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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 1997
REGISTRATION NO. 333-36227
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-8/S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Including registration of shares for resale by means of a Form S-3 Prospectus)
---------------------
J.D. EDWARDS & COMPANY
(Exact name of issuer as specified in its charter)
---------------------
<TABLE>
<S> <C>
DELAWARE 84-0728700
(State of Incorporation) (I.R.S. Employer Identification Number)
</TABLE>
ONE TECHNOLOGY WAY
DENVER, COLORADO 80237
(303) 334-4000
(Address, including zip code, and telephone number including area code, of
Registrant's principal executive offices)
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1992 INCENTIVE STOCK OPTION PLAN
1992 NONQUALIFIED STOCK OPTION PLAN
1997 EQUITY INCENTIVE PLAN
1997 EMPLOYEE STOCK PURCHASE PLAN
1997 EMPLOYEE STOCK PURCHASE PLAN FOR NON-U.S. EMPLOYEES
(Full title of the plans)
---------------------
RICHARD G. SNOW, JR., ESQ.
J.D. EDWARDS & COMPANY
ONE TECHNOLOGY WAY
DENVER, COLORADO 80237
(303) 334-4000
(Name, address, including zip code and telephone number, including area code, of
agent for service)
---------------------
COPY TO:
HERBERT P. FOCKLER, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value
-- To be issued under the 1992 Incentive Stock
Option Plan...................................... 12,851,013 shares $ 4.85 $ 62,327,413 $ 18,888(1)
-- To be issued under the 1992 Nonqualified Stock
Option Plan...................................... 8,932,700 shares 4.11 36,713,397 11,126(1)
-- Issued under the 1992 Incentive Stock Option
Plan............................................. 145,747 shares 23.00 3,352,181 1,016(1)
-- Additional Shares Issued under the 1992 Incentive
Stock Option Plan (the "Additional Shares")...... 10,500 shares 33.1875(2) 348,469(2) 103
-- To be issued under the 1997 Equity Incentive
Plan............................................. 10,000,000 shares 23.00 230,000,000 69,697(1)
-- To be issued under the 1997 Employee Stock
Purchase Plan and the 1997 Employee Stock
Purchase Plan for Non-U.S. Employees............. 2,000,000 shares 19.55 39,100,000 11,849(1)
----------------- ------------ --------
TOTAL........................................ 33,939,960 shares $371,841,460 $112,679(3)
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(1) This registration fee was previously paid.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee on the basis of the average between the
high and low price reported in the Nasdaq National Market on December 2,
1997, which average was $33.1875.
(3) The registration fee of $112,576 was previously paid; the balance of $103 is
being paid herewith.
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EXPLANATORY NOTE
This Registration Statement relates to (i) 33,783,713 shares of Common Stock to
be issued in the future upon the exercise of options or the purchase of stock
under the Company's employee benefit plans and (ii) the resale of 156,247 shares
of Common Stock previously issued under the Company's employee benefit plans.
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PROSPECTUS
156,247 SHARES
J.D. EDWARDS & COMPANY
COMMON STOCK
---------------------
This Prospectus relates to 156,247 shares of the Common Stock (the
"Shares") of J.D. Edwards & Company (the "Company"), which may be offered from
time to time by certain stockholders of the Company (the "Selling Stockholders")
for their own accounts. The Company will receive no part of the proceeds from
sales made hereunder. The Shares were acquired by the Selling Stockholders
pursuant to the Company's employee benefit plans. The Shares may be offered by
the Selling Stockholders from time to time in one or more transactions in the
over-the-counter market at prices prevailing therein, in negotiated transactions
at such prices as may be agreed upon, or in a combination of such methods of
sale. See "Plan of Distribution." The price at which any of the Shares may be
sold, and the commissions, if any, paid in connection with any such sale, are
unknown and may vary from transaction to transaction. The Selling Stockholders
will bear all sales commissions and similar expenses. Any other expenses
incurred by the Company in connection with the registration and offering that
are not borne by the Selling Stockholders will be borne by the Company. None of
the Shares have been registered prior to the filing of the Registration
Statement of which this Prospectus is a part.
The Company's Common Stock is listed on the Nasdaq National Market under
the symbol "JDEC." On December 5, 1997, the last sale price of the Company's
Common Stock was $34.75 per share.
---------------------
SEE "RISK FACTORS" ON PAGE 4 FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
---------------------
The Securities and Exchange Commission (the "Commission") may take the view
that, under certain circumstances, 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 of 1933, as amended (the "Securities Act"). Commissions,
discounts or concessions received by any such broker-dealer or agent may be
deemed to be underwriting commissions under the Securities Act. See "Plan of
Distribution."
---------------------
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.
---------------------
The date of this Prospectus is December 8, 1997
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
NW, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300, New
York, New York 10048 and Chicago Regional Office, Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C. 20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. The Common Stock of the Company is listed on the Nasdaq
National Market, and such reports, proxy and information statements and other
information concerning the Company may be inspected at the offices of Nasdaq
Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-8/S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is hereby made
to the Registration Statement. The Registration Statement may be inspected at
the public reference facilities maintained by the Commission at the addresses
set forth in the preceding paragraph. Statements contained herein concerning any
document filed as an exhibit are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement. Each such statement is qualified in its entirety by
such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission are hereby incorporated
by reference in this Prospectus:
(1) The Company's Registration Statement on Form S-1 (Registration No.
333-30701) under the Securities Act, in the form declared effective on
September 23, 1997, including the Prospectus dated September 23, 1997 as
filed by the Company pursuant to Rule 424(b) on September 24, 1997.
(2) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed September 19, 1997
pursuant to Section 12(g) of the Exchange Act and declared effective
September 23, 1997.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of this offering
shall be deemed to be incorporated by reference in this Prospectus and to
be part hereof from the date of filing of such reports and other documents.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request of any such person, a copy of any and all of the
information that has been or may be incorporated by reference in this
Prospectus, other than exhibits to such documents. Requests for such copies
should be directed to Richard G. Snow, Jr., Esq., General Counsel, J.D. Edwards
& Company, One Technology Way, Denver, Colorado, 80237. The Company's telephone
number at that location is (303) 334-4000.
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THE COMPANY
J.D. Edwards develops, markets and supports highly functional Enterprise
Resource Planning ("ERP") software solutions that operate on multiple computing
platforms and are designed to accelerate customers' time to benefit, lower
customers' costs of ownership and reduce information systems risks arising from
changes in technology and business practices. The Company's integrated software
application suites support manufacturing, finance, distribution/logistics and
human resources operations for multi-site and multinational organizations.
Through its Configurable Network Computing ("CNC") architecture, the Company's
ERP software is specifically designed to enable customers to change technology
and/or business practices while minimizing costs and business interruptions. The
Company provides implementation, training and support services designed to
enable customers to rapidly achieve the benefits of the Company's ERP solutions.
The Company has developed and marketed ERP solutions for over 20 years,
principally for operation on the IBM AS/400 platform and other IBM mid-range
systems and, more recently, on leading UNIX and Windows NT servers through
Windows- and Internet browser-enabled desktop clients. The Company was
incorporated in Colorado in March 1977 and was reincorporated in Delaware in
August 1997. The Company's principal executive office is located at One
Technology Way, Denver, Colorado 80237, and its telephone number at this
location is (303) 334-4000.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference contain
forward-looking statements that are based on current expectations, estimates and
projections about the Company's industry, management's beliefs, and assumptions
made by management. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
such forward-looking statements. Such risks and uncertainties include those set
forth herein under "Risk Factors," as well as those noted in the documents
incorporated herein by reference. The Company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.
