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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 8, 2000
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
i2 TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 7372 75-2294945
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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ONE i2 PLACE
11701 LUNA ROAD
DALLAS, TEXAS 75234
(469) 357-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WILLIAM M. BEECHER
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
i2 TECHNOLOGIES, INC.
ONE i2 PLACE
11701 LUNA ROAD
DALLAS, TEXAS 75234
(469) 357-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
RONALD G. SKLOSS
BROBECK, PHLEGER & HARRISON LLP
301 CONGRESS AVENUE, SUITE 1200
AUSTIN, TEXAS 78701
TELEPHONE: (512) 477-5495
FACSIMILE: (512) 477-5813
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: From
time to time after this registration statement becomes effective.
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, 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(c)
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. [ ]
----------------
CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED (1) PER SHARE(2) OFFERING PRICE(2) FEE
- --------------------------------------------------- ------------------- -------------------- -------------------- ---------------
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Common Stock, par value $0.00025 per share......... 19,188 $246.25 $4,725,045 $1,247
=================================================== =================== ==================== ==================== ===============
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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) The price of $246.25, the average of the high and low prices of i2's
common stock on the Nasdaq Stock Market's National Market on February 4, 2000,
is set forth solely for the purpose of computing the registration fee pursuant
to Rule 457(c).
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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION, DATED FEBRUARY 8, 2000
PRELIMINARY PROSPECTUS
19,188 SHARES
i2 TECHNOLOGIES, INC.
COMMON STOCK
This prospectus relates to the public offering, which is not being
underwritten, of 19,188 shares of our common stock underlying warrants held by
certain persons.
The prices at which such persons may sell the shares registered under
this prospectus will be determined by the prevailing market price for the shares
or in negotiated transactions. We will not receive any of the proceeds from the
sale of the shares.
Our common stock is quoted on the Nasdaq National Market under the
symbol "ITWO." On February 4, 2000, the average of the high and low prices for
our common stock was $246.25.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE RISK FACTORS ON PAGE
3 TO READ ABOUT CERTAIN FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF
COMMON STOCK BEING OFFERED BY THIS PROSPECTUS.
----------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
----------------------------------------------------
The date of this prospectus is February __, 2000.
<PAGE> 3
We have not authorized any person to make a statement that differs from
what is in this prospectus. If any person does make a statement that differs
from what is in this prospectus, you should not rely on it. This prospectus is
not an offer to sell, nor is it seeking an offer to buy, these securities in any
state in which the offer or sale is not permitted. The information in this
prospectus is complete and accurate as of its date, but the information may
change after that date.
----------------------------------------------------
TABLE OF CONTENTS
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Page
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Where You Can Find More Information.............................................................................. 2
The Company...................................................................................................... 3
Risk Factors..................................................................................................... 3
Selling Stockholders............................................................................................ 13
Plan of Distribution............................................................................................ 13
Legal Matters................................................................................................... 15
Experts......................................................................................................... 15
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission, or SEC. You may read
and copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from our Web site at www.i2.com or at
the SEC's Web site at www.sec.gov. However, the information on our Web site does
not constitute a part of this prospectus.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to that information. The information incorporated by reference is considered
to be part of this prospectus, and later information filed with the SEC will
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this offering is
completed.
1. The information referred to in our annual report on Form 10-K for the
year ended December 31, 1998 as contained in our definitive proxy statement
relating to our 1999 annual meeting of stockholders;
2. Our quarterly report on Form 10-Q for the quarter ended September 30,
1999;
3. Our current reports on Form 8-K filed February 4, March 1, April 21, May
19, July 30, and November 30, 1999 and January 19, 2000; and
4. The description of our common stock contained in our registration
statement on Form 8-A (File No. 0-28030), as filed with the SEC on March 20,
1996.
You may obtain a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
One i2 Place
11701 Luna Road
Dallas, Texas 75234
Telephone: (469) 357-1000
You should rely only on the information provided in this document or
incorporated in this document by reference. We have not authorized anyone to
provide you with different information. You should not assume that the
information in this document, including any information incorporated herein by
reference, is accurate as of any date other than that on the front of the
document.
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<PAGE> 4
THE COMPANY
i2 is a leading provider of intelligent eBusiness solutions that help
enterprises optimize business processes both internally and among trading
partners. Our solutions enable enterprises to significantly improve
efficiencies, collaborate with suppliers and customers, respond to market
demands and engage in dynamic business interactions over the Internet. Our
RHYTHM product suite principally includes solutions for supply chain management,
customer management, product lifecycle management, inter-process planning and
strategic planning. We recently began launching our Marketplace Services,
through which we provide our RHYTHM software applications to public and private
Internet-based marketplaces consisting of communities of trading partners. In
addition, our recently announced TradeMatrix portal is designed to provide
value-added services to participants spanning multiple digital marketplaces. We
also provide services such as consulting, training and maintenance in support of
these offerings.
Our principal executive offices are located at One i2 Place, 11701 Luna
Road, Dallas, Texas 75234, and our telephone number is (469) 357-1000.
RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties that we do not
presently know or that we currently deem immaterial may also impair our business
operations.
If any of the following risks actually occur, they could materially
adversely affect our business, financial condition or results of operations. In
that case, the trading price of our common stock could decline.
OUR FINANCIAL RESULTS MAY VARY SIGNIFICANTLY FROM QUARTER TO QUARTER AND WE MAY
FAIL TO MEET EXPECTATIONS, WHICH MAY NEGATIVELY IMPACT THE PRICE OF OUR STOCK.
