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As filed with the Securities and Exchange Commission on June 23, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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i2 TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2294945
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
909 E. LAS COLINAS BLVD., 16TH FLOOR
IRVING, TEXAS 75039
(214) 860-6000
(Address, including zip code, and telephone number,
including area code, of the registrant's principal executive offices)
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DAVID F. CARY
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
i2 TECHNOLOGIES, INC.
909 E. LAS COLINAS BLVD., 16TH FLOOR
IRVING, TEXAS 75039
(214) 860-6000
FACSIMILE: (214) 860-6373
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
RONALD G. SKLOSS, ESQ.
BROBECK, PHLEGER & HARRISON LLP
301 CONGRESS AVENUE, SUITE 1200
AUSTIN, TEXAS 78701
(512) 477-5495
FACSIMILE: (512) 477-5813
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
[ ]___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C> <C>
Common Stock, $.00025 par value ..... 3,266,470 shares $32.8125 $107,181,047 $31,619
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(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
outstanding shares of Common Stock.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) based upon the average of the
high and low sales prices for the Common Stock as quoted on the Nasdaq
National Market for June 22, 1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 23, 1998
3,266,470 SHARES
[i2 LOGO]
i2 TECHNOLOGIES, INC.
COMMON STOCK
(PAR VALUE $.00025 PER SHARE)
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This Prospectus relates to the public offering, which is not being
underwritten, of up to 3,266,470 shares (the "Shares") of Common Stock, par
value $.00025 per share (the "Common Stock"), of i2 Technologies, Inc., a
Delaware corporation ("i2" or the "Company"), by the stockholders of the Company
named herein (the "Selling Stockholders") or by pledgees, donees, transferees or
other successors in interest that receive such shares as a gift, partnership
distribution or other non-sale related transfer. None of the proceeds from the
sale of the Shares will be received by the Company. See "Selling Stockholders."
The Shares may be offered by the Selling Stockholders from time to time
in transactions in the over-the-counter market, in privately negotiated
transactions, or by a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). See "Plan of
Distribution."
The Company has agreed to bear certain expenses (other than fees and
expenses, if any, of counsel and other advisors to the Selling Stockholders and
any brokerage fees or commissions) in connection with the registration and sale
of the Shares. The Company and certain Selling Stockholders have agreed to
indemnify the other and their respective controlling persons against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended (the "Securities Act").
The Common Stock is quoted on the Nasdaq National Market under the
symbol "ITWO." On June 22, 1998, the last sale price for the Common Stock as
quoted on the Nasdaq National Market was $33.00 per share.
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
THE SHARES HAVE NOT BEEN REGISTERED FOR SALE BY THE SELLING
STOCKHOLDERS UNDER THE SECURITIES LAWS OF ANY STATE AS OF THE DATE OF THIS
PROSPECTUS. BROKERS OR DEALERS EFFECTING TRANSACTIONS IN THE SHARES SHOULD
CONFIRM THE REGISTRATION THEREOF UNDER THE SECURITIES LAWS OF THE STATES IN
WHICH SUCH TRANSACTIONS OCCUR, OR THE EXISTENCE OF AN EXEMPTION FROM
REGISTRATION.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1998.
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AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, is required to file periodic reports, proxy materials and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or
at its regional offices located at 500 West Madison, Suite 1400, Chicago,
Illinois 60661, and at 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material may also be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
Commission's web site is http://www.sec.gov.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments, exhibits and schedules, referred
to as the "Registration Statement") under the Securities Act with respect to the
Shares offered hereby. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any document referred to are not necessarily complete. With respect to each
such document filed as an exhibit to the Registration Statement, reference is
made to the exhibit for a more complete description of the matter involved, and
each such statement shall be deemed qualified in its entirety by such reference.
The Registration Statement, including the exhibits and schedules thereto, may be
inspected at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of all or any part thereof may be obtained from such office at prescribed
rates.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;
3. The Company's Current Reports on Form 8-K dated March 24, May
5, June 19 and June 22, 1998; and
4. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A (File No. 0-28030), as
filed with the Commission on March 20, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus but
prior to the termination of the offering to which this Prospectus relates shall
be deemed to be incorporated by reference in this Prospectus and to be part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus.
Upon written or oral request, the Company will provide without charge
to each person to whom a copy of the Prospectus is delivered a copy of the
documents incorporated by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
therein). Requests should be submitted in writing or by telephone to Investor
Relations, 909 E. Las Colinas Blvd., 16th Floor, Irving, Texas 75039; telephone
(214) 860-6000.
All share amounts in this Prospectus reflect a two-for-one split of the
Common Stock effected as a stock dividend on June 2, 1998.
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THE COMPANY
i2 is the leading provider of client/server-based decision support
software products for supply chain management and related applications. Supply
chain management encompasses the planning and scheduling of manufacturing and
related logistics, including demand forecasting, raw materials procurement,
work-in-process distribution and transportation across multiple enterprises.
i2's client/server software solution, Rhythm, is designed to provide customers
with an end-to-end supply chain management solution, enabling customers to model
complex, multi-site supply chains to rapidly generate integrated solutions to
supply chain challenges such as demand volatility, production bottlenecks,
supply interruptions and distribution alternatives. Rhythm utilizes a
constraint-based methodology which simultaneously considers a broad range of
factors -- from changing revenue forecasts to machine capacities to individual
customer commitments -- to optimize all aspects of the supply chain. Rhythm's
advanced decision-support capabilities enable companies to make better informed
and more timely planning, scheduling and resource allocation decisions in order
to improve throughput, operating efficiency, customer satisfaction and return on
assets. The Company's software products and services are designed to enable
customers to reduce costs, increase market share and enhance their competitive
advantage.
