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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Michael G. Potter who wrote (12123)	4/29/1999 1:52:00 AM
From: Obewon	Read Replies (2) \| Respond to of 16960

Based on the Proxy statement, management expects the following costs will be incurred due to the merger in either the first or second quarter of 1999: 1) Restructuring costs: $1.0M - a) Employee relocations - $0.6M - b) Employee separations - $0.1M - c) Facility consolidation - $0.3M 2) In-process R&D - $4.3M (expensed immediately upon completion of merger) 3) Intangibles - a) Existing technology - $11.4M - b) Trademarks - $4.4M - c) Work Force-in-place - $2.3M - d) Executive Covenants - $1.0M - e) Goodwill - $0.4M (Collectively $7.6M of these five charges will be amortized over the first year, half of total has a useful life of 3 years or less) (NOTE: The Goodwill amount will change up or down depending on whether 3dfx's stock price is above or below $14.045/share at the time of completion of the merger. Using $16.50/share, Goodwill would increase to approx. $10.0M with a five year useful life) Additionally, you have the following expenses not directly related to the merger gleaned from public statements by the company: 4) Reserve against recovery of A/R owed by Diamond Multimedia - $3.9M 5) Consumer marketing and advertising campaign - $20.0M Total Expenses added to 1Q99 and 2Q99 quarter = $33.0M (Assumes no increase in goodwill) Obewon