Our operating results have varied significantly from quarter to quarter in
the past, and we expect our operating results to continue to vary from quarter
to quarter in the future, due to a variety of factors, many of which are outside
of our control. Factors that could affect quarterly operating results include:
o volume and timing of customer orders;
o length of the sales cycle;
o customer budget constraints;
o announcement or introduction of new products or product enhancements
by us or our competitors;
o changes in prices of our products and those of our competitors;
o foreign currency exchange rate fluctuations;
o market acceptance of new products;
o mix of direct and indirect sales;
o changes in our strategic relationships; and
o changes in our business strategy.
Furthermore, customers may defer or cancel their purchases of products if
they experience a downturn in their business or if there is a downturn in the
general economy. We will continue to determine our investment and expense levels
based on expected future revenues. A significant portion of our expenses are not
variable in the short
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term, and we cannot reduce them quickly to respond to decreases in revenues.
Therefore, if revenues are below expectations, this shortfall is likely to
adversely and disproportionately affect our operating results. In addition, we
may reduce our prices or accelerate investment in research and development
efforts in response to competitive pressures or to pursue new market
opportunities. Any of these activities may further limit our ability to adjust
spending in response to revenue fluctuations. Revenues may not grow at
historical rates in future periods, or they may not grow at all. Accordingly, we
may not maintain positive operating margins in future quarters. Any of these
factors could cause our operating results to be below the expectations of public
market analysts and investors, and the price of our common stock may fall.
WE ANTICIPATE SEASONAL FLUCTUATIONS IN REVENUES, WHICH MAY CAUSE VOLATILITY IN
THE PRICE OF OUR COMMON STOCK.
The market price of our common stock has been volatile in the past and our
common stock may be volatile in the future. Historically, our revenues have
tended to be strongest in the fourth quarter of the year. We believe that our
seasonality is due to the calendar year budgeting cycles of many of our
customers and our compensation policy that rewards sales personnel for achieving
annual revenue quotas. In future periods, these seasonal trends may cause our
quarter-to-quarter operating results to vary, which may result in failing to
meet the expectations of public market analysts and investors.
WE DEPEND ON SIGNIFICANT INDIVIDUAL LICENSE SALES. THEREFORE, OUR OPERATING
RESULTS FOR A GIVEN PERIOD COULD SUFFER SERIOUS HARM IF WE FAIL TO CLOSE THE
LARGE SALES WE TARGETED FOR THAT PERIOD.
We generally derive a significant portion of revenues in each quarter from a
small number of relatively large sales. For example, in the first three quarters
of 1999, the last three quarters of 1998 and each quarter of 1997 and 1996, one
or more customers individually accounted for at least 15% of our total software
license revenues in each respective quarter. Moreover, due to customer
purchasing patterns, we typically realize a significant portion of our software
license revenues in the last few weeks of a quarter. As a result, we are subject
to significant variations in license revenues and results of operations if we
incur any delays in customer orders. If in any future period we fail to close
one or more substantial license sales that we have targeted to close in that
period, this failure could seriously harm our operating results for that period.
WE MAY NOT REMAIN COMPETITIVE, AND INCREASED COMPETITION COULD SERIOUSLY HARM
OUR BUSINESS.
Our competitors offer a variety of solutions addressed at various segments
of the supply chain as well as other eBusiness processes. These competitors
include:
o enterprise resource application software vendors such as Baan, JD
Edwards, Oracle, PeopleSoft and SAP, each currently offering or
marketing competitive software solutions;
o vendors of products and services for eBusiness;
o other software vendors who may broaden their product offerings by
internally developing, or by acquiring or partnering with independent
developers of, eBusiness solutions;
o supply chain software vendors, including Manugistics and Logility; and
o corporate information technology departments, which may develop their
own eBusiness solutions.
Historically, a number of enterprise resource planning vendors have jointly
marketed our products as a complement to their own systems. However, as we
attempt to increase our market share and expand our product offerings, and as
enterprise resource planning vendors expand their own product offerings, our
relationships with these vendors have and may continue to become more
competitive. We believe that enterprise resource planning vendors are focusing
significant resources on increasing the functionality of their own planning and
scheduling products.
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Relative to us, many of our competitors have:
o longer operating histories;
o significantly greater financial, technical, marketing and other
resources;
o greater name recognition;
o a broader range of products to offer; and
o a larger installed base of customers.
Current and potential competitors have established, or may establish,
cooperative relationships among themselves or with third parties to enhance
their products, which may result in increased competition. In addition, we
expect to experience increasing price competition as we compete for market
share, and we may not be able to compete successfully with our existing or new
competitors. If we experience increased competition, substantial harm may result
to our business, operating results and financial condition.
OUR STRATEGIES OF ESTABLISHING AND PROMOTING OUR MARKETPLACE SERVICES IN DIGITAL
TRADING COMMUNITIES AND OUR TRADEMATRIX PORTAL ARE UNPROVEN AND MAY BE
UNSUCCESSFUL.