The Company's executive offices are located at 909 E. Las Colinas
Blvd., 16th Floor, Irving, Texas 75039, and its telephone number is (214)
860-6000.
i2's logo and "Rhythm" are registered trademarks of the Company. This
Prospectus also contains or incorporates by reference trademarks and registered
trademarks of companies other than i2.
RISK FACTORS
The following risk factors should be considered carefully in addition
to the other information contained or incorporated by reference in this
Prospectus before purchasing the Common Stock offered hereby. In addition to the
historical information contained and incorporated by reference herein, the
discussion in and incorporated by reference in this Prospectus contains certain
forward-looking statements, within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, that involve risks and uncertainties,
such as statements concerning: growth and future operating results; future
customer benefits attributable to the Company's products; developments in the
Company's markets and strategic focus; new products and product enhancements;
potential acquisitions and the integration of acquired businesses, products and
technologies; strategic relationships; and future economic, business and
regulatory conditions. Such forward-looking statements are generally accompanied
by words such as "plan," "estimate," "expect," "believe," "should," "would,"
"could," "anticipate," "may" or other words that convey uncertainty of future
events or outcomes. The cautionary statements made or incorporated by reference
in this Prospectus should be read as being applicable to all related
forward-looking statements whenever they appear or are incorporated by reference
in this Prospectus. The Company's actual results could differ materially from
those discussed herein and in the incorporated documents. Factors that could
cause or contribute to such differences include those discussed below as well as
those cautionary statements and other factors set forth elsewhere herein and in
the incorporated documents.
POTENTIAL FOR SIGNIFICANT FLUCTUATIONS IN QUARTERLY RESULTS; DEPENDENCE ON
SIGNIFICANT INDIVIDUAL SALES
The Company's quarterly revenues, expenses and operating results have
varied significantly in the past and are likely to vary significantly from
quarter to quarter in the future. Because the purchase of a supply chain
management software solution generally involves a significant commitment of
capital, the sales cycle associated with the purchase of the Company's products
varies substantially and is subject to a number of significant risks, including
customers' budgetary constraints, timing of budget cycles and concerns about the
pricing or introduction of new products by the Company or its competitors,
factors over which the Company has little or no control. Additional factors
include foreign currency exchange rate fluctuations, the mix of direct or
indirect sales, changes in joint-marketing relationships, and changes in the
Company's strategy. Furthermore, purchases of the Company's products may be
deferred or canceled in the event of a downturn in any potential customer's
business or the economy in general.
The amount of revenues associated with particular licenses can vary
significantly based upon the number of software modules purchased and the number
of sites and users involved in the installation. The Company generally derives a
significant portion of its software license revenues in each quarter from a
small number of relatively large sales. For example, in each quarter of 1996 and
1997, one or more customers each accounted for
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at least 15% of total software license revenues in such quarter. While the
Company believes that the loss of any of these particular customers would not
have an adverse effect, an inability to consummate one or more substantial
license sales in any future period could have a material adverse effect on the
Company's operating results for that period. Moreover, similar to many other
software companies, the Company typically realizes a significant portion of its
software license revenues in the last month or even the last week of a quarter.
The Company also believes that the tendency of customers to delay placing orders
for software products until near the end of a quarter has become more pronounced
in recent periods. As a result, small delays in customer orders can cause
significant variability in the Company's license revenues and results of
operations for any particular period. For all of the foregoing reasons, revenues
are difficult to forecast.
The Company intends to continue to invest heavily in its sales and
marketing, consulting and research and development organizations, and sets
investment and expense levels based on expected future revenues. If revenues are
below expectations, operating results and net income are likely to be adversely
and disproportionately affected because a significant portion of the Company's
expenses are not variable in the short term, and cannot be quickly reduced to
respond to decreases in revenues. In addition, the Company may reduce prices or
accelerate its investment in research and development efforts in response to
competition or to pursue new market opportunities. Any one of these activities
may further limit the Company's ability to adjust spending in response to
fluctuations in revenue levels. There can be no assurance that revenues will
grow in future periods, that they will grow at historical rates, or that the
Company will maintain positive operating margins in future quarters.
The Company's quarterly results of operations are subject to certain
seasonal fluctuations. Historically, the Company's revenues have tended to be
strongest in the fourth quarter of the year and to increase only modestly in the
first quarter of the following year. The Company believes that this seasonality
is due to the calendar year budgeting cycles of many of its customers and to
compensation policies that tend to compensate sales personnel for achieving
annual revenue quotas. The Company expects that in future periods these seasonal
trends may cause first quarter revenues to remain consistent with, or decrease
from, the level achieved in the preceding quarter.
COMPETITION
The markets in which the Company operates are highly competitive. The
Company's competitors are diverse and offer a variety of solutions directed at
various segments of the supply chain as well as the enterprise as a whole.
