According to the firm's 10-Q filing dated 8/14/2001, on December 15, 1995, Paul Margetis and Helen Margetis filed a securities fraud class action complaint against the Company in the United States District Court for the Northern District of California. This lawsuit alleged securities laws violations, including omissions and/or misrepresentations of material facts related to the events and transactions which are the subject of the claims contained in Cadence's civil lawsuit against the Company. In addition, on May 30, 1997, Joanne Hoffman filed a securities fraud class action in the United States District Court for the Northern District of California on behalf of purchasers of the Company's stock between March 29, 1996 and April 11, 1997, the date of the filing of a criminal complaint against the Company and six of its employees and/or directors. The plaintiffs alleged that the Company and its officers misled the market as to the likelihood of the criminal indictment and as to the validity of the Cadence allegations. The District Court subsequently certified these two securities class actions, consolidated them for pretrial purposes, and stayed most discovery and other proceedings pending resolution of the criminal proceeding described above. In March 2001, the Company reached agreement with counsel for the plaintiff classes in both securities actions for a voluntary resolution of the cases. Under that agreement, the Company paid a total of $47.5 million in exchange for dismissal of the actions and a release of claims by members of the classes. The District Court entered an order on June 21, 2001, that gave final approval to the settlement and dismissed the litigation with prejudice. The Company paid the full settlement amount of $47.5 million in April 2001. In accordance with SFAS No. 5 “Accounting for Contingencies”, the Company recognized the settlement as an expense in the fourth quarter of 2000.

According to a Press Release dated December 24, 1997, the complaint in the action charges that, during the Class Period, Avant! and certain of its senior officers violated Sections 10(b) and 20 of the Securities Exchange Act of 1934 and Sections 11, 12(2) and 15 of the Securities Act of 1933 by making materially misleading and fraudulent statements about, and failing to disclose material adverse information about, defendants' wrongful use of proprietary software technology stolen from Avant!'s primary competitor, Cadence Design Systems Inc. During the Class Period, Avant! vehemently denied that it had done anything wrong, denigrated the civil action filed against it by Cadence as a desperate act of "corporate terrorism" by a competitor that is "running scared," repeatedly assured investors of Avant!'s position that the claims had no merit and would not have a material adverse impact on Avant!'s financial position, and affirmatively represented that its products did not infringe the proprietary rights of others. On April 11, 1997, the Santa Clara County district attorney's office filed a criminal felony action against Avant! and members of its senior management charging them with theft of trade secrets and conspiracy. The price of Avant!'s stock dropped over 50% in the wake of the criminal complaint.