As part of our business strategy, we are offering our Marketplace Services
to trading community participants in digital marketplaces. In addition, we are
offering our TradeMatrix services to link and provide value-added services to
digital marketplaces. This strategy is unproven, and currently we are providing
our Marketplace Services in only a small number of digital trading communities
and currently are providing only a limited portion of our intended TradeMatrix
services. We have limited experience developing and operating digital
marketplaces, and we cannot assure you that these trading communities will be
operated effectively, that enterprises will join and remain in these trading
communities, that we will develop and provide successfully all intended
TradeMatrix services, or that we will generate significant revenues from these
services. To date, we have not generated significant revenues from these
services. If this business strategy is flawed, or if we are unable to execute it
effectively, our business, operating results and financial condition could be
substantially harmed.
In addition, we expect to rely on third parties' efforts to promote our
Marketplace Services and TradeMatrix portal. Because our revenues from these
sources are likely to be largely based on subscriptions to or utilization of our
digital marketplaces, any failure by these third parties to successfully promote
our Marketplace Services or TradeMatrix portal, or any reluctance to participate
in our digital marketplaces or TradeMatrix on the part of suppliers,
manufacturers, distributors, logistics providers or customers, could harm our
business, results of operations and financial condition.
Furthermore, our Marketplace Services and TradeMatrix portal may be unable
to support large numbers of trading community participants. We currently use
third-party service providers to host these services, and we intend to
internally host some or all of these services in the future. We may be liable to
trading community participants for damages, or these marketplaces may experience
service interruptions, if we or third-party service providers suffer system
failures or if a digital marketplace or TradeMatrix otherwise becomes
inoperable.
RAPID GROWTH IN OUR OPERATIONS COULD CONTINUE TO STRAIN OUR MANAGERIAL AND
OPERATIONAL RESOURCES.
We have experienced rapid growth. Revenues have increased to $571.1 million
in 1999 from $369.2 million in 1998, from $221.8 million in 1997 and from $101.5
million in 1996. Our employee count has increased to approximately 2,650 at
September 30, 1999 from 2,244 at December 31, 1998 and from 1,191 at December
31, 1997. We have also increased the scope of our operating and financial
systems and the geographic distribution of our operations and customers. This
growth has strained our management and operations, and they will continue to be
strained if rapid growth continues. Our officers and other key employees will
need to implement and improve our operational, customer support and financial
control systems and effectively expand, train and manage our employee base.
Further, we expect that we will be required to manage an increasing number of
relationships with various customers and other third parties. We may not be able
to manage future expansion successfully, and our inability to do so would harm
our business, operating results and financial condition.
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ANY DECREASE IN DEMAND FOR OUR RHYTHM SUITE OF PRODUCTS AND SERVICES COULD
SIGNIFICANTLY REDUCE OUR REVENUES.
We derive substantially all of our revenues from licenses of our RHYTHM
suite of products and related services. RHYTHM-related revenues, including
maintenance and consulting contracts, will continue to account for substantially
all of our revenues for the foreseeable future. As a result, our future
operating results will depend upon continued market acceptance of RHYTHM and
enhancements thereto. However, RHYTHM may not achieve continued market
acceptance. Competition, technological change or other factors could decrease
demand for, or market acceptance of, RHYTHM. Any decrease in demand or market
acceptance of RHYTHM could substantially harm our business, operating results
and financial condition.
WE ARE INVESTING SIGNIFICANT RESOURCES IN DEVELOPING AND MARKETING OUR
INTELLIGENT EBUSINESS SOLUTIONS. THE MARKET FOR THESE SOLUTIONS IS NEW AND
EVOLVING, AND, IF THIS MARKET DOES NOT DEVELOP AS WE ANTICIPATE OR IF WE ARE
UNABLE TO DEVELOP ACCEPTABLE SOLUTIONS, SERIOUS HARM WOULD RESULT TO OUR
BUSINESS.
We currently derive a substantial portion of our revenues from licenses for
decision-support software products associated with supply chain management
software and related services. However, we are investing significant resources
in further developing and marketing enhanced products and services to facilitate
eBusiness over public and private networks. For the first few months after we
introduce new products and services, the demand for and market acceptance of
those products and services are subject to a high level of uncertainty,
especially where acquisition of our products or services requires a large
capital commitment or other significant commitment of resources. Adoption of
eBusiness software solutions, particularly by those individuals and enterprises
that have historically relied upon traditional means of commerce and
communication, will require a broad acceptance of new and substantially
different methods of conducting business and exchanging information. These
products and services involve a new approach to the conduct of business, and, as
a result, intensive marketing and sales efforts may be necessary to educate
prospective customers regarding the uses and benefits of these products and
services in order to generate demand. The market for this broader functionality
may not develop, competitors may develop superior products and services, or we
may not develop acceptable solutions to address this functionality. Any one of
these events could seriously harm our business, operating results and financial
condition.
RAPID ADOPTION OF OUR MARKETPLACE SERVICES AND TRADEMATRIX SERVICES COULD REDUCE
OUR SOFTWARE LICENSING REVENUES.
Our customers may rapidly adopt our Marketplace Services and TradeMatrix
services. Revenues from these services will be based on subscriptions to or
utilization of digital marketplaces. This pricing model differs from our
historical model of deriving revenues from licenses of the RHYTHM suite of
products, which we largely recognize upon executing a contract and delivering
software. Although our revenue from digital marketplaces and TradeMatrix has
been immaterial to date, our business model calls for a growing portion of our
revenues in the future to be based upon subscription and utilization fees from
these services. To the extent that our customers choose to use our Marketplace
Services and TradeMatrix services in lieu of licensing the RHYTHM suite of
products, we may recognize lower revenues in the initial periods of our
relationships with these customers.