Competitors include: (i) enterprise resource application software vendors such
as SAP AG ("SAP"), PeopleSoft, Inc., Oracle Corporation ("Oracle") and Baan
Company, N.V., each of which currently offers sophisticated enterprise resource
planning ("ERP") solutions that currently or may in the future incorporate
supply chain management modules or advanced planning and scheduling software;
(ii) other suppliers of supply chain software including Manugistics Group, Inc.
and Logility, Inc.; (iii) other business application software vendors who may
broaden their product offerings by internally developing, or by acquiring or
partnering with independent developers of, advanced planning and scheduling
software; (iv) internal development efforts by corporate information technology
departments; and (v) companies offering standardized or customized products for
mainframe and/or mid-range computer systems.
In connection with specific customer solicitations, a number of ERP
vendors have from time to time jointly marketed the Company's products as a
complement to their own systems. The Company believes that as its market share
increases, and as the ranges of products offered by the Company and these ERP
vendors expand and increasingly overlap, relationships which were cooperative in
the past will become more competitive, thereby increasing the overall level of
competition the Company faces. Specifically, in 1997 the Company and SAP
terminated a license and distribution agreement, and SAP has announced its
intention to develop a suite of advanced planning and scheduling products which
are expected to be directly competitive with Rhythm. The Company believes that
additional ERP vendors are focusing significant resources on increasing the
functionality of their own planning and scheduling modules, and at least two ERP
vendors have recently acquired independent developers of advanced planning and
scheduling software which compete with Rhythm.
Many of the Company's competitors have longer operating histories,
significantly greater financial, technical, marketing and other resources,
greater name recognition, a broader range of products to offer and a larger
installed base of customers than the Company, each of which could provide them
with a significant competitive advantage over the Company. In addition, the
Company expects to experience increasing price competition as the Company and
its competitors compete for market share. There can be no assurance that the
Company will be able to compete successfully with existing or new competitors or
that competition will not have a material adverse effect on the Company's
business, operating results and financial condition.
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MANAGEMENT OF GROWTH
The Company's business has grown rapidly in recent years, with revenues
increasing from $38.5 million in 1995 to $100.5 million in 1996 and to $213.7
million in 1997. The Company's recent expansion has resulted in substantial
growth in the number of its employees (from 330 at December 31, 1995 to 721 at
December 31, 1996 to 1,191 at December 31, 1997), the scope of its operating and
financial systems and the geographic distribution of its operations and
customers. This recent rapid growth has placed, and if continued will continue
to place, a significant strain on the Company's management and operations.
Accordingly, the Company's future operating results will depend on the ability
of its officers and other key employees to continue to implement and improve its
operational, customer support and financial control systems, and to effectively
expand, train and manage its employee base. There can be no assurance that the
Company will be able to manage any future expansion successfully, and any
inability to do so would have a material adverse effect on the Company's
business, operating results and financial condition.
PRODUCT CONCENTRATION; DEPENDENCE ON PRODUCT LINE EXPANSION
The Company currently derives all of its revenues from Rhythm licenses
and related services. The Company expects that Rhythm-related revenues,
including maintenance and consulting contracts, will continue to account for
substantially all of the Company's revenues for the foreseeable future. As a
result, the Company's future operating results are dependent upon continued
market acceptance of Rhythm and enhancements thereto. There can be no assurance
that Rhythm will achieve continued market acceptance. A decline in demand for,
or market acceptance of, Rhythm as a result of competition, technological change
or other factors would have a material adverse effect on the Company's business,
operating results and financial condition.
As enterprises increasingly focus on decision support for supply chain
management challenges, they are requiring greater levels of functionality and
broader product offerings from their application software vendors. Moreover, the
market for the Company's software products is characterized by rapid
technological advances, evolving industry standards in computer hardware and
software technology, and frequent product introductions and enhancements. The
Company's future success will depend upon its ability to continue to enhance its
current product line and to develop and introduce new products that keep pace
with technological developments, satisfy increasingly sophisticated customer
requirements and achieve market acceptance. There can be no assurance that the
Company will be successful in developing and marketing, on a timely and
cost-effective basis, fully functional product enhancements or new products that
respond to technological advances by others, or that its new products will
achieve market acceptance. The Company's failure to successfully develop and
market product enhancements or new products could have a material adverse effect
on the Company's business, operating results and financial condition.
INTEGRATION OF RECENT ACQUISITIONS; POTENTIAL FUTURE ACQUISITIONS
In April 1998, the Company completed the acquisition of InterTrans
Logistics Solutions Limited ("ITLS"). In May 1997, the Company acquired Think
Systems Corporation ("Think") and Optimax Systems Corporation ("Optimax"). The
success of acquisitions depends primarily on the Company's ability to (i)
retain, motivate and integrate the acquired personnel with the Company's
operations, (ii) integrate multiple information systems and (iii) integrate
acquired software with Rhythm. No assurance can be given that the Company will
not encounter difficulties in integrating the respective operations and products
of the Company, ITLS, Think or Optimax, or that the benefits expected from such
integration will be realized. Failure to successfully integrate ITLS', Think's
and Optimax's respective operations and products into the Company's operations
and products could have a material adverse effect on the Company's business,
operating results and financial condition.
The Company may in the future pursue additional acquisitions of
businesses, products and technologies, or enter into joint venture arrangements,
that could complement or expand the Company's business. The negotiation of
potential acquisitions or joint ventures as well as the integration of an
acquired business, product or technology could cause diversion of management's
time and resources. Future acquisitions by the Company could result in
potentially dilutive issuances of equity securities, the incurrence of debt and
contingent liabilities, amortization of goodwill and other intangibles, research
and development write-offs and other acquisition-related expenses. Further, no
assurances can be given that any acquired business will be successfully
integrated with the Company's operations. If any such acquisition were to occur,
there can be no assurance that the Company will receive the intended benefits of
the acquisition. Future acquisitions, whether or not consummated, could have a
material adverse effect on the Company's business, operating results and
financial condition.
