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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
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 the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[JDEDWARDS LOGO]
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MARCH 6, 2001
2:00 P.M.
Dear J.D. Edwards Stockholder:
On Tuesday, March 6, 2001, we will hold our 2001 Annual Meeting of
Stockholders at our World Headquarters at One Technology Way, Denver, Colorado
80237. The meeting will begin at 2:00 p.m., local time.
Only stockholders of record who owned shares of our common stock at the
close of business on January 5, 2001 may vote at this meeting or any
adjournments that may take place. The purposes of the meeting are to:
1. Elect two Class I directors for a term of three years;
2. Ratify the appointment of PricewaterhouseCoopers LLP as J.D.
Edwards' independent accountants for the 2001 fiscal year; and
3. Transact 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 our fiscal year 2000 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
Richard G. Snow, Jr.
Vice President, General Counsel and
Secretary
January 26, 2001
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TABLE OF CONTENTS
PAGE
----
Questions and Answers....................................... 1
Proposals................................................... 3
Information About Nominees and Other Directors.............. 4
Board and Committee Meetings................................ 6
Directors' Compensation..................................... 7
Audit Committee Report...................................... 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.............. 15
Section 16(a) Beneficial Ownership Compliance............... 15
Stock Performance Graph..................................... 16
Other Matters............................................... 16
Exhibit..................................................... A-1
(i)
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QUESTIONS AND ANSWERS
Q. WHAT MAY I VOTE ON?
A. You may vote on the following two matters:
- the election of the Class I nominees to serve on our Board of Directors
- the approval of the appointment of the independent accountants for fiscal
year 2001
See "Information About Nominees and Other Directors," beginning on 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 I nominees and for the
appointment of PricewaterhouseCoopers LLP as J.D. Edwards' independent
accountants for fiscal year 2001.
Q. WHO IS ENTITLED TO VOTE?
A. Stockholders of record as of the close of business on January 5, 2001, the
Record Date, are entitled to vote at the Annual Meeting. As of the Record
Date, 111,202,876 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 the Record Date. The proxy card or cards 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 or cards 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
doing one of the following:
- delivering a later dated proxy card to J.D. Edwards' Secretary
- notifying J.D. Edwards' Secretary in writing before the meeting
- 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 Computershare Investor Services LLC, 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 Computershare Investor
Services 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 transfer agent will, however,
forward to management any written comments you make
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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 two 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 accountants.
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 exists. Abstaining votes are deemed to be
votes cast and are included in the tabulation of the voting results. Broker
non-votes are not deemed to be votes cast and, 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 accountants and
do not count as 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 2001 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 Rhonda A. Wagner, Securities Counsel, to vote on these
matters at their discretion.
Q. WHEN ARE THE STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING DUE?
A. All stockholder 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
September 25, 2001. Stockholder proposals must comply with Rule 14a-8 of
the Securities Exchange Act of 1934.
Additionally, J.D. Edwards' advance notice bylaw provisions require that
any stockholder proposal to be presented from the floor of the 2002 Annual
Meeting must be submitted, in writing, to J.D. Edwards' Secretary, at the
above address, not less than 60 days prior to the meeting. The advance
notice must be accompanied by a brief description of the business to be
brought before the meeting; the name and address of the stockholder; the
class and number of shares held; and any material interest the stockholder
has in the business. Proposals may be presented after our 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 the nominees.
Q. WHO PAYS FOR THE PROXY SOLICITATION COSTS?
A. J.D. Edwards will pay all the costs of soliciting proxies. In addition to
mailing proxy solicitation 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.
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PROPOSALS
1. ELECTION OF DIRECTORS
There are two Class I nominees up for reelection this year. Detailed
information on each nominee is provided on pages 4 and 5 of this proxy
statement. One of the three Classes of directors is elected each year, and
directors serve for three-year terms.
Two Class I directors are to be elected at this meeting for a three-year
period ending in 2004. The Board of Directors has nominated Gerald Harrison and
Delwin D. Hock for reelection. If either of the nominees is unable or declines
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.
There is currently a vacancy in Class I of the Board of Directors created
by the resignation of Douglas S. Massingill in April 2000. The Board of
Directors is presently examining potential candidates to fill this vacancy;
however, no nomination has been made as of the date of this proxy statement.
Your proxies cannot be voted for a greater number of persons than the number of
nominees named in this proxy statement.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE TWO NOMINEES.
2. APPROVAL OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT
ACCOUNTANTS
The Audit Committee has recommended, and the Board has approved, the
appointment of PricewaterhouseCoopers LLP as our independent accountants for
fiscal year 2001 subject to your approval. They have unrestricted access to the
Audit Committee to discuss audit findings and other financial matters.
Representatives of PricewaterhouseCoopers LLP 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 PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL
YEAR 2001.