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RISK FACTORS
The Shares offered hereby are speculative in nature and involve a high
degree of risk. The following risk factors should be considered carefully, in
addition to the other information contained in the documents incorporated by
reference herein, before purchasing the Common Stock offered hereby:
Variability of Quarterly Operating Results; Seasonality. The Company's
quarterly operating results have fluctuated significantly in the past, and will
likely continue to fluctuate in the future, as a result of a number of factors,
many of which are outside the Company's control. These factors include the
demand for the Company's software products and services; the size and timing of
specific sales; the level of product and price competition that the Company
encounters; the length of sales cycles; the timing of new product introductions
and product enhancements by the Company or its competitors; market acceptance of
new products; changes in pricing policies by the Company or its competitors; the
Company's ability to hire sales and consulting personnel to meet the demand, if
any, for implementations of the OneWorld version of its application suites; the
Company's ability to establish and maintain relationships with third-party
implementation providers; the Company's ability to establish and maintain
relationships with hardware and software suppliers; the announcement of new
hardware platforms that cause delay of customer purchases; variations in the
length of the implementation process for the Company's software products; the
Company's ability to complete fixed-price consulting contracts on budget; the
mix of products and services sold; the mix of distribution channels through
which products are sold; the mix of international and domestic revenue; changes
in the Company's sales incentives; changes in the renewal rate of support
agreements; product life cycles; software defects and other product quality
problems; seasonality of technology purchases; personnel changes; changes in the
Company's strategy; the activities of competitors; the extent of industry
consolidation; expansion of the Company's international operations; general
domestic and international economic and political conditions; and budgeting
cycles of the Company's customers. The timing of large individual sales has been
difficult for the Company to predict, and large individual sales have, in some
cases, occurred in quarters subsequent to those anticipated by the Company.
There can be no assurance that the loss or deferral of one or more significant
sales would not have a material adverse effect on the Company's quarterly
operating results.
The Company's software products are typically shipped when orders are
received, and consequently, license backlog at the beginning of any quarter has
in the past represented only a small portion of that quarter's expected revenue.
As a result, license fee revenue in any quarter is difficult to forecast because
it is substantially dependent on orders booked and shipped in that quarter.
Moreover, the Company typically recognizes a substantial amount of its revenue
in the last month of the quarter, frequently in the last week or even days of
the quarter. Since the Company's operating expenses are based on anticipated
revenue levels and because a high percentage of the Company's expenses are
relatively fixed in the near term, any shortfall from anticipated revenue or any
delay in the recognition of revenue could result in significant variations in
operating results from quarter to quarter. Quarterly license fee revenue is also
difficult to forecast because the Company's sales cycles, from initial
evaluation to delivery of software, vary substantially from customer to
customer. If revenue falls below the Company's expectations in a particular
quarter, the Company's operating results could be materially adversely affected.
See "-- Lengthy Sales Cycle."
The Company has experienced, and is expected to continue to experience, a
high degree of seasonality, with a disproportionately greater amount of the
Company's revenue for any fiscal year being recognized in its fourth fiscal
quarter and an even greater proportion of net income being recognized in such
quarter. For example, in fiscal 1996, 32% of total revenue, 39% of license fee
revenue, 28% of service revenue and 67% of net income were recognized in the
fourth fiscal quarter. In addition, because the Company's operating expenses are
relatively fixed in the near term, the Company's operating margins have
historically been significantly higher in its fourth fiscal quarter than in its
other quarters. The Company believes that such seasonality is primarily the
result of the efforts of the Company's direct sales force to meet or exceed
fiscal year-end sales quotas and the tendency of certain customers to finalize
sales contracts at or near the Company's fiscal year end. Because revenue,
operating margins and net income are greater in the fourth quarter, any
shortfall from anticipated revenue, particularly license fee revenue, in the
fourth quarter would have a disproportionately large adverse effect on the
Company's operating results for the fiscal year. In addition, the Company's
total revenue, license fee revenue, service revenue and net income in its first
fiscal
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quarter have historically been lower than those in the immediately preceding
fourth quarter. For example, total revenue, license fee revenue, service revenue
and net income in the first quarter of fiscal 1997 decreased 20%, 41%, 3% and
87%, respectively, from the fourth quarter of fiscal 1996. The Company's first
quarter revenue has historically slowed during the holiday season in November
and December.
Based on all of the foregoing, the Company believes that future revenue,
expenses and operating results are likely to vary significantly from quarter to
quarter. As a result, quarter-to-quarter comparisons of operating results are
not necessarily meaningful or indicative of future performance. Furthermore, the
Company believes it is likely that in some future quarter the Company's
operating results will be below the expectations of public market analysts or
investors. In such event, or in the event that adverse conditions prevail, or
are perceived to prevail, with respect to the Company's business or generally,
the market price of the Company's Common Stock would likely be materially
adversely affected.
Limited Deployment of OneWorld Version; Entering New Markets. The Company
first shipped the OneWorld version of its application suites in late calendar
1996. The Company's future revenue growth is substantially dependent upon the
market acceptance of these OneWorld application suites and the ability of the
Company to license OneWorld application suites to new customers who are not
currently users of the Company's WorldSoftware. The Company does not expect to
generate substantial OneWorld license fee revenue from its existing installed
base of WorldSoftware users. The Company expects that it will take a longer time
to implement the OneWorld version of its application suites than it takes to
implement the WorldSoftware version, which typically takes six to 18 months. To
date, only a limited number of the Company's customers have licensed the
OneWorld version of its application suites, and, due to the lengthy
implementation process, only a few have completed implementation of some or all
of the licensed OneWorld applications suites. Potential and existing customers
may find it difficult, or be unable, to successfully implement OneWorld
application suites, or may not purchase OneWorld application suites for a number
of reasons, including a lack of implementation experience by the Company or its
third-party implementation providers in complex multi-platform environments; a
customer's lack of the necessary hardware, software or networking
infrastructure; an absence of required functionality in OneWorld application
suites; excessive time and cost of implementation; the failure of the OneWorld
version to be competitive with other products on the market; defects or "bugs"
in OneWorld application suites; and a failure to meet customer expectations. In
addition, because the Company is using OneWorld application suites to target
potential customers in new markets, the Company must overcome certain
significant obstacles, including new competitors who have significantly more
experience and name recognition with open systems customers, implementations and
platforms; the Company's limited relationships with third-party implementation
providers; the limited experience of the Company's sales and consulting
personnel in the open systems environment; and the Company's limited existing
reference accounts in the open systems market. If, for any reason, the Company
is unable to successfully sell or implement OneWorld in the UNIX or Windows NT
("NT") markets, the Company's reputation would be damaged, and such failure
would have a material adverse effect on the Company's business, operating
results and financial condition. Moreover, if the Company fails to meet the
expectations of market analysts or investors with regard to sales or
implementations of OneWorld application suites, the market price of the
Company's Common Stock would likely be materially adversely affected.
Dependence on IBM AS/400 Platform. Although the Company has recently
released the OneWorld version of its application suites to run on leading UNIX
and NT servers, the Company is and, for an extended period, expects to remain
substantially dependent upon the market for software products for the IBM AS/400
platform. All of the Company's revenue in fiscal 1994, 1995 and 1996 and
substantially all of the Company's revenue for the first nine months of fiscal
1997 was derived from its software products and related services for the AS/400
market. The market for the AS/400 platform is expected to grow at a minimal
rate; however, there can be no assurance that the AS/400 market will grow at all
in the future. Similarly, there can be no assurance that AS/400 customers or
prospective customers will respond favorably to the Company's future or enhanced
software products or that the Company will continue to be successful in selling
its software products or services in the AS/400 market. The Company's future
growth will depend in part on its ability to gain market share in the AS/400
market; however, there can be no assurance that the Company will be able to
achieve any such market share gains or maintain its current market share.
Moreover, the Company's goal of
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gaining market share in the AS/400 market will be more difficult to achieve
since the Company is also focusing on the UNIX and NT markets. See
"-- Management of Growth; Need for Additional Qualified Personnel." If the
Company's AS/400 installed customer base erodes, resulting in a decline in
recurring support and other service revenue, the Company's business, operating
results and financial condition will be materially adversely affected.
