<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by Registrant [X] [ ] Confidential, for Use of the
Filed by Party other than Registrant [ ] Commission Only (as permitted by
Check the appropriate box: Rule 14a-6(e)(2))
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-12
</TABLE>
J.D. EDWARDS & COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check Appropriate Box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[JDEdwards LOGO]
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MARCH 24, 1999
10:00 A.M.
Dear J.D. Edwards Stockholder:
On Wednesday, March 24, 1999, J.D. Edwards & Company ("J.D. Edwards or the
Company") will hold its 1999 Annual Meeting of Stockholders at its World
Headquarters at One Technology Way, Denver, Colorado 80237. The meeting will
begin at 10:00 a.m., local time.
Only stockholders of record who owned shares of J.D. Edwards' common stock
at the close of business on January 25, 1999 may vote at this meeting or any
adjournments that may take place. The purposes of the meeting are to:
1. Elect three Class II directors for a term of three years;
2. Ratify the appointment of PricewaterhouseCoopers LLP as J.D.
Edwards' independent auditors for the 1999 fiscal year; and
3. Transact such other business as may properly come before the
meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE TWO PROPOSALS
DISCUSSED IN THIS PROXY STATEMENT.
At the meeting we will also report on J.D. Edwards' 1998 business results
and other matters of interest to stockholders.
Your vote is important to us. Whether you plan to attend the meeting or
not, please complete, date, sign and return the enclosed proxy card promptly. If
you attend the meeting and prefer to vote in person, you may do so.
We look forward to seeing you at the meeting.
By Order of the Board of Directors
/s/ RICHARD G. SNOW, JR.
Richard G. Snow, Jr.
Vice President, General Counsel and
Secretary
February 8, 1999
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Questions and Answers....................................... 1
Proposals................................................... 3
Information About Nominees and Other Directors.............. 4
Board and Committee Meetings................................ 6
Directors' Compensation..................................... 7
Beneficial Owners and Management's Ownership of J.D. Edwards
Stock..................................................... 8
Executive Compensation Report............................... 10
Compensation Committee Interlocks and Insider
Participation............................................. 11
Compensation of Executive Officers.......................... 12
Certain Relationships and Related Transactions.............. 14
Section 16(a) Beneficial Ownership Compliance............... 14
Stock Performance Graph..................................... 15
Other Matters............................................... 16
</TABLE>
(i)
<PAGE> 4
QUESTIONS AND ANSWERS
Q. WHAT MAY I VOTE ON?
A. You may vote on the following two matters:
- the election of the Class II nominees to serve on our Board of
Directors; and
- the approval of the appointment of the independent auditors for
fiscal 1999.
See page 4 for more details.
Q. HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
A. The Board recommends a vote for each of the Class II nominees and for the
appointment of PricewaterhouseCoopers LLP as J.D. Edwards' independent
auditors for fiscal 1999.
Q. WHO IS ENTITLED TO VOTE?
A. Stockholders of record as of the close of business on January 25, 1999 (the
"Record Date") are entitled to vote at the Annual Meeting. As of the Record
Date, 103,517,966 shares of J.D. Edwards' common stock were outstanding.
Q. HOW MANY VOTES DO I HAVE?
A. You are entitled to one vote for each share of J.D. Edwards' common stock
that you own as of January 25, 1999. The proxy card(s) indicate the number
of shares of common stock that you own as of the Record Date.
Q. HOW DO I VOTE?
A. Complete, sign and date each proxy card you receive and return it in the
prepaid envelope. If you return your signed proxy card, but do not mark the
boxes showing how you wish to vote, your shares will be voted "FOR" the two
proposals.
Q. WHAT SHARES ARE INCLUDED ON THE PROXY CARD(S)?
A. The shares on your proxy card(s) represent all of your shares of J.D.
Edwards' common stock that you owned on the Record Date. If you are an
employee of J.D. Edwards, this also includes those shares in your J.D.
Edwards Employee Stock Purchase Plan account and shares held in custody for
your account by Fidelity Investment, as trustee for the J.D. Edwards &
Company Retirement Savings Plan.
Q. HOW DO I REVOKE MY PROXY?
A. You have the right to revoke your proxy at any time before the meeting by:
1. delivering to J.D. Edwards' Corporate Secretary a later dated proxy
card;
2. notifying J.D. Edwards' Corporate Secretary in writing before the
meeting; or
3. by voting in person at the meeting.
Any written notice or subsequent proxy should be delivered to J.D. Edwards
& Company, One Technology Way, Denver, Colorado 80237, Attention:
Secretary, or hand delivered to the Secretary of the Company before the
vote is taken at the meeting.