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INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
The Board of Directors currently consists of eight members divided into
three classes, with members of each class holding office for staggered
three-year terms. There are currently three Class II directors whose terms
expire in 2002, three Class III directors whose terms expire in 2003, and two
Class I directors whose terms expire at this Annual Meeting. Each director
serves in office until his respective successor is duly elected and qualified or
until his 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 I DIRECTORS
GERALD HARRISON Director since January 1997
Age 68
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
an L.L.B. from the University of Colorado School of Law.
DELWIN D. HOCK Director since March 1997
Age 66
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
Public Service Company, including 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, RMI.Net, and
Hathaway Corporation.
INCUMBENT CLASS II DIRECTORS
RICHARD E. ALLEN Director since September 1991
Age 43
Richard E. Allen has been the Executive Vice President, Finance and
Administration since May 2000 and the Chief Financial Officer and Assistant
Secretary since January 1990. Mr. Allen served as the Senior Vice President,
Finance and Administration from November 1997 until May 2000, as Vice President,
Finance and Administration from January 1990 through October 1997, and as
Treasurer from January 1990 to April 2000. From August 1985 to September 1994,
Mr. Allen served as Controller of J.D. Edwards 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 67
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 57
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.
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From August 1978 until June 1997, he served in a number of management roles with
J.D. Edwards, 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 III DIRECTORS
MICHAEL J. MAPLES Director since January 1997
Age 58
Michael J. Maples is currently retired and is 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 60
C. Edward McVaney resumed the positions of President and Chief Executive
Officer of J.D. Edwards in April 2000. He is Chairman of the Board of Directors
of J.D. Edwards, which he co-founded. Mr. McVaney held the positions of
President and Chief Executive Officer from J.D. Edwards' inception in March 1977
to October 1998, except that Mr. McVaney did not act as President of J.D.
Edwards 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 64
Trygve E. Myhren is currently President of Myhren Media, Inc., which
invests in media, telecommunications, Internet, 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 also Chief
Executive Officer of King Holdings, an owner and manager of broadcast and cable
television properties. From 1981 to 1988, Mr. Myhren served as Chairman and
Chief Executive Officer of American Television and Communications Corporation, a
publicly traded subsidiary of Time, Inc. During 1986 and 1987, Mr. Myhren also
served as Chairman of the National Cable Television Association. 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., and
Dreyfus Founders Funds.
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BOARD AND COMMITTEE MEETINGS
The Board of Directors met, either in person or by telephone, 15 times
during fiscal year 2000. Overall attendance at the Board and Committee meetings
was 93%. Attendance was at least 75% for each director.
The Board of Directors has an Audit, Compensation, Finance, and Governance
and Nominating Committee.
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. A copy of the Audit Committee Charter is included as an
exhibit to this proxy statement.
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 and reports to the Board on J.D. Edwards'
capital structure, capital expenditures, financing arrangements, risk
management, and long range financial planning.
The Governance and Nominating Committee acts on behalf of the Board in
between Board meetings and periodically considers potential candidates to be
nominated to the Board. 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 year 2000:
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GOVERNANCE AND
NAME AUDIT COMPENSATION FINANCE NOMINATING
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Richard E. Allen X X
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Gerald Harrison X X
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Delwin D. Hock X X
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Harry T. Lewis, Jr. X X
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Michael J. Maples X
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C. Edward McVaney
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Trygve E. Myhren X X
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Robert C. Newman X X
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NUMBER OF MEETINGS IN FISCAL YEAR 2000 4 10 4 1
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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
- $1,500 for each Board meeting attended
- $500 for each Board conference call attended
- $1,500 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 year 2000 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 the J.D. Edwards 1997 Equity Incentive Plan. No
discretionary grants were made during fiscal year 2000.
AUDIT COMMITTEE REPORT
The J.D. Edwards & Company Audit Committee has (1) reviewed and discussed
the audited financial statements with management, (2) discussed with
PricewaterhouseCoopers LLP, its independent accountants, the matters required to
be discussed by the Statement on Auditing Standards No. 61, and (3) received the
written disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1, and has discussed the accountants'
independence with the independent accountants. Based upon these discussions and
reviews, the Audit Committee recommended to the Board that the audited financial
statements be included in J.D. Edwards' Annual Report on Form 10-K for the
fiscal year ended October 31, 2000 and filed with the Securities and Exchange
Commission.
The Audit Committee is composed of the following three directors, all of
whom are independent directors as defined in Rule 4200(a)(14) of the National
Association of Securities Dealers listing standards: Harry T. Lewis, Jr.; Delwin
D. Hock; and Gerald Harrison.
The Board has adopted a written charter for the Audit Committee. The
Charter will be included as an exhibit to the proxy statement for the 2001
Annual Meeting of Stockholders.