Competition. The market for Enterprise Resource Planning ("ERP") software
solutions is intensely competitive, subject to rapid technological change and
significantly affected by new product introductions and other market activities
of industry participants. The Company's products are designed and marketed for
the AS/400 market and, more recently, for leading UNIX and NT servers. The
Company's primary competition comes from a large number of independent software
vendors including: (i) companies offering products that run on the AS/400
platform and other mid-range computers, including System Software Associates,
Inc., Marcam Corporation, Infinium Software, Inc. (formerly Software 2000) and
JBA Holdings plc; (ii) companies offering products that run on UNIX or NT
servers in a client/server environment, such as SAP Aktiengesellschaft ("SAP"),
Baan Company N.V. ("Baan"), PeopleSoft, Inc. ("PeopleSoft") and Oracle
Corporation ("Oracle"); and (iii) companies offering either standard or fully
customized products that run on mainframe computer systems, such as SAP.
Additionally, the Company faces indirect competition from suppliers of
custom-developed business application software that focus mainly on proprietary
mainframe and mid-range computer-based systems, such as systems consulting
groups of major accounting firms, and from IT departments of potential customers
that develop systems internally. The Company's competitors currently offer
products that run on the AS/400 platform and/or UNIX and NT servers or have
announced their intent to introduce such products in the near future. As a
result, the Company will experience increased competition. There can be no
assurance that the Company will be able to successfully compete with new or
existing competitors or that such competition will not have a material adverse
effect on the Company's business, operating results or financial condition.
Many of the Company's competitors, and SAP and Oracle in particular, have
significantly greater financial, technical, marketing and other resources than
the Company, as well as wider name recognition and larger installed customer
bases. Moreover, the Company has traditionally competed only in the AS/400
market, which primarily consists of mid-sized organizations, and has only
recently entered the UNIX and NT markets. In contrast, each of SAP, Baan,
PeopleSoft and Oracle has significantly more experience with UNIX and NT
implementations and platforms, name recognition with potential UNIX and NT
customers, and reference accounts with UNIX and NT customers. Accordingly, such
competitors have significantly more customers in the UNIX and NT markets to use
as references when competing against the Company. Additionally, several of the
Company's competitors have well-established relationships with current and
potential customers of the Company. These relationships may prevent the Company
from competing effectively in divisions or subsidiaries of such customers. Many
of the Company's competitors, such as SAP, Baan, PeopleSoft and Oracle, also
offer, or have announced their intention to offer, vertical applications
targeted to mid-sized organizations, which market comprises a substantial
portion of the Company's revenue. Further, several of the Company's competitors
regularly and significantly discount prices on their products. If these
competitors continue to discount or increase the amount or frequency of such
discounts in response to increased competition or other factors, the Company may
be required to similarly discount its products, which could have an adverse
effect on the Company's margins. There can be no assurance that the Company will
be able to compete successfully against any of these competitors.
The Company relies, and expects to increase its reliance, on a number of
third-party implementation providers and other customer support services, as
well as for recommendations of its products during the evaluation stage of the
purchase process. A number of the Company's competitors, including SAP, Baan,
PeopleSoft, and Oracle, have significantly more well-established relationships
with such providers and, as a result, such firms may be more likely to recommend
competitors' products rather than the Company's products. Furthermore, there can
be no assurance that these third parties, many of which have significantly
greater financial, technical, marketing and other resources than the Company,
will not market software products in competition with the Company in the future.
If the Company is unable to maintain or increase the
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number and quality of its relationships with providers who recommend, implement
or support ERP software, the Company's business, operating results and financial
condition will be materially adversely affected.
Lengthy Sales Cycle. The Company's software is generally used for division-
or enterprise-wide, business-critical purposes and involves significant capital
commitments by customers. Potential customers generally commit significant
resources to an evaluation of available enterprise software and require the
Company to expend substantial time, effort and money educating them about the
value of the Company's solutions. Sales of the Company's software products
require an extensive sales effort throughout a customer's organization because
decisions to license such software generally involve the evaluation of the
software by a significant number of customer personnel in various functional and
geographic areas, each often having specific and conflicting requirements. A
variety of factors, including factors over which the Company has little or no
control, may cause potential customers to favor a particular supplier or to
delay or forego a purchase. As a result of these or other factors, the sales
cycle for the Company's products is long, typically ranging between six and 15
months. Moreover, the Company expects that the sales cycle for the recently
released OneWorld version of its application suites may be longer than that of
the WorldSoftware version, at least until the Company's sales force becomes
familiar with the needs of customers operating on UNIX and NT servers. As a
result of the length of the sales cycle for its software products, the Company's
ability to forecast the timing and amount of specific sales is limited, and the
delay or failure to complete one or more large license transactions could have a
material adverse effect on the Company's business, operating results or
financial condition and cause the Company's operating results to vary
significantly from quarter to quarter. See "-- Variability of Quarterly
Operating Results; Seasonality."
Lengthy Implementation Process. The Company's software products are complex
and perform or directly affect business-critical functions across many different
functional and geographic areas of the enterprise. Consequently, implementation
of the Company's software is a complex, lengthy process that involves a
significant commitment of resources by the Company's customers and that is
subject to a number of significant risks over which the Company has little or no
control. The Company expects that implementation of the OneWorld version of its
application suites on UNIX and NT servers is likely to be more complex and
require more time than implementation on the AS/400 platform. In addition, the
Company's lack of experience in implementing the OneWorld version of its
application suites may contribute to the length of the implementation process.
Delays in the completion of implementations of any of its application suites
whether by the Company or its business partners, may result in customer
dissatisfaction or damage to the Company's reputation and could have a material
adverse effect on the Company's business, operating results or financial
condition.
Reliance on Third Parties and Development of Certain Relationships. The
Company intends to rely primarily on third-party implementation providers for
the implementation of the OneWorld version of its application suites. Although
the Company has historically subcontracted a portion of its implementation
services to third parties, the Company has adopted a strategy in which an
increasing number of OneWorld implementations will be performed by third parties
that will contract directly with the Company's customers to provide such
services. Executing this strategy will require that third-party implementation
providers with which the Company has existing relationships allocate additional
resources to OneWorld implementations and that the Company enter into new
relationships with additional third-party implementation providers to provide
such services. Due to the limited resources and capacities of many third-party
implementation providers and the reluctance of such providers to switch partners
or enter into new relationships with additional suppliers, there can be no
assurance that the Company will be able to establish or maintain relationships
with third parties having sufficient resources to provide the necessary
implementation services to support demand, if any, for the OneWorld version. If
such resources are unavailable, the Company will be required to perform such
services internally, and there can be no assurance that the Company will have
sufficient resources available for such purposes. In addition, there can be no
assurance that any third-party implementation provider with which the Company
has, or intends to establish, such a relationship will provide the level and
quality of service required to meet the needs and expectations of the Company's
customers. If the Company is unable to establish and maintain effective,
long-term relationships with such providers, or if such providers do not meet
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<PAGE> 10
customer needs, the Company's business, operating results or financial condition
will be materially adversely affected.
The Company has established a number of relationships with third parties,
including consulting and systems integration firms, hardware suppliers, and
database, operating system and other independent software vendors, in order to
enhance its sales, marketing and customer service efforts. Many of these third
parties have better established relationships with one or more of the Company's
competitors and may, in specific instances, select or recommend ERP software
offerings of the Company's competitors rather than the Company's software. In
addition, certain of these third parties, including Oracle, compete with the
Company in developing and marketing ERP software applications. Competition
between the Company and these third parties may cause a deterioration in or
termination of such relationships, which could have a material adverse effect on
the Company's business, operating results or financial condition. See
"-- Competition."