Q. WHO WILL COUNT THE VOTE?
A. Representatives of Harris Trust Company, our transfer agent, will count the
votes and act as the inspector of election.
Q. IS MY VOTE CONFIDENTIAL?
A. Proxy cards, ballots and voting tabulations that identify individual
stockholders are mailed or returned directly to Harris Trust Company and
handled in a manner that protects your voting privacy. The transfer agent
will not disclose your vote to management unless it is necessary to meet
legal requirements. The
1
<PAGE> 5
transfer agent will, however, forward to management any written comments
you make on the proxy card or elsewhere without disclosing your name unless
it is necessary to meet legal requirements.
Q. WHAT IS A QUORUM?
A. A quorum of stockholders is necessary to hold a valid meeting. A quorum
will exist if stockholders entitled to cast at least a majority of all the
votes entitled to be cast at the meeting are present at the meeting or
represented by proxy.
Q. WHAT IS THE REQUIRED VOTE TO TAKE ACTION ON THE TWO PROPOSALS?
A. The three Board nominees receiving the highest number of votes cast will be
elected. The affirmative vote of a majority of votes cast is required to
ratify the appointment of the independent auditors.
Q. HOW ARE ABSTENTIONS AND BROKER "NON-VOTES" TREATED?
A. Abstaining votes and broker "non-votes" are counted as present for
determining whether a quorum is present. Abstaining votes are also deemed
to be "votes cast;" however, broker "non-votes" are not deemed to be "votes
cast." As a result, broker "non-votes" are not included in the tabulation
of the voting results on the election of directors or the appointment of
the independent auditors and do not have the effect of votes "against" such
matters. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary voting power with respect to that item and has
not received instructions from the beneficial owner as to how to vote on
that item.
Q. HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A. Although we do not know of any business to be considered at the 1999 Annual
Meeting other than the proposals described in this proxy statement, if any
other business is presented at the meeting, your signed proxy card gives
authority to Richard G. Snow, Jr., Vice President, General Counsel and
Secretary, and Stacey L. Bowers, Staff Attorney/Securities Counsel, to vote
on such matters at their discretion.
Q. WHEN ARE THE SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING DUE?
A. All shareholder proposals to be considered for inclusion in next year's
proxy statement must be submitted in writing to J.D. Edwards & Company, One
Technology Way, Denver, Colorado 80237, Attention: Secretary by October 11,
1999. Such proposal must comply with Rule 14a-8 of the Securities Exchange
Act of 1934.
Additionally, J.D. Edwards' advance notice bylaw provisions require that
any shareholder proposal to be presented from the floor of the 2000 annual
meeting must be submitted in writing to J.D. Edwards' Corporate Secretary,
at the above address, not less than 60 days prior to the meeting. Such
notice must be accompanied by a brief description of the business to be
brought before the meeting; the name and address of the shareholder; the
class and number of shares held; and any material interest the shareholder
has in the business. Proposals may be presented after the J.D. Edwards &
Company Board of Directors has determined that it is a proper matter for
consideration under our bylaws. In addition to these procedures, a
stockholder's notice with regard to nominations for the election of
directors must contain specific information concerning such nominees.
Q. WHO PAYS FOR THE PROXY SOLICITATION COSTS?
A. J.D. Edwards will pay all the costs of soliciting these proxies. In
addition to mailing proxy soliciting material, J.D. Edwards' directors and
employees may also solicit proxies in person, by telephone or by other
electronic means of communication. J.D. Edwards will ask banks, brokers,
other institutions, nominees and fiduciaries to forward the proxy material
to their principals and to obtain authority to execute proxies. J.D.
Edwards will reimburse them for expenses.
2
<PAGE> 6
PROPOSALS
1. ELECTION OF DIRECTORS
There are three Class II nominees up for re-election this year. Detailed
information on each nominee is provided on pages 4 to 5. One of the three
Classes of directors is elected each year and directors serve for three-year
terms.
Three Class II directors are to be elected at this meeting for a three-year
period ending in 2002. The Board of Directors has nominated Richard E. Allen,
Robert C. Newman and Harry T. Lewis, Jr. for re-election. If any of the nominees
are unable or decline to serve as a director at the time of the meeting, the
proxies will be voted for a nominee designated by the present Board to fill the
vacancy. We are not aware that any nominee will be unable or will decline to
serve as a director.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THREE NOMINEES.
2. APPROVAL OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT
AUDITORS
The Audit Committee has recommended, and the Board has approved, the
appointment of PricewaterhouseCoopers LLP ("PwC") as our independent auditors
for fiscal 1999 subject to your approval. PwC has served as our independent
auditors since May 1995. They have unrestricted access to the Audit Committee to
discuss audit findings and other financial matters. Representatives of PwC will
attend the Annual Meeting to answer appropriate questions. They may also make a
statement.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
APPOINTMENT OF PWC AS INDEPENDENT AUDITORS FOR 1999.
