agrees that he will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so. 12. NO ADMISSION OF LIABILITY. Employee understands and acknowledges that this Agreement constitutes a compromise and settlement of disputed claims. No action taken by the Company, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Employee or to any third party. 13. COSTS. The Parties shall each bear their own costs, expert fees, attorneys' fees and other fees incurred in connection with this Agreement. 14. ARBITRATION. The Parties agree that any and all disputes arising out of the terms of this Agreement, their interpretation, and any of the matters herein released, including any potential claims of harassment, discrimination or wrongful termination shall be subject to binding arbitration, to the extent permitted by law, in Santa Clara County, California, before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes. EMPLOYEE AGREES AND HEREBY WAIVES HIS RIGHT TO JURY TRIAL AS TO MATTERS ARISING OUT OF THE TERMS OF THIS AGREEMENT AND ANY MATTERS HEREIN RELEASED TO THE EXTENT PERMITTED BY LAW. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. 15. AUTHORITY. Employee represents and warrants that Employee has the capacity to act on his own behalf and on behalf of all who might claim through Employee to bind them to the terms and conditions of this Agreement. 16. NO REPRESENTATIONS. Employee represents that Employee has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement. 17. SEVERABILITY. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 18. ENTIRE AGREEMENT. This Agreement, the Employment Agreement, the stock option agreements between the parties, and the Confidentiality Agreement represent the entire agreement and understanding between the Company and Employee concerning Employee's separation from the Company, and supersede and replace any and all prior agreements and understandings concerning -15- Employee's relationship with the Company and his compensation by the Company. This Agreement may only be amended in writing signed by Employee and the President of the Company. 19. GOVERNING LAW/CONSENT TO PERSONAL JURISDICTION. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California. Employee hereby expressly consents to the personal jurisdiction of the state and federal courts located in California for any law suit filed there against Employee by the Company arising from or relating to this Agreement. 20. EFFECTIVE DATE. This Agreement is effective eight (8) days after it has been signed by both Parties. 21. COUNTERPARTS. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 22. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: (a) They have read this Agreement; (b) They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel; (c) They understand the terms and consequences of this Agreement and of the releases it contains; (d) They are fully aware of the legal and binding effect of this Agreement. -16- IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. INFORMIX SOFTWARE, INC. Dated: By ------------------- ---------------------------------- JAMES FOY, an individual Dated: ------------------ ------------------------------------ James Foy -17- EX-10.73 4 EXHIBIT 10.73 EXHIBIT 10.73 PART-TIME EMPLOYMENT AND TRANSITION AGREEMENT WHEREAS, Peter Gyenes ("Executive") has been employed as the President and Chief Executive Officer of Ardent Software, Inc. ("Ardent") and serves as a member and the Chairman of Ardent's Board of Directors, and WHEREAS, upon the effectiveness of the merger of Iroquois Acquisition Corporation, a wholly-owned subsidiary of Informix Corporation ("Informix"), with and into Ardent Software, Inc. (the "Merger"), Ardent will become a wholly-owned subsidiary of Informix; and WHEREAS, in connection with the effectiveness of the merger, the parties desire and agree to enter into a part-time employment relationship by means of this Agreement; NOW, THEREFORE, this Employment Transition Agreement ("Agreement") is made by and between Informix Software, Inc. (the "Company"), a wholly-owned subsidiary of Informix, and the Executive effective on the effective date of the merger (the "Employment Transition Date") as defined in the Agreement and Plan of Reorganization, effective as of November 30, 1999, among Informix, Ardent, and Iroquois Acquisition Corporation. 1. DURATION AND OBLIGATIONS OF PART-TIME EMPLOYMENT RELATIONSHIP. (a) DURATION OF PART-TIME EMPLOYMENT. On and after the Employment Transition Date, the Company agrees to employ the Executive as a common-law employee on a part-time basis for the period of one year from the Employment Transition Date, unless Executive is terminated earlier (the period of Executive's part-time employment hereunder is referred to as the "Part-Time Employment Period"). In this capacity, Executive shall report to the Chief Executive Officer of the Company (the "CEO"). Executive's duties shall consist of, among other duties reasonably assigned by the CEO, including assisting with the integration of Ardent into Informix and related matters. (b) OBLIGATIONS. During the Part-Time Employment Period, Executive shall devote substantial business efforts and time (on a part-time basis) to the Company. During the Part-Time Employment Period, Executive agrees to comply with the standard and policies contained in the Informix Worldwide Ethics Policy (the "Policy") and not to engage actively in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the CEO which approval shall be consistent with the Policy; provided, however, that Executive may serve in any capacity with any civic, educational or charitable organization without the approval of the CEO, so long as such activities do not interfere with his duties and obligations under this Agreement; provided, further that Executive may sit on the boards of directors of corporations and committees thereof without violating his obligations hereunder, and consistent with the Policy, a copy of which has been provided to Executive. 2. EMPLOYEE VACATION AND BENEFITS. During the Part-Time Employment Period, Executive shall be entitled to vacation in accordance with the Company's current policies, and shall be eligible to participate in the employee benefit plans maintained by the Company to the extent provided for full-time employees of the Company as permitted by applicable law and pursuant to the terms and conditions of those plans. 3. AT-WILL EMPLOYMENT. Executive and the Company understand and acknowledge that Executive's employment with the Company is "at-will." Executive and the Company acknowledge that the part-time employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or Executive. 