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INTERNATIONAL OPERATIONS AND CURRENCY FLUCTUATIONS
The Company derived approximately 9%, 22% and 31% of its total revenues
from customers located outside of the United States in 1995, 1996 and 1997,
respectively. The Company believes that continued growth and profitability will
require expansion of its sales in international markets. Further penetration of
international markets will require the Company to expand existing foreign
operations, to establish additional foreign operations and to translate its
software and manuals into additional foreign languages. This expansion may be
costly and time-consuming and may not generate returns for a significant period
of time, if at all. To the extent that the Company is unable to expand its
international operations or translate its software and manuals into foreign
languages in a timely manner, the Company's ability to further penetrate
international markets would be adversely affected, which could have a material
adverse effect on the Company's business, results of operations and financial
condition.
The Company's international operations are subject to risks inherent in
international business activities, including: difficulty in staffing and
managing geographically disparate operations; longer accounts receivable payment
cycles in certain countries; compliance with a variety of foreign laws and
regulations; unexpected changes in regulatory requirements; overlap of different
tax structures; greater difficulty in safeguarding intellectual property; import
and export licensing requirements; trade restrictions; changes in tariff rates;
and general economic conditions in international markets. In particular,
countries in the Asia Pacific region have recently experienced weaknesses in
their currency, banking and equity markets. In the future, these weaknesses
could adversely affect the demand for the Company's products, the U.S. dollar
value of the Company's foreign currency denominated sales and ultimately the
Company's results of operations. There can be no assurance that the Company's
business, results of operations or financial condition will not be adversely
affected by these or other factors that may affect international operations.
To date, the Company's revenues from international operations have
primarily been denominated in United States dollars. As a result, the Company's
sales in international markets may be adversely affected by a strengthening
United States dollar. Certain sales and the majority of the expenses incurred by
the Company's international operations are denominated in currencies other than
the United States dollar. In addition, with the expansion of international
operations, the number of foreign currencies in which the Company must operate
will increase, resulting in increased exposure to exchange rate fluctuations.
The Company has implemented limited hedging programs to mitigate its exposure to
currency fluctuations. Notwithstanding these hedging programs, exchange rate
fluctuations have caused and will continue to cause currency transaction gains
and losses. While such currency transaction gains and losses have not been
material to date, there can be no assurance that currency transaction losses
will not have a material adverse effect on the Company's business, results of
operations or financial condition in future periods.
RISKS ASSOCIATED WITH STRATEGIC RELATIONSHIPS
The Company has from time to time established relationships with other
companies, including Oracle and System Software Associates, Inc., involving
collaboration in areas such as product development, marketing, distribution and
implementation. The maintenance of these relationships and the development of
other such relationships is a meaningful part of the Company's business
strategy. However, most of the Company's current and potential strategic
partners are either potential competitors of the Company or are currently
competitive with the Company to some degree. In addition, certain of the
Company's cooperative relationships have failed to meet expectations, such as
the Company's terminated license and distribution relationship with SAP. There
can be no assurance that the Company's current collaborative relationships will
be beneficial to the Company, that such relationships will be sustained, or that
the Company will be able to enter into successful new strategic relationships in
the future.
DEPENDENCE UPON KEY PERSONNEL
The Company's future operating results depend in significant part upon
the continued service of a relatively small number of key technical and senior
management personnel, few of whom are bound by an employment agreement. The
Company's future success also depends on its continuing ability to attract,
train and retain other highly qualified technical and managerial personnel.
Competition for such personnel is intense, and the Company has at times in the
past experienced difficulty in recruiting qualified personnel. There can be no
assurance that the Company will retain its key technical and managerial
employees or that it will be successful in attracting, assimilating and
retaining other highly qualified technical and managerial personnel in the
future. Kanna (Ken) N. Sharma, the Company's Vice Chairman of the Board and
Executive Vice President, has been diagnosed with a brain tumor. While Mr.
Sharma is currently providing services to the Company, there can be no assurance
as to
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how long he will be able to continue to do so. The loss of any member of the
Company's key technical and senior management personnel or the inability to
attract and retain additional qualified personnel could have a material adverse
effect on the Company's business, operating results and financial condition.
INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS; USE OF LICENSED TECHNOLOGY
The Company relies primarily on a combination of copyright, trademark
and trade secret laws, confidentiality procedures and contractual provisions to
protect its proprietary rights. In addition, the Company generally licenses
Rhythm products to end users in object code (machine-readable) format, and the
Company's license agreements generally allow the use of Rhythm products solely
by the customer for internal purposes without the right to sublicense or
transfer the Rhythm products. However, the Company believes that the foregoing
measures afford only limited protection. Despite the Company's efforts to
protect its proprietary rights, unauthorized parties may attempt to copy aspects
of the Company's products or to obtain and use information that the Company
regards as proprietary. Policing unauthorized use of the Company's products is
difficult, and while the Company is unable to determine the extent to which
piracy of its software products exist, software piracy can be expected to be a
problem. In addition, the laws of some foreign countries do not protect the
Company's proprietary rights to the same extent as the laws of the United
States. Furthermore, there can be no assurance that the Company's competitors
will not independently develop technology similar to that of the Company. The
Company may increasingly be subject to claims of intellectual property
infringement as the number of products and competitors in the Company's industry
segment grows and the functionality of products in different industry segments
overlaps. Although the Company is not aware that any of its products infringes
upon the proprietary rights of third parties, there can be no assurance that
third parties will not claim infringement by the Company with respect to current
or future products. Any such claims, with or without merit, could be
time-consuming, result in costly litigation, cause product shipment delays or
require the Company to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms acceptable
to the Company, which could have a material adverse effect upon the Company's
business, operating results and financial condition.