THE MARKETS IN WHICH WE COMPETE EXPERIENCE RAPID TECHNOLOGICAL CHANGE. IF WE DO
NOT RESPOND TO THE TECHNOLOGICAL ADVANCES OF THE MARKETPLACE, WE COULD SERIOUSLY
HARM OUR BUSINESS.
Enterprises are increasing their focus on decision-support solutions for
eBusiness challenges. As a result, they are requiring their application software
vendors to provide greater levels of functionality and broader product
offerings. Moreover, competitors continue to make rapid technological advances
in computer hardware and software technology and frequently introduce new
products, services and enhancements. We must continue to enhance our current
product line and develop and introduce new products and services that keep pace
with the technological developments of our competitors. We must also satisfy
increasingly sophisticated customer requirements. If we cannot successfully
respond to the technological advances of others, or if our new products or
product enhancements and services do not achieve market acceptance, these events
could seriously harm our business, operating results and financial condition.
IF USE OF THE INTERNET FOR COMMERCE AND COMMUNICATION DOES NOT INCREASE AS WE
ANTICIPATE, OUR BUSINESS WILL SUFFER.
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We are offering new and enhanced products and services, some of which, such
as Marketplace Services and TradeMatrix, depend on increased acceptance and use
of the Internet as a medium for commerce and communication. Rapid growth in the
use of the Internet is a recent phenomenon. As a result, acceptance and use may
not continue to develop at historical rates, and a sufficiently broad base of
business customers may not adopt or continue to use the Internet as a medium of
commerce. Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty, and there
exist few proven services and products.
Our business could be seriously harmed if:
o use of the Internet and other online services does not continue to
increase or increases more slowly than expected;
o the necessary communication and computer network technology underlying
the Internet and other online services does not effectively support any
expansion that may occur;
o new standards and protocols are not developed or adopted in a timely
manner; or
o for any other reason -- such as concerns about security, reliability,
cost, ease of use, accessibility or quality of service -- the Internet
does not create a viable commercial marketplace, inhibiting the
development of electronic commerce and reducing the need for and
desirability of our products and services.
FUTURE REGULATION OF THE INTERNET MAY SLOW ITS GROWTH, RESULTING IN DECREASED
DEMAND FOR OUR PRODUCTS AND SERVICES AND INCREASED COSTS OF DOING BUSINESS.
Due to increasing popularity and use of the Internet, it is possible that
state and federal regulators could adopt laws and regulations that impose
additional burdens on companies conducting business online. For example, the
growth and development of the market for Internet-based services may prompt
calls for more stringent consumer protection laws. Moreover, the applicability
to the Internet of existing laws in various jurisdictions governing issues such
as property ownership, sales tax, libel and personal privacy is uncertain and
may take years to resolve. Any new legislation or regulation, the application of
laws and regulations from jurisdictions whose laws do not currently apply to our
business, or the application of existing laws and regulations to the Internet
and other online services could decrease the expansion of the Internet, causing
our costs to increase and our growth to be harmed.
CONCERNS THAT OUR PRODUCTS DO NOT ADEQUATELY PROTECT THE PRIVACY OF CONSUMERS
COULD INHIBIT SALES OF OUR PRODUCTS.
One of the principal features of our customer management software
applications is the ability to develop and maintain profiles of consumers for
use by businesses. Typically, these products capture profile information when
consumers, business customers and employees visit a Web site and volunteer
information in response to survey questions concerning their backgrounds,
interests and preferences. Our products augment these profiles over time by
collecting usage data. Although we have designed our customer management
products to enable the development of applications that permit Web site visitors
to prevent the distribution of any of their personal data beyond that specific
Web site, privacy concerns may nevertheless cause visitors to resist providing
the personal data necessary to support this profiling capability. If we cannot
adequately address consumers' privacy concerns, these concerns could seriously
harm our business, financial condition and operating results.
IF OUR ENCRYPTION TECHNOLOGY FAILS TO ENSURE THE SECURITY OF OUR CUSTOMERS'
ONLINE TRANSACTIONS, SERIOUS HARM TO OUR BUSINESS COULD RESULT.
The secure exchange of value and confidential information over public
networks is a significant concern of consumers engaging in online transactions
and interaction. Our customer management software applications use encryption
technology to provide the security necessary to effect the secure exchange of
value and confidential information. Advances in computer capabilities, new
discoveries in the field of cryptography or other events or
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developments could result in a compromise or breach of the algorithms that these
applications use to protect customer transaction data. If any compromise or
breach were to occur, it could seriously harm our business, financial condition
and operating results.
WE MAY NOT SUCCESSFULLY INTEGRATE OR REALIZE THE INTENDED BENEFITS OF OUR RECENT
ACQUISITIONS.
We acquired InterTrans Logistics Solutions Limited, or ITLS, in April 1998
and SMART in July 1999. In addition, we have acquired other businesses and
products to help broaden and strengthen our product portfolio. The success of
these acquisitions will depend primarily on our ability to:
o retain, motivate and integrate the acquired personnel;
o integrate multiple information systems; and
o integrate acquired software with our existing products and services.
We may encounter difficulties in integrating our operations and products with
those of ITLS, SMART and others. We may not realize the benefits that we
anticipated when we made these acquisitions. Our failure to successfully
integrate our operations and products with those of ITLS, SMART and others could
seriously harm our business, operating results and financial condition.