4. COMPENSATION. During the Part-Time Employment Period, and subject to his continued part-time employment, the Company shall pay the Executive as compensation for his services an annual base salary in the amount of One Hundred and Fifty-Thousand Dollars ($150,000), paid bimonthly according to the Company's usual payroll practices, less all applicable withholding taxes. 5. SEVERANCE BENEFITS WITHIN OR AT THE CONCLUSION OF ONE YEAR OF EFFECTIVE DATE. Executive shall be entitled to receive benefits set forth in Ardent's "Policy Regarding Termination of Executive Status and Related Matters in the Event of a Sale of the Company," adopted July 29, 1996, as amended on July 22, 1998 (the "Ardent Severance Policy"), a copy of which is Attachment A to this Agreement, on the first to occur of (i) termination for any reason by either Executive or the Company of Executive's employment during the Part-Time Employment Period or (ii) at the end of the one year period hereunder. 6. EXPENSES. During the Part-Time Employment Period, the Company will pay or reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive's duties hereunder in accordance with the Company's established policies. Executive shall furnish the Company with evidence of such expenses within a reasonable period of time from the date that they were incurred. 7. DEATH OR DISABILITY OF EXECUTIVE. If Executive dies or becomes permanently and totally disabled during the term of this Agreement, this Agreement shall terminate immediately. 8. EXECUTION OF CONFIDENTIALITY/OWNERSHIP/NONSOLICITATION AGREEMENT. As a condition of entering into this Agreement and of receiving the benefits hereunder, Executive agrees to execute the Informix Employee Confidentiality/Ownership/Nonsolicitation Agreement. 9. EXECUTION OF RELEASE AGREEMENT UPON TERMINATION. As a condition of entering into this Agreement and of receiving benefits hereunder, Executive agrees to execute a release of claims agreement substantially in the form of Attachment B to this Agreement upon the termination of his employment with the Company. -2- 10. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive's death and (b) any successor of the Company. Any such successor of the Company shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein, "successor" shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon the death of Executive following termination without cause. Any attempted assignment, transfer, conveyance or other disposition (other than as aforesaid) of any interest in the rights of Executive to receive any form of compensation hereunder shall be null and void. 11. NOTICES. All notices, requests, demands and other communications called for hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile or one (1) day after being sent by Federal Express overnight service or a similar commercial delivery service, prepaid and addressed to the parties or their successors in interest at the following addresses: If to the Company: Informix Corporation 4100 Bohannon Drive Menlo Park, CA 94025 Attn: General Counsel If to Executive: Peter Gyenes at the last residential address known by the Company. 12. ARBITRATION. (a) To the extent permitted by law, any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof shall be settled by arbitration to be held in San Mateo County, California, in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the "Rules"). The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. (b) The arbitrator shall apply California law to the merits of any dispute or claim, without reference to rules of conflict of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. With respect to any actions or proceedings to compel arbitration, enforce any arbitration award or appeal any arbitration award related to this Agreement, the parties hereto expressly consent to the personal jurisdiction of the state and federal courts located in California. (c) The Company and Executive shall each pay one-half of the costs and expenses of such arbitration, and shall separately pay its counsel fees and expenses. -3- (d) THE PARTIES HAVE READ AND UNDERSTAND SECTION 12, WHICH DISCUSSES ARBITRATION. THE PARTIES UNDERSTAND THAT BY SIGNING THIS AGREEMENT, THEY AGREE, TO THE EXTENT PERMITTED BY LAW, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THEIR RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES, INCLUDING AS TO DISCRIMINATION, RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP. 13. SEVERABILITY. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 14. ENTIRE AGREEMENT. This Agreement, the Ardent Severance Policy, and the Confidentiality/Ownership/ Nonsolicitation agreement between Executive and the Company, represent the entire agreement and understanding between the Company and Executive concerning Executive's employment relationship with the Company, and supersede and replace in their entirety any and all prior agreements and understandings concerning Executive's employment relationship with the Company. 15. NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE. This Agreement may only be amended, canceled or discharged in writing signed by Executive and an authorized officer of the Company. 16. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 17. ACKNOWLEDGMENT. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement. 18. TAX TREATMENT. Payment of the compensation set forth herein shall be subject to standard employment and income tax withholding. -4- IN WITNESS WHEREOF, the undersigned have executed this Agreement on the respective dates set forth below INFORMIX SOFTWARE, INC Date: 3/28/2000 /s/Gary Lloyd -------------------------- --------------------------- EXECUTIVE Date: /s/Peter Gyenes -------------------------- --------------------------- Peter Gyenes -5- ATTACHMENT A (Ardent Software Policy Regarding Termination of Executive Staff and Related Matters in the Event of a Sale of the Company) -6- ARDENT SOFTWARE POLICY REGARDING TERMINATION OF EXECUTIVE STATUS AND RELATED MATTERS IN THE EVENT OF A SALE OF THE COMPANY ---------- The Company believes that, in the current environment of acquisitions and consolidation within the software industry, it is in its best interest to have a policy regarding termination of executive status and related matters which is designed, in the event of a Sale of the Company, to maintain the services of key executives during the negotiation process and thereafter. Accordingly, the Company first adopted a policy on July 29, 1996 and revised the policy on July 22, 1998. The policy, as revised, is as follows: In the event of a Sale of the Company, then: 1. All shares under stock options held by an Executive shall become exercisable immediately following the closing of the Sale. 2. In the event the executive status of an Executive is terminated by the Company, including a Constructive Termination, but not including a Termination