The Company has in the past and may in the future resell certain
software which it licenses from third parties. There can be no assurance that
these third-party software licenses will continue to be available to the Company
on commercially reasonable terms. The loss of or inability to maintain or obtain
any of these software licenses could result in delays or reductions in product
shipments until equivalent software could be identified, licensed and
integrated, which could adversely affect the Company's business, operating
results and financial condition.
COMPLEXITY OF SOFTWARE PRODUCTS; RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCTS
Rhythm is a client/server solution which can operate on hardware
platforms from Digital Equipment, Hewlett-Packard, IBM and Sun Microsystems and
operating systems from Sun Microsystems and Microsoft, and can access data from
most widely used SQL (structured query language) databases, including Informix,
Oracle and Sybase. To the extent that additional hardware or software platforms
gain significant market acceptance, the Company may be required to port Rhythm
to such platforms in order to remain competitive. Such platforms may not be
architecturally compatible with Rhythm's software product design, and there can
be no assurance that the Company will be able to port Rhythm to such additional
platforms on a timely basis or at all. Any failure to maintain compatibility
with existing platforms or to port to new platforms that achieve significant
market acceptance would have a material adverse effect on the Company's
business, operating results and financial condition.
As a result of the complexities inherent in client/server computing
environments and the broad functionality and performance demanded by customers
for supply chain management products, major new products and product
enhancements can require long development and testing periods. In addition,
software programs as complex as those offered by the Company may contain
undetected errors or "bugs" when first introduced or as new versions are
released that, despite testing by the Company, are discovered only after a
product has been installed and used by customers. While the Company has on
occasion experienced delays in the scheduled introduction of new and enhanced
products and products containing bugs, to date the Company's business has not
been materially adversely affected by delays or the release of products
containing errors. There can be no assurance, however, that errors will not be
found in future releases of the Company's software, or that any such errors will
not impair the market acceptance of these products and adversely affect the
Company's business, operating results and financial condition.
While the Company generally takes steps to avoid interruptions of sales
often associated with the pending availability of new products, customers may
delay their purchasing decisions in anticipation of the general availability of
new or enhanced Rhythm products, which could have a material adverse effect on
the Company's
7
<PAGE> 10
business and operating results. Moreover, significant delays in the general
availability of such new releases, significant problems in the installation or
implementation of such new releases, or customer dissatisfaction with such new
releases, could have a material adverse effect on the Company's business,
operating results and financial condition.
DEPENDENCE ON TECHNICAL AND IMPLEMENTATION PERSONNEL
The sales of Rhythm typically involve the utilization of highly
qualified technical sales support personnel. A limitation on the number of
qualified technical sales support personnel could have a material adverse effect
on the Company's ability to expand sales and enter into new vertical markets.
The implementation of Rhythm requires the services of highly trained
implementation personnel working directly for the Company or for independent
consultants. A shortage in the number of trained implementers, either within the
Company or with third-party consulting firms, could limit the Company's ability
to implement its software on a timely and effective basis. Delayed or
ineffective implementation of the Company's software may limit the Company's
ability to expand its revenues and may result in customer dissatisfaction and
damage the Company's reputation, each of which could have a material adverse
effect on the Company's business, operating results and financial condition.
YEAR 2000 COMPLIANCE
Many older computer systems and software products currently in use are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. As a result, in less than two years, computer systems
and/or software used by many companies may need to be upgraded to comply with
such "Year 2000" requirements. Significant uncertainty exists in the software
industry concerning the potential effects associated with such compliance. Based
on the Company's assessment, the Company believes that its current versions of
its software products are Year 2000 compliant. However, the Company believes
some customers are running earlier versions of the software products developed
by acquired companies that are not Year 2000 compliant, and the Company has been
encouraging such customers to migrate to current product versions. Moreover, the
Company's products are generally integrated into enterprise systems involving
complicated software products developed by other vendors. Year 2000 problems
inherent in a customer's transactional software programs might significantly
limit that customer's ability to realize the intended benefits offered by
Rhythm. The Company may in the future be subject to claims based on Year 2000
problems in others' products, custom scripts created by third parties to
interface with the Company's products or issues arising from the integration of
multiple products within an overall system. Although the Company has not been a
party to any litigation or arbitration proceeding to date involving its products
or services and related to Year 2000 compliance issues, there can be no
assurance that the Company will not in the future be required to defend its
products or services in such proceedings, or to negotiate resolutions of claims
based on Year 2000 issues. The costs of defending and resolving Year
2000-related disputes, and any liability of the Company for Year 2000-related
damages, including consequential damages, could have a material adverse effect
on the Company's business, operating results and financial condition.