WE MAY MAKE FUTURE ACQUISITIONS OR ENTER INTO JOINT VENTURES THAT MAY NOT BE
SUCCESSFUL.
In the future, we may acquire additional businesses, products and
technologies, or enter into joint venture arrangements, that could complement or
expand our business. Management's negotiations of potential acquisitions or
joint ventures and management's integration of acquired businesses, products or
technologies could divert their time and resources. Any future acquisitions
could require us to issue dilutive equity securities, incur debt or contingent
liabilities, amortize goodwill and other intangibles, or write off in-process
research and development and other acquisition-related expenses. Further, we may
not be able to integrate any acquired business, product or technology with our
existing operations or train, retain and motivate personnel from the acquired
business. If we are unable to fully integrate an acquired business, product or
technology or train, retain and motivate personnel from the acquired business,
we may not receive the intended benefits of that acquisition.
WE FACE RISKS ASSOCIATED WITH INTERNATIONAL SALES AND OPERATIONS THAT COULD HARM
OUR COMPANY.
Our international operations are subject to risks inherent in international
business activities. In addition, we may expand our international operations in
the future, which would increase our exposure to these risks. The risks we face
internationally include:
o difficulties and costs of staffing and managing geographically
disparate operations;
o longer accounts receivable payment cycles in certain countries;
o compliance with a variety of foreign laws and regulations;
o unexpected changes in regulatory requirements;
o overlap of different tax structures;
o greater difficulty in safeguarding intellectual property;
o import and export licensing requirements;
o trade restrictions;
o changes in tariff rates;
o political instability; and
o general economic conditions in international markets.
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CHANGES IN THE VALUE OF THE U.S. DOLLAR, AS COMPARED TO THE CURRENCIES OF
FOREIGN COUNTRIES WHERE WE TRANSACT BUSINESS, COULD HARM OUR OPERATING RESULTS.
To date, our international revenues have been denominated primarily in U.S.
dollars. The majority of our international expenses and some revenues have been
denominated in currencies other than the U.S. dollar. Therefore, changes in the
value of the U.S. dollar as compared to these other currencies may adversely
affect our operating results. As our international operations expand, we will
use an increasing number of foreign currencies, causing our exposure to currency
exchange rate fluctuations to increase. Although we have implemented limited
hedging programs to mitigate our exposure to currency fluctuations, currency
exchange rate fluctuations have caused, and will continue to cause, currency
transaction gains and losses. While these gains and losses have not been
material to date, they may harm our business, results of operations or financial
condition in the future.
WE DEPEND ON OUR STRATEGIC PARTNERS AND OTHER THIRD PARTIES. IF WE FAIL TO
DERIVE BENEFITS FROM OUR EXISTING AND FUTURE STRATEGIC RELATIONSHIPS, OUR
BUSINESS WILL SUFFER.
From time to time, we have collaborated with other companies, including IBM
and PricewaterhouseCoopers, in areas such as product development, marketing,
distribution and implementation. Maintaining these and other relationships is a
meaningful part of our business strategy. However, some of our current and
potential strategic partners are either actual or potential competitors, which
may impair the viability of these relationships. In addition, some of our
relationships have failed to meet expectations and may fail to meet expectations
in the future. We may not be able to enter into successful new strategic
relationships in the future.
THE LOSS OF ANY OF OUR KEY PERSONNEL OR OUR FAILURE TO ATTRACT ADDITIONAL
PERSONNEL COULD SERIOUSLY HARM OUR COMPANY.
We rely upon the continued service of a relatively small number of key
technical and senior management personnel. Our future success depends on
retaining our key employees and our continuing ability to attract, train and
retain other highly qualified technical and managerial personnel. Very few of
our key technical or senior management personnel are bound by employment
agreements. As a result, our employees could leave with little or no prior
notice. In the past, we have had difficulty recruiting qualified personnel. We
may not be able to attract, assimilate or retain other highly qualified
technical and managerial personnel in the future. Our loss of any of our key
technical and senior management personnel or our inability to attract, train and
retain additional qualified personnel could seriously harm our business,
operating results and financial condition.
IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR FACE A
CLAIM OF INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, WE COULD LOSE OUR
INTELLECTUAL PROPERTY RIGHTS OR BE LIABLE FOR SIGNIFICANT DAMAGES.
We rely primarily on a combination of copyright, trademark and trade secret
laws, confidentiality procedures and contractual provisions to protect our
proprietary rights. However, these measures afford only limited protection.
Unauthorized parties may attempt to copy aspects of our products or to obtain
and use information that we regard as proprietary. Although we believe software
piracy may be a problem, we are not able to determine the extent to which piracy
of our software products exists. Policing unauthorized use of our products is
difficult, and we cannot be certain that the steps we have taken will prevent
misappropriation of our technology. This is particularly true in foreign
countries where the laws may not protect proprietary rights to the same extent
as the laws of the United States and may not provide us with an effective remedy
against piracy.
As the number of products and competitors continues to grow, the
functionality of products in different industry segments is increasingly
overlapping. As a result, we increasingly may be subject to claims of
intellectual property infringement. Although we are not aware that any of our
products infringe upon the proprietary rights of third parties, third parties
may claim infringement by us with respect to current or future products. Any
infringement
9
<PAGE> 11
claims, with or without merit, could be time-consuming, result in costly
litigation or damages, cause product shipment delays or the loss or deferral of
sales, or require us to enter into royalty or licensing agreements. If we enter
into royalty or licensing agreements in settlement of any litigation or claims,
these agreements may not be on terms acceptable to us. Unfavorable royalty and
licensing agreements could seriously harm our business, operating results and
financial condition.
