<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMIX CORPORATION
FORM 10-Q
QUARTERLY PERIOD ENDED MARCH 31, 2000
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
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
</TABLE>
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.
<PAGE>
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)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
3
<PAGE>
INFORMIX CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
4
<PAGE>
INFORMIX CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
5
<PAGE>
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):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
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
<PAGE>
INFORMIX CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
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
</TABLE>
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):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
The tax effect on components of other comprehensive income (loss) is
not significant.
NOTE D - STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
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
=========
</TABLE>
7
<PAGE>
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):
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999
--------------------
<S> <C>
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
===============
</TABLE>
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
<PAGE>
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
<PAGE>
INFORMIX CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Three months ended North Asia Latin
March 31, America Europe Pacific America Eliminations Total
- ------------------------------- ----------- ---------- ----------- ----------- -------------- -----------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
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):
<TABLE>
<CAPTION>
Transact i.Foundation i.Intelligence i.Informix Total
---------- ------------ -------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Total net revenues (in thousands)..... $147,062 $49,200 $43,082 $11,540 $250,884
</TABLE>
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
<PAGE>
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
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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
<PAGE>
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.
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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
<PAGE>
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.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
2000 1999
--------- --------
<S> <C> <C>
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%
========= ========
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
As of or for the
Three Months Ended
March 31,
---------------------------
2000 1999
------------ ------------
<S> <C> <C>
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
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
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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
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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.
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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.
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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,
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- 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
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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
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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.
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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
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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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<TABLE>
<CAPTION>
Weighted-
Contract Average
AT MARCH 31, 2000 Amount Contract Rate Fair Value
- ----------------- ---------------- ---------------- -------------
(In thousands) (In thousands)
<S> <C> <C> <C>
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
============= ===========
</TABLE>
- -----
* Not meaningful
34
<PAGE>
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
<TABLE>
<CAPTION>
For Against Abstentions
--- ------- -----------
<S> <C> <C>
102,682,287 987,497 570,111
</TABLE>
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<S> <C>
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
<PAGE>
10.75* Offer of Employment Letter, dated March 9, 2000, from Registrant to Laurent Mayer
27.1 Financial Data Schedule
</TABLE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
EXHIBIT A
ARDENT SEVERANCE POLICY
-7-
<PAGE>
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
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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)
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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
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EXHIBIT B
FORM RELEASE AGREEMENT
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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,
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(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
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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.
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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
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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.
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<PAGE>
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
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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.
<PAGE>
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.
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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.
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(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.
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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
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ATTACHMENT A
(Ardent Software Policy Regarding Termination of Executive Staff
and Related Matters in the Event of a Sale of the Company)
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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
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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
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<PAGE>
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
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<PAGE>
ATTACHMENT B
(Release of Claims Agreement)
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<PAGE>
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,
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<PAGE>
(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
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<PAGE>
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,
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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.
<PAGE>
(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.
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<PAGE>
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.
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<PAGE>
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
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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
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<PAGE>
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:
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<PAGE>
(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
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<PAGE>
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
<PAGE>
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
<PAGE>
(c) They understand the provisions and legal consequences of
this Release.
10
<PAGE>
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
<PAGE>
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>
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
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