3
<PAGE> 7
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
The Board of Directors consists of nine members divided into three classes,
with members of each class holding office for staggered three-year terms. There
are currently three Class I directors whose terms expire in 2001, three Class II
directors whose terms expire at this Annual Meeting, and three Class III
directors whose terms expire in 2000. Each director serves in office until his
or her respective successor is duly elected and qualified or until his or her
earlier death or resignation. Any additional directors added to the Board will
be distributed among the three classes so that, as nearly as possible, each
class will consist of an equal number of directors.
NOMINEES FOR CLASS II DIRECTORS
RICHARD E. ALLEN Director since September 1991
Age 41
Richard E. Allen has been Senior Vice President, Finance and Administration
since November 1997 and Chief Financial Officer, Treasurer and Assistant
Secretary since January 1990. From January 1990 through October 1997 he was Vice
President, Finance and Administration. From August 1985 to September 1994, Mr.
Allen served as Controller of the Company and as Secretary from March 1986 to
January 1990. Mr. Allen holds a B.S. in business administration from Colorado
State University.
HARRY T. LEWIS, JR. Director since March 1995
Age 66
Harry T. Lewis, Jr. has been self-employed as a private investor and
financial consultant since April 1988. From January 1981 to March 1988, he was
Senior Vice President for Dain Bosworth Incorporated, an investment banking
firm. Prior to that, Mr. Lewis was a partner with Boettcher & Company, an
investment banking firm. Mr. Lewis has an A.B. from Dartmouth College and an
M.B.A. from the Amos Tuck School of Business Administration at Dartmouth
College. He serves as a director of The Berger Mutual Funds.
ROBERT C. NEWMAN Director since August 1978
Age 55
Robert C. Newman is one of the co-founders of the Company. He is currently
a professor at the University of Denver and manages private investments through
his firm Greenwood Gulch Ventures LLC. From August 1978 until June 1997, he
served in a number of management roles with the Company, including Vice
President of Complementary Technologies and Managing Director of J.D. Edwards &
Company, Ltd. (U.K.). Dr. Newman holds a B.S. in industrial engineering from the
University of California, Berkeley, an M.B.A. from the University of California,
Los Angeles, and a Ph.D. in management from Golden Gate University.
INCUMBENT CLASS I DIRECTORS
GERALD HARRISON Director since January 1997
Age 66
Gerald Harrison has been engaged in private research and writing since
1984. From 1982 to 1984, he was President and Chief Executive Officer of
Stearns-Roger World Corporation, an engineering and construction firm, and for
14 years prior to that, he served in various other positions. Mr. Harrison holds
a LL.B. from the University of Colorado School of Law.
DELWIN D. HOCK Director since March 1997
Age 64
Delwin D. Hock has been self-employed as a business consultant and private
investor since July 1997. He retired from his positions as Chief Executive
Officer of Public Service Company of Colorado, a utility services company, in
January 1996 and as Chairman of the Board of Directors in July 1997. From
September 1962 to January 1996, Mr. Hock held various management positions with
the Public Service Company including
4
<PAGE> 8
President and Chief Operating Officer, President and Chief Executive Officer,
and Chairman, President and Chief Executive Officer. Mr. Hock received his B.S.
in accounting from the University of Colorado. He serves as a director of
American Century Investors, Rocky Mountain Internet and Hathaway Corporation.
DOUGLAS S. MASSINGILL Director since November 1998
Age 41
Douglas S. Massingill has been President and Chief Executive Officer since
November 1998. From March 1997 to October 1998, he was Executive Vice President
and Chief Operating Officer. From February 1994 to March 1997, he was Executive
Vice President of Worldwide Operations, and from January 1993 to March 1994, Mr.
Massingill was Vice President and General Manager of the South Area. He joined
the Company in June 1990 as Account Executive for the large Accounts Program.
Mr. Massingill holds a B.A. in accounting from Shorter College and an M.B.A.
from Georgia Southern University.
INCUMBENT CLASS III DIRECTORS
MICHAEL J. MAPLES Director since January 1997
Age 56
Michael J. Maples is currently retired and operating a ranch. From April
1988 to July 1995, Mr. Maples held various management positions at Microsoft
Corporation, most recently as Executive Vice President of the Worldwide Products
Group. Prior to that, he served as a Director of Software Strategy for IBM. Mr.