We resell some software that we license from third parties. Although we may
continue this practice, third-party software licenses may not continue to be
available to us on commercially reasonable terms. Our inability to maintain or
obtain any of these software licenses will delay or reduce our product shipments
until we can identify, license and integrate equivalent software. Any loss of
these licenses or delay or reduction in product shipments could harm our
business, operating results and financial condition.
OUR PRODUCTS' FAILURE TO REMAIN COMPATIBLE WITH EXISTING AND NEW COMPUTERS AND
SOFTWARE OPERATING SYSTEMS WOULD SERIOUSLY HARM OUR BUSINESS.
Our RHYTHM software can operate on hardware platforms from Digital
Equipment, Hewlett-Packard, IBM and Sun Microsystems and operating systems from
Sun Microsystems and Microsoft. RHYTHM can access data from most widely-used
structured query language databases, including Informix, Oracle and Sybase. If
additional hardware or software platforms gain significant market acceptance, we
may be required to attempt to adapt RHYTHM to those platforms in order to remain
competitive. However, those platforms may not be architecturally compatible with
RHYTHM's software product design, and we may not be able to adapt RHYTHM to
those additional platforms on a timely basis, or at all. Any failure to maintain
compatibility with existing platforms or to adapt to new platforms that achieve
significant market acceptance would seriously harm our business, operating
results and financial condition.
OUR SOFTWARE IS COMPLEX AND MAY CONTAIN UNDETECTED ERRORS.
Our software programs are complex and may contain undetected errors or
"bugs." Although we conduct extensive testing, we may not discover bugs until
our customers install and use a given product or until the volume of services
that a product provides increases. On occasion, we have experienced delays in
the scheduled introduction of new and enhanced products because of bugs.
Undetected errors could result in loss of customers or reputation, adverse
publicity, loss of revenues, delay in market acceptance, diversion of
development resources, increased insurance costs or claims against us by
customers, any of which could seriously harm our business, operating results and
financial condition.
RELEASES OF AND PROBLEMS WITH NEW PRODUCTS MAY CAUSE PURCHASING DELAYS, WHICH
WOULD HARM OUR REVENUES.
Customers may delay their purchasing decisions in anticipation of our new or
enhanced products, or products of competitors. Delays in customer purchasing
decisions could seriously harm our business and operating results. Moreover,
significant delays in the general availability of new releases, significant
problems in the installation or implementation of new releases, or customer
dissatisfaction with new releases could seriously harm our business, operating
results and financial condition.
OUR FAILURE TO SUCCESSFULLY RECRUIT AND RETAIN TECHNICAL AND IMPLEMENTATION
PERSONNEL COULD REDUCE OUR LICENSE REVENUES OR LIMIT THE GROWTH OF OUR LICENSE
REVENUES.
A shortage of qualified technical sales support personnel could harm our
ability to expand sales and enter into new vertical markets. We will depend on
our trained implementation personnel or those of independent consultants to
implement our products and services. A shortage in the number of trained
implementation personnel could limit our ability to implement our software and
services on a timely and effective basis. Delayed or ineffective implementation
of our software and services may limit our ability to expand our revenues and
may result in customer dissatisfaction and harm to our reputation. Any of these
events could seriously harm our business, operating results and financial
condition.
10
<PAGE> 12
RESIDUAL PROBLEMS RELATING TO THE "YEAR 2000 ISSUE" COULD ADVERSELY AFFECT OUR
COMPANY.
Prior to January 1, 2000, there was a great deal of concern regarding the
ability of computers to adequately distinguish 21st century dates from 20th
century dates due to the two-digit date fields used by many systems. Most
reports to date, however, are that computer systems are functioning normally and
the compliance and remediation work accomplished leading up to 2000 was
effective to prevent any problems. Computer experts have warned that there may
still be residual consequences of the change in centuries, and any such
difficulties could result in a decrease in sales of our products, an increase in
allocation of resources to address Year 2000 problems of our customers without
additional revenue commensurate with such dedication of resources, or an
increase in litigation costs relating to losses suffered by our customers due to
such Year 2000 problems.
WE MAY BECOME SUBJECT TO PRODUCT LIABILITY CLAIMS.
Our license agreements typically seek to limit our exposure to product
liability claims from our customers. However, these contract provisions may not
preclude all potential claims. Additionally, our general liability insurance may
be inadequate to protect us from all liability that we may face. Product
liability claims could require us to spend significant time and money in
litigation or to pay significant damages. As a result, any claim, whether or not
successful, could harm our reputation and business, operating results and
financial condition.
OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE VOTING CONTROL.
Our executive officers and directors together beneficially own approximately
44% of the total voting power of our company. Accordingly, these stockholders
will be able to determine the composition of our Board of Directors, will retain
the voting power to approve all matters requiring stockholder approval and will
continue to have significant influence over our affairs.
OUR CHARTER AND BYLAWS HAVE ANTI-TAKEOVER PROVISIONS.
Provisions of our Certificate of Incorporation and our Bylaws as well as the
Delaware General Corporation Law could make it more difficult for a third party
to acquire us, even if doing so would be beneficial to our stockholders. We are
subject to the provisions of Section 203 of the Delaware General Corporation
Law, which restricts certain business combinations with interested stockholders.