Dependence on Service Revenue. The Company licenses software under
non-cancelable license agreements and provides related services, which consist
of support, training, consulting and implementation. Total revenue from license
fees and services has increased from year to year. As a percentage of total
revenue, service revenue has increased from 55.3% of total revenue in fiscal
1994 to 62.3% of total revenue in fiscal 1996 primarily as a result of the
Company's continued emphasis on providing consulting and training services that
complement its software products and increased support revenue resulting from
the Company's growing installed base of customers. Furthermore, the Company has
historically subcontracted a portion of its consulting and training services to
third parties, and, in fiscal 1996, such subcontracted services accounted for
approximately 40.0% of services revenue. However, the Company is currently
pursuing a strategy of relying on third-party implementation providers to
contract directly with its customers for OneWorld implementation and related
services. To the extent the Company is successful in implementing this strategy
and the OneWorld version of the Company's application suites achieves market
acceptance in future periods, revenue from subcontracted services and total
service revenue as a percentage of revenue will likely decrease. If such revenue
decreases more than anticipated, the Company's operating results will be
materially adversely affected. There can be no assurance that the Company will
be successful in implementing its strategy or that such products will achieve
market acceptance, the failure of which could have a material adverse effect on
its business, operating results and financial condition.
Management of Growth; Need for Additional Qualified Personnel. Although the
Company has experienced significant revenue growth in past years, such growth is
not necessarily indicative of future revenue growth. This growth has resulted in
new and increased responsibilities for management personnel and has placed, and
continues to place, a significant strain upon the Company's management,
operating and financial resources. There can be no assurance that such strain
will not have a material adverse effect on the Company's business, operating
results or financial condition. The rapid growth of the Company's business has
required the Company to make significant recent additions in personnel,
particularly in product development and sales and marketing. The Company
believes that its future operating results depend in significant part on its
ability to attract and retain highly skilled technical, managerial, sales,
marketing, service and support personnel. Although the Company has increased the
number of its sales, services and support personnel in recent years, the Company
has experienced, and expects to continue to experience, difficulty in recruiting
such personnel. The Company anticipates that it will need to continue to
increase the size of its direct sales, services and support personnel in future
periods. If the Company is unable to hire qualified personnel on a timely basis,
the Company's business, operating results and financial condition will be
materially adversely affected.
To manage its operations, the Company must continuously evaluate the
adequacy of its management structure and its existing procedures, including,
among others, its financial and internal controls. There can be no assurance
that management will adequately anticipate all of the changing demands that
growth may impose on the Company's procedures and structure. Any failure to
adequately anticipate and respond to such changing demands may have a material
adverse effect on the Company's business, operating results or financial
condition. As a result of the Company's development and release of the OneWorld
version of its application suites, a significant amount of the Company's
resources has been focused on the UNIX and NT markets. To maintain a focus on
the AS/400 market, as well as on the UNIX and NT markets, the Company is in the
process of implementing certain internal organizational changes. If the
Company's efforts to maintain
8
<PAGE> 11
a focus on both markets are unsuccessful, the Company's business, operating
results and financial condition may be materially adversely affected.
Fixed-Price Service Contracts. The Company offers a combination of ERP
software, implementation and support services to its customers. Typically, the
Company enters into service agreements with its customers that provide for
consulting and implementation services on a "time and materials" basis. Certain
customers have asked for, and the Company has from time to time entered into,
fixed-price service contracts. These contracts specify certain milestones to be
met by the Company regardless of actual costs incurred by the Company in
fulfilling those obligations. The Company believes that fixed-price service
contracts may increasingly be offered by its competitors to differentiate their
product and service offerings. As a result, the Company may enter into more
fixed-price contracts in the future. There can be no assurance that the Company
can successfully complete these contracts on budget, and the Company's inability
to do so could have a material adverse effect on its business, operating results
and financial condition.
Year 2000 Compliance. Many currently installed computer systems and
software products 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 three 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. Although the Company currently offers software
products that are designed to be Year 2000 compliant, there can be no assurance
that the Company's software products contain all necessary date code changes.
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 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. In addition, it is possible that certain of the Company's
customers are purchasing support contracts only to ensure that they become Year
2000 compliant and that, once such customers believe they are Year 2000
compliant, they will not renew support contracts. If a significant number of the
Company's customers do not renew support contracts for this or other reasons,
the Company's business, operating results and financial condition would be
adversely affected. Many potential customers may also choose to defer purchasing
Year 2000 compliant products until they believe it is absolutely necessary, thus
resulting in potentially stalled market sales within the industry. Conversely,
Year 2000 issues may cause other companies to accelerate purchases, thereby
causing an increase in short-term demand and a consequent decrease in long-term
demand for software products. Additionally, Year 2000 issues could cause a
significant number of companies, including current Company customers, to
reevaluate their current ERP system needs, and as a result consider switching to
other systems or suppliers. Moreover, the Company believes that some customers
may be purchasing the Company's products as an interim solution to their Year
2000 needs until their current suppliers reach compliance. There can be no
assurance that such customers will purchase support services from the Company or
that they will upgrade beyond their current version of the Company's software
once their current software suppliers reach compliance. Any of the foregoing
could result in a material adverse effect on the Company's business, operating
results and financial condition.
International Operations and Currency Fluctuations. International revenue
as a percentage of total revenue ranged between 35% and 37% from fiscal 1994
through the first nine months of fiscal 1997, and the Company expects that
revenue from international customers will continue to account for a significant
portion of the Company's total revenue. The Company currently has 27
international sales offices located throughout Canada, Europe, Asia, Latin
America and Africa. To service the needs of its customers with international
operations, the Company and its support partners must provide worldwide product
support services. One of the Company's strategies is to continue to expand its
existing international operations and enter additional international markets,
which will require significant management attention and financial resources.
Traditionally, international operations are characterized by higher operating
expenses and lower operating margins. As a result, if international revenue
increases as a percentage of total revenue, operating margins may be adversely
affected. Costs associated with international expansion include the
establishment of additional foreign offices,
9
<PAGE> 12
the hiring of additional personnel, the localization and marketing of its
products for particular foreign markets, and the development of relationships
with additional international service providers. If international revenue is not
adequate to offset the expense of expanding foreign operations, the Company's
business, operating results or financial condition could be materially adversely
affected.
A significant portion of the Company's revenue is received in currencies
other than U.S. dollars and, in the past, the Company has engaged in minimal
hedging activities. As a result, the Company is subject to risks associated with
foreign exchange rate fluctuations. In the first nine months of fiscal 1997 and
fiscal 1996, the Company incurred foreign exchange losses of approximately $1.6
million and $1.1 million, respectively. Accordingly, due to the substantial
volatility of foreign exchange rates, there can be no assurance that foreign
exchange rate fluctuations will not have a material adverse effect on the
Company's business, operating results or financial condition.
The Company's international operations are subject to other risks inherent
in international business activities, such as the imposition of governmental
controls, export license requirements, restrictions on the export of certain
technology, cultural and language difficulties associated with servicing
customers, the impact of a recessionary environment in economies outside the
United States, reduced protection for intellectual property rights in some
countries, the potential exchange and repatriation of foreign earnings,
political instability, trade restrictions, tariff changes, localization and
translation of products for foreign countries, difficulties in staffing and
managing international operations, difficulties in collecting accounts
receivable and longer collection periods, and the impact of local economic
conditions and practices. The Company's success in expanding its international
business will be dependent, in part, on its ability to anticipate and
effectively manage these and other risks. There can be no assurance that these
and other factors will not have a material adverse effect on the Company's
business, operating results or financial condition.