for Cause, within one year following the closing of the Sale: a) The Company shall continue to employ the former Executive for a period of one year (two years in the case of the CEO) thereafter at an annual salary, payable not less frequently than twice per month for the one or two year period as applicable, in an amount equal to the aggregate of (i) the Executive's annual salary rate at the time of the termination and (ii) the amount of bonus, if any, paid to the executive in respect of the most recently completed fiscal year. b) The Company's obligation to make premium payments under the Split Dollar Life Insurance Agreement with the Executive, if any such Agreement exists shall continue regardless of the provisions of Section 2(a) of that Agreement. c) During the employment specified in a. above, the Former Executive shall be on special assignment to the CEO of the Company and shall have no duties other than those reasonably assigned by the CEO. Any such -7- assignments shall involve no more than five hours in any month. During such employment, the Executive shall not accrue any additional vacation time but shall be entitled to a lump sum payment for any unused vacation time accrued in accordance with the Company's policy prior thereto. d) Except as specifically set forth above, all agreements, policies and practices in connection with employment and termination thereof, including policies and practices relating to exercise of options, participation in the stock purchase plan, and use of confidential information, shall be applicable. For purposes of the foregoing: "Sale" of the Company shall refer to any transfer of stock or assets, merger, or other transaction or series of transactions which result in (i) the disposition by the Company of substantially all its business (other than in connection with a mere change of place of incorporation or business form) or (ii) the acquisition of two-thirds or more of the voting power of the Company by a person, entity or group. "Executive" shall refer from time to time to any officer employed by the Company who is deemed by the Company to be subject to the requirements of Section 16 of the Securities Exchange Act of 1934 or otherwise designated by the Board of Directors as an Executive for purposes hereof. "Constructive Termination" of executive status shall refer to the termination of such status by the Executive as a result of a material reduction in salary, benefits or level of responsibilities, a material increase in travel requirements, or a material change of assigned office to another geographic location. "Termination for Cause" shall refer to a termination of executive status by the Company for (i) the material falsification of records, embezzlement of funds or similar fraudulent acts by the Executive against the Company or its customers, (ii) the conviction of the Executive of, or the entry of a pleading of guilty or nolo contendere by the Executive to, any felony or any other crime involving fraud, deceit, dishonesty or moral turpitude, (iii) a material violation by the Executive of the Company's published policies from time to time regarding confidentiality and compliance with various laws, or (iv) continued willful failure of the Executive, after reasonable notice, to -8- observe the reasonable directives of the Board or (in the case of Executives other than the CEO) the CEO. SECTION 16 EXECUTIVES: Peter Gyenes (CEO - 2 yrs.) Peter Fiore James Foy Charles Kane Cornelius McMullan Jason Silvia James K. Walsh (Founder - 2 yrs.) EXECUTIVES FOR PURPOSES HEREOF: Ralph Breslauer Jeffrey Spotts Mary Murphy Gary Hoffman Mikael Wipperfield Joanne Protano William Gendrolius Alan Grady Gene Faessler Trevor Grey Pierre Lannadere Kim Lewin Rodger Morrill James Todhunter Lee Scheffler -9- ATTACHMENT B (Release of Claims Agreement) -10- RELEASE OF CLAIMS AGREEMENT This Release of Claims Agreement ("Release") is made by and between Informix Software, Inc. (the "Company"), and Peter Gyenes ("Executive"). WHEREAS, Executive was employed by the Company; NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Executive (collectively referred to as "the Parties") hereby agree as follows: 1. TERMINATION. Executive's employment from the Company terminated on ________________. 2. CONSIDERATION. As set forth in that certain Part-Time Employment and Transition Agreement by and between the Parties dated ________________ (the "Agreement"), the Company agreed, subject to Executive entering into this Release, to provide Executive with certain payments and benefits during and following Executive's employment. As additional consideration for Executive entering into this Release, the Company hereby agrees to pay up to ten thousand dollars ($10,000) for individual executive outplacement services performed for Executive following Executive's termination of employment. 3. CONFIDENTIAL INFORMATION. Executive shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Informix Employee Confidentiality/Ownership/Nonsolicitation Agreement between Executive and the Company (the "Confidentiality Agreement"). Executive shall return all the Company property and confidential and proprietary information in his possession to the Company on the Effective Date of this Release. 4. PAYMENT OF SALARY. Executive acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Executive on the Effective Date of this Release except those benefits provided in the Agreement, including those benefits set forth in the Ardent Severance Policy, a copy of which is Attachment A to the Agreement. 5. RELEASE OF CLAIMS. Executive agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Executive by the Company. Executive, on behalf of himself, and Executive's respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Release including, without limitation, -11- (a) any and all claims relating to or arising from Executive's employment relationship with the Company and the termination of that relationship; (b) any and all claims relating to, or arising from, Executive's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; (c) any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion; (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the Family Medical and Leave Act, the California Fair Employment and Housing Act, and Labor Code section 201, ET SEQ. and section 970, ET SEQ. and all amendments to each such Act as well as the regulations issued thereunder; (e) any and all claims for violation of the federal, or any state, constitution; (f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and (g) any and all claims for attorneys' fees and costs. Executive agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This Release does not extend to any of the Company's obligations incurred under the Transition Employment Agreement. 6. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Executive acknowledges that he is waiving and releasing any rights Executive may have under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and voluntary. Executive and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Release. Executive acknowledges that the consideration given for this waiver and Release is in addition to anything of value to which Executive was already entitled. Executive further acknowledges that Executive has been advised by this writing that (a) Executive should consult with an attorney PRIOR to executing this Release; (b) Executive has at least twenty-one (21) days within which to consider this Release; (c) Executive has seven (7) days following the execution of this Release by the parties to revoke the Release; and (d) this Release shall not be effective until the revocation period has expired. Any revocation should be -12- in writing and delivered to Gary Lloyd, Vice-President, Legal and General Counsel, Informix Software, Inc., by close of business on the seventh day from the date that Executive signs this Release. 7. CIVIL CODE SECTION 1542. Executive represents that he is not aware of any claims against the Company other than the claims that are released by this Release. Executive acknowledges that he has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Executive, being aware of said code section, agrees to expressly waive any rights he may have thereunder, as well as under any other statute or common law principles of similar effect. 8. NO PENDING OR FUTURE LAWSUITS. Executive represents that Executive has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Executive also represents that Executive does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein. 9. APPLICATION FOR EMPLOYMENT. Executive understands and agrees that, as a condition of this Release, Executive shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and Executive hereby waives any right, or alleged right, of employment or re-employment with the Company. Executive further agrees that he will not apply for employment with the Company, its subsidiaries, its parents, or related companies, or any successor and will not apply to work as an independent contractor for the Company, its parents, its subsidiaries or any successor. 10. CONFIDENTIALITY. Executive agrees to use Executive's best efforts to maintain in confidence the existence of this Release, the contents and terms of this Release, and the consideration for this Release (hereinafter collectively referred to as "Settlement Information"). Executive agrees to take every reasonable precaution to prevent disclosure of any Settlement Information to third parties, and agrees that there will be no publicity, directly or indirectly, concerning any Settlement Information. Executive agrees to take every precaution to disclose Settlement Information only to those attorneys, accountants, governmental entities, and family members who have a reasonable need to know of such Settlement Information. 11. NO COOPERATION. Executive agrees he will not act in any manner that might damage the business of the Company. Executive agrees that he will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, -13- employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so. 12. NO ADMISSION OF LIABILITY. Executive understands and acknowledges that this Release constitutes a compromise and settlement of disputed claims. No action taken by the Company, either previously or in connection with this Release shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Executive or to any third party. 13. COSTS. The Parties shall each bear their own costs, expert fees, attorneys' fees and other fees incurred in connection with this Release. 14. ARBITRATION. The Parties agree that any and all disputes arising out of the terms of this Release, their interpretation, and any of the matters herein released, including any potential claims of harassment, discrimination or wrongful termination shall be subject to binding arbitration, to the extent permitted by law, in Santa Clara County, California, before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes. EXECUTIVE AGREES AND HEREBY WAIVES HIS RIGHT TO JURY TRIAL AS TO MATTERS ARISING OUT OF THE TERMS OF THIS RELEASE AND ANY MATTERS HEREIN RELEASED TO THE EXTENT PERMITTED BY LAW. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. 15. AUTHORITY. Executive represents and warrants that Executive has the capacity to act on his own behalf and on behalf of all who might claim through Executive to bind them to the terms and conditions of this Release. 16. NO REPRESENTATIONS. Executive represents that Executive has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Release. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Release. 17. SEVERABILITY. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Release shall continue in full force and effect without said provision. 18. ENTIRE AGREEMENT. This Release, the Employment Transition Agreement, and the Confidentiality Agreement represent the entire agreement and understanding between the Company and Executive concerning Executive's separation from the Company, and supersede and replace any and all prior agreements and understandings concerning Executive's relationship with the Company and his compensation by the Company. This Release may only be amended in writing signed by Executive and the President of the Company. 19. GOVERNING LAW/CONSENT TO PERSONAL JURISDICTION. This Release shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California. Executive hereby expressly consents to the personal jurisdiction of the state and federal courts located in -14- California for any law suit filed there against Executive by the Company arising from or relating to this Release. 20. EFFECTIVE DATE. This Release is effective eight (8) days after it has been signed by both Parties. 21. COUNTERPARTS. This Release may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 22. VOLUNTARY EXECUTION OF RELEASE. This Release is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: (a) They have read this Release; (b) They have been represented in the preparation, negotiation, and execution of this Release by legal counsel of their own choice or that they have voluntarily declined to seek such counsel; (c) They understand the terms and consequences of this Release and of the releases it contains; (d) They are fully aware of the legal and binding effect of this Release. IN WITNESS WHEREOF, the Parties have executed this Release on the respective dates set forth below. INFORMIX SOFTWARE, INC. Dated: , 2000 By ---------------------- ----------------------------- Peter Gyenes, an individual Dated: , 2000 ---------------------- ------------------------------- Peter Gyenes -15- EX-10.74 5 EXHIBIT 10.74 EXHIBIT 10.74 SEPARATION AGREEMENT This Separation Agreement ("Agreement") is made and entered into by and between Howard A. Bain III ("Employee") and Informix Corporation and its affiliates and subsidiaries ("Informix"), as of the Effective Date set forth in Section 1(a) below. 