Respectfully submitted by the members of the Audit Committee of the Board
of Directors.
Harry T. Lewis, Jr.
Delwin D. Hock
Gerald Harrison
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BENEFICIAL OWNERS AND MANAGEMENT'S OWNERSHIP OF J.D. EDWARDS STOCK
The following table shows, as of January 5, 2001, how many shares of 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, unless otherwise noted.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
NO. OF SHARES
OPTIONS OF RETIREMENT
EXERCISABLE SAVINGS PLAN PERCENT
SHARES BENEFICIALLY WITHIN 60 DAYS STOCK BENEFICIALLY BENEFICIALLY
NAME OWNED(1) (1)(2) OWNED OWNED
- -----------------------------------------------------------------------------------------------------------------
Richard E. Allen(3) 337,871 285,970 43,381 *
- -----------------------------------------------------------------------------------------------------------------
Gerry E. Bleau 25,818 109,042 25 *
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David E. Girard 43,400 250,505 5,807 *
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Gerald Harrison 11,540 32,081 -- *
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Delwin D. Hock 15,240 32,081 -- *
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Harry T. Lewis, Jr. 21,000 57,281 -- *
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Michael J. Maples 25,870 19,958 -- *
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Douglas S. Massingill(4) 53,530 611,661 19,485 *
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C. Edward McVaney(5) 4,799,843 -- 67,564 4.4%
- -----------------------------------------------------------------------------------------------------------------
Trygve E. Myhren 20,040 29,081 -- *
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Robert C. Newman(6) 8,150,854 -- 61,171 7.4%
- -----------------------------------------------------------------------------------------------------------------
Michael A. Schmitt 89,582 50,874 -- *
- -----------------------------------------------------------------------------------------------------------------
Donald C. White(7) 58,583 54,091 16,531 *
- -----------------------------------------------------------------------------------------------------------------
J.D. Edwards & Company
Retirement Savings Plan 5,937,638 -- -- 5.3%
- -----------------------------------------------------------------------------------------------------------------
FMR Corp.(8) 11,901,860 -- -- 10.7%
- -----------------------------------------------------------------------------------------------------------------
Kylee A. Fernalld(9) 10,866,467 -- -- 9.8%
- -----------------------------------------------------------------------------------------------------------------
Kevin E. McVaney(9) 10,362,508 -- -- 9.3%
- -----------------------------------------------------------------------------------------------------------------
Jack L. Thompson(10) 9,724,520 -- -- 8.7%
- -----------------------------------------------------------------------------------------------------------------
All directors and executive
officers as a group (20
persons including those
named above) 13,792,980 1,973,330 294,674 14.2%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- ---------------
* 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 Securities Exchange Act of 1934 and the
information is not necessarily indicative of beneficial
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ownership for any other purpose. Under this 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 after January 5, 2001 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 voting
and investment power 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 each person has the right to acquire as a result of the exercise
of stock options within 60 days after January 5, 2001.
(3) Includes 299,011 shares held by the Allen Family Trust, 21,660 shares held
by the Allen Family Charitable Lead Trust, 3,200 shares held by the Allen
Family Foundation, and 14,000 shares held of record by Mr. Allen's
children.
(4) Shares held by the Massingill Family Trust.
(5) Includes 2,779,322 shares held by the C. Edward McVaney Trust and 1,270,521
shares held of record by Mr. McVaney's wife in the Carole Louise McVaney
Trust.
(6) Includes 4,953,619 shares held by Newkop Investments L.L.P., a company
affiliated with Mr. Newman, 175,000 shares held of record by Mr. Newman's
wife in each of the Judith Newman Grantor Retained Annuity Trusts 1 and 2,
and 175,000 shares held of record by Mr. Newman in each of the Robert
Newman Grantor Retained Annuity Trusts 1 and 2.
(7) Shares held by the Donald C. and Mary G. White Family Trust.
(8) As reflected on Form 13(g), filed on November 10, 2000, by FMR Corp. FMR
Corp. may be reached at 82 Devonshire Street, Boston, Massachusetts 02109.
(9) As reflected on Ms. Fernalld's and Mr. McVaney's Form 4 filings for
November 2000.
(10) As reflected on Mr. Thompson's Form 13(g), filed on February 11, 2000.
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EXECUTIVE COMPENSATION REPORT
The Compensation 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 principles, specific program objectives, and other factors
considered by the Committee in reaching its determinations regarding executive
compensation.
EXECUTIVE COMPENSATION POLICIES
The objectives of J.D. Edwards' executive compensation program are to:
- Attract, retain, and motivate highly qualified executive talent
- Reward executives based on J.D. Edwards' performance
- Align the compensation and interests of executive officers with the
long-term interests of J.D. Edwards' stockholders
J.D. Edwards' executive compensation program consists of base salary, cash
bonuses, long-term incentives in the form of stock options, and the benefit
programs generally available to all full-time employees.