Risks Associated with New Versions and New Products; Rapid Technological
Change; Risks of Software Defects. The market for the Company's products is
characterized by rapid technological change, evolving industry standards in
computer hardware and software technology, changes in customer requirements and
frequent new product introductions and enhancements. The introduction of
products embodying new technologies and the emergence of new industry standards
can render existing products obsolete and unmarketable. The life cycles of the
Company's software products are difficult to estimate. As a result, the
Company's future success will depend, in part, upon its ability to continue to
enhance existing products and develop and introduce in a timely manner new
products that keep pace with technological developments, satisfy customer
requirements and achieve market acceptance. There can be no assurance that the
Company will successfully identify new product opportunities and develop and
bring new products to market in a timely and cost-effective manner, or that
products, capabilities or technologies developed by others will not render the
Company's products or technologies obsolete or noncompetitive or shorten the
life cycles of the Company's products. See "-- Competition." Although the
Company has addressed the need to develop new products and enhancements
primarily through its internal development efforts, the Company has also
addressed this need through the licensing of third-party technology. Licensing
third-party technology involves numerous risks. See "-- Limited Protection of
Proprietary Technology; Risks of Infringement." If the Company is unable to
develop on a timely and cost-effective basis new software products or
enhancements to existing products, or if such new products or enhancements do
not achieve market acceptance, the Company's business, operating results and
financial condition may be materially adversely affected.
Historically, the Company has issued significant new releases of its family
of software products periodically, with interim releases issued even more
frequently. As a result of the complexities inherent in software development,
and in particular for multi-platform environments, and the broad functionality
and performance demanded by customers for ERP products, major new product
enhancements and new products can require long development and testing periods
before they are commercially released. The Company has on occasion experienced
significant delays in the scheduled introduction of new and enhanced products,
and there can be no assurance that such delays will not be experienced in the
future. The Company recently released OneWorld, the network-centric version of
its application suites. Because the development of enhancements in
network-centric environments is more complex than in host-centric systems, there
can be no assurance that the introduction of future enhancements will not be
delayed.
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<PAGE> 13
Complex software products such as those offered by the Company frequently
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. The Company has in the past
discovered software errors in new versions of its ERP software after their
release. To date, the Company's business, operating results or financial
condition have not been materially adversely affected by the release of products
containing errors. There can be no assurance, however, that errors will not be
found in the Company's products or that such errors will not result in delay or
loss of revenue, diversion of development resources, damage to the Company's
reputation, increased service and warranty costs, or impaired market acceptance
of these products, any of which could result in a material adverse effect on the
Company's business, operating results or financial condition.
Dependence on Key Personnel. The Company's success depends to a significant
extent upon a limited number of members of senior management and other key
employees. The loss of one or more key employees could have a material adverse
effect on the Company. Although the Company currently maintains key man life
insurance on C. Edward McVaney, Chairman, President and Chief Executive Officer,
such insurance is minimal and is not maintained on other key personnel. The
Company does not have employment agreements with its executive officers. In
addition, the Company believes that its future success will depend in part on
its ability to attract and retain highly skilled technical, managerial, sales
and marketing personnel. Competition for such personnel in the computer software
industry is intense. There can be no assurance that the Company will be
successful in attracting and retaining such personnel, and the failure to do so
could have a material adverse effect on the Company's business, operating
results or financial condition.
Limited Protection of Proprietary Technology; Risks of Infringement. The
Company's ability to compete is dependent in part upon its internally developed,
proprietary intellectual property. Although the Company currently has no
patents, it has five patent applications pending on various aspects of its
application suites. In addition, the Company has applied to register the
trademarks "WorldSoftware" and "OneWorld." The Company also relies on general
trademark and copyright protection for its technology, although it generally
does not register such intellectual property. Furthermore, the Company relies on
trade secret law, confidentiality procedures and licensing arrangements to
establish and protect its rights in its technology. Nevertheless, the Company
believes that factors such as the technological and creative skills of its
personnel, new product developments, frequent product enhancements, name
recognition, customer training and reliable product support, are more essential
to protect its market position. There can be no assurance that others will not
develop technologies that are similar or superior to the Company's technology.
The Company typically enters into confidentiality or license agreements with its
employees, consultants and suppliers, and typically controls access to and
distribution of its software, documentation and other proprietary information.
Despite these precautions, it may be possible for a third party to copy or
otherwise obtain and use the Company's products or technology without
authorization, or to develop similar technology independently through reverse
engineering or other means. In addition, the laws of some foreign countries do
not protect the Company's proprietary rights as fully as do the laws of the
United States. There can be no assurance that the Company's means of protecting
its proprietary rights in the United States or abroad will be adequate or that
competitors will not independently develop similar technology. Preventing or
detecting unauthorized use of the Company's products is difficult. There can be
no assurance that the steps taken by the Company will prevent misappropriation
of its technology or that its license agreements will be enforceable. In
addition, litigation may be necessary in the future to enforce the Company's
intellectual property rights, to protect the Company's trade secrets, to
determine the validity and scope of the proprietary rights of others, or to
defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversion of resources and could have a material
adverse effect on the Company's business, operating results or financial
condition.
The Company typically licenses its products to end users under the
Company's standard license agreements, although each license is individually
negotiated and may contain variations. The Company's products are licensed not
only to end users, but also to independent, third-party distributors with a
right to sublicense. Although the Company seeks to establish the conditions
under which the Company's products are licensed by such distributors to end
users, the Company cannot ensure that its distributors do not deviate from such
conditions. Moreover, in order to facilitate the customization required by most
of the Company's
11
<PAGE> 14
customers, the Company generally licenses its software products to end users in
both object code (machine-readable) and source code (human-readable) format.
Although this practice facilitates customization, making software available in
source code also makes it easier for third parties to copy or modify the
Company's software for non-permitted purposes.
In the future, the Company may receive notice of claims of infringement of
other parties' proprietary rights. Although the Company does not believe that
its products infringe the proprietary rights of third parties, there can be no
assurance that infringement or invalidity claims (or claims for indemnification
resulting from infringement claims) will not be asserted or prosecuted against
the Company or that any such assertions or prosecutions will not materially
adversely affect the Company's business, operating results or financial
condition. Regardless of the validity or the successful assertion of such
claims, defending against such claims could result in significant costs and
diversion of resources with respect to the defense thereof, which could have a
material adverse effect on the Company's business, operating results or
financial condition. In addition, the assertion of such infringement claims
could result in injunctions preventing the Company from distributing certain
products, which would have a material adverse effect on the Company's business,
operating results and financial condition. If any claims or actions are asserted
against the Company, the Company may seek to obtain a license to such
intellectual property rights. There can be no assurance, however, that such a
license would be available on reasonable terms or at all.
The Company also relies on certain other technology which it licenses from
third parties, including software that is integrated with internally developed
software and used in the Company's products to perform key functions. Most
notably, the Company licenses the graphical user interface to the WorldSoftware
version of its application suites (which the Company markets as WorldVision).
There can be no assurance that these third-party technology licenses will
continue to be available to the Company on commercially reasonable terms. The
loss of, or inability to maintain, any of these technology licenses,
particularly that for WorldVision's graphical user interface, would result in
delays or reductions in product shipments until equivalent technology could be
identified, licensed or developed, and integrated. Any such delays or reductions
in product shipments could materially adversely affect the Company's business,
operating results or financial condition. Moreover, although the Company is
generally indemnified by third parties against claims that such third parties'
technology infringes the proprietary rights of others, such indemnification is
not always available for all types of intellectual property rights (for example,
patents may be excluded) and in some cases the geographic scope of
indemnification is limited. The result is that the indemnity that the Company
receives against such claims is often less broad than the indemnity that the
Company provides to its customers. Even in cases in which the indemnity that the
Company receives from a third-party licensor is as broad as the indemnity that
the Company provides to its customers, the third-party licensors from whom the
Company would be receiving indemnity are often not well-capitalized and may not
be able to indemnify the Company in the event that such third-party technology
infringes the proprietary rights of others. Accordingly, the Company could have
substantial exposure in the event that technology licensed from a third party
infringes another party's proprietary rights. The Company currently does not
have any liability insurance to protect against the risk that licensed
third-party technology infringes the proprietary rights of others. There can be
no assurance that infringement or invalidity claims arising from the
incorporation of third-party technology, and claims for indemnification from the
Company's customers resulting from such infringement claims, will not be
asserted or prosecuted against the Company or that any such assertions or
prosecutions will not materially adversely affect the Company's business,
operating results or financial condition. Regardless of the validity or
successful assertion of such claims, the Company could incur significant costs
and diversion of resources with respect to the defense thereof, in addition to
potential product redevelopment costs and delays, all of which could have a
material adverse effect on the Company's business, operating results or
financial condition.