1. In consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Informix and Employee agree to the following: (a) RESIGNATION. Employee will resign from the position of Executive Vice President and Chief Financial Officer of Informix effective March 20, 2000. Employee's resignation shall be announced publicly March 20, 2000. The resignation shall be in writing and addressed to Jean-Yves F. Dexmier, Informix's Chief Executive Officer and President. In the absence of the receipt by Informix of Employee's written notice of resignation, Employee will be deemed to have resigned his position effective March 20, 2000. (b) DUTIES AND RESPONSIBILITIES OF EMPLOYEE'S REMAINING EMPLOYMENT. During Employee's remaining employment by Informix, Employee shall discharge his responsibilities as Executive Vice President and Chief Financial Officer as are commensurate with Employee's position. Employee agrees to: (i) use his best efforts to ensure an orderly and efficient transition of Employee's duties and responsibilities; and (ii) devote his full time and efforts to the performance of his duties and the discharge of his responsibilities. (c) SEVERANCE. Employee shall receive a severance payment in the amount equal to one year's base salary of Three Hundred and Thirty-five Thousand Dollars ($335,000), less applicable withholding for federal and state taxes and other payroll deductions, and less any other payroll deductions that Employee may authorize in writing ("the net severance payment"). On the effective date of Employee's resignation, as set forth in paragraph 1(a), Employee shall receive a payment in the amount of the net severance payment, plus accrued but unused vacation conditioned on Employee's having signed the Release referred to in paragraph 2 and attached hereto as Attachment A. (d) BENEFITS. All benefits will continue until the last day of the month in which Employee's resignation is effective. Health insurance benefits paid by Informix will terminate on the last day of the month in which Employee's resignation is effective. (e) STOCK OPTIONS. Employee will not qualify for any stock option vesting after the effective date of Employee's resignation, as set forth in paragraph 1(a). Employee waives any and all rights to continued vesting of stock options after the effective date of Employee's resignation. The period during which Employee may exercise vested options shall stock option exercise period begins on the effective date of Employee's resignation in accordance with the Employee's applicable Stock Option Agreement, Informix's Stock Option and Award Plan, and Informix's policies. (f) INCENTIVE BONUS. Informix will make a payment to Employee in the amount of One Hundred and Sixty-seven Thousand Five Hundred Dollars ($167,500), an amount equal to 100% of Employee's target incentive for fiscal year 1999 (50% of annual base salary), as defined in the Informix Executive Incentive Compensation Plan for 1999. This payment shall be paid in a lump sum, less applicable withholding for federal and state taxes and other payroll deductions, on the regularly scheduled payment date as determined by Informix for participants in the Plan. (g) 401(k) CONTRIBUTIONS. Commencing on the effective date of Employee's resignation, neither Employee nor Informix shall make additional contributions to Employee's 401(k) plan. (h) COMPUTER. Following the effective date of his resignation, Employee shall be entitled to retain his Informix-issued laptop computer; provided, however, that all confidential Informix proprietary and business information shall be transferred to Informix's MIS Department. Employee understands that the fair market value of the laptop computer may, if required by applicable federal and state tax laws, be reported as income to Employee on an IRS Form 1099 and on a comparable State of California tax form. (i) CELLULAR PHONE. Following the effective date of his resignation, Employee will assume ownership of Employee's cellular telephone and Informix will not longer pay or be responsible for any of Employee's cellular telephone charges. (j) COBRA. Following the effective date of his resignation, Employee will receive, by separate cover, information regarding Employee's rights to health insurance continuation (COBRA rights). To the extent that Employee has rights, nothing in this Agreement will impair those rights. 2. EXECUTION OF RELEASE AGREEMENT UPON TERMINATION. As a condition of entering into this Agreement and of receiving the benefits hereunder, Employee agrees to hereto as Exhibit A upon termination of his employment from Informix. 3. OTHER TERMINATION. If Employee's employment is terminated by Employee for any reason whether voluntary or involuntarily, prior to the expected date of Employee's resignation as defined in paragraph 1(a), or by Informix for Cause (as defined in paragraph 4 herein), then Employee shall not be entitled to receive severance or other benefits pursuant to this Agreement. 2 4. DEFINITION. For purposes of this Agreement, "Cause" shall mean the occurrence of any one of the following: (i) Employee's conviction by, or entry of a plea of guilty or nolo contendere in, a court of competent jurisdiction for any crime which constitutes a felony in the jurisdiction involved; (ii) Employee's misappropriation of funds or commission of an act of fraud, whether prior to or subsequent to the date hereof, upon Informix; (iii) gross and willful negligence by Employee in the scope of Employee's services to Informix as set forth in paragraph 1(b); (iv) a breach by Employee of a material provision of this Agreement which is not cured within ten (10) days of notice; or (v) a willful failure of the Employee to substantially perform his duties hereunder after notice of such failure. 5. RIGHT OF ADVICE OF COUNSEL. Employee acknowledges that he has had the right to consult with his own separate legal counsel and is fully aware of his rights and obligations under this Agreement. 