Maples holds a B.S. in electrical engineering from Oklahoma University and an
M.B.A. from Oklahoma City University. He serves as a director of Lexmark
International, Inc. and PSW Technologies.
C. EDWARD MCVANEY Director since March 1977
Age 58
C. Edward McVaney is Chairman of the Board of Directors of the Company,
which he co-founded. Mr. McVaney held the positions of President and Chief
Executive Officer from the Company's inception in March 1977 to October 1998,
except that Mr. McVaney did not act as President of the Company from September
1987 through September 1991. Mr. McVaney holds a B.S. in mechanical engineering
from the University of Nebraska and an M.B.A. from Rutgers University.
TRYGVE E. MYHREN Director since January 1997
Age 62
Trygve E. Myhren is currently President of Myhren Media, Inc., which
invests in and advises media, telecommunications and consumer products
companies. From November 1990 to March 1996, he served as President of The
Providence Journal Company, a company that owned and managed newspapers,
broadcast television stations, cable television systems, programming networks
and interactive and multimedia ventures. During this same time, he was Chief
Executive Officer of King Holdings, an owner and manager of broadcast and cable
television properties. Mr. Myhren has a B.A. in political science and philosophy
from Dartmouth College, and an M.B.A. from the Amos Tuck School of Business
Administration at Dartmouth College. He serves on the boards of Peapod, Ltd.,
Advanced Marketing Services, Inc., University of Denver, Verio, Inc. and
Founders Funds Inc.
Jack L. Thompson who is one of the co-founders of J.D. Edwards and has been
a member of the Board since March 1977 resigned from his Board position in
January 1999.
5
<PAGE> 9
BOARD AND COMMITTEE MEETINGS
The Board of Directors met six times during fiscal 1998. Overall attendance
at the Board and committee meetings was 98%. Attendance was at least 90% for
each director.
The Board of Directors has an Audit, Compensation, Finance and Governance
Committee. The Board has no nominating committee or committee performing a
similar function.
The Audit Committee reviews and reports to the Board on the quality and
performance of both the internal and external accountants and auditors, the
reliability of financial information, and the adequacy of financial controls and
policies. The committee also initiates and approves changes in any of these
areas when necessary.
The Compensation Committee reviews and reports to the Board on compensation
and personnel policies and plans, including management development and
succession plans, employee compensation and benefits, and administration of
stock plans.
The Finance Committee reviews J.D. Edwards' capital structure, capital
expenditures, financing arrangements, risk management and long range financial
planning.
The Governance Committee acts on behalf of the Board in between Board
meetings. The committee then reports any actions taken at the next regular Board
meeting. Actions of the committee are generally limited to handling legal
formalities and technicalities concerning administrative operations.
The following table sets forth the members of each committee and the number
of meetings held in fiscal 1998:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
NAME AUDIT COMPENSATION FINANCE GOVERNANCE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Allen X X
- ------------------------------------------------------------------------------------------------------
Gerald Harrison X X
- ------------------------------------------------------------------------------------------------------
Delwin D. Hock X X
- ------------------------------------------------------------------------------------------------------
Harry T. Lewis, Jr. X X
- ------------------------------------------------------------------------------------------------------
Michael J. Maples X
- ------------------------------------------------------------------------------------------------------
Douglas S. Massingill
- ------------------------------------------------------------------------------------------------------
C. Edward McVaney
- ------------------------------------------------------------------------------------------------------
Trygve E. Myhren X X
- ------------------------------------------------------------------------------------------------------
Robert C. Newman X X
- ------------------------------------------------------------------------------------------------------
Jack L. Thompson
- ------------------------------------------------------------------------------------------------------
NUMBER OF MEETINGS IN FISCAL 1998 4 6 2 3
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 10
DIRECTORS' COMPENSATION
J.D. Edwards' compensates each of its directors who are not employees of
J.D. Edwards or its subsidiaries as follows:
- $15,000 per year as an annual retainer;
- $1,000 for each Board meeting attended; and
- $1,000 for each committee meeting attended (directors do not receive
a fee for a committee meeting attended that is held in conjunction
with a Board meeting).
Additionally, non-employee directors may elect to receive stock options,
instead of the cash amounts described above, to purchase shares of J.D. Edwards'
common stock having a fair market value of the cash compensation they otherwise
would have received. Only one non-employee director in fiscal 1998 elected to
receive stock options as compensation. Non-employee directors are also
reimbursed for expenses incurred in attending meetings. J.D. Edwards does not
compensate directors who are employees of J.D. Edwards or its subsidiaries.