The Compensation Committee reviews the base salaries of executive officers
annually. In its recommendation of base salary adjustments, the Committee
considers individual performance and experience, relative scope of
responsibility, and company performance, as well as the base salaries paid to
executives in the competitive marketplace.
J.D. Edwards' incentive compensation plan bonus awards in fiscal year 2000
were based on the following measures of the company's performance:
- Customer satisfaction
- Achievement of corporate profit
- Achievement of license revenue
J.D. Edwards establishes target levels of performance for the above
measures under its annual business plans. Using the annual business plan for
fiscal year 2000, J.D. Edwards funded a total bonus opportunity cash pool based
upon the company's percentage performance against the annual business plan's
target levels for the above measures. Then, an individual performance
"management factor" of 0 to 2.0 times each individual's bonus opportunity, based
upon achievement of the individual performance measures, was applied to
calculate the actual bonus award for the year for each eligible employee. The
management factor for each eligible employee was subjectively determined on the
basis of an assessment of the individual's performance against qualitative
performance factors, the financial performance of the specific business unit for
which results the executive is responsible, or a combination of both. The
management factor for the executive officers was determined by the President and
Chief Executive Officer or other officer to whom each executive officer reports
directly.
Ownership of J.D. Edwards' common stock is a key and fundamental element of
executive compensation. Executive officers, as well as other employees, are
eligible to receive grants under the J.D. Edwards 1997 Equity Incentive Plan.
This plan permits the Board or the Compensation Committee to grant stock options
to officers and employees on terms the Board or the Committee may determine.
Options granted have a term of 8 years and generally vest 25% at the end of the
first year and 1/48th each month thereafter until fully vested four years from
the date of grant. Options to purchase a total of 10,203,179 shares were granted
to employees in fiscal 2000.
The J.D. Edwards 1997 Employee Stock Purchase Plans for U.S. and Non-U.S.
Employees permit employees to acquire J.D. Edwards common stock through payroll
deductions and promote broad-based equity participation throughout the company.
The Committee believes that the stock plans align the interests of employees
with the long-term interests of stockholders.
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J.D. Edwards maintains the J.D. Edwards & Company Retirement Savings Plan
to provide retirement benefits to its employees. The 401(k) portion of the
Retirement Savings Plan provides benefits through tax deferred salary deductions
for its U.S. employees who meet certain eligibility requirements. J.D. Edwards
generally matches 50% of an employee's eligible contributions up to a maximum
match of 3% of eligible compensation. This match is discretionary. The
discretionary contribution portion of the Retirement Savings Plan is designed to
invest primarily in J.D. Edwards common stock for the benefit of the U.S.
employees. Company contributions are determined by the Board, in its discretion,
and, if made, may be in the form of cash or J.D. Edwards common stock. J.D.
Edwards may continue to make contributions of Company common stock or cash to
the discretionary contribution portion of the Retirement Savings Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL YEAR 2000
C. Edward McVaney was appointed by the Board to the positions of President
and Chief Executive Officer of J.D. Edwards as of April 6, 2000. Mr. McVaney
earned a base salary of $120,000 and no cash incentives. His base salary took
into consideration the performance factors described above. Mr. McVaney does not
participate in J.D. Edwards bonus incentive compensation plan. Mr. McVaney
received no option grants during fiscal year 2000. Douglas S. Massingill was
promoted to the positions of President and Chief Executive Officer of the
Company in November 1998 and served in those capacities until his resignation as
President and Chief Executive Officer on April 6, 2000. Mr. Massingill earned an
annual base salary of $254,291 and cash incentives of $25,000. Cash incentives
approximated 10% of his base salary. Mr. Massingill was granted options to
purchase 100,000 shares of common stock during fiscal year 2000.
Respectfully submitted by the members of the Compensation Committee of the
Board of Directors:
Michael J. Maples
Trygve E. Myhren
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
J.D. Edwards' 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 Board or Compensation Committee and the board of directors or compensation
committee of any other company, nor has any interlocking relationship existed in
the past.
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COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning total
compensation received by the Chief Executive Officers and each of the five most
highly compensated executive officers who served in those capacities during
fiscal year 2000, the Named Executive Officers, for services rendered to J.D.
Edwards during the last three fiscal years.
