$11 million for contract cancellation charges associated with the closure of the Company's outsourced data center and $10 million for contract cancellation charges related to supply and development agreements previously discontinued.

During the second quarter of 1999, the Company took certain actions to improve the flexibility and efficiency of its manufacturing operations by moving final assembly of certain of its products to third-party manufacturers. These restructuring actions resulted in the Company recognizing a charge to operations of approximately $9 million during the second quarter of 1999. The charge was comprised of $6 million for severance benefits to be paid to employees involuntarily terminated, $2 million for the write-down of operating assets to be disposed of, and $1 million for payments on canceled contracts. These actions resulted in the termination of approximately 580 employees.

EXECUTIVE BONUS

During the first quarter of 2000, the Company's Board of Directors approved a special executive bonus for the Company's Chief Executive Officer for past services in the form of an aircraft with a total cost to the Company of approximately $90 million, the majority of which is not tax deductible. Approximately half of the total charge is the cost of the aircraft. The other half represents all other costs and taxes associated with the bonus.

INTEREST AND OTHER INCOME (EXPENSE), NET

Net interest income increased $116 million or 133% to $203 million during 2000 as compared to 1999. This increase is attributable to three principal factors. First, the Company's cash, cash equivalents, and short-term investments increased $801 million or 25% during 2000. Second, the weighted-average interest rate earned by the Company on its cash equivalents and short-term investments increased to 6.55% as of the end of 2000 compared to 5.38% at the end of 1999. The combination of these first two factors increased interest income during 2000 by $66 million. Third, interest expense declined $26 million during 2000 as a result of the conversion of approximately $661 million of the Company's convertible subordinated notes to common stock during the third quarter of 1999.

During 1999, the Company experienced a $59 million increase in net interest income, primarily the result of higher cash and investment balances, and by decreased interest expense associated with the conversion of the convertible subordinated notes during the third quarter of 1999.

GAIN FROM SALE OF INVESTMENT

The Company holds a significant equity investment in ARM Holdings plc (ARM), a publicly held company in the United Kingdom involved in the design and licensing of high performance microprocessors and related technology. As of September 30, 2000, the Company holds 34.8 million shares of ARM stock valued at $383 million.

During 2000, the Company sold a total of 45.2 million shares of ARM stock for net proceeds of approximately $372 million, recorded a gain before taxes of approximately $367 million, and recognized related income tax of approximately $94 million. During 1999, the Company sold a total of 163 million shares of ARM stock for net proceeds of approximately $245