J.D. Edwards' also grants non-employee directors non-qualified stock
options to purchase 35,000 shares of J.D. Edwards common stock at the annual
meeting at which the director is first elected to the Board and non-qualified
stock options to purchase 7,000 shares of J.D. Edwards common stock each
successive year they remain a director. These shares vest 25% on the first
anniversary date of the grant and 1/48th each month thereafter. The exercise
price for all options granted to non-employee directors is equal to the market
price of the common stock on the date of grant. Non-employee directors are also
eligible to receive discretionary grants under J.D. Edwards' 1997 Equity
Incentive Plan. No discretionary grants were made during fiscal 1998.
7
<PAGE> 11
BENEFICIAL OWNERS AND MANAGEMENT'S OWNERSHIP OF J.D. EDWARDS STOCK
The following table shows, as of January 25, 1999, how much J.D. Edwards
common stock is owned by (1) each person or entity known to beneficially own
more than 5% of the outstanding shares; (2) each of the officers named in the
Summary Compensation Table; (3) each director; and (4) all directors and
executive officers as a group. Each stockholder listed can be reached at J.D.
Edwards' principal offices.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF
OPTIONS SHARES OF
SHARES EXERCISABLE ESOP STOCK PERCENT
BENEFICIALLY WITHIN BENEFICIALLY BENEFICIALLY
NAME OWNED(1) 60 DAYS(2) OWNED OWNED
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Richard E. Allen 367,620(3) 398,931 42,590 *
- ---------------------------------------------------------------------------------------------------------------
Paul C. Covelo 189,090 533,278 65,049 *
- ---------------------------------------------------------------------------------------------------------------
David E. Girard 1,086 286,173 6,995 *
- ---------------------------------------------------------------------------------------------------------------
Gerald Harrison 11,540 15,895 *
- ---------------------------------------------------------------------------------------------------------------
Delwin D. Hock 15,240 15,895 *
- ---------------------------------------------------------------------------------------------------------------
Harry T. Lewis, Jr. 16,240 35,495 *
- ---------------------------------------------------------------------------------------------------------------
Michael J. Maples 15,240 15,895 *
- ---------------------------------------------------------------------------------------------------------------
Douglas S. Massingill 155,680 473,752 18,933 *
- ---------------------------------------------------------------------------------------------------------------
C. Edward McVaney 32,781,862(4) 66,591 31.7
- ---------------------------------------------------------------------------------------------------------------
Trygve E. Myhren 16,240 15,895 *
- ---------------------------------------------------------------------------------------------------------------
Robert C. Newman 9,356,330(5) 60,562 9.1
- ---------------------------------------------------------------------------------------------------------------
Daniel B. Snyder 175,046 332,138 9,718 *
- ---------------------------------------------------------------------------------------------------------------
Jack L. Thompson 10,324,520(6) 10.0
- ---------------------------------------------------------------------------------------------------------------
J.D. Edwards & Company ESOP 8,005,451(7) 7.7
- ---------------------------------------------------------------------------------------------------------------
All directors and executive officers as a
group (16 persons including those named
above) 53,635,819 2,478,470 296,517 53.2
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
* Less than 1% of the Company's common stock
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the
individual or entity has voting power or investment power and any shares
which the individual has the right to acquire within 60 days of January 25,
1999 through the exercise of any stock option or other right. Unless
otherwise indicated in the footnotes, each person or entity has sole voting
and investment power (or shares such powers with his or her spouse) with
respect to the shares shown as beneficially owned.
(2) The amounts shown in this column represent shares of J.D. Edwards common
stock that such person has the right to acquire as a result of the exercise
of stock options within 60 days after January 25, 1999.
(3) Includes 138,590 shares held by the Allen Family Trust, 25,910 shares held
by the Allen Family Charitable Lead Trust and 14,000 shares held of record
by Mr. Allen's children. Excludes 8,005,451 shares owned by the ESOP. Mr.
Allen is a co-trustee of the ESOP, and shares voting and dispositive power
of the shares owned by the ESOP, but has no pecuniary interest therein.
(4) Includes 6,971,620 shares held by the C. Edward McVaney Trust, 11,734,370
shares held by the C. Edward McVaney G.R.A.T., 2,341,502 shares held of
record by Mr. McVaney's wife in the Carole Louise McVaney Trust, and
11,734,370 held of record by the Carole L. McVaney G.R.A.T. Pursuant to the
Amended and Restated Stockholders Agreement, Mr. McVaney must vote his
shares in accordance with the provisions of such agreement. See "Certain
Relationships and Related Transactions."
8
<PAGE> 12
(5) Includes 5,365,000 shares held by Newkop Investments L.L.P., a company
affiliated with Mr. Newman. Pursuant to the Amended and Restated
Stockholders Agreement, Mr. Newman must vote his shares in accordance with
the provisions of such agreement. See "Certain Relationships and Related
Transactions."