The Company believes that the purchasing patterns of customers and
potential customers may be affected by Year 2000 issues in a variety of ways.
Many companies are expending significant resources to correct or patch their
current hardware and software systems for Year 2000 compliance. These
expenditures may result in reduced funds available to purchase software products
such as those offered by the Company. Any of the foregoing could result in a
material adverse effect on the Company's business, operating results and
financial condition.
The Company utilizes third-party vendor equipment, telecommunication
products and software products which may or may not be Year 2000 compliant.
Although the Company is currently taking steps to address the impact, if any, of
the Year 2000 compliance issue surrounding such third-party products, failure of
any critical technology components to be Year 2000 compliant may have an adverse
impact on business operations or require the Company to incur unanticipated
expenses to remedy any problems. Management has not yet determined the cost of
achieving Year 2000 compliance.
PRODUCT LIABILITY
While the Company's license agreements with its customers typically
contain provisions designed to limit the Company's exposure to potential product
liability claims, it is possible that such limitation of liability provisions
may not be effective under the laws of certain jurisdictions. Although the
Company has not experienced any product liability claims to date, there can be
no assurance that the Company will not be subject to such claims in the future.
A successful product liability claim brought against the Company could have a
material adverse effect on the
8
<PAGE> 11
Company's business, operating results and financial condition. Moreover,
defending such a suit, regardless of its merits, could entail substantial
expense and require the time and attention of key management personnel, either
of which could have a material adverse effect on the Company's business,
operating results and financial condition.
VOLATILITY OF STOCK PRICE
The market price of the Common Stock has been volatile at times and in
the future can be expected to be significantly affected by factors such as
quarterly variations in the Company's results of operations, the announcement of
new products or product enhancements by the Company or its competitors,
technological innovations by the Company or its competitors, and general market
conditions or market conditions specific to particular industries. In
particular, the stock prices for many companies in the technology and emerging
growth sectors have experienced wide fluctuations which have often been
unrelated to the operating performance of such companies. Such fluctuations may
adversely affect the market price of the Common Stock.
CONTROL BY MANAGEMENT
As of May 31, 1998, the Company's executive officers beneficially owned
approximately 57% of the Company's outstanding Common Stock. Consequently, the
Company's executive officers are able to control the outcome of all matters
submitted for stockholder action, including the election of members to the
Company's Board of Directors and the approval of significant change in control
transactions, and effectively control the management and affairs of the Company,
which may have the effect of delaying or preventing a change in control of the
Company. In addition, Messrs. Sanjiv S. Sidhu, Chairman of the Board and Chief
Executive Officer, Kanna (Ken) N. Sharma, Vice Chairman of the Board, Executive
Vice President and Secretary and Sandeep (Sandy) R. Tungare, President, Demand
Management, constitute three of the five members of the Board of Directors and,
therefore, have significant influence in directing the actions of the Board of
Directors.
ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation, as amended (the "Charter"),
and Bylaws, as amended (the "Bylaws"), contain certain provisions that may have
the effect of discouraging, delaying or preventing a change in control of the
Company or unsolicited acquisition proposals that a stockholder might consider
favorable, including provisions: authorizing the issuance of "blank check"
preferred stock; providing for a Board of Directors with staggered, three-year
terms; requiring super-majority voting to effect certain amendments to the
Charter and Bylaws; limiting the persons who may call special meetings of
stockholders; prohibiting stockholder action by written consent; and
establishing advance notice requirements for nominations for election to the
Board of Directors or for proposing matters that can be acted upon at
stockholder meetings. Certain provisions of Delaware law and the Company's stock
incentive plans may also have the effect of discouraging, delaying or preventing
a change in control of the Company or unsolicited acquisition proposals.
9
<PAGE> 12
SELLING STOCKHOLDERS
This Prospectus relates to the sale by the Selling Stockholders named
below from time to time of up to 3,266,470 shares of Common Stock. Of the
offered Shares, (i) 3,159,166 Shares were originally issued by the Company in
connection with the Company's acquisition of all of the outstanding capital
stock of InterTrans Logistics Solutions Limited, an Ontario corporation
("ITLS"), (ii) 6,846 Shares were originally issued in connection with the
exercise of options assumed by the Company in connection with the acquisition of
ITLS, (iii) 76,680 Shares were originally issued in connection with the
Company's acquisition of Innomat OY, a Finnish corporation ("Innomat"), and (iv)
23,778 Shares were originally issued in connection with the Company's
acquisition of Think Systems Private Limited, an Indian corporation. The Shares
described in (i) are being registered by the Company pursuant to a Registration
Rights Agreement entered into by and among the Company and the former
shareholders of ITLS as a condition to the ITLS acquisition. Except as described
herein, the Company is unaware that any Selling Shareholder has had a material
relationship with the Company within the past three years other than as a result
of the ownership of Shares or other securities of the Company.
The following table provides certain information with respect to the
number of shares of Common Stock currently owned, offered hereby and to be owned
by the Selling Stockholders after this offering assuming all offered shares are
sold in this offering.