Security; Product Liability. The Company has included security features in
certain of its Internet browser-enabled products that are intended to protect
the privacy and integrity of customer data. Despite the existence of these
security features, the Company's software products may be vulnerable to
break-ins and similar disruptive problems caused by Internet users. Such
computer break-ins and other disruptions may jeopardize the security of
information stored in and transmitted through the computer systems of the
Company's customers. Break-ins often involve hackers bypassing firewalls and
misappropriating confidential
12
<PAGE> 15
information. Addressing problems caused by such third parties may require
significant expenditures of capital and resources by the Company, which may have
a material adverse effect on the Company's business, operating results or
financial condition.
Although the Company's license agreements with its customers typically
contain provisions designed to limit the Company's exposure to potential
liability for damages arising out of use of or defects in the Company's
products, it is possible that such limitation of liability provisions may not be
effective as a result of existing or future federal, state or local laws or
ordinances or unfavorable judicial decisions. Although the Company has not
experienced any such product liability claims to date, there can be no assurance
that the Company will not be subject to such claims in the future. Because the
Company's software products may be used in business-critical applications, a
successful product liability claim brought against the Company could have a
material adverse effect on the Company's business, operating results or
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 or financial condition.
General Economic and Market Conditions. Segments of the software industry
have experienced significant economic downturns characterized by decreased
product demand, price erosion, work slowdowns and layoffs. The Company's
operations may in the future experience substantial fluctuations from period to
period as a consequence of general economic conditions affecting the timing of
orders from major customers and other factors affecting capital spending.
Although the Company has a diverse client base, it has targeted certain vertical
markets. Therefore, any economic downturns in general or in the targeted
vertical segments in particular would have a material adverse effect on the
Company's business, operating results and financial condition.
Control by Existing Stockholders. Immediately after the closing of the
Company's IPO (as defined herein) (based on shares outstanding at July 31,
1997), 61.4% of the outstanding Common Stock was held by the directors and
executive officers of the Company, together with certain entities affiliated
with them, assuming no exercise of outstanding stock options. As a result, these
stockholders, if acting together, would be able to control substantially all
matters requiring approval by the stockholders of the Company, including the
election of all directors and approval of significant corporate transactions. In
addition, C. Edward McVaney, Robert C. Newman and Jack L. Thompson (the
"Founders") have entered into an Amended and Restated Stockholders Agreement
with the Company, which provides that Messrs. Newman and Thompson must cast
their votes in the same proportion as the votes cast by Mr. McVaney with respect
to certain significant corporate issues, such as any revision of the Company's
Certificate of Incorporation; any merger, consolidation, share exchange or
similar event; any sale or other disposition of all or substantially all of the
Company's assets; any dissolution or liquidation of the Company; or bankruptcy
filing for the Company. As a result, Mr. McVaney has substantial control over
the approval of such matters. In addition, each Founder must vote for the
election of each of the other Founders to the Company's Board of Directors or a
designee appointed by such other Founder.
Antitakeover Effects of Certificate of Incorporation, Bylaws and Delaware
Law. Certain provisions of the Company's Amended and Restated Certificate of
Incorporation and Bylaws and certain provisions of Delaware law could delay or
make difficult a merger, tender offer or proxy contest involving the Company.
The authorized but unissued capital stock of the Company includes 5,000,000
shares of preferred stock. The Board of Directors is authorized to provide for
the issuance of such preferred stock in one or more series and to fix the
designations, preferences, powers and relative, participating, optional or other
rights and restrictions thereof. Accordingly, the Company may in the future
issue a series of preferred stock, without further stockholder approval, that
will have preference over the Common Stock with respect to the payment of
dividends and upon liquidation, dissolution or winding-up of the Company. In
addition, the Company's Amended and Restated Certificate of Incorporation
includes provisions that create a classified board of directors. Further,
Section 203 of the General Corporation Law of the State of Delaware (as amended
from time to time, the "DGCL"), which is applicable to the Company, prohibits
certain business combinations with certain stockholders for a period of three
years after they acquire 15% or more of the outstanding voting stock of a
corporation. Any of the foregoing could adversely affect holders of the Common
Stock or discourage or make difficult any attempt to obtain control of the
Company.
13
<PAGE> 16
Shares Eligible for Future Sale. Sales of a substantial number of shares of
Common Stock (including shares issued upon the exercise of outstanding options)
in the public market after the Company's initial public offering (the "IPO")
could materially adversely affect the market price of the Common Stock. Such
sales also might make it more difficult for the Company to sell equity
securities or equity-related securities in the future at a time and price that
the Company deems appropriate. Upon completion of the IPO (based on shares
outstanding at July 31, 1997), the Company had outstanding an aggregate of
91,974,914 shares of Common Stock, assuming no exercise of outstanding options.
Of these shares, all of the shares sold in this offering will be freely
tradeable without restriction or further registration under the Securities Act,
unless such shares are purchased by "affiliates" of the Company as that term is
defined in Rule 144 under the Securities Act (the "Affiliates"). The remaining
75,884,910 shares of Common Stock held by existing shareholders are "restricted
securities" as that term is defined in Rule 144 under the Securities Act
("Restricted Shares"). Restricted Shares may be sold in the public market only
if registered or if they qualify for an exemption from registration under Rules
144 or 701 promulgated under the Securities Act. As a result of the contractual
restrictions described below and the provisions of Rules 144 and 701, the
Restricted Shares will be available for sale in the public market as follows:
(i) 515,830 shares in addition to the shares offered hereby will be eligible for
immediate sale on the date of this Prospectus; (ii) 135,240 shares will be
eligible for sale beginning 90 days after the date of this Prospectus; (iii)
75,224,600 shares will be eligible for sale upon expiration of the lock-up
agreements 180 days after the date of this Prospectus; and (iv) 9,240 shares
will be eligible for sale thereafter upon expiration of their respective
one-year holding periods. Notwithstanding the above, the Company's ESOP, in
which 8,706,040 shares are held as of the date of this Prospectus, obligates the
trustees thereof to distribute at scheduled distribution dates shares held
therein to a beneficiary following the cessation of his or her employment with
the Company. The next scheduled distribution date will not occur until March 30,
1998. Following such distribution, the shares so distributed will be immediately
available for sale in the public market to the extent they are not held by
Affiliates. All officers and directors and certain stockholders and certain
option holders of the Company have agreed not to offer, pledge, sell, contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly (or enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of), any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for shares of Common Stock, for
a period of 180 days after the date of this Prospectus, without the prior
written consent of Morgan Stanley & Co. Incorporated.
No Prior Public Market; Possible Stock Price Volatility. Prior to the IPO,
there has been no public market for the Company's Common Stock, and there can be
no assurance that an active public market for the Common Stock will develop or
be sustained after the IPO. The initial public offering price will be determined
by negotiations among the Company, the Selling Stockholders, and the
representatives of the Underwriters based on several factors and may not be
indicative of the future market price of the Common Stock after this offering.