(6) Includes 3,500,000 shares held by JVB Properties L.L.P., a company owned by
Mr. Thompson and his wife, and excludes 8,005,451 shares owned by the ESOP.
Mr. Thompson is a co-trustee of the ESOP, and shares voting and dispositive
power of the shares owned by the ESOP, but has no pecuniary interest
therein. Pursuant to the Amended and Restated Stockholders Agreement, Mr.
Thompson must vote his shares in accordance with the provisions of such
agreement. See "Certain Relationships and Related Transactions."
(7) Excludes shares owned by the trustees of the ESOP.
9
<PAGE> 13
EXECUTIVE COMPENSATION REPORT
The Compensation Committee (the "Committee") of the Board has
responsibility to review and report to the Board on compensation and personnel
policies, programs and plans, including management development and succession
plans, employee compensation and benefits, and administration of stock plans.
The purpose of this report is to summarize the philosophical principles,
specific program objectives, and other factors considered by the Committee in
reaching its determinations regarding executive compensation.
COMPENSATION PHILOSOPHY AND GOALS
The Company's executive compensation program, which consists of a
combination of base salary, cash bonuses and stock options, is designed in large
part to align executive incentives with the Company's strategic goals. The
Company's compensation goals are to:
- Ensure that there is a link between executive compensation and
long-term stockholder value;
- Ensure that the compensation program motivates, retains and attracts
executives of outstanding abilities;
- Ensure that current cash and equity incentives are competitive with
those of comparable companies;
- Ensure that there is a link between executive compensation and
customer satisfaction;
- Ensure that executives contribute to the Company's long term success;
and
- Reward executives for achieving the Company's financial goals.
ELEMENTS OF COMPENSATION
Compensation for officers and employees of the Company includes both cash
and equity elements. Cash compensation consists of base salary, which is
determined on the basis of the level of responsibility, expertise and experience
of the officer or employee. In addition, cash bonuses may be awarded to officers
and employees. The Committee believes that the salaries of its officers are
comparable to those paid by other software companies. Compensation of sales and
services personnel also includes sales commissions that are tied to quarterly
and yearly revenue targets.
Ownership of the Company's common stock is a key element of executive
compensation. Officers and other employees of the Company are eligible to
receive grants under the 1997 Equity Incentive Plan. This plan permits the Board
of Directors or the Committee to grant stock options to officers and employees
on such terms as the Board or the Committee may determine. In determining the
size of a stock option grant to an officer or employee, the Committee takes into
account the level, experience and responsibility of the officer or employee and
their potential future contribution. Additional options may be granted to
current employees to reward performance or to provide additional equity
incentives. Options granted have a term of 8 years and vest 25% at the end of
the first year and 1/48th each month thereafter, thus requiring the employee's
continuing services to the Company.
The Company's 1997 Employee Stock Purchase Plans for U.S. and Non-U.S.
employees permit employees to acquire common stock of the Company through
payroll deductions and promotes broad-based equity participation throughout the
Company. The Committee believes that such stock plans align the interests of
employees with the long-term interests of stockholders.
During fiscal 1998, the Company merged the J.D. Edwards & Company Employee
Stock Ownership Plan into the J.D. Edwards & Company 401(k) Plan to form the
J.D. Edwards & Company Retirement Savings Plan (the "Plan"). The Company
maintains the Plan to provide retirement benefits to its employees. The 401(k)
portion of the Plan provides benefits through tax deferred salary deductions for
its U.S. employees who meet certain eligibility requirements. The Company
generally matches 50% of an employee's eligible contributions up to a maximum
match of 3% of eligible compensation. Such match is discretionary.
10
<PAGE> 14
The discretionary contribution portion of the Plan is designed to invest
primarily in the Company's common stock for the benefit of the Company's U.S.
employees. Company contributions are determined by the Board of Directors, are
discretionary, and, if made, may be in the form of cash or the Company's common
stock. The Company may continue to make contributions of Company common stock or
cash to the discretionary contribution portion of the Plan.
EXECUTIVE COMPENSATION
Executive compensation for fiscal 1998 included base salary, cash bonuses
and option grants, plus, in the case of sales executives, commissions. Bonus
awards for executive officers were based on the following measures of the
Company's performance:
- customer satisfaction
- achievement of corporate profit
- achievement of license fee growth
Executive officers, like other employees, were eligible for option grants under
the 1997 Equity Incentive Plan. Options to purchase a total of 4,648,590 shares
were granted to employees in fiscal 1998.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL 1998
C. Edward McVaney co-founded the Company in March 1977 and is currently
Chairman of the Board. Mr. McVaney served as President and Chief Executive
Officer through October 1998. During fiscal 1998, Mr. McVaney earned a base
salary of $120,000 and cash incentives of $20,227. Cash incentives approximated
17% of his base salary and were based on attaining the goals described above.