6. SUCCESSORS. Any successor to Informix (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of Informix's business and/or assets shall assume the obligations under this Agreement in the same manner and to the same extent as Informix would be required to perform such obligations in the absence of a succession. In addition, without the express written consent of Informix, Employee shall not assign or transfer this Agreement or any right and obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Employee hereunder shall inure to the benefit of, and be enforceable by, Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 7. CONFIDENTIAL AND PROPRIETARY MATERIALS. Prior to the effective date of his resignation, Employee will return to Informix all property owned by Informix and all documents and files, including electronically stored information, that Employee may have, including but not limited to the following: proprietary and confidential information about Informix's policies, practices and procedures; employees; product information, trade secrets, customer lists, employee lists; telephone and sales directories; Informix company data, software, sales forecasts or product marketing pertaining to the current and anticipated business and operations of Informix; financial forecasts, analyses and data; notebooks, bulletins, or manuals; and/or Company pricing, cost and purchasing information. Employee acknowledges that he previously signed an agreement with Informix regarding Confidential Information and Trade Secrets. A copy of that agreement is attached. Employee and Informix agree that all provisions of the agreement shall remain in full force and effect following the effective date of Employee's resignation including, but not limited to, confidential and proprietary information regarding Informix's products, sales and marketing methods or strategies, non-solicitation provisions, product development, research and plans, personnel data regarding employees of Informix, including salaries, and other confidential or proprietary information not readily available to the public. 3 8. CONFIDENTIALITY. Employee agrees that he will not, unless required by law, disclose to any person any information regarding the terms of this Agreement, or the amounts to be paid and benefits to be provided pursuant to this Agreement, except that Employee may disclose this information to Employee's immediate family, attorneys, accountants or other professional advisors to whom Employee must make the disclosure in order for them to render professional services to Employee. Any such disclosure may be made only upon the recipient's express agreement to maintain the confidentiality of the information. 9. NOTICE CLAUSE. Any notice hereby required or permitted to be given shall be sufficiently given if in writing and upon mailing by registered or certified mail, postage prepaid, to either party at the address of such party or such other address as shall have been designated by written notice by such party to the other party. Any notice or other communication required or permitted to be given under this Agreement will be deemed given when: (i) delivered in person, or; (ii) on the third business day after such notice was mailed in compliance with this paragraph. 10. INTEGRATION. This Agreement, the attached Release, Employee's Confidential Information and Trade Secret Agreement, Employee's Stock Option Agreement, and Informix's Stock Option and Award Plan, represent the full agreement between Employee and Informix regarding the terms and conditions of Employee's termination of employment. These documents supersede and are in lieu of all prior oral or written agreements and may not be changed except in writing signed by Employee and Informix's Vice President, Legal, and General Counsel, or his designee. 11. SEVERABILITY. If any provision of this Agreement is held to be invalid, void, or unenforceable, the remaining provisions shall remain in full force and effect. 12. NO OTHER RIGHTS. Nothing in this Agreement is intended to create any rights to employment or employment benefits except as expressly set forth in this Agreement. 13. GOVERNING LAW. This Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to be performed entirely within California. Any claim for breach of this Agreement shall be referred to the American Arbitration Association for resolution under its National Rules for the Resolution of Employment Disputes, and any and all arbitration or mediation shall be at the AAA offices in San Francisco County, California, or at a mutually agreeable location in San Mateo County, California. EMPLOYEE AGREES AND HEREBY WAIVES HIS RIGHT TO JURY TRIAL AS TO MATTERS ARISING OUT OF THE TERMS OF THIS AGREEMENT AND ANY MATTERS HEREIN RELEASED TO THE EXTENT PERMITTED BY LAW. In the event that Employee is in breach any of obligations under this Agreement or as otherwise imposed by law, Informix will be entitled to recover all payments paid pursuant to this Agreement and to obtain all other relief provided by law or equity. In addition, Informix will be entitled to recover its costs and attorneys' fees and expenses. Nothing herein shall be construed as a 4 waiver of Informix's right to seek injunctive or other equitable relief in a court of competent jurisdiction for a breach of any of Employee's obligations under this Agreement. 14. TAXES. All payments made pursuant to this Agreement shall be subject to the withholding of applicable income and employment taxes. IN WITNESS WHEREOF, the parties have executed this Separation Agreement and Release as the date first set forth below. Date: 1/28/00 /s/Howard A. Bain III ------------------------------ ----------------------------------- Howard A. Bain III Date: Jan. 28, 2000 /s/Gary Lloyd ------------------------------ ----------------------------------- Gary Lloyd, Vice President Legal, and General Counsel Informix Corporation 5 ATTACHMENT A RELEASE OF CLAIMS AGREEMENT This Release of Claims Agreement ("Agreement") is made by and between Howard A. Bain III ("Employee") and Informix Corporation, its affiliates and subsidiaries (the "Company"). In consideration of the mutual promises made herein, the Company and Employee (collectively referred to, where appropriate as "the Parties") hereby agree as follows: 1. TERMINATION. Employee's employment from the Company terminated on March 20, 2000. 2. CONSIDERATION. As set forth in that certain Separation Agreement by and between the Parties dated January 28, 2000 (the "Separation Agreement"), the Company agreed, subject to Employee's execution of this Release of Claims Agreement ("Release"), to provide Employee' with certain payments and benefits, conditioned upon, among other things: (i) Employee's continued employment by the Company until the effective date of his resignation set forth in paragraph 1 (a) of the Separation Agreement; and (ii) Employee's performance of his duties and responsibilities as Executive Vice President and Chief Financial Officer as appropriate during his remaining employment by Informix. 3. CONFIDENTIAL INFORMATION. Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Employee Inventions and Confidentiality Agreement between Employee and the Company. Employee shall return all the Company property and confidential and proprietary information in his possession to the Company on or before the effective date of his resignation, pursuant to the terms of the Separation Agreement. 4. PAYMENT OF SALARY. Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee on the effective date of this Release except the severance payments described in paragraphs 1(c) and 1(f) of the Separation Agreement. 5. RELEASE OF CLAIMS. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company. Employee, on behalf of himself, and his heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, stockholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue or otherwise institute o r cause to be instituted any legal action or administrative proceeding concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including 5he effective date of this Release including, without limitation: 6 (a) any and all claims relating to or arising from Employee's employment relationship with the Company and the termination of that relationship; (b) any and all claims relating to, or arising from, Employee's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; (c) any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion; (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the Family Medical and Leave Act, the California Fair Employment and Housing Act, and Labor Code section 201, ET SEQ. and section 970, ET SEQ. and all amendments to each such Act as well as the regulations issued thereunder; (e) any and all claims for violation of the federal, or any state, constitution; (f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and (g) any and all claims for attorneys' fees and costs. Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release of claims as to the matters released. This release does not extend to any obligations incurred under this Release, the stock option agreement evidencing Employee's stock options and the agreement(s) evidencing the exercise of such options. 6. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Employee acknowledges that he is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and voluntary. Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that Employee has been notified by this Release that: (a) Employee should consult with an attorney PRIOR to executing this Release; (b) Employee has at least twenty-one (21) days within which to consider this Release; (c) Employee has seven (7) days following the execution of this Release by the parties to revoke this Release; and (d) this 7 Release shall not be effective until the revocation period has expired. Any revocation should be in writing and delivered to Gary Lloyd, Vice President, Legal, and General Counsel by close of business on the seventh day from the date that Employee signs this Release. 7. CIVIL CODE SECTION 1542. Employee represents that Employee is not aware of any claims against the Company other than the claims that are released by this Release. Employee acknowledges that he has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Employee, acknowledges that he is aware of and understands the Civil Code Section set forth above and agrees expressly to waive any rights he may have thereunder, as well as under any other statute or common law principles of similar effect. 8. CONFIDENTIALITY. Employee agrees to use Employee's best efforts to maintain in confidence the existence of this Release, the substance of this Release, and the consideration for this Release (collectively the "Settlement Information"). Employee agrees to take every reasonable precautions to prevent disclosure of any Settlement Information to third parties, and agrees that there will not cause any public disclosure, directly or indirectly, of any Settlement Information. Employee agrees to disclose Settlement Information only to those attorneys, accountants, governmental entities, and family members who have a reasonable need to know the information. 9. NO ADMISSION OF LIABILITY. Employee understands and acknowledges that this Release constitutes a compromise and settlement of disputed claims. No action taken by the Company, either previously or in connection with this Release shall be deemed or construed to be either: (a) an admission of the truth or falsity of any claims heretofore made; or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Employee or to any third party. 10. COSTS. The Parties shall each bear their own costs, expert fees, attorneys' fees and other fees incurred in connection with this Release. 11. ARBITRATION. The Parties agree that any and all disputes arising out of the terms of this Release, their interpretation, and any of the matters herein released, including any potential claims of harassment, discrimination or wrongful termination shall be subject to binding arbitration, to the extent permitted by law, in its offices in San Francisco County, California, or at a mutually agreeable location in San Mateo County, California, before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes. EMPLOYEE AGREES AND HEREBY WAIVES HIS RIGHT TO JURY TRIAL AS TO MATTERS ARISING OUT OF THE TERMS OF THIS AGREEMENT AND ANY MATTERS HEREIN RELEASED TO THE EXTENT PERMITTED BY LAW. In the event that Employee is in breach of any of its obligations under this Release or the Separation Agreement, nothing in this section is to be construed as a waiver of the 8 Company's rights to seek injunctive or equitable relief in a court of competent jurisdiction. In addition, the Company will be entitled to recover its costs and attorneys' fees and expenses. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. 12. AUTHORITY. Employee represents and warrants that Employee has the capacity to act on his own behalf and on behalf of all who might claim through Employee to bind them to the terms and conditions of this Release. 13. NO REPRESENTATIONS. Employee represents that Employee has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Release. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Release. 14. SEVERABILITY. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Release shall continue in full force and effect without said provision. 15. ENTIRE AGREEMENT. This Release, the Separation Agreement, the stock option agreements between the parties, and the Confidentiality Agreement represent the entire agreement and understanding between the Company and Employee concerning Employee's separation from the Company, and supersede and replace any and all prior agreements and understandings concerning Employee's relationship with the Company and his compensation by the Company. This Release may only be amended in writing signed by Employee and the Company's Vice President, Legal and General Counsel. 