<TABLE>
<CAPTION>
NUMBER OF
SHARES TO BE
NUMBER OF SHARES OWNED AFTER
OWNED NUMBER OF THE OFFERING
BEFORE THE SHARES BEING --------------
NAME OF SELLING STOCKHOLDER OFFERING OFFERED (1) NUMBER PERCENT
--------------------------- -------- ----------- ------ -------
<S> <C> <C> <C> <C>
Former ITLS Shareholders:
1244433 Ontario Limited.................. 231,888 231,888 0 *
1244520 Ontario Limited.................. 159,186 159,186 0 *
1244519 Ontario Limited.................. 81,798 81,798 0 *
1244518 Ontario Limited.................. 36,418 36,418 0 *
La Hougue Financial Management 0 *
Services Limited ...................... 579,800(2) 579,800 0
Advent Atlantic and Pacific III L.P. .... 201,412 201,412 0 *
Advent New York L.P. .................... 52,438 52,438 0 *
Advent VII L.P. ......................... 523,912 523,912 0 *
TA Venture Investors Limited 0 *
Partnership............................ 7,864 7,864
The Schwarzwald Trust.................... 463,772 463,772 0 *
The Garabaldi Trust...................... 318,378 318,378 0 *
The Santarini Trust...................... 163,602 163,602 0 *
The Wailea Trust......................... 163,602 163,602 0 *
The Freiburg Trust....................... 72,832 72,832 0 *
The Emerald Cedar Trust.................. 18,206 18,206 0 *
1244432 Ontario Limited.................. 9,104 9,104 0 *
Argentum Enterprises Inc................. 81,800 81,800 0 *
Former Innomat Shareholders:
Kalle Valimaa............................ 56,448 56,448 0 *
Sami Lahti............................... 3,960 3,960 0 *
Juhani Malmivuori........................ 3,600 3,600 0 *
Seija Valimaa............................ 3,600 3,600 0 *
Harri Rajala............................. 2,520 2,520 0 *
Mikko Leppanen........................... 1,080 1,080 0 *
Pekka Valimaa............................ 1,080 1,080 0 *
Jari Hietala............................. 720 720 0 *
Jarmo Juhola............................. 720 720 0 *
Katja Rantasalo.......................... 720 720 0 *
Juha Nylund.............................. 540 540 0 *
Hannele Lindell.......................... 360 360 0 *
Tommi Malmivuori......................... 360 360 0 *
Klas Monni............................... 360 360 0 *
Mika Valimaa............................. 360 360 0 *
Marika Lehtonen.......................... 180 180 0 *
Tapio Lepisto............................ 36 36 0 *
Minna Luusalo............................ 36 36 0 *
Other Selling Stockholders:
Ravi B. Reddy............................ 1,947,210(3) 23,778 1,923,432 2.8%
</TABLE>
10
<PAGE> 13
- -----------------------------
* Indicates less than 1%.
(1) There is no assurance that the Selling Stockholders will sell any or
all of the offered Shares.
(2) Includes 6,846 shares issued upon the exercise of options assumed by
the Company in connection with the acquisition of ITLS and (ii) 572,954
shares held for the benefit of De Vijver B.V.
(3) Includes 90,000 shares held by the Reddy Family Foundation, of which
34,390 shares are subject to currently exercisable options. Mr. Reddy
may be deemed to be the beneficial owner of such shares. Also includes
887,634 shares held by such stockholder's spouse.
PLAN OF DISTRIBUTION
The Company will receive no proceeds from this offering. The Shares
offered hereby may be sold by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest that receive such shares as a gift,
partnership distribution or other non-sale related transfer, from time to time
in transactions in the over-the-counter market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Shares may not simultaneously engage
in market making activities with respect to the Common Stock of the Company
during a period beginning one or five business days prior to the commencement of
such distribution. In addition and without limiting the foregoing, each Selling
Stockholder will be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including, without limitation, Rule 102, which
provisions may limit the timing of purchases and sales of shares of Common Stock
by the Selling Stockholders.
The Company will pay all costs and expenses incurred in connection with
the registration under the Securities Act of the Shares, including, without
limitation, all registration and filing fees, printing expenses and fees and
disbursements of counsel and accountants for the Company. The Selling
Stockholders will pay any brokerage fees and commissions, fees and disbursements
of legal counsel for the Selling Stockholders and stock transfer and other taxes
attributable to the sale of the Shares. The Company also has agreed to indemnify
the Selling Stockholders (who are former shareholders of ITLS) and their
respective officers and directors and each person who controls (within the
meaning of the Securities Act) such Selling Stockholders against certain losses,
claims, damages and expenses arising under the securities laws in connection
with this offering. Each such Selling Stockholder has agreed to indemnify the
Company, its officers, directors and each person who controls (within the
meaning of
11
<PAGE> 14
the Securities Act) the Company against other losses, claims, damages and
expenses arising under the securities laws in connection with this offering with
respect to written information furnished to the Company by such Selling
Stockholder.
There is no assurance that the Selling Stockholders will sell any or
all of the Shares.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
the Company by Brobeck, Phleger & Harrison LLP, Austin, Texas.
EXPERTS
The supplemental consolidated financial statements of i2 Technologies,
Inc. included in the Company's Current Report on Form 8-K dated June 19, 1998
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
supplemental consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
12
<PAGE> 15
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING STOCKHOLDER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY OF THIS
PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
----------------------
TABLE OF CONTENTS
PAGE
----
Available Information.......................................................2
Documents Incorporated by Reference........................................ 2
The Company.................................................................3
Risk Factors................................................................3
Selling Stockholders.......................................................10
Plan of Distribution.......................................................11
Legal Matters..............................................................12
Experts....................................................................12
================================================================================
================================================================================
3,266,470 SHARES
i2 TECHNOLOGIES, INC.