Mr. McVaney received no option grants during fiscal 1998.
Michael J. Maples
Trygve E. Myhren
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was formed to review and report to the
Board on compensation and personnel policies, programs and plans, including
management development and succession plans, employee compensation and benefits,
and administration of stock plans. The Committee is currently composed of Mr.
Myhren and Mr. Maples. No interlocking relationship exists between any member of
the Company's Board or Compensation Committee and the board of directors or
compensation committee of any other company, nor has any such interlocking
relationship existed in the past.
11
<PAGE> 15
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning total
compensation received by the Chief Executive Officer and each of the four most
highly compensated executive officers who served in such capacities during
fiscal 1998 (the "Named Executive Officers") for services rendered to J.D.
Edwards during the last three fiscal years.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
BASE UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
C. Edward McVaney 1998 120,000 20,227 --
Chairman(1) 1997 300,000 69,300 --
1996 300,000 404,500 --
- ----------------------------------------------------------------------------------------------------
Douglas S. Massingill 1998 328,125 133,088 --
President and Chief Executive Officer(2) 1997 277,875 276,209 42,000
1996 253,333 206,764 112,000
- ----------------------------------------------------------------------------------------------------
David E. Girard 1998 236,708 118,562 33,000
Executive Vice President and 1997 190,042 263,587 42,000
Chief Operating Officer(3) 1996 179,500 171,500 112,000
- ----------------------------------------------------------------------------------------------------
Paul E. Covelo 1998 226,416 91,835 10,000
Senior Vice President 1997 215,859 180,306 28,000
1996 204,700 170,035 112,000
- ----------------------------------------------------------------------------------------------------
Daniel B. Snyder 1998 236,708 120,012 10,000
Senior Vice President 1997 172,792 342,262 42,000
1996 162,366 203,500 112,000
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) Formerly President and CEO through 10/98
(2) Formerly Executive Vice President and COO through 10/98
(3) Formerly Senior Vice President through 10/98
12
<PAGE> 16
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth, as to the Named Executive Officers,
information concerning stock options granted during the 1998 fiscal year.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(4)
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR(2) PER SHARE DATE(3) 5% 10%
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. Edward McVaney -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
Douglas S.
Massingill -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
David E. Girard 33,000 0.72% $38.75 04/09/06 $610,546 $1,462,364
- --------------------------------------------------------------------------------------------------------------------
Paul E. Covelo 10,000 0.22 38.75 04/09/06 185,014 443,141
- --------------------------------------------------------------------------------------------------------------------
Daniel B. Snyder 10,000 0.22 38.75 04/09/06 185,014 443,141
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) The options in this table are nonqualified stock options granted under the
J.D. Edwards 1997 Equity Incentive Plan and have exercise prices equal to
the fair market value of the Company's common stock on the date of grant.
All such options have 8-year terms and vest 25% on the first anniversary
date of the grant and 1/48th each month thereafter.
(2) The Company granted options to purchase 4,648,950 shares of common stock to
employees in fiscal 1998.
(3) The options in this table may terminate before their expiration as a result
of the termination of optionee's status as an employee or upon the
optionee's disability or death.
(4) Under rules promulgated by the SEC, the amounts in these two columns
represent the hypothetical gain or "option spread" that would exist for the
options in this table based on assumed stock price appreciation from the
date of grant until the end of such options' eight-year term at assumed
annual rates of 5% and 10%. The 5% and 10% assumed annual rates of
appreciation are specified in SEC rules and do not represent the Company's
estimate or projection of future stock price growth. There can be no
assurance that the actual stock price appreciation over the 8-year option
term will be at the assumed 5% and 10% annual rates of compounded stock
appreciation or at any other defined rate.
13
<PAGE> 17
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth, as to the Named Executive Officers, certain
stock option information concerning the number of shares subject to both
exercisable and unexercisable stock options and the value of such options as of
October 31, 1998.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END ($)(1)
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. Edward McVaney -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Douglas S.