16. GOVERNING LAW. This Release shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California. 17. EFFECTIVE DATE. This Release is effective eight (8) days after it has been signed by both Parties. 18. COUNTERPARTS. This Release may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 19. VOLUNTARY EXECUTION OF RELEASE. This Release is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: (a) They have read this Release; (b) They have been represented in the preparation, negotiation, and execution of this Release by legal counsel of their own choice or that they have voluntarily declined to seek such counsel; and 9 (c) They understand the provisions and legal consequences of this Release. 10 IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. INFORMIX CORPORATION Dated: Jan. 28, 2000 By /s/Gary Lloyd ------------------- ----------------------------------------- Gary Lloyd, Vice President, Legal, and General Counsel Howard A. Bain, III, an individual Dated: Jan. 28, 2000 /s/Howard A. Bain III ------------------- ----------------------------------------- Howard A. Bain, III 11 EX-10.75 6 EXHIBIT 10.75 EXHIBIT 10.75 March 9, 2000 Mr. Laurent Mayer 720 Montrose Ave. Palo Alto, CA 94303 Dear Laurent: We are very pleased that you are considering joining us at Informix Software, Inc. (Company). The purpose of this letter is to set forth our offer of employment. We propose that you begin employment with Informix Software, Inc. in the capacity of Vice President - Business Intelligence Solutions, reporting to Charlie Chang, Senior Vice President - i.Intelligence Business Group. Your salary computed on an annual basis beginning on the date you become an employee of the Company, will be $240,000 per year and shall be paid in equal semi-monthly installments. You will also participate in the Executive Incentive Compensation Plan in 2000 at a rate of 45%; to be pro-rated for actual service in 2000. Plan details will be provided under separate cover. In addition to the change-in-control protections outlined below, you will receive six (6) months severance pay should you be terminated for other than cause. In addition to the above, you will be recommended for a non-qualified stock option under the Informix Corporation Employee Stock Option Plan to acquire 175,000 shares of the common stock of Informix Corporation. This option, if granted, will be given to you on the 15th U.S. Informix business day of the month following the month your employment commences. You, of course, will be under no obligation to exercise any stock options, which may be granted to you. Should a change-in-control (CIC) occur (standard definition to be included in the CIC agreement) and, as a result, you are terminated or experience a material change in duties or responsibilities (commonly referred to as a "double trigger"), the Company and it's successors agree to: - - Accelerate stock option vesting 50% if the CIC occurs within six months of your start date, or 100%, if the CIC occurs after six months. - - Pay six (6) months of base pay severance. This offer of employment is contingent upon the following: - - Your signing of the Company's Employee Agreement for Nondisclosure of Confidential Information (copy forthcoming). - - Your acceptance of this offer by signing the letter below. - - Your signing of a W-4 form. - - On your first day of employment you must provide proof of your legal right to work in the United States and complete the Immigration Form I-9 as required by the U.S. Immigration and Naturalization Service. These include either a U.S. passport, a U.S. certificate of citizenship, a U.S. certificate of naturalization, an unexpired foreign passport with attached employment authorization, or an alien registration card with photograph, or a state driver's license, a state I.D. card, or a U.S. military card; AND a Social Security card or a U.S. birth certificate. If you do not have proof of identification on the first day of employment, you will be sent home to obtain the documents. You will not be placed on the payroll until the I-9 form is completed by a Company representative after examining your documents. Page 2 Mr. Laurent Mayer March 9, 2000 IF FOR ANY REASON YOU ARE UNABLE TO PROVIDE PROOF OF YOUR IDENTITY AS WELL AS YOUR LEGAL RIGHT TO WORK IN THE UNITED STATES WITHIN THE FIRST THREE DAYS, THE COMPANY MAY TERMINATE YOUR EMPLOYMENT. From time to time after your first day of employment, you may be asked to provide proof of your identity as well as your legal right to work in the United States. Employment may be contingent upon approval of an Export License granted by the U.S. Department of Commerce, if required in the United States. This offer of employment is "at will" which means that it is not for any specific period of time and your employment may be terminated with or without cause by yourself or the Company at any time and for any reason. As an employee of Informix, you also agree to comply with company policies, procedures and standards of conduct that may be established by the Company. This offer of employment contains all of the terms and conditions of your employment with the Company and supersedes any and all prior oral or written representations or agreements made by anyone employed by, or associated with, the Company. The terms of this offer, if accepted, will become your terms of employment and can only be added to or modified by a written document signed by the Vice President of Human Resources or the President of the Company. I am looking forward to your acceptance of this offer. Please be advised that this offer of employment is valid only to March 16, 2000. Please acknowledge your acceptance by signing and dating this letter and returning it to us by March 16, 2000. Upon your acceptance of this offer, we will provide you the necessary new hires forms that must be completed prior to beginning your employment, or no later than 3 days after your date of hire. These forms will include a Non-Disclosure Form, I-9 Form, W-4, and Application of Employment. Should you have any questions regarding this offer, please feel free to contact me at 650-926-6818. Sincerely, INFORMIX SOFTWARE, INC. /s/Wayne Page Wayne Page Vice President, Human Resources AGREED ON THE 13TH DAY OF MARCH 2000 ----------- --------------- ANTICIPATED START DATE: 3-28-00 --------------------------- SIGNED: /S/LAURENT MAYER ------------------------------------------- 2 EX-27.1 7 EXHIBIT 27.1
5 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 201,364 102,085 264,526 (15,464) 0 586,098 295,273 226,953 812,584 392,214 0 0 0 2,800 416,060 812,584 119,279 250,884 12,585 61,317 212,431 0 171 (16,220) 6,763 (22,983) 0 0 0 (22,983) (0.08) (0.08)
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