The market price of the Company's Common Stock is likely to be highly volatile
and may be subject to significant fluctuations in response to actual or
anticipated variations in quarterly operating results and other factors, such as
announcements of technological innovations, new products or new contracts by the
Company or its competitors, conditions and trends in the software and other
technology industries, adoption of new accounting standards affecting the
software industry, changes in earning estimates or recommendations by securities
analysts, general market conditions or other events. In addition, equity markets
have also experienced extreme volatility that has particularly affected the
market prices of equity securities of many high technology companies and that
has often been unrelated or disproportionate to the operating performance of
such companies. Broad market fluctuations, as well as economic conditions
generally and in the software industry specifically, may result in material
adverse effects on the market price of the Company's Common Stock. There can be
no assurance that the market price for the Company's Common Stock will not
decline below the initial public offering price. In the past, following periods
of volatility in the market price of a particular company's securities,
securities class action litigation has often been brought against that company.
There can be no assurance that such litigation will not occur in the future with
respect to the Company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which could have a material
adverse effect upon the Company's business, operating results or financial
condition.
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<PAGE> 17
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Stockholders, as described below. See "Selling Stockholders" and "Plan
of Distribution" described below.
SELLING STOCKHOLDERS
None of the Selling Stockholders is an executive officer or director of the
Company. The Selling Stockholders do not beneficially own, individually or in
the aggregate, more than 1% of the outstanding Common Stock of the Company prior
to this offering. The following table shows the names of the Selling
Stockholders and the number of Shares to be sold by them pursuant to this
Prospectus:
<TABLE>
<CAPTION>
NO. OF
NAME SHARES
---- -----------
<S> <C>
James D. Anderson........................................... 5,600
Gina Ashby.................................................. 4,200
Donna J. Baily.............................................. 5,600
Koen Bas.................................................... 3,500
Rick Byrne.................................................. 11,200
C. Frederick Clark.......................................... 2,800
Timothy Davis............................................... 700
Marcelo Gabriel Di Rosa..................................... 7,700
Glenn Erickson.............................................. 5,600
Jim Evans................................................... 1,400
Aubrey Evens................................................ 2,800
Greg Everett................................................ 3,547
Laurent F. Ferrere, II...................................... 11,200
Mark R. Fleet............................................... 4,200
Kimberly Foos............................................... 4,200
Irving Frank................................................ 2,800
John P. Greer............................................... 700
David W. Hill, Jr. ......................................... 8,400
Leslie Hoyt................................................. 700
Chris Jobson................................................ 2,100
Scott Johnson............................................... 7,700
Mary K. Lehman.............................................. 2,100
Denise Letzler.............................................. 2,800
William Maloney............................................. 700
Jim McLoughlin.............................................. 2,100
Christopher Mongovan........................................ 8,400
Michael F. Murphy........................................... 4,200
Joseph N. O'Toole........................................... 8,400
David Packer................................................ 2,100
Michael G. Powders.......................................... 1,400
Estate of Charles T. Pritchard.............................. 700
Diane Raizen-Stone.......................................... 1,400
Mark Rutherford............................................. 2,800
David Siebert............................................... 8,400
Robert Siniscalchi.......................................... 5,600
Stuart Tolen................................................ 1,400
Mark H. Williams............................................ 2,100
Gordon Wilson............................................... 4,200
John D. Woodburn............................................ 800
-------
Total............................................. 156,247
</TABLE>
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<PAGE> 18
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that they intend
to sell all or a portion of the Shares from time to time in the over-the-counter
market and that sales will be made at prices prevailing in the public market at
the times of such sales. The Selling Stockholders may also make private sales
directly or through a broker or brokers, who may act as agent or as principal.
Further, the Selling Stockholders may choose to dispose of the Shares by gift to
a third party or as a donation to a charitable or other non-profit entity. In
connection with any sales, the Selling Stockholders and any brokers
participating in such sales may be deemed to be underwriters within the meaning
of the Securities Act.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholders (and, if such broker acts as agent for
the purchaser of such Shares, from such purchaser). Usual and customary
brokerage fees will be paid by the Selling Stockholders. Broker-dealers may
agree with the Selling Stockholders to sell a specified number of Shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable to
do so acting as agent for the Selling Stockholders, to purchase as principal any
unsold Shares at the price required to fulfill the broker-dealer commitment to
the Selling Stockholders. Broker-dealers who acquire Shares as principal may
thereafter resell such Shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
Shares commissions computed as described above.
The Company has advised the Selling Stockholders that the anti-manipulative
rules of Regulation M under the Exchange Act may apply to sales in the market
and has informed them of the possible need for delivery of copies of this
Prospectus. The Selling Stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the Shares against certain
liabilities, including liabilities arising under the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such
broker-dealers, and, if any such broker-dealers purchase Shares as principal,
any profits received on the resale of such Shares, may be deemed to be
underwriting discounts and commissions under the Securities Act.
If applicable, upon the Company's being notified by the Selling
Stockholders that any material arrangement has been entered into with a
broker-dealer for the sale of Shares through a cross or block trade, a
supplemental prospectus will be filed under Rule 424(c) under the Securities
Act, setting forth the name of the participating broker-dealer(s), the number of
Shares involved, the price at which such Shares were sold by the Selling
Stockholders, the commissions paid or discounts or concessions allowed by the
Selling Stockholders to such broker-dealer(s), and, where applicable, that such
broker-dealer(s) did not conduct any investigation to verify the information set
out in this Prospectus. Any securities covered by this Prospectus that qualify
for sale pursuant to Rule 144 under the Securities Act may be sold under that
Rule rather than pursuant to this Prospectus. There can be no assurance that the
Selling Stockholders will sell any or all of the Shares of Common Stock offered
hereunder.
LEGAL MATTERS
The validity of the Shares of Common Stock offered hereby will be passed
upon by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California, counsel to the Company.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the J.D. Edwards & Company Registration Statement on Form S-1 (Registration No.
333-30701), in the form declared effective on September 23, 1997, have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
16
<PAGE> 19
======================================================
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE BY THIS
PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING
STOCKHOLDER OR BY ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES
OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE OF OR OFFER TO SELL THE SHARES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Information Incorporated By
Reference........................... 2
The Company........................... 3
Forward-Looking Statements............ 3
Risk Factors.......................... 4
Use of Proceeds....................... 15
Selling Stockholders.................. 15
Plan of Distribution.................. 16
Legal Matters......................... 16
Experts............................... 16
</TABLE>
======================================================
======================================================
J.D. EDWARDS & COMPANY
156,247 SHARES
OF
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
December 8, 1997
======================================================
<PAGE> 20
REGISTRATION STATEMENT ON FORM S-8/S-3
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information previously filed with the
Securities and Exchange Commission by J.D. Edwards & Company (the "Company") are
hereby incorporated by reference in this Registration Statement:
(1) The Company's Registration Statement on Form S-1 (file no.
333-30701) under the Securities Act of 1933, as amended (the "Securities
Act"), in the form declared effective on September 23, 1997, including the
Prospectus dated September 23, 1997 as filed by the Company pursuant to
Rule 424(b) on September 24, 1997.
(2) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed September 19, 1997
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and declared effective September 23, 1997.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities registered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware (the "DGCL")
provides that a Delaware corporation may 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 such corporation) by
reason of the fact that any such person is or was a director, officer, employee
or agent of such corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of such 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. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided that such officer or director acted in good faith and in a manner such
person 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 or her conduct was unlawful. A Delaware
corporation may indemnify officers and directors against expenses (including
attorneys' fees) in connection with the defense or settlement of an action by or
in the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses (including attorneys' fees) which such officer or director actually and
reasonably incurred. The foregoing description is qualified in its entirety by
reference to the more detailed provisions of Section 145 of the DGCL.