COMMON STOCK
[i2 LOGO]
-----------------------
, 1998
-----------------------
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this
Registration Statement shall have the meanings assigned to them in the
Prospectus which forms a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, payable by the
registrant connection with the registration of the Shares under the Securities
Act. All amounts are estimates except the Commission registration fee.
<TABLE>
<S> <C>
Commission registration fee.......................................................................$ 31,619
Legal fees and expenses........................................................................... 25,000
Accounting fees and expenses...................................................................... 60,000
Miscellaneous..................................................................................... 5,000
--------
Total....................................................................................$121,619
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect to any claim
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any such action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that the indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights which the
indemnified party may be entitled;s that indemnification provided by Section 145
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
II-1
<PAGE> 17
Section 102(b)(7) of the General Corporation Law or the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the
liability of the director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Eleventh of the registrant's Charter provides that, to the
fullest extent permitted by the Delaware General Corporation Law as the same
exists or as it may hereafter be amended, no director of the registrant shall be
personally liable to the registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director.
Section 6.1 of the registrant's Bylaws further provides that the
registrant shall, to the maximum extent and in the manner permitted by the
General Corporation Law of Delaware, indemnify each of its directors and
officers against expenses (including attorneys' fees), judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of the registrant.
The registrant has entered into indemnification agreements with each of
its directors and executive officers.
The registrant maintains officers' and directors' liability insurance.
Article III of the Registration Rights Agreement by and among the
registrant and each of the ITLS Selling Stockholders contains provisions
indemnifying the officers and directors of the registrant against certain
liabilities under the Securities Act.
ITEM 16. EXHIBITS.
NO. DESCRIPTION
4.1 Specimen certificate representing shares of Common Stock
(filed as Exhibit 4.1 to the registrant's Registration
Statement on Form S-1 (Reg. No. 333-1752) and incorporated
herein by reference).
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the
opinion filed as Exhibit 5.1 hereto).
24.1 A power of attorney pursuant to which amendments to this
Registration Statement may be filed (included on the signature
page contained in Part II of this Registration Statement).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sales are
being made, a post-effective amendment to this Registration Statement
to:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in
II-2
<PAGE> 18
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act), that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the Delaware General Corporation Law, the Charter or the
Bylaws of the registrant, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irving, State of Texas, on this 23rd day of
June, 1998.
i2 TECHNOLOGIES, INC.
By:/s/ David F. Cary
--------------------------------
David F. Cary
Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Sanjiv S. Sidhu and David F.
Cary, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to sign any registration
statement for the same offering covered by this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and all post-effective amendments thereto, and to file
the same, with all exhibits thereto and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Sanjiv S. Sidhu Chairman of the Board June 23, 1998
- ------------------------------------- and Chief Executive
Sanjiv S. Sidhu Officer (Principal
executive officer)
/s/ Kanna N. Sharma Vice Chairman of the June 23, 1998
- ------------------------------------- Board, Executive Vice
Kanna N. Sharma President and Secretary
/s/ David F. Cary Vice President and June 23, 1998
- ------------------------------------- Chief Financial Officer
David F. Cary (Principal financial and
accounting officer)
/s/ Harvey B. Cash Director June 23, 1998
- -------------------------------------
Harvey B. Cash
/s/ Thomas J. Meredith Director June 23, 1998
- -------------------------------------
Thomas J. Meredith
/s/ Sandeep R. Tungare Director June 23, 1998
- -------------------------------------
Sandeep R. Tungare
</TABLE>
II-4
<PAGE> 20
EXHIBIT INDEX
NO. DESCRIPTION
4.1 Specimen certificate representing shares of Common Stock
(filed as Exhibit 4.1 to the registrant's Registration
Statement on Form S-1 (Reg. No. 333-1752) and incorporated
herein by reference).
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the
opinion filed as Exhibit 5.1 hereto).
24.1 A power of attorney pursuant to which amendments to this
Registration Statement may be filed (included on the signature
page contained in Part II of this Registration Statement).
<PAGE> 1
[BROBECK, PHLEGER & HARRISON LLP LETTERHEAD]
June 23, 1998
i2 Technologies, Inc.
909 E. Las Colinas Blvd., 16th Floor
Irving, Texas 75039
Re: i2 Technologies, Inc. Registration Statement on
Form S-3 for 3,266,470 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to i2 Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the sale by certain stockholders
of the Company of up to 3,266,470 shares of the Company's Common Stock
(collectively, the "Shares"), pursuant to the Company's Registration Statement
on Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act").
This opinion is being furnished in accordance with the requirements of
Item 16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the issuance and sale of the
Shares. Based on such review, we are of the opinion that the Shares have been
duly authorized, were legally issued and are fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus which is part of the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Act, the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, or
Item 509 of Regulation S-K.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we
<PAGE> 2
i2, Technologies, Inc. June 23, 1998
Page 2
render no opinion, whether by implication or otherwise, as to any other matters
relating to the Company or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement and related Prospectus of i2 Technologies, Inc. for
the registration of 3,266,470 shares of its common stock and to the
incorporation by reference therein of our report dated June 19, 1998, with
respect to the supplemental consolidated financial statements of i2
Technologies, Inc. included in its Current Report on Form 8-K dated June 19,
1998.
ERNST & YOUNG LLP
Dallas, Texas
June 19, 1998