The combination of these provisions may inhibit a non-negotiated merger or other
business combination.
11
<PAGE> 13
OUR STOCK PRICE HISTORICALLY HAS BEEN VOLATILE, WHICH MAY MAKE IT MORE DIFFICULT
FOR YOU TO RESELL COMMON STOCK WHEN YOU WANT AT PRICES YOU FIND ATTRACTIVE.
The market price of our common stock has been volatile in the past, and the
market price of our common stock may be volatile in the future. The following
factors may significantly affect the market price of our common stock:
o quarterly variations in our results of operations;
o the announcement of new products or product enhancements by us or our
competitors;
o technological innovations by us or our competitors; and
o general market conditions or market conditions specific to particular
industries.
In particular, the stock prices of many companies in the technology and emerging
growth sectors have fluctuated widely due to events unrelated to their operating
performance. These fluctuations may harm the market price of the common stock.
THE PRICE OF OUR COMMON STOCK MAY DECLINE DUE TO SHARES ELIGIBLE FOR FUTURE
SALE.
Sales of substantial amounts of common stock in the public market following
this offering, or the appearance that a large number of shares is available for
sale, could adversely affect the market price for our common stock. In addition
to the adverse effect a price decline could have on holders of common stock,
that decline would likely impede our ability to raise capital by issuing
additional shares of common stock or other equity securities.
IF WE ARE REQUIRED TO REGISTER AS AN INVESTMENT COMPANY, WE WOULD BECOME SUBJECT
TO SUBSTANTIAL REGULATION, WHICH WOULD INTERFERE WITH OUR ABILITY TO IMPLEMENT
OUR BUSINESS PLAN.
As a result of our previous financings, we have substantial cash, cash
equivalents and short-term investments. We plan to continue investing the excess
proceeds of these financings in short-term instruments consistent with prudent
cash management and not primarily for the purpose of achieving investment
returns. Investment in securities primarily for the purpose of achieving
investment returns could result in our being an "investment company" under the
Investment Company Act of 1940. The Investment Company Act requires the
registration of companies that are primarily in the business of investing,
reinvesting or trading securities or that fail to meet certain statistical tests
regarding their composition of assets and sources of income, even though they
consider themselves not to be primarily engaged in investing, reinvesting or
trading securities. We believe that we are primarily engaged in a business other
than investing in or trading securities and, therefore, are not an investment
company within the meaning of the Investment Company Act. If the Investment
Company Act required us to register as an investment company, we would become
subject to substantial regulation with respect to our capital structure,
management, operations, transactions with affiliated persons and other matters.
Application of the provisions of the Investment Company Act to us may materially
and adversely affect our business, prospects, operating results and ability to
repay our debt.
12
<PAGE> 14
SELLING STOCKHOLDERS
The following table sets forth the number of shares owned by each of
the selling stockholders. None of the selling stockholders has had a material
relationship with us within the past three years other than as a result of the
ownership of the shares or other securities of i2. No estimate can be given as
to the amount of shares that will be held by the selling stockholders after
completion of this offering because the selling stockholders may offer all or
some of the shares and because there currently are no agreements, arrangements
or understandings with respect to the sale of any of the shares. The shares
offered by this prospectus may be offered from time to time by the selling
stockholders named below.
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE
NUMBER OF SHARES OWNED AFTER THE OFFERING
OWNED BEFORE THE NUMBER OF SHARES BEING -------------------------
NAME OF SELLING STOCKHOLDER OFFERING (1) OFFERED (2) NUMBER PERCENT
--------------------------- ----------------------- ---------------------- --------- ---------
<S> <C> <C> <C> <C>
Austin Ventures IV-A, L.P. 13,465 338 13,127 *
Austin Ventures IV-B, L.P. 28,250 710 27,540 *
Internet Capital Group 15,354 15,354 0 *
Technology Development
Corporation 2,007 2,007 0 *
Richard E. Anderson 6,500 195 6,305 *
Kitychco, Inc. 9,000 195 8,805 *
Kenneth A. Fox 195 195 0 *
Charles A. Anderson 96 96 0 *
Billy Rose Parrish and James 98 98 0 *
Michael Parrish
</TABLE>
- ----------------------
* Represents beneficial ownership of less than one percent.
(1) Includes shares issuable upon the exercise of warrants.
(2) This prospectus also shall cover any additional shares of common stock
which become issuable in connection with the shares registered for sale by
this prospectus 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 our
outstanding shares of common stock.
PLAN OF DISTRIBUTION
We are registering all 19,188 shares to be sold under this prospectus
on behalf of the holders of certain warrants. All of the shares will be issued
upon exercise of warrants to acquire shares of our common stock. The warrants
became exercisable for shares of our common stock in connection with our
acquisition of Sales Marketing Administration Research Tracking Technologies,
Inc., or SMART Technologies. We acquired SMART Technologies through a merger of
one of our wholly-owned subsidiaries with and into SMART Technologies. We will
receive no proceeds from this offering. The selling stockholders named in the
table above or pledgees, donees, transferees or other successors-in-interest
selling shares received from a named selling stockholder as a gift, partnership
distribution or other non-sale-related transfer after the date of this
prospectus (collectively, the "Selling Stockholders") may sell the shares from
time to time. The Selling Stockholders will act independently of us in making
decisions with respect to the timing, manner and size of each sale. The sales
may be made on one or more exchanges or in the over-the-counter market or
otherwise, at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Selling
Stockholders may effect such transactions by selling the shares to or through
broker-dealers. The shares may be sold by one or more of, or a combination of,
the following:
13
<PAGE> 15
o a block trade in which the broker-dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of such
exchange;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In effecting
sales, broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate in the resales.
