Accrued merger and integration 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 December 31, 1999, $0.9 million had been paid for severance and other acquisition-related costs, $1.5 million had been paid for costs associated with the shutdown and consolidation of Red Brick facilities and $1.0 million had been paid to settle acquired royalty commitments for abandoned technology. During 1999, accrued merger and integration costs were reduced by $3.1 million, which resulted in a corresponding $3.1 million decrease in goodwill. These adjustments were the result of a decrease of approximately $2.3 million in the estimated costs associated with various former Red Brick facilities due to a change in the amount of sublease income to be received for such facilities, a decrease of approximately $0.7 million in severance-related costs and a decrease of $0.1 million in royalty commitments.

The following pro forma financial information presents the combined results of operations of Informix and Red Brick as if the acquisition had occurred as of the beginning of 1998 and 1997, after giving effect to certain adjustments, including amortization of goodwill and excluding the write-off of acquired in-process research and development. The pro forma financial information does not necessarily reflect the results of operations that would have occurred had the two companies constituted a single entity during such periods.

In February 1997, the Company acquired all of the outstanding capital stock of CenterView Software, Inc. (“CenterView”), a privately-owned company which develops and sells software application development tools. The aggregate purchase price paid was approximately $8.7 million, which included cash and direct acquisition costs. The transaction has been accounted for as a purchase and, based on an independent appraisal of the assets acquired and liabilities assumed, the purchase price has been allocated to the net tangible and intangible assets acquired, including developed software technology, acquired workforce, in-process technology, and goodwill. The in-process technology, which based on the independent appraisal has been valued at $7 million, had not, at the date of acquisition, reached technological feasibility and had no alternative future uses in other research and development projects. Consequently, its value was charged to operations in the first quarter of fiscal 1997, the period the acquisition was consummated. The remaining identifiable intangible assets are being amortized over three to five years.

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.