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
LONG-TERM
OTHER ANNUAL COMPENSATION ALL OTHER
ANNUAL COMPENSATION COMPENSATION AWARDS COMPENSATION
---------------------------------------------------------------------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR BASE SALARY BONUS OPTIONS
- ------------------------------------------------------------------------------------------------------------------------
C. Edward McVaney........ 2000 $120,000 -- -- -- --
President and Chief 1999 120,000 -- -- -- --
Executive Officer 1998 120,000 $ 20,227 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Douglas S. Massingill.... 2000 $254,291 $ 25,000 -- 100,000 $336,458(1)
Former President and 1999 438,667 240,000 -- 200,000 --
Chief Executive Officer 1998 328,125 133,088 -- -- --
- ------------------------------------------------------------------------------------------------------------------------
David E. Girard.......... 2000 $344,153 $114,412 $113,993(2) 285,000 --
Executive Vice President 1999 327,092 200,000 -- 120,000 --
and Chief Operating 1998 236,708 118,562 -- 33,000 --
Officer
- ------------------------------------------------------------------------------------------------------------------------
Richard E. Allen......... 2000 $297,815 $ 57,289 -- 250,000 --
Executive Vice
President............. 1999 277,088 60,000 -- 45,000 --
and Chief Financial 1998 245,000 74,529 -- 10,000 --
Officer
- ------------------------------------------------------------------------------------------------------------------------
Donald C. White.......... 2000 $234,026 $ 86,015 $ 4,558 116,500 --
Senior Vice President, 1999 192,333 208,936 1,010 25,000 --
United States 1998 185,833 164,691 -- 25,000 --
- ------------------------------------------------------------------------------------------------------------------------
Gerry E. Bleau(3)........ 2000 $232,683 $ 85,535 -- 99,500 --
Senior Vice President, 1999 144,478 120,178 $ 162 25,000 --
Canada, Asia Pacific 1998 140,460 94,399 337 20,000 --
and Latin America
- ------------------------------------------------------------------------------------------------------------------------
Michael A. Schmitt....... 2000 $264,575 $ 28,630 $ 666 20,000 $333,960(4)
Former Senior Vice 1999 232,000 65,796 -- 40,000 --
President, 1998 216,667 115,000 -- 33,000 --
B2B E-Commerce
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Amount paid to Mr. Massingill pursuant to an arrangement in connection with
his resignation as President and Chief Executive Officer in April 2000. Mr.
Massingill remains an employee of the Company.
(2) Includes $61,835 in taxable moving expenses paid by the Company on Mr.
Girard's behalf. Also includes $50,836 reimbursed to Mr. Girard for payment
of taxes.
(3) Base salary and bonus compensation for fiscal 1998 and 1999 paid in Canadian
dollars. Amounts shown have been converted to U.S. dollars utilizing an
average annualized exchange rate of .6824 and .6694 for fiscal 1998 and
fiscal 1999, respectively.
(4) Amount paid to Mr. Schmitt pursuant to an arrangement in connection with his
resignation as Senior Vice President, B2B E-Commerce in July 2000.
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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 2000 fiscal year.
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(4)
-------------------------------------------------------------------------------------------
NO. OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION
NAME GRANTED(1) FISCAL YEAR(2) SHARE DATE(3) 5% 10%
- ----------------------------------------------------------------------------------------------------------------------
C. Edward McVaney....... -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Douglas S. Massingill... 100,000 0.98% $27.00 12/09/07 $1,289,130 $3,087,690
- ----------------------------------------------------------------------------------------------------------------------
60,000 0.59% 27.00 12/09/07 773,478 1,852,614
David E. Girard (5)..... 225,000 2.21% 13.06 07/31/08 1,403,271 3,361,079
- ----------------------------------------------------------------------------------------------------------------------
25,000 0.25% 27.00 12/09/07 322,282 771,922
Richard E. Allen(6)..... 225,000 2.21% 13.06 07/31/08 1,403,271 3,361,079
- ----------------------------------------------------------------------------------------------------------------------
40,000 0.39% 22.81 10/31/07 435,678 1,043,525
Donald C. White......... 76,500 0.75% 10.50 05/23/08 383,516 918,588
- ----------------------------------------------------------------------------------------------------------------------
40,000 0.39% 22.81 10/31/07 435,678 1,043,525
Gerry E. Bleau.......... 59,500 0.58% 10.50 05/23/08 298,290 714,457
- ----------------------------------------------------------------------------------------------------------------------
Michael A. Schmitt...... 20,000 0.20% 27.00 12/09/07 257,826 617,538
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ---------------
(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 J.D. Edwards common stock on the date of grant.
Except as otherwise noted, all options have 8-year terms and vest 25% on the
first anniversary date of the grant and 1/48th each month thereafter.
(2) J.D. Edwards granted options to purchase 10,203,179 shares of common stock
to employees in fiscal year 2000.
(3) The options in this table may terminate before their expiration as a result
of the termination of the 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 an assumed stock price appreciation from the
date of grant until the end of the 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 J.D. Edwards'
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.