II-1
<PAGE> 21
Section 102 of the DGCL allows a Delaware corporation to eliminate or limit
the personal liability of a director to the corporation or to any of its
stockholders for monetary damage for a breach of fiduciary duty as a director,
except in the case where the director (i) breaches such person's duty of loyalty
to the corporation or its stockholders, (ii) fails to act in good faith, engages
in intentional misconduct or knowingly violates a law, (iii) authorizes the
payment of a dividend or approves a stock purchase or redemption in violation of
Section 174 of the DGCL or (iv) obtains an improper personal benefit.
In accordance with the DGCL, the Registrant's Amended and Restated
Certificate of Incorporation contains a provision to limit the personal
liability of its directors for monetary damages for breach of their fiduciary
duty to the fullest extent permitted by the DGCL now, or as it may hereafter be
amended.
In addition, as permitted by the DGCL, the Registrant's Bylaws provide that
(i) the Registrant is required to indemnify its directors and officers and
persons serving in such capacities in other business enterprises at the
Registrant's request, to the fullest extent permitted by Delaware law; (ii) the
Registrant may indemnify its employees and agents to the maximum extent
permitted by Delaware law; (iii) the Registrant is required to advance expenses
incurred by its directors and officers in connection with defending a proceeding
(except that a director or officer must undertake to repay any advances if it
should ultimately be determined that the director or officer is not entitled to
indemnification); (iv) the rights conferred in the Bylaws are not exclusive; and
(v) the Registrant may not retroactively amend the Bylaw provisions in a way
that adversely affects any director or officer.
The Registrant maintains insurance covering its directors and officers
against certain liabilities incurred by them in their capacities as such,
including among other things, certain liabilities under the Securities Act. The
Registrant also intends to enter into indemnification agreements with its
directors and officers prior to the closing of this offering that provide the
maximum indemnity allowed to directors and officers by the DGCL and the
Registrant's Bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The issuance of the Shares being offered by the Form S-3 resale prospectus
were deemed exempt from registration under the Securities Act in reliance upon
Section 4(2) of the Securities Act.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 J.D. Edwards & Company 1992 Incentive Stock Option Plan
(which is incorporated herein by reference to Exhibit
10.16 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-30701), as amended,
("Registrant's Form S-1")).
4.2 J.D. Edwards & Company 1992 Nonqualified Stock Option Plan
(which is incorporated herein by reference to Exhibit
10.17 to the Registrant's Form S-1).
4.3 J.D. Edwards & Company 1997 Equity Incentive Plan (which is
incorporated herein by reference to Exhibit 10.21 to the
Registrant's Form S-1).
4.4 J.D. Edwards & Company 1997 Employee Stock Purchase Plan
(which is incorporated herein by reference to Exhibit
10.20 to the Registrant's Form S-1).
4.5 J.D. Edwards & Company 1997 Employee Stock Purchase Plan for
Non-U.S. Employees (which is incorporated herein by
reference to Exhibit 10.23 to the Registrant's Form S-1).
5.1 Opinion of counsel as to legality of original issuance
securities being registered.
23.1 Consent of counsel (contained in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1* Power of Attorney (included as part of the signature page of
this registration statement).
</TABLE>
- ---------------
* Previously filed.
II-2
<PAGE> 22
ITEM 9. UNDERTAKINGS.
(a) 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 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.
(b) 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 the 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8/S-3 and has duly caused this Post-Effective
Amendment No. 1 to Form S-8/S-3 Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Denver,
State of Colorado, on this 5th day of December 1997.
J.D. EDWARDS & COMPANY
By: /s/ RICHARD G. SNOW, JR.
----------------------------------
Name: Richard G. Snow, Jr.
Title: Vice President, General
Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, Post-Effective
Amendment No. 1 to the Registration Statement on Form S-8/S-3 has been signed on
the 5th day of December 1997 by the following persons in the capacities
indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
C. EDWARD MCVANEY* Chairman of the Board of Directors, President
- ----------------------------------------------------- and Chief Executive Officer (principal
C. Edward McVaney executive officer)
RICHARD E. ALLEN* Chief Financial Officer, Vice President,
- ----------------------------------------------------- Finance and Administration and Director
Richard E. Allen (principal financial officer)
PAMELA L. SAXTON* Vice President of Finance, Controller and
- ----------------------------------------------------- Chief Accounting Officer (principal
Pamela L. Saxton accounting officer)
ROBERT C. NEWMAN* Director
- -----------------------------------------------------
Robert C. Newman
Director
- -----------------------------------------------------
Jack L. Thompson
GERALD HARRISON* Director
- -----------------------------------------------------
Gerald Harrison
Director
- -----------------------------------------------------
Delwin D. Hock
HARRY T. LEWIS, JR.* Director
- -----------------------------------------------------
Harry T. Lewis, Jr.
Director
- -----------------------------------------------------
Michael J. Maples
Director
- -----------------------------------------------------
Trygve E. Myhren
*By: /s/ RICHARD G. SNOW, JR.
------------------------------------------------
Richard G. Snow, Jr.
(Attorney-in-fact)
</TABLE>
II-4
<PAGE> 24
J.D. EDWARDS & COMPANY
REGISTRATION STATEMENT ON FORM S-8/S-3
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 J.D. Edwards & Company 1992 Incentive Stock Option Plan
(which is incorporated herein by reference to Exhibit
10.16 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-30701), as amended,
("Registrant's Form S-1"))
4.2 J.D. Edwards & Company 1992 Nonqualified Stock Option Plan
(which is incorporated herein by reference to Exhibit
10.17 to the Registrant's Form S-1)
4.3 J.D. Edwards & Company 1997 Equity Incentive Plan (which is
incorporated herein by reference to Exhibit 10.21 to the
Registrant's Form S-1)
4.4 J.D. Edwards & Company 1997 Employee Stock Purchase Plan
(which is incorporated herein by reference to Exhibit
10.20 to the Registrant's Form S-1)
4.5 J.D. Edwards & Company 1997 Employee Stock Purchase Plan for
Non-U.S. Employees (which is incorporated herein by
reference to Exhibit 10.23 to the Registrant's Form S-1)
5.1 Opinion of counsel as to legality of original issuance
securities being registered
23.1 Consent of counsel (contained in Exhibit 5.1)
23.2 Consent of Price Waterhouse LLP
24.1* Power of Attorney (included as part of the signature page of
this registration statement)
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 5.1
December 5, 1997
J.D. Edwards & Company
One Technology Way
Denver, Colorado, 80237
RE: POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT ON FORM S-8/S-3
Ladies and Gentlemen:
We have examined the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-8/S-3 (the "Registration Statement") to be filed by you with
the Securities and Exchange Commission on or about December 8, 1997, in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 33,783,713 shares of your Common Stock (the "Future Issuance
Shares") reserved for future issuance pursuant to the 1992 Incentive Stock
Option Plan, the 1992 Nonqualified Stock Plan, the 1997 Employee Stock Purchase
Plan, the 1997 Employee Stock Purchase Plan for Non-U.S. Employees, and the 1997
Equity Incentive Plan (together, the "Plans"), and 156,247 shares previously
issued under the 1992 Incentive Stock Option Plan (the "Issued Shares"). As your
legal counsel, we have reviewed the actions taken by you in connection with the
issuance and sale of the Issued Shares and those proposed to be taken by you in
connection with the issuance and sale of the Future Issuances Shares to be
issued under the Plans.
It is our opinion that the Future Issuance Shares, when issued and sold
in the manner referred to in the Plans and pursuant to the agreements which
accompany the Plans, will be legally and validly issued, fully paid and
nonassessable and that the Issued Shares have been legally and validly issued
and are fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8/S-3 of our report
dated August 22, 1997, which appears on page F-2 of the Registration Statement
on Form S-1 of J.D. Edwards & Company (file no. 333-30701). We also consent to
the reference to us under the heading "Experts."
/s/ PRICE WATERHOUSE LLP
- ------------------------------------------
PRICE WATERHOUSE LLP
Boulder, Colorado
December 4, 1997