The Selling Stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with Selling Stockholders. The
Selling Stockholders also may sell shares short and redeliver the shares to
close out such short positions. The Selling Stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares pursuant to this prospectus. The Selling Stockholders also
may loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the pledged
shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders. Broker-dealers
or agents may also receive compensation from the purchasers of the shares for
whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the sale.
Broker-dealers or agents and any other participating broker-dealers or the
Selling Stockholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, or the Securities Act, in
connection with sales of the shares. Accordingly, any such commission, discount
or concession received by them and any profit on the resale of the shares
purchased by them may be deemed to be underwriting discounts or commissions
under the Securities Act. Because Selling Stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, the
Selling Stockholders will be subject to the prospectus delivery requirements of
the Securities Act. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 promulgated under the Securities Act may
be sold under Rule 144 rather than pursuant to this prospectus.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. 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.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, or the Exchange Act, any person engaged in the distribution of the
shares may not simultaneously engage in market making activities with respect to
our common stock for a period of two business days prior to the commencement of
such distribution. In addition, each Selling Stockholder will be subject to
applicable provisions of the Exchange Act and the associated rules and
regulations under the Exchange Act, including Regulation M, which provisions may
limit the timing of purchases and sales of shares of our common stock by the
Selling Stockholders. We will make copies of this prospectus available to the
Selling Stockholders and have informed them of the need for delivery of copies
of this prospectus to purchasers at or prior to the time of any sale of the
shares.
We will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by a Selling
Stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose:
14
<PAGE> 16
o The name of each such Selling Stockholder and of the
participating broker-dealer(s);
o The number of shares involved;
o The price at which such shares were sold;
o The commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
o That such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
o Other facts material to the transaction.
In addition, upon being notified by a Selling Stockholder that a donee
or pledgee intends to sell more than 500 shares, we will file a supplement to
this prospectus.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The Selling Stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The Selling
Stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be
passed upon for us by Brobeck, Phleger & Harrison LLP, Austin, Texas.
EXPERTS
The consolidated financial statements included in our Report on Form
8-K dated November 30, 1999, incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
15
<PAGE> 17
We have not authorized any person to make a statement that differs from what is
in this prospectus. If any person does make a statement that differs from what
is in this prospectus, you should not rely on it. This prospectus is not an
offer to sell, nor is it seeking an offer to buy, these securities in any state
in which the offer or sale is not permitted. The information in this prospectus
is complete and accurate as of its date, but the information may change after
that date.
-------------------------------
i2 TECHNOLOGIES, INC.
19,188 SHARES
OF COMMON STOCK
-------------
PROSPECTUS
-------------
February __, 2000
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with the sale of common stock being registered. All amounts are estimates except
the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee............................. $ 1,247
Legal fees and expenses.......................... 15,000
Accounting fees and expenses..................... 5,000
Printing fees.................................... 5,000
Miscellaneous.................................... 12,000
---------
Total..................................... $ 38,247
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the Delaware General Corporation Law
(the "DGCL") 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 of the DGCL 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 of the DGCL 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; 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> 19
Section 102(b)(7) of the DGCL 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 DGCL 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 DGCL 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.
Article Eleventh of the registrant's Certificate of Incorporation, as
amended, provides that, to the fullest extent permitted by the DGCL, 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 DGCL,
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.
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 in this registration
statement by reference).
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included
in the opinion filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on page II-4 of this
registration statement).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(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 set forth
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
II-2
<PAGE> 20
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 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 this registration
statement or any material change to such information in this
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 foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and therefore is 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 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> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Dallas, State of Texas, on this this 3rd day of
February, 2000.
i2 TECHNOLOGIES, INC.
By: /s/ William M. Beecher
-------------------------
William M. Beecher
Executive Vice President and Chief Financial Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Sanjiv S. Sidhu and William M. Beecher,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, 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 file same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
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, and any of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below 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 and Chief February 3, 2000
- ------------------------------------ Executive Officer (Principal
Sanjiv S. Sidhu executive officer)
/s/ William M. Beecher Executive Vice President and Chief February 3, 2000
- ------------------------------------ Financial Officer (Principal
William M. Beecher financial officer)
Director
- ------------------------------------
Sandeep R. Tungare
/s/ Harvey B. Cash Director February 3, 2000
- ------------------------------------
Harvey B. Cash
/s/ Thomas J. Meredith Director February 3, 2000
- ------------------------------------
Thomas J. Meredith
</TABLE>
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
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 in this registration
statement by reference).
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included
in the opinion filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on page II-4 of this
registration statement).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[BROBECK, PHLEGER & HARRISON LLP LETTERHEAD]
February 8, 2000
i2 Technologies, Inc.
One i2 Place
11701 Luna Road
Dallas, Texas 75234
(469) 357-1000
Re: i2 Technologies, Inc. Registration Statement on
Form S-3 for 19,188 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 19,188 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, when
issued, will be duly authorized, validly issued, 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 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
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
November 19, 1999 for the year ended December 31, 1998, included in i2
Technologies, Inc.'s Form 8-K, dated November 30, 1999 and to all references to
our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Dallas, Texas
February 3, 2000