(5) The grant of 225,000 options to Mr. Girard was made on August 1, 2000, in
connection with an employment agreement between J.D. Edwards and Mr. Girard,
and will vest 100% on May 1, 2002. Vesting of these options is contingent
upon Mr. Girard's continued employment with J.D. Edwards. See "Employment
Contracts and Change in Control Arrangements" on page 14 of this proxy
statement for a more detailed description of the vesting terms.
(6) The grant of 225,000 options to Mr. Allen was made on August 1, 2000, in
connection with an employment agreement between J.D. Edwards and Mr. Allen,
and will vest 100% on May 1, 2002. Vesting of these options is contingent
upon Mr. Allen's continued employment with J.D. Edwards. See "Employment
Contracts and Change in Control Arrangements" on page 14 of this proxy
statement for a more detailed description of the vesting terms.
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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 the options as of
October 31, 2000.
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END($)(1)
ACQUIRED VALUE ----------------------------------------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------
C. Edward McVaney -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Douglas S.
Massingill -- -- 560,028 247,534 $10,431,119 $ 870,613
- ---------------------------------------------------------------------------------------------------------------------
David E. Girard 132,173 $4,441,887 270,025 401,575 4,064,791 3,683,008
- ---------------------------------------------------------------------------------------------------------------------
Richard E. Allen 171,630 6,100,941 246,095 311,726 4,655,519 3,532,092
- ---------------------------------------------------------------------------------------------------------------------
Donald C. White 69,291 2,280,878 19,791 161,818 6,771 1,710,429
- ---------------------------------------------------------------------------------------------------------------------
Gerry E. Bleau 5,000 66,694 89,610 126,142 1,454,532 1,144,219
- ---------------------------------------------------------------------------------------------------------------------
Michael A. Schmitt 165,920 4,875,113 95,674 -- 814,678 --
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Based on the fair market value of J.D. Edwards common stock at fiscal year
end less the exercise price payable for the shares.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
J.D. Edwards entered into Employment Agreements with Mr. Girard and Mr.
Allen, effective as of May 1, 2000 and continuing for an initial term of two
years through May 1, 2002. Under the terms of their respective agreements, Mr.
Girard and Mr. Allen will receive certain salary and bonus compensation,
contingent upon their continued and satisfactory performance of the duties
specified in their agreements. In addition, Mr. Girard and Mr. Allen each
received grants of 225,000 options, which will vest one hundred percent (100%)
on May 1, 2002, or earlier if either Mr. Girard or Mr. Allen is terminated for
reasons other than "Cause," "Performance," or "Disability," as defined in their
agreements. If either Mr. Girard's or Mr. Allen's employment is terminated for
reasons of Performance or Disability after May 1, 2001, their options will vest
twenty-five percent (25%) on May 1, 2001, and 1/16th per month thereafter until
the date of termination of employment, at which time all unvested options will
be cancelled. Their options will be immediately cancelled if either resigns or
is terminated for Cause any time prior to May 1, 2002. Mr. Girard and Mr. Allen
are each entitled to certain severance payments in the event of their
termination of employment for reasons other than for Cause. Each agreement will
automatically renew for successive one-year periods thereafter unless either
J.D. Edwards or Mr. Girard or Mr. Allen, as applicable, provides the other with
written notice of intent not to renew no later than 30 days prior to the end of
any period. Salary and bonus compensation, as well as subsequent option grants,
if any, for renewal periods will be established by a written addendum to Mr.
Girard's and Mr. Allen's employment agreements to be approved by the
Compensation Committee of the Board.
J.D. Edwards maintains a Management Change in Control Plan in which the
executive officers participate. The Company's Management Change in Control Plan
provides for severance payments to be made to participants under circumstances
which, following a "change in control" of J.D. Edwards (as defined in the Plan),
are deemed to be an involuntary termination of such participant's employment
with J.D. Edwards. The severance payments are determined based upon a formula
that takes into account each
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participant's annual compensation at the time of involuntary termination and the
average bonus received by a participant over the preceding three years.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
J.D. Edwards did not enter into any transactions nor did any business
relationships exist during the last fiscal year that require disclosure under
this section. Any 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 requires J.D. Edwards'
directors, executive officers, and holders of more than 10% of J.D. Edwards
common stock 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 year 2000, our executive officers, directors, and
10% stockholders complied with all applicable Section 16(a) filing requirements,
except that Messrs. James L. Foos, David E. Girard, Nigel R. Pullan, and Donald
C. White each filed one late report detailing initial ownership or reporting
sales, and Messrs. Richard E. Allen, Gerry E. Bleau, Brian A. McKeon, and Robert
C. Newman each filed two late reports detailing initial ownership or reporting
sales.
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19
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 J.D. Edwards' 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 J.D. Edwards common stock. Note that historic stock
price performance is not necessarily indicative of future stock price
performance.