Massingill 407,598 $12,569,311 340,352 266,000 $ 9,968,849 $7,464,445
- ----------------------------------------------------------------------------------------------------------------------
David E. Girard 128,227 4,247,126 242,773 229,000 7,038,138 5,362,590
- ----------------------------------------------------------------------------------------------------------------------
Paul E. Covelo 427,172 11,982,580 402,678 264,800 11,862,358 7,217,644
- ----------------------------------------------------------------------------------------------------------------------
Daniel B. Snyder 413,362 13,606,170 190,738 234,000 5,475,709 6,203,332
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) Based on the fair market value of the Company's common stock at fiscal year
end less the exercise price payable for such shares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 1993, Messrs. McVaney, Thompson and Newman (the "Founders") and
the Company entered into a Shareholder Agreement, which was subsequently amended
in January 1996 (the "Old Shareholder Agreement"). The Old Shareholder Agreement
sets forth, among other things, certain voting covenants and transfer
restrictions on the shares beneficially owned by the Founders. In August 1997,
the Founders and the Company amended and restated the Old Shareholder Agreement
(the "Amended and Restated Stockholders Agreement"), effective in September
1997. The Amended and Restated Stockholders Agreement 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 amending the Company's Certificate of Incorporation or any merger, share
exchange, sale or dissolution of the Company. 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. Effective in January
1999 the Amended and Restated Stockholders Agreement was terminated.
The Company believes that each of the transactions involving the Company
described above were on terms no less favorable to the Company than could have
been obtained from unaffiliated third parties. All future transactions between
the Company and any director or executive officer will be subject to approval by
a majority of the disinterested members of the Board.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
common stock of the Company to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of J.D. Edwards. Except as described below, based
solely upon a review of reports submitted, and representations made to J.D.
Edwards, we believe that during fiscal 1998, our executive officers, directors
and 10% stockholders complied with all applicable Section 16(a) filing
requirements, except for Messrs. Allen, Covelo, Maples, Snyder and Ms. Saxton
who each filed one late report.
14
<PAGE> 18
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return to stockholders on
J.D. Edwards' common stock with the cumulative total return of the S&P 500 Index
and the Morgan Stanley Technology Index. The graph assumes that $100 was
invested on September 23, 1997 (the day of the Company's initial public
offering) in J.D. Edwards' common stock, the S&P 500 Index and the Morgan
Stanley Technology Index, including reinvestment of dividends. No dividends have
been declared or paid on common stock. Note that historic stock price
performance is not necessarily indicative of future stock price performance.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) JD Edwards S&P 500 MS Hi-Tech
- --------------------- ---------- -------- ----------
<S> <C> <C> <C>
31-Oct-97 97.1862 96.8385 86.4977
30-Jan-98 94.4172 103.7905 88.9796
30-Apr-98 101.8312 117.7103 109.8137
31-Jul-98 106.8334 118.6547 113.2803
30-Oct-98 93.6132 116.3254 119.3218
19-Jan-99 66.8155 131.6343 183.8925
</TABLE>
15
<PAGE> 19
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting other than what has been described
above. If any other matters are properly presented at the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgment on such matters.
THE BOARD OF DIRECTORS
Denver, Colorado
February 8, 1999
16
<PAGE> 20
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
J.D. EDWARDS & COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MARCH 24, 1999
The undersigned stockholder of J.D. Edwards & Company, a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and accompanying Proxy Statement each dated February 8,
1999 and hereby appoints Richard G. Snow, Jr. and Stacey L. Bowers, or either of
them, proxies and attorneys-in-fact, each with full power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of J.D. Edwards
& Company to be held Wednesday, March 24, 1999 at 10:00 a.m., local time, at
J.D. Edwards & Company's World Headquarters at One Technology Way, Denver,
Colorado and at any adjournment thereof, and to vote all shares of Common Stock
of the Company held of record by the undersigned on January 25, 1999 as
hereinafter specified upon the proposals listed on the reverse side.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING OF STOCKHOLDERS,
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS ON THE
REVERSE SIDE AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THESE PROPOSALS.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
J.D. EDWARDS & COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
MARK HERE FOR ADDRESS
CHANGE AND NOTE AT LEFT [ ]
1. Election of Class II Directors
NOMINEES: RICHARD E. ALLEN, HARRY T. LEWIS, JR.,
ROBERT C. NEWMAN
WITHHOLD
AUTHORITY
FOR all to vote FOR all nominees, except
nominees for all nominees vote withheld for those named below:
[ ] [ ] [ ]
--------------------
NOMINEE EXCEPTIONS
2. RATIFICATION OF APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR THE YEAR ENDING OCTOBER 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Please sign exactly as your name appears hereon. When shares are registered in
the names of two or more persons, whether as joint tenants, as community
property or otherwise, both or all of such persons should sign. When signing as
attorney, executor, administrator, trustee, guardian or another fiduciary
capacity, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized person. If a partnership, please
sign in partnership name by authorized person.
- --------------------------------------------------------------------------------
Signature Date
- --------------------------------------------------------------------------------
Signature Date
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