[GRAPH]
JD EDWARDS & COMPANY S&P 500 MORGAN STANLEY TECHNOLOGY
-------------------- ------- -------------------------
9/23/97 100.00 100.00 100.00
10/97 97.19 101.95 91.01
10/98 93.61 124.37 130.35
10/99 68.42 156.30 238.01
10/00 73.96 165.82 259.70
OTHER MATTERS
The Board of Directors is not aware of any 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 these matters.
THE BOARD OF DIRECTORS
Denver, Colorado
January 26, 2001
16
20
EXHIBIT A
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF J.D. EDWARDS & COMPANY
PURPOSE:
The Audit Committee will make such examinations as are necessary to monitor
the corporate financial reporting and the internal and external audits of J.D.
Edwards & Company and its subsidiaries (the "Company"), to provide to the Board
of Directors the results of its examinations and recommendations derived
therefrom, to outline to the Board improvements made, or to be made, in internal
accounting controls, to select independent auditors, and to provide to the Board
such additional information and materials as it may deem necessary to make the
Board aware of significant financial matters that require Board attention.
In addition, the Audit Committee has the authority to undertake the
specific duties and responsibilities listed below and will have the authority to
undertake such other specific duties as the Board of Directors from time to time
prescribes.
MEMBERSHIP:
The Audit Committee shall consist of at least three (3) members of the
Board, all of whom shall be independent directors, in accordance with the rules
of the Nasdaq Stock Market Inc.'s Nasdaq National Market and the standards set
forth in the SEC's Blue Ribbon Committee Report on Improving the Effectiveness
of Corporate Audit Committees. The members of the Audit Committee shall be
appointed by and shall serve at the discretion of the Board of Directors.
RESPONSIBILITIES:
The Audit Committee has the authority to undertake the following duties and
responsibilities:
1. Reviewing on a continuing basis the adequacy of the Company's
system of internal controls, policies and procedures;
2. Reviewing on a continuing basis the activities, organizational
structure and qualifications of the Company's internal audit function;
3. Prior to the annual independent audit, reviewing with the
independent auditors and management the auditors' proposed audit scope and
approach and the areas of audit emphasis;
4. Conducting a post-audit review of the financial statements and
audit findings, including any significant suggestions for improvements
provided to management by the independent auditors and their judgment about
the quality of the Company's accounting principals; the form and content of
the Company's financial statements and disclosures; and the required
communications from the independent auditors under generally accepted
auditing standards and Securities and Exchange Commission regulations;
5. Reviewing and discussing with management before release the audited
financial statements and Management's Discussion and Analysis in the
Company's Annual Report on Form 10-K;
6. Receive from the independent auditors formal quarterly disclosures
regarding the auditors' independence required by the Independence Standards
Board Standard No. 1 and discuss with the independent auditors their
independence;
7. Based upon the review and discussions with management and the
independent auditors, including the independent auditors' disclosure
regarding independence, recommend to the Board of Directors that the
financial statements be included in the Annual Report on Form 10-K;
8. Reviewing the performance of the independent auditors;
A-1
21
9. Reviewing and recommending the selection and retention of
independent auditors to the Board of Directors;
10. Reviewing, before release, the unaudited quarterly operating
results in the Company's quarterly earnings release and discussing with the
independent auditors the quarterly review prior to filing the 10-Q;
11. Overseeing compliance with SEC requirements for disclosure of
auditors' services and audit committee members and activities;
12. Reviewing management's monitoring of compliance with the Company's
Standards of Business Conduct and with the Foreign Corrupt Practices Act;
13. Reviewing, in conjunction with counsel, any legal matters that
could have a significant impact on the Company's financial statements;
14. Providing oversight and review of the Company's asset management
policies, including an annual review of the Company's investment policies
and performance for cash and short-term investments;
15. If necessary, instituting special investigations and, if
appropriate, hiring special counsel or experts to assist;
16. Reviewing related party transactions for potential conflicts of
interest;
17. Providing a forum for the independent auditors to meet in closed
session with the Audit Committee;
18. Reviewing with senior management and the independent auditors the
Company's accounting and financial personnel resources;
19. Reviewing any dispute between management and the independent
auditors and recommending action to the Board of Directors;
20. Perform other oversight functions as requested by the full Board
of Directors;
21. Coordinating with other committees of the Board of Directors to
ensure responsibilities are being allocated appropriately pursuant to the
committees' respective charters;
22. Reviewing annually, and modifying as necessary, this Audit
Committee Charter;
23. Disclose in the proxy statement 1) that the Board of Directors has
adopted a written charter for the Audit Committee and include a copy every
three years, and 2) whether the Audit Committee members are "independent";
24. Include in the proxy statements an Audit Committee report
containing certain statements regarding responsibilities No. 4-7 above,
required by the Securities and Exchange Commission Rule on Audit Committee
Disclosure effective January 1, 2000.
In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board of Directors delegates to it, and will
report, at least annually, to the Board regarding the Committee's examinations
and recommendations.
MEETINGS:
It is anticipated that the Audit Committee will meet at least four (4)
times each year. However, the Audit Committee may establish its own schedule,
which it will provide to the Board of Directors in advance. Each meeting will
include an executive session which will allow the Audit Committee to maintain
free and open communications with the Company's independent auditors.
The Audit Committee will meet separately with the Chief Executive Officer
and separately with the Chief Financial Officer of the Company at least annually
to review the financial affairs of the Company. The
A-2
22
Audit Committee will meet with the independent auditors of the Company, at such
times as it deems appropriate, to review the independent auditors' examination
and management report. The Audit Committee is authorized, by majority vote or
unanimous written consent of its members, to adopt its own rules of procedure,
including the formalities of calling, noticing, and holding meetings and for the
taking of action of the Audit Committee by vote at any such meeting or by
unanimous written consent of the members thereof, and that unless and until any
such procedures are formally adopted by the Audit Committee, the procedures with
respect to calling, noticing, and holding meetings of the Audit Committee and
conducting business of the Audit Committee shall be the same as those provided
in the Bylaws of the Company with respect to calling, noticing, and holding
meetings of and taking action by the Board of Directors.
REPORTS:
The Audit Committee may report its summaries of recommendations to the
Board in written or oral form. The Audit Committee recommendations will be
incorporated as a part of the minutes of the Board of Directors meeting at which
those recommendations are presented.
MINUTES:
The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board of
Directors.
OTHER:
The Audit Committee shall have the right, as and when it shall determine to
be necessary or appropriate to the functions of the Audit Committee:
(i) at the expense of the Company and not at the expense of the members
thereof, to retain counsel (which may be, but need not be, the regular
corporate counsel to the Company) and other advisors to assist it in
connection with its functions; and
(ii) to request from the Chief Executive Officer and the Chief
Financial Officer of the Company and from any representative of the
independent auditors to the Company participating in such independent
auditors' engagement by the Company, and to rely upon, advice, orally
or in writing, concerning aspects of the operation or financial
condition of the Company relevant to the functions of the Audit
Committee.
The officers of the Company are requested to cooperate with the Audit
Committee and to render assistance to it as it shall request in carrying out its
functions.
Approved By:
/s/ HARRY T. LEWIS, JR.
------------------------------------
November 30, 2000
/s/ DELWIN D. HOCK
------------------------------------
November 30, 2000
/s/ GERALD HARRISON
------------------------------------
November 30, 2000
A-3
23
J.D. EDWARDS & COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
WITHHOLD
AUTHORITY
FOR ALL TO VOTE FOR FOR ALL NOMINEES, EXCEPT
NOMINEES ALL NOMINEES VOTE WITHHELD FOR THOSE NAMED BELOW:
1. Election of Class I Directors [ ] [ ] [ ]
Nominees: 01. Gerald Harrison,
02. Delwin D. Hock
---------------------------------------
Nominee Exceptions
2. Ratification of the appointment of
PricewaterhouseCoopers LLP as independent FOR AGAINST ABSTAIN
accountants of J.D. Edwards & Company [ ] [ ] [ ]
for the fiscal year ending October 31, 2001
MARK HERE FOR ADDRESS CHANGE
AND NOTE AT LEFT [ ]
Please sign exactly as your name appears on this form. If
your shares are registered in more than one name, whether
as joint tenants, as community property, or otherwise,
each of you should sign. When signing as attorney,
executor, administrator, trustee, guardian, or in another
fiduciary capacity, please give your full title. If a
corporation, the president or other authorized person
should sign and indicate his or her title and the full
corporate name. If a partnership, an authorized person
should sign and indicate his or her title and the full
partnership name.
---------------------------------------------------------
Signature Date
---------------------------------------------------------
Signature Date
- -----------------------------------------------------------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
24
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF J.D. EDWARDS & COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MARCH 6, 2001
By signing on the reverse side, you acknowledge receipt of the Notice of Annual
Meeting of Stockholders of J.D. Edwards & Company and the accompanying Proxy
Statement, each dated January 26, 2001, and appoint Richard G. Snow, Jr. and
Rhonda A. Wagner, or either of them, proxies and attorneys-in-fact, each with
full power of substitution, to represent you at the Annual Meeting, to be held
Tuesday, March 6, 2001 at 2:00 p.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 you on January 5, 2001 as 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 PROMPTY 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 AND AS DEEMED ADVISABLE BY THE PROXIES